Audio

025: How Jeff Rose Created A 6 Figure Blog To Drive Clients To His Offline Business

Jeff Rose

Jeff Rose is a good friend of mine who I met a long time ago randomly via the social networks. And the reason I asked him to be on the show is because he is easily one of the most charismatic bloggers that I know. Plus he’s a genuinely nice guy.

He makes 6 figures with his blog, Good Financial Cents, and owns various web properties that all generate a healthy income. But what’s unique about Jeff is that even though he makes a healthy income online, he primarily uses his web properties to drive new clients to his financial planning practice.

So if you own a professional services company and are looking for new ways to expand and attract clients, then this interview will teach you exactly how to do that. Oh and he also publishes his income reports online at DollarsAndRoses.com and runs a life insurance site at LifeInsuranceByJeff.com

Below is an example of how Jeff puts himself out there and makes financial planning more entertaining. Personally, I wouldn’t have the guts to put on a video like this but he pulls it off.

What You’ll Learn

  • How Jeff cranks out content fast and efficiently
  • How to utilize an online business to improve your offline business
  • How Jeff recovered from a severe Google penalty
  • How to leverage every medium possible to get the word out about your business

Other Resources And Books

Transcript

Steve: 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 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’re interested in starting your own online business, be sure to sign up for my free six day mini-course where I show you how my wife and I managed to make over a 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 my My Wife Quit Her Job podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here’s your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job podcast. Today I’m thrilled to have a good friend of mine on the show Jeff Rose. Now if you don’t know who Jeff is, he blogs at GoodFinnancialCents.com, DollarsAndRoses.com. He’s got like three podcasts, his own financial planning practice and he actually makes a bunch of You Tube videos as well. And out of all the bloggers that I know, I would say that Jeff is probably one of the most charismatic personalities out there, and he’s actually built quite a brand for himself. Not to mention the fact that he also makes a good deal of money with his various businesses, and in fact he puts out all of his income online for everyone to see and I’ll go ahead and link that up with the show notes because it’s quite interesting where all the income sources come from.

Now Jeff is actually a hard man to track down. First of all you have to get past his virtual assistant, but fortunately I know all of his weak points, in and out burger, juicing and crossfits. So, step number one if you want to get a hold Jeff Rose, include in and out burger in the subject line of your email, and I may have also led him to believe that this podcast was about eating burgers. So sorry man no burgers here. Jeff is actually one of the reasons why I started this podcast in the first place. So welcome to the show Jeff. How are you doing man?

Jeff: You’re saying there is no in and out burger with this like– I’m sorry dude I got to go man.

Steve: I got you here, it’s too late, it’s too late we’re already recording.

Jeff : Cool man, thanks for having me on.

Steve : So you got a really interesting story, and I don’t know if a lot of people know about your back story. You kind of came from a poor upbringing. You joined the marines. What kind of made you decide to start your own business online?

Jeff : You know I mean my father struggled with that. I don’t want to make it sound like I was poor, poor but, let’s just say that both my parents they separated when I was a young age. My mom you know she has my step dad– he was pretty successful but, they just– both of them, mom stepdad and dad really did not know how to manage money at all. My dad filed for bankruptcy twice, my mom filed for bankruptcy once. At times, they had– my mom had five mortgages at one time.

Steve: Wow!

Jeff: And which like that’s what the [Inaudible] [00:03:37] but, they actually ended up losing like three of those like five properties because they just didn’t know what they were doing.

Steve: Was that during the craze with the real estate?

Jeff : No, no they– that was well before that. They actually– its funny you mention that because they finally like started doing better, sold their house in LA, moved to Las Vegas before the boom, and then they had cash left over that they actually were sitting pretty but, instead of sitting pretty, they invested it to a Vespa property in Las Vegas. Prior to that, they ended up losing two more houses to foreclosure. So yeah like that’s what I’ve been having to work through growing up, seeing some of those financial shortfalls along the way.

Steve : Man, okay. So you know what’s ironic about all of this, is that my parents, they kind of made their money through real estate, and you know at least that generation– they’ve always advised my brother and I to always buy real estate because that’s something that can never really go down. So it’s just interesting that your parents actually lost money during the boom with real estate so.

Jeff : Yeah, so like and you know my dad dropped out of college. You know when he was younger, he joined the army and after that he just kind of I don’t know he was like a car salesman, just kind of bounced around a lot of end jobs, and he always told me like you know he always wanted me to be– to do better than he is. So he really wanted me to go to college, you know do the whole degree thing, and I ended up dropping out my first semester of college, and started working a dead end job basically. And then I joined the army national guard, not the marines that you mentioned.

Steve: Oh my bad.

Jeff: It’s okay, it’s all good and you know joining the national guard for me was– that was my life savior I mean that, that’s what basically got my butt in gear, got me back on track just career wise and just getting focused again. And– but even still even getting my career back on track I still like knew nothing about investing or financial planning or really even how to manage money, and I end up becoming a finance major. Actually my dad suggested I be a Finance major, and you know I always listen to him so I went that path and ended up getting internship with a brokerage firm that ended up me becoming a financial planner and as they say the rest is history.

Steve: So.

Jeff: Go ahead.

Steve: You broke off from that to start your own practice eventually right?

Jeff: Yeah, so I did I was working for ‘the man’ for about five years building my book of business and probably one of the best things that happened was my old firm got bought out by a bigger firm and had that never happened I don’t know if I would have left, because I really enjoyed the company. That was the only coolade that I had drunk at that time and I liked the coolade I didn’t know any other, I didn’t want to try any other coolade, because I liked it. But, when they got bought out it forced me to kind of look at what other options existed and that’s when I ended up leaving with three others and co-founded our own investment firm, and we’re independent in our space is a common way of hearing that.

And when I went independent that allowed me to market myself a little bit more differently than others. I had a little bit more freedom and that’s really where the blog ended up. That’s where it all came from. With that ability to market myself and just looking for other unique ways to get myself out there and stumbled upon blogging and registered domain GoodFinnancialCents.com and it’s been a blast ever since then. That was back in July– I left December of 07, launched the blog in July of 2008.

Steve: So you actually started good financial cents to help promote your practice is that right or?

Jeff: Yeah, no that was that was basically the only reason. I mean I did have a passion for educating others, that was kind of the other underlying thing to it. But you know it was what it was. It was to market myself being an independent financial planner, and to hopefully get new clients. And along the way I learned more about blogging, about key words, and driving traffic and the fact that you can actually monetize the blog. First I started with Adsense, then eventually grew to using affiliates and other means. So it all– once I started blogging and networking with other bloggers, I just was opened up to an entirely new world that I was completely oblivious to at the time.

Steve: So let’s go in a little bit more depth. So how does JFC make money today?

Jeff: A combination, you know right now I still get the occasional new clients. Actually kind of a cool story I– this is three years in the making, I but I had a guy who I kind of knew here locally and he had seen some of my posts on Facebook where I share some of my blog comments or some of my blog articles and he emailed me. This was three years ago and said “Hey, I really appreciate your willingness to educate people on personal finance and investing. I have a friend that I want to introduce you to.” That was three years ago. Long story short that person just now finally got the money that they’d been waiting on to settle and brought in like 1.5 million dollars all because of my blogging efforts. But, that was like three years in the making, and at this point in time that is not the biggest client that I’ve got from my blog.

Steve: That’s awesome so I’ve been on your blog obviously many times. Is there– there doesn’t seem to be like a funnel that goes directly to your practice and at least as far as I could tell?

Jeff: Yeah, and that– its funny you mention that because we’re going to talk about a pivot here in a little bit, correct?

Steve: That’s correct at the very end. I said it out too early, didn’t I.

Jeff: You did that’s okay. You had an original question I forgot what that was?

Steve: How does it make money and yeah.

Jeff: Oh yeah. That is that is one way getting you know getting new clients that feed in to the practice. The the first way that I used to make money was using just using Google Adsense. Just because I really didn’t know any other way to make money. That was the easiest way, just slap some Adsense code on there, and let the money roll in. From there I started doing affiliates. My– probably my top revenue producers are like brokerage firms, Scottrade, TDAmeritrade, E-trade etcetera. I also do pretty good with the pure and pure lenders like lending club and Prosper and savings accounts like Capital One 360 and a few others. So affiliates are another revenue source and then banner advertising. I got a pretty good ad network where I get a fairly competitive CPM which you know is based on impressions. And those are basically the three ways I guess that bring in revenue.

Steve: So let me ask you this. So you said that you started Good Financial Cents to actually get more clients to you your practice, that was the initial intention. So doesn’t adding ads and you know Adsense and that sort of thing kind of– isn’t that kind of contrary to the kind of goal so to speak because you’re clicking on a banner that takes you off the site, so how does it all work together.

Jeff: That’s a great question. That’s something I had someone ask me the very beginning when I put ads on there, and what I– the logic that I went through to come to the conclusion why I left the ads on there was I cannot be a financial advisor for everybody. People are going to come to my site, they are going to– they’re maybe want to work with me maybe not, but if I can at least monetize that and get a few dollars from all the effort that I put into it, I’m okay with that. And the amount of clients I‘ve been able to get even with having advertising on there I think kind of speaks to that. So I feel like it’s just a nice secondary income that you know comes in and it’s a decent secondary income but…

Steve: Right, yeah, yeah, I’m definitely going to link up you’re your income reports in the show notes because it’s pretty impressive.

Jeff: Yeah, it’s just something that I wrestled with for a long time, but the final concluding factor or the thing I came to was Jeff you cannot be a financial advisor for everybody, and not everybody is going to want to hire you. The people who really want to hire you, they are going to look past the ads, they are going to contact you, ask a question. I get questions all the time, and I think that’s where, that’s where I guess that connection really builds. They contact me via email or contact form and really just share their entire financial history, and if I’m able to provide value you know that’s where there’s going to be– going to build that trust even having ads on the side.

Steve: So are all your clients kind of local to where you live or do you get people from all over the country?

Jeff: Actually majority are local, I do have a few that were not. I’ve got several that are out of state, but not huge. I think the furthest one I ever got which– this still amazes me was I have a client that is in the air force, and at the time of us starting our working relationship, she was stationed in Japan. And she found my blog for whatever reason, and like she wanted to work with me. And we– we’ve never met face-to-face, we’ve chatted on Skype a few times, and that’s it. She’s actually in the states now. I think she’s in Virginia, but she’ll be going to Japan I think in the next year. So that’s like my first international client per se, but I’ve got several on the west coast, and you know several scattered but I mean I’m not in every single state. I think maybe we have clients in about ten different states right now.

Steve: That’s actually really cool that you have clients that you’ve gotten from all over the country through your blog. Just curious, do they ever tell you why they decide to go with you?

Jeff: Yeah, you know there is one lady who recently, this is actually another lady. She is in my state, but she lives five hours from me and she called me, which happens every so often. And she told me she’s like her husband was in a situation where they were in their early 50s, and they were I guess something came up where they thought they needed a financial advisor, and the husband said to the wife “Hey do you know anyone that you feel that you trust.” And she is like, you know she’s like the only guy I know is this guy that I’ve been on his email list for about a year and he’s got a blog FinnancialCents.com, and she told me this when she called me.

She’s like I’ve been on your email list for a year and she’s like either you are super trustworthy or you have the biggest scam going but you know just the content you put out, I feel like that I know you. And I just thought that was funny that she was very candid about contacting me, because I love when people do contact me and want to work with me. I love just finding out how did you find me, and you know and just like with the lady in Japan like you know what was it about me that– because I told her, if I were you, I don’t know I could trust somebody to transfer all of my retirement assets even though I’ve never met that person face to face. I mean that is a huge leap of faith you know I would think, I couldn’t do it but I’ve had people do it.

Steve: It probably has something to do with your dance in You Tube videos. So for everyone listening, Jeff has all these You Tube videos where he’s actually dancing and acting kind of silly on the videos, but it somehow ties that in with personal finance in a very– in a very well done way. I can’t I can’t really describe it, I’ll just have to link up one of these You tube videos in the show notes for you guys to see. So okay, so you’re getting these clients through your blog. How do you actually get traffic to your site?

Jeff: You know, initially it was all just key words, it was– so kind of like my journey of really understanding how a blog works. The first key word that I ever wanted to target was financial planner Illinois. Actually, no correction, the first keyword that I ever wanted to target was my name Jeff Rose because before I started the blog if you goggled Jeff Rose like you didn’t see me. You found Jeff Rose the actor, Jeff Rose the golf polo maker, and Jeff Rose the superintendant in Oregon and you know that was it. So I wanted to own my name you know people wanted to do research on Jeff Rose they would find me, and that wasn’t that hard. After setting up the blog, setting up my LinkedIn profile and all that good stuff. But then I realized you know what, if people needed a financial planner they know, they don’t know Jeff Rose, they are not going to Google Jeff Rose. So I thought okay I’m want to target financial planner Illinois. So I went on this like campaign of guest posting and linking back to a landing page I created you know focusing on those key words, and I was able to do it. And I think it was two or three short months for the most part. And it’s pretty good considering the fact that I live in Illinois which you know I’ve got Chicago which is a pretty big city you know competing with all the financial advisors up there, and I was able to get at the time three listings on the top ten for financial planner Illinois.

Steve: Nice.

Jeff: I think it’s only two but I think I’ve got like three in the top twelve. So for a guy that really knew nothing about blogging, I was pretty impressed with that fete. So when I got that– when I was able to rank for that, then the thought was okay how do I rank for search terms for people that might need my services? Like 401k rollover, how much life insurance do I need to buy, how to do a Roth IRA conversion you know. Just figured basic thinking of key words or relevant search terms that people would need my services. So that’s when I started to write articles that were trying to target those certain key words. And this was all pre panda, pre Google panda which if people don’t know what that was, that was an algorithm update that Google did that just basically wiped out a lot of sites searching new traffic. So I was doing really good pre panda, and then Google for whatever reason didn’t like me, and I promise I wasn’t doing anything that wasn’t legal in Google’s eyes, but I got spanked pretty hard, I lost 70% of my traffic.

Steve: Wow, I didn’t realize it was 70%.

Jeff: 70% over night. April 11 2011[laughter] I actually just thought I looked at the date and I’m like you know what, that was like three years ago.

Steve: 2nd anniversary.

Jeff: Yeah exactly. It was horrible man, I mean I spent two and a half, three years building up this blog that was getting at the time a 100, a 150 unique visitors per month and lost it poo over night. And I just cried and you know kind of looked at myself but… So that was how I initially got traffic and you know since panda you know I’ve done more You tube videos like you’ve mentioned. Just focused on doing You Tube videos good content you know, just really putting out better content and doing like guest posting. I started writing for other major sites just to get more back links back to Good Financial Cents, and here recently here it’s the podcast. Launched the Good Financial Cents podcast earlier this year I think or last year I forget exactly, but you know but just basically doing things outside the box to drive traffic back to the blog. I guess the other major thing I shouldn’t have probably forgot about was my book…

Steve: Oh, yes.

Jeff: That came out last fall soldier sort of finance I released that got published in fall so you know all these different things I was doing all to get people back to my main hub which was my blog.

Steve: So are you still trying to get back in the rankings or is this just kind of your way of driving outside traffic and kind of Google proofing your site?

Jeff: You know, honestly, now like I used to do a lot of keyword research. And occasionally like I’ll start doing keyword research again, and like then I realized I’m never going to write the article to rank that term anyway. So now it’s like I don’t even– I don’t care as much as I used to. Like I think for example a recent post that I did was six things– I forgot things like title you know ‘six ways that retirees screw up their retirement’. That’s actually the worst title ever but, there is nothing about it that was targeting SEO. You know it was just six tips that I just felt that I’ve seen people continually screw up, with a lot of the clients that I’ve worked with. I took that article, I made the six tips, I’ve turned it into a podcast, I had my new assistant create a prezi which is kind of like a really sexy– like PowerPoint 2.0 presentation. So we created a nice prezi which I uploaded to You Tube, and I did a– when I recorded the podcast I also did a presentation with it as well, and I’ve got a nice image that I’ve created for Pinterest, and I’ll pin it on Pinterest. So just what I really want to focus on especially like my really good midi content is just to make it available, and as may [Inaudible] [00:20:19] as possible.

Steve: So out of all your referring traffic sources outside of Google, which ones do the best for you?

Jeff: Right now it’s actually Pinterest that’s actually driving the most referral traffic other than Google.

Steve: Really?

Jeff: Yeah, it’s my wife– she’s helped me a lot with the Pinterest pics and just making me knowledgeable with Pinterest and actually if I could check, let’s see. I mean Pinterest and then I think Facebook would be the next as far as social media referral.

Steve: So I’ve actually never gotten anything really hot on Pinterest and I was just thinking it was because the topic that I write about isn’t really geared towards that audience. Are you trying– are you kind of adjusting your content to appeal more to the Pinterest audience in any way?

Jeff: You know it’s something I go back and forth with, but the I just rebranded Good Financial Cents you know I just came out of doing site design not too long ago, and I started focusing more on the younger investor which is actually totally different than the actual clientele I work with. Most of my clientele probably 85% are of baby boomer age. But I– my wife who also has a blog and she gets a lot of young families to her blog which is kind of her residence because you know we’re a young family, we’ve got three young boys, so it’s just natural that those people kind of are the readers of her blog. And you know she always mentions me in her blog, so I’ve got like carry over traffic. So I just have a lot of people that come over from her blog that are all you know that are all younger they are all you know young families getting started financially. So it just kind of made sense to start devoting more content to that. And that’s kind of what’s been in our focus.

Steve: So I’d be curious, do any of those Pinterest people– have any of them become your clients?

Jeff : I’ve had a few people that we started on that path, but its– I– to protect my time, I don’t have like a minimum of clients like I formally announce you know like on my practice, from my blog anywhere, but I have you know have a mental minimum that I just know like to make it worth my time you know I have to have a minimum as far as working with people especially virtually. So I actually just more enjoy if they contact me, I like to give them the information you know they need, and it’s just kind of like point them in the right direction.

Steve: Okay. So let’s talk about some of your other web properties. So you got Good Financial Cents, you got Dollars and Roses, and you have a secret niche site which we I guess won’t go into too much depth about. But how does everything come together? So what is Dollars and Roses about?

Jeff: So Dollars and Roses was one of my– one of my many brain childs I came up with, but when my wife quit her job back in the fall of 2008…

Steve: Hey that’s already taken man, you can’t use that URL.

Jeff: What’s that?

Steve: You just said my wife quit her job. That’s…

Jeff: Wow, that was like totally, I’m going to actually register mywifequitherjobHq.com. It’s funny I just said that. So when she did quit her job and started helping me with my blog you know her– she didn’t have more time to focus on her blog, and that’s when she became more passionate about it. And I just thought it’d be really cool if we started a blog together that showcased our blogging efforts. And the initial intention of that, I mean it was basically a mirrored kind of a pathlin {phonetic] model, you know smart passive income, but to be more like the couple version.

And in the time, I really had no desire to be another you know Pat Flynn [phonetic] or you know another male in the internet marketing world. But my big vision was I thought you know if Mandy could really become more of a voice of this blog because in her niche I mean in the mommy blogger or lifestyle or whatever you want to call it. There just aren’t many mom bloggers that are very open and transparent with how much traffic they get, how much money they make from their blogs, you know it’s just kind of more of a taboo thing. They all want to pretend like they make money but they are never really open to share what that really is.

So that’s where I kind of– that’s where it all came to be. It was something we could do together, kind of a fun project and from that we started the podcast. But you know we don’t spend a lot of time on it because we’ve got so much other stuff going on that it’s not our main revenue maker so you got to kind of spend the time where you make money. But the same token I think that blog has done– it’s been good for us as far as like social proof like with the online space. You know her and I actually– we got asked to be a– to do a key note talk in San Diego this summer at a conference that you know that wouldn’t have came about if it wasn’t for the Dollars and Rose’s blog.

Steve: Let’s see so the purpose of Dollars and Roses in a way then is to just kind of strengthen your online presence, not necessarily tied to your practice or anything like that?

Jeff: Yeah, I have like this secret I think obsession of– I love being seen as an entrepreneur and you know one day if I ever want to sell the practice and then focus more on the online space you know this is kind of like setting those kind of like those steps to get there. So that’s kind of what the intent is I think.

Steve: I see, that makes sense I mean, I started my blog at the time as my retirement plan as well. So you know even though I’m still working the blog actually makes more than my salary so I could in theory I guess quit at any time. So since were on that topic. I often get asked actually on my blog what the best business model is in terms of making money online. You’ve tried a bunch of things including niche sites, blogging, writing a book, podcasts, You Tube videos. What would you say is you know for someone just starting out at least what should they be focusing on?

Jeff: Yeah, I think when people that are just starting their online business, starting blogging for the first time and they see someone like myself or even like yourself you know that has like the course and all these sites and now a podcast, and it’s very overwhelming. It’s like where do you start, and I think maybe what they realize like for me– for me it was just a blog. I started the blog, I did that for my goodness, I want to say at least a year before I did anything major like with doing any You Tube videos. And I actually think it was longer, I think it was like two years. So I mean it was just like finding that groove and just figure out one if like they even like blogging.

A lot of people– they’ll read the income reports or they’ll see myself like a Pat Flynn and everyone else that is like killing it online, like I want to do that, I can do that, and they’ve never even written a blog post before. And you know it’s like you start that and you realize crap I don’t like to write. And I’ve kind of had that epiphany a few times myself, so probably I’ll do a few more videos. So I think it is just starting, I think it’s just putting it out there, and trying to launch the blog and just seeing if you’ve got the mental fortitude to persevere because there are so many little hang ups that can frustrate you. And you know for me, my hang up like I didn’t even like want to go to word press because I didn’t even know how to install word press, which is kind of funny now, reflecting back for me that was like a big thing for me like I just didn’t know how to do it.

So I didn’t, I was using Jumbo because I was too afraid to go to word press but– and I remember one time the first time I installed my own theme, you know my first thesis theme on word press like I didn’t install right, and didn’t know where to go, had no one to talk to, and it was just frustrating. I spent like a whole freaking weekend trying to figure out how to reinstall a theme, like I’m not exaggerating, like an entire weekend. My mom was actually visiting at the time and so she had our– we just had one son at the time, and I was seriously behind the computer for like 48 hours trying to figure that stupid thing out. And most people don’t do that, like that’s weird.

Steve: It’s not weird. It’s fair to say that you don’t have a technical background is that right, Jeff?

Jeff: Oh my goodness absolutely not. No, I still laugh to this day like how I even have an online business, like how I ever blog because there was like the red button that you press to blow my blog up, like I’m surprised I haven’t pressed it like two, three times.

Steve: But say you got. I’m sorry go on.

Jeff: No, it’s like I think that’s it, I think most people– they have all these big pictures, they get overwhelmed and it’s like just start from beginning, start a blog if that’s what you want to do, and just see if you like it you know try it out for 90 days, and if you realize man this isn’t my thing you know delete and move on.

Steve: What about, you know podcasting? What about You Tube videos? Have you actually monetized any of your podcasts yet?

Jeff: You know actually just– I got my first sponsor that was the route I went. I just tried it, it was just actually more of a test to see if I could actually get somebody to do it. And you know I got a sponsor that is paying 7000 dollars for like a 90 days spot. I don’t know if I’ll continue that route. I don’t know if I like the idea of having sponsors. I guess this was the right fit. This is– I actually approached I think it was three different potential sponsors. So these ones I felt comfortable partnering with. You know one of the said yes, so I may go to the other two and see if they are interested for the nest quarter, but I don’t know, like it wasn’t always about making money. I just wanted to see if I could do it and I did it so.

Steve: So the podcast is again just one of those things just getting your name out there right?

Jeff: Yeah, it is you know and so you know for me and I slightly mentioned this but like with my blog and I know you and I talk about this several times. Writing for me– that’s not my strong point. Yeah I’ve got a blog, got over a thousand articles. Yeah I wrote a book but, [Inaudible] [00:30:11].

Steve: Yeah, and I was just about to say you just wrote a book.

Jeff: It’s like writing still it takes the most like– writing takes more energy than doing a crossfit workout. Like it literally just takes– there are times that I enjoy it but like I have to be in that perfect Zen state, where I’m heavily caffeinated, and it’s like fresh in the morning, I don’t have any kids and I’m not tempted to watch walking dead. I mean I have to be in this perfect state to write. But, you put me in front of a camera or if you put a microphone in front of me like that– those are my unique abilities where I can just do it, and I get jazzed to do it. Like it doesn’t take– it doesn’t require as much brain juice from me.

Steve: I see, so do you still write articles on JSC or?

Jeff: Yeah, and like the strategy that I do now is I use– I have a– what do I call it transcription service that I pay for, its called mobile assistant and I pay its like 50 bucks a month. Where it’s on my cell phone so I can call, and I can talk for how long and right now, I’ve figured out that if I talk for about 12 minutes that’s about a thousand word post .

Steve: Wow, okay.

Jeff: So I’ve got it down to a t man. And actually an article I’ve just written if people want to check it out it’s– it’s kind of boring but it’s how to cash out an annuity. And I– it’s probably not relevant to this podcast, but why I’m so excited about this post is that I’ve got my new headset. Illinois just passed law and now we’re finally hands free if you’re driving finally after I don’t know how California has been like after they applied for it.

Steve: It’s been like that for a long time yeah.

Jeff: Yeah, yeah, you feel like it just passed like two months ago. So I’m on my headset driving to crossfit mind you, and I’m on the phone for 12 minutes to mobile assistant talking out this post. I get the email later on that evening, I forward it to my new office manager who has an English background and she edits the post for me, to make sure I’ve got no comma surprises and everything reads properly and I copy and paste what she’s done, and it was ready to go the next morning. And so I was able to write a 12 minute post or a one thousand word post in approximately about 15 minutes.

Steve: That’s awesome dude.

Jeff: And that was like the fastest turn around post I’ve ever been able to do, and so that’s how I’ve been able to now crank out content so much faster you know I– having an editor you know that’s something that I was trying to find somebody. I tested out a few other people but this one here was by far like amazing.

Steve: So this is a human on the other end right?

Jeff: This is a human yes, with mobile assistant it is. Yes so these are all real people, they are all US based so it’s a phenomenal service that I freaking, I recommend all the time because I use it a lot for client meetings too. I use it for client meetings, detailing client notes, sending letters to clients. I also use it for emails, like any time I want to email somebody, I’m in the car and I want to email somebody, I just call in an email so that when I get that I can just quickly do a scan over an email. One thing I hear– I’ve used lately, how many times have you had to do text interviews Steve?

Steve: I did a bunch of them but they just became too much work, so I started declining them.

Jeff: Yeah, because like they take a lot of time right?

Steve: It’s like writing a blog post.

Jeff: It is, and like then some so this is how I answer like I just had a 12 question text interview that I did via mobile assistant. Had It done in 12 minutes, got it to my assistant just to make sure, and actually lots of times I even tell him hey I used my mobile transcription service you might want to check it for edit, you know when you get a chance to look it over. And so that way I can knock out these interviews and get– because I’m getting links from all these sites and doing all these interviews. I hate to decline them but you know they are, it would take me three hours to answer this interview via text but I can do it now in less than 15 minutes.

Steve: So instantly I would like to let the audience know that Jeff has actually been one of the big proponents in kind of influencing me to start outsourcing some of my activities. Those of you guys who follow my blog know that I pretty much do everything in my business. It’s just recently that I started outsourcing stuff and it’s because of Jeff’s success in kind of outsourcing and making his activities much more efficient so.

Jeff: I tell you what man, if you get Chris Tucker on– if he was here on your show like I think I’m doing pretty good. I have interviewed Chris for my podcast and after talking to him like offline for like 12 minutes like I realized I wasn’t even close.

Steve: Is that right?

Jeff: Yeah I mean he just– he like just he opened my eyes just all these other little things that I’m still doing that I shouldn’t be doing. And it’s just kind of like wow, okay it just opened up the door like how much more I could be outsourcing. I mean I’m doing a pretty big a job, but it can always be improved.

Steve: Well, I’m just glad that you didn’t outsource this interview because if I got your VA, I would have been a little pissed off. All right, so let’s talk about this major pivot that we mentioned earlier on. So what is this major pivot that is going to take your business to the next level?

Jeff: Yeah so you know the funny thing so with me was like– I’ve talked a little bit about the growing a practice, and what not and I really became a little bit more disenchanted from growing the practice. I don’t know what happened I think I just got so infatuated with building this online persona and this online business, and you wind up become more– I didn’t want to be tied to the office. You know I love it when I can go work in a coffee shop, and just be out of the office. I just like I thrive more or even when I work at home, like I’m now actually in my down stairs studio which is basically an unfinished spare bedroom in our basement that is in our recording studio. But I really didn’t want to grow the practice as much so I mean I was growing it just because you know people were referring clients to me. But I think you alluded to it at the beginning of this call where I didn’t really have a clear call to action on how to work with me.

And when I first rebranded Good Financial Cents, like that was actually intentional. I didn’t want people like if people really want to work with me like I always going to make them work for it. So they would have to like figure out how they are going to contact me, or find my contact form or really just like seek me out, and which is kind of cool because those that did really did want to work with me. I was able to talk to another advisor that has grown his practice exponentially, I mean he’s killing it. It’s like ten times the size of my practice, which once again like that has never really been a goal of mine but was really– what I was really impressed with this guy was his practice is like 90% virtual.

You know he actually relocated from Michigan out to the southern California and most of his clients are all virtual, they work basically via Skype or email and that’s it. And he showed me the process he has done to do so, and it really just got me fired up because my– the traffic that I get on my blogs and my online properties dwarf what he’s been able– what he gets. But he’s been able to grow it substantially just because you know clear call to action, and he has a really good process to kind of to streamline it.

So I now have embraced the fact that Jeff I have this digital asset with the blog, I have the financial planning practice. I haven’t really done a good job of processing, building processes it’s something I’ve been wanting to work on, I just haven’t been focused on it because I wanted to build more of a process on the online business. But here recently I finally launched my own unique process for the financial planning practice which is called the financial success blueprint, and it’s just the six step process that people walk through if they want to work with me.

And so now if you go to the blog its fairly prominent, you’ll see they work with me you know and the top navigational bar, and I have other call to actions that I’ will be implementing here soon as soon as my developer can get those going. And just going to have more of a clear hey you want to work with me, here is what it is, here is the type of clients that I work with, you know if you’re the type of person that needs contact from me like needs to talk once a week, like we’re not a good fit. Yes I’m really doing a good job of actually showing people the exact kind I want to work with, and to keep myself honest and fair to myself like I’m going to hold true to that.

Steve: So are the clients that you bring in– is this whole thing kind of scalable? Like can you handle like thousands and thousands of clients?

Jeff: It is, I mean thousands and thousands actually not. Could I handle 5-10 new clients a month? That would be a lot of work for me. My– what I want to do is I want to perfect the process, if we’ve had a few people go through it, they’ve been kind of like our guinea pigs. So just to see what are some of the pinpoints on our end, like what are some of the things that could be– like the stuff that I was doing that my new office manager can be doing, or maybe some of the stuff that the client could be doing more on their end like more home work or filling out more of the spreadsheets and stuff. So we’ve had a few people going through where we’re just trying to streamline it even more. Big picture would be bringing on a junior advisor that could facilitate you know some of the dialogue between going through the process. So, absolutely I think it could be could be streamlined even more. I could bring on other people to kind of walk you through that process once we have it perfected.

Steve: So it could be in many respects kind of almost as scalable as your online income in a way?

Jeff: I firmly believe so, and the guy– and I have my the guy who’s done it already that shown me how he’s done it and like he doesn’t work for people now. He has his initial clients that he’s built up and anybody new that comes in they all get funneled to his team.

Steve: That’s really interesting.

Jeff: So that’s what I’m jazzed about. You know it’s basically, it’s something I’ve been running from for like the last almost two or three years, and now I’ve just finally embraced it. And I’m just kind of excited to see how it can grow.

Steve: Yeah, so let’s talk about this change. So, was it due to any books that you’ve read? Or how do you network? How do you meet these people?

Jeff: You know it’s funny because– so this guy that I’m mentioning I, he’s somebody that I’ve seen online. You know like that’s the beauty of like seeing people online and just kind like social stalk people, but he’s been mentioned in a few trade journals you know that I read, and then I actually got like a sales call for to join some internet marketing company or specific towards financial advisors and once again his name was mentioned. And I thought his name came up like three times over the course of like four weeks and I’m like okay I got to reach out to this guy and see what’s going on. You know Like so I just emailed him like kind of a cold email and he responded immediately, and was like hey its actually funny because I’ve actually kind of like been following you for the last like three or four years.

Steve: Oh, okay.

Jeff: So that’s kind of how that came to be but I think it’s just monitoring your space like my space is financial planning, so anything I– anytime I read anything about anybody that’s marketing online or blogging or using You tube, I mean that immediately catches my interest so I’m always going to read up on it and kind of stay up on it so. I love seeing what other advisors are doing on our space.

Steve: So your blog actually probably got your foot in the door with this guy in a way?

Jeff: Yeah it did, I mean I said that, I mean yeah, I mean he always calls me his blogging superstar you know like he always looks at me like– but you know like I might be the blogging superstar, but he’s been able to grow his practice you know more than I have because you know he’s been more focused on it.

Steve: So any books that have influenced you in any way?

Jeff: Oh, my goodness. You know I think, I mean the usual you know Tim Ferriss’s “4-Hour Work week” you know that’s actually what inspired me to hire my first virtual assistant. You know it’s like that book, no question. I think another book that I love is “built to sell”.

Steve: Built to sell is that John Warrillow?

Jeff: Yes, yes and if your into audio books, I say that is actually probably the worst audio book. Did you– are you– do you do audio books?

Steve: No you know I actually have a copy. He actually sent me a copy for free a while back when he was launching it. I don’t know why he reached out to me. So I kind of wrote a little thing for him to help him promote it.

Jeff: The guy I wish he would have self like read it but he hired another writer and this guy man it’s just, it’s horrible. I mean, but it was good content so I mean I got through it, but I just love that book because it really talks about streamlining your business and having that clear process. And a coaching program that I’m in, they really talk about having a unique process and I’ve never done it. I’ve always wanted to do it you know so for me the financial success blueprint is that and you know kind of like I know this is a big picture, but if I can actually streamline this business to where– I guess I’m never doing it anything with it, I’m just like following lead that’s a good thing, but you know ultimately one day this is an asset I would like to sell, and if I have a streamlined unique process that you know I’ll basically just hand it over to the next person. I mean that makes the practice that much more valuable. Now the multiple becomes much more. I kind of have like a secret, see I’m 36 now, I have like a secret four year exit strategy. So if I can actually build this thing and sell it by the time I’m 40. Not if I want to sell, but if I could sell it I want to see like what I can do over the next four years to build it to make it potentially sellable.

Steve: Yeah I was going to ask you about that because you know for Good Financial Cents at least, your personality is a big part of that blog and likewise with my blog my personality is a big part of it as well. So how do you kind of divorce that to make it sellable?

Jeff: Yeah, so I mean I think that building up the process to where you know eventually I want to– I don’t mind being the face, but I think it’s a matter at that point in time you know I guess having to bring on a co-face, in especially the practice. But if I’m not the main guy dealing with people, that it’s my team that’s working with people, then I don’t think it will be much of an issue with the practice. With the blog, that’s something that I’ve wrestled with, but you know I think if I sell the practice, I don’t know if I could ever sell the blog. It be easier– it be easier actually to sell the practice than the blog even though the practice brings in more revenue. But I don’t know, I just love the blog and I think there is always going to be potential to monetize the online persona. You know I mean there is so many different angles I could go if I really needed to monetize it.

Steve: Right, absolutely.

Jeff: So I think that’s something that would be hard for me to let it go.

Steve: Cool, well Jeff I don’t want to take up too much of your time. If anyone wants to contact you, or give you their money to manage, how can they reach you?

Jeff: Yeah, you know GoodFinnancialCents.com that’s my main hub. You can also track me down on twitter, twitter I go by jjeffrose. There is two j’s cause Jeff Rose in Canada took it. But I’m active twitter, Facebook but also the hub is Good Financial Cents.

Steve: Okay, incidentally, what does that extra J stand for Jeff?

Jeff: You had to bring that up didn’t you dude?

Steve: I can [Inaudible] [00:45:37] this out if you want but.

Jeff: All right if people really want to know, my middle name is Jeff and then for some reason my parents named me Jan. Jan is my legal name, so Jan Jeffery Rose is what I go by, but I never really told anybody, but now your whole podcast community knows.

Steve: Nice, nice maybe I’ll leave this out and use it against you later.

Jeff: How sweet.

Steve: All right man well thanks a lot for your time. This was a really good talk.

Jeff: Yeah man, I appreciate having me on.

Steve: All right man, take care.

You might not have been able to tell from the podcast but the reason why I admire Jeff, is because he always has an open mind. And he is basically willing to try anything. And it’s because of his open mind that he’s constantly finding new and innovative ways to increase his brand and grow his business. And like I mentioned in the interview, Jeff is one of the main reasons why I started this podcast in the first place and for that I’m thankful.

For more information about this episode go to mywifequitherjob.com/episode25 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 also helps keep this podcast up in the ranks so other people can use this information, 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 also giving away free business consultations 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 a 100k in profit in our first year in 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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024: How Dan Faggella Leveraged Email Marketing To Create A 6 Figure Jiu Jitsu Training Site

Dan Faggella

I learned so much from this interview that afterwards, I went and revamped my entire email marketing autoreponder sequence. The information from this interview with Dan Faggella is that good and I guarantee you’ll learn something from it.

Dan runs the popular site ScienceOfSkill.com, where he sells Brazilian Jiu Jitsu training videos online. He also runs 2 other online businesses at TechEmergence LLC and CLVboost where he helps other businesses improve their email marketing.

What You’ll Learn

  • How Dan has created such a large mindshare among Brazilian Jiu Jitsu fanatics even though he’s not a world champion
  • How Dan found the right marketing angle to pursue with his BJJ business which has allowed him to stand out in a crowded niche
  • How Dan gets people on his proverbial “bus”
  • How Dan segments his email list to maximize conversions, open rates and clicks.
  • How Dan gets people to sign up for his email list
  • How to get the attention of experts and bigger players

Other Resources And Books

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 we bring on famous entrepreneurs simply to celebrate their success. Instead, I have them take us back to the beginning and delve in 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 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 a 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 is your host, Steve Chou!

Steve: Welcome to The My Wife Quit Her Job podcast. Today I’m really happy to have Dan Faggella on the show. Now, Dan runs ScienceOfSkill.com where he runs a blog and a six figure online store selling Brazilian Jiu Jitsu training videos. So here’s what’s interesting about Dan, he’s been studying BJJ which is Brazilian Jiu Jitsu for all of you guys who don’t know what it stands for since 2005 and owns his own BJJ Academy in Rhode Island which he started which he started when he was a student at the University of Rhode Island.

Now he’s placed in the top three in many Jiu Jitsu tournaments around the world, but here’s the thing, I have a lot of friends that are really into BJJ and Dan is not the number one BJJ practitioner out there and he’s not like the champion of the world in this sport, now don’t get me wrong, he’s really awesome at what he does but the thing is– is that when I ask my friends who are into BJJ, they’ve all heard of him because of his online presence and all that he has done for this sport. Now, within the BJJ community, the guy is all over the place. Now, he’s created this amazing community and he’s an expert at what he does, and in fact he’s the perfect example of taking a skill that you have and creating a profitable business around it. So, welcome to the show Dan, looking forward to hearing your story.

Faggella: Steve! Glad to be here my man! Glad to be here. Thanks for the– such a warm into. I don’t think I’ve ever gotten one that good.

Steve: Is that– you know it is funny so, I have like three or four friends who are into it and they’ve all heard of you so–

Faggella: That’s great!

Steve: Clearly you’re doing something right in your own part of [Inaudible] [00:02:47].

Faggella: Yeah, yeah we have– we do you know, 700 blog posts and now 350 videos later somebody’s going to– somebody’s going to hear something I guess.

Steve: [Laughing] Yeah what’s– what’s funny about that is that there’s like this huge names like Marcello Garcia and that sort of thing and yet you know, in terms of online presence I almost feel like even though he’s like the champion of the world, you have an equal presence it seems in terms of people hearing about you so…

Faggella: Yeah, yeah it’s just to focus on that particular stuff. Again, I never pretended to be Marcello but we certainly focused on– and at least being able to share our material with just as many people.

Steve: Yeah. So give us a quick background story? Tell us you know, tell us how you got started with this, and how you make a living online.

Faggella: Yeah, exactly. So interesting tale as you had mentioned you know’ it started with a very small Martial Arts Academy in Rhodes Island. So basically here’s how it goes, I mean, I was in the University of Rhode Island–very little town I mean 8,000 people or so in my town of Wakefield, URI is in Kingston. And URI has a significantly larger population at the university alone than my entire town.

And you know, I ended up getting into UPENN because I’m very interested in human potential and psychology for my Masters, and at the time I was kind of running like a fight club in the back of a carpet store just because you know, I like fighting more than working and I was getting a couple of bucks for private lessons so that was cool. And then I got the bill from UPENN and I was like, ‘Men! That’s pretty wild I guess I better– men! I better make some money or something.’ So, I was like men! This Masters Degree isn’t cheap if I decide to join.

So I ended up turning that thing into a real Martial Arts Academy and teaching Brazilian Jiu Jitsu and driving back and forth from Pennsylvania to Rhode Island while I was running that thing and then, while I was kind of growing it right after I graduated, we had our roof collapse at the gym, and I was doubling a bit in internet marketing but at that point I realized, ‘Men! You know what? If I’m counting on this many square feet of map, in this town of 8,000 people for all of my income, I’m in a pretty rough spot.

So I decided to take– you know, I’d won enough– I’d put enough shinny stuff up on the wall at that point you know, from national tournaments and whatever, I was to–to, you know, to be able to share some expertise online and so we started building that as a more serious presence and pretty soon we were doing more per month than we were in the physical– the physical gym.

Steve: So your physical gym eventually you– you decided to sell that is that correct?

Faggella: Yes it is. Yeah I sold that in maybe around year or so ago. I’m still teaching there for a little bit right? It’s now like a larger mat. You can’t exactly just plug in a new owner and have it work the same. But– but yes, so I sold that about a year ago and then I moved up to [Inaudible] [0:05:20] essentially all the stuff that I used to sell the gym was– because we automated the marketing very well and we did email marketing really, really well with software for that business so it made the sale easier because a lot of it was [Inaudible] [00:05:32] and those same systems, those exact same systems, put to a bigger scale with the entirety of the online BJJ community ended up picking up very well.

So I had to become very neurotic about how to make the most of every lead, how to maximize profit per prospect when I’m in a town where I run out of human leads very quickly. So when I took that to the internet where there’s more people, it grew and I was able to carry that thing right up Bosnia after I sold the physical one and now obviously we do a kind of consulting in that world but– but yeah so the physical one is now sold, but I still go down there and train sometimes.

Steve: Okay, so what does your company sell exactly?

Faggella: Yes.

Steve: Just training videos?

Faggella: Totally yap! So what we sell now just to kind of make things clear for the folks out there, there’s a lot of models you can do with selling information. So we’re an information marketing company. We’re not primarily selling like you know, uniforms and things like that. I’m not all that big on inventory, so we sell information. So primarily we sell downloadable video courses about very specific niche components of Brazilian Jiu Jitsu for example, if you want to know how to do a particular leg lock, or you’re interested in you know, beating bigger opponents with chokes or arm locks or something like that, we’ve very, very specific niche courses and a lot of my staff because I walk around about 128 pounds, is you know, how a smaller guy can beat a bigger guy. So we sell niche videos courses and subscription memberships to a particular niche BJJ skills.

Steve: Okay, so there’s actually quite a few BJJ training courses out there. I was just kind of…

Faggella: Oh yeah, tons.

Steve: …looking around. Yeah, so how do you kind of distinguish yourself from the rest of the packing? How do you stand out?

Faggella: All day. Well, a couple of things. Number one, I like to think and there’s a couple of guys they’re okay marketers in that space and I basically know all the guys that are really in that game and they’re all really nice folks but I like to think on the aggregate, we just put a lot more attention first and foremost into our funnel. So in other words, when we collect a lead we can make that a more profitable lead than most of the people simply because our follow up is really dialed in, or our automatic sequences, and then our, you know, broadcast messaging in our kind of continuous circulation of various products and services to our sub segments.

So maximizing profit per prospect is a big thing for me but in terms of positioning which is probably what you’re talking about, ultimately, my shebang is this; you know, there’s a lot of people and Steve, this is– this is a really curious thing about sort of teaching your passion is a lot of people do only want to learn from world champions so oddly enough, me, Dan Faggella, you know, when I watch BJJ, I’m not watching really anybody besides you know, the Marcello Garcia’s and [Inaudible] [00:08:12] and the [Inaudible] [00:08:14] is that the world– I mean, I paid for private lessons with a lot of those kind of guys and seminars and what not and I really only tune into that.

But, most people aren’t actually like that and a lot of people will really resonate with the small town 128 year old white dude who, you know, who competed nationally and like has a bunch of videos of you know, screaming Brazilians with their legs getting torn off you know because, he’s on their leg or something right? So, a lot of people resonate with like the you know, small town kid who kind of had to figure things out on his own and had to train with a bunch of white folks in a tiny town and really [Inaudible] [00:08:48] in his training to figure out how to beat all these who are you know, bigger.

So they kind of resonate with the struggle, they resonate with the story, and so for me it’s beating bigger opponents and it’s also sort of you know, training I guess for the guy who doesn’t live in the heart of Rio and you know, trains seven days a week like a killer but still wants to get better right? So skill development at UPENN was my focus so, that’s a little bit of the angle but it’s mostly you know, how a regular dude can kind of beat bigger stronger folks and that’s really the angle, beating bigger, stronger opponents is the major thing.

Steve: Okay, yeah, I noticed that on your site, there’s a lot of personal stories and a lot of personal videos on there which kind of, you know, allows me to get to know you a whole lot better and in that way it might make me more attracted to learning from you as opposed to some of the bigger names.

Faggella: Yeah, that’s exactly it. I mean, again, this is all just marketing right? I mean, I didn’t make any of that stuff up, I mean, there’re is a– you know, the things that I think we can sometimes do better than the world champion guys, and you know, I love and respect all those guys, I mean I pay bunch of bucks for private lessons with you know, a big long laundry list of world champions but you know, there’re obviously I mean, my main focus was getting into you know, intravesting and other things like that and scaling in internet business.

Their main focus is mostly, you know, growing their Academies and winning national tournaments so they’re not going to invest a ton in let’s say creating a whole bunch of little niche front end and tiny products so that anybody with a credit card can kind of take a step through the front door and really get a feel for their products you know, they’re going to create a DVD set here and there but that’s it. They’re not going to take the time to do a million different tiny front-ends to attract a million different people and they’re also, you know, not necessarily going to sit there and kind of lay out their tale in kind of bigger personal pieces to sort of build that bond and relationship simply because you know, that online business usually isn’t their main priority.

So people see that with me and they do get to know me as a character. They get to know me as this you know, funny little guy in this tiny town who you know, scrapped and scrambled to make it happen and they know a bit about my story and they know that I got slammed and had back problems because I was such little guy and I was getting beat up by all the big guys and that makes them really connect with me.

There’s a concept called– that a marketing teacher of mine once said of kind of getting people on the bus, so when I tell my story, and there’s other great marketers that do this exceptionally well but when I’m telling my story, I’m essentially telling individual little personal snippets about myself, and different parts and different snippets will get different people on my bus.

By on my bus I mean for them to say, ‘You know what, I resonate with this guy. You know what, I like this guy.’ And those different segments that can get people on the ‘I like this guy’ bus could be that when I talk about how I came up in that 8,000 person town, could be the part that I had to drive five hours to go to all these different seminars and stuff and how I was always like the smaller kind of weaker guy. You know, so they’ll resonate with some aspect of that, and now they’re kind of part of me. They have a little bit of a relationship with me and that is I think what helps differentiate us as well.

Steve: So you mentioned that email marketing is a large part of your business right?

Faggella: Yeah.

Steve: So, can you just kind of walk me through one of your funnels and how they’re structured.

Faggella: Sure, so on a really basic level, we do a lot of front end past segmentation. So– and now again, we’re in kind of the consulting space and we’re clogging the same with bigger scalable businesses. But in BJJ it looks like this very simply.

We’ll have a YouTube video, about let’s say a leg lock technique so you know, hey, I want to learn how to do a leg lock or something. I got a lot of competition videos doing that kind of funky stuff, so people look it up on the whole of YouTube and at the bottom of the leg lock video is a link, and the call to action on the link is a free eBook or video course about, you can probably guess it Steve, leg lock! For crying out freaking loud! And then once they land on that page, we’re testing that squeeze page if we’re doing our job correctly, and getting people to opt in for leg locks and then once they opt in– so the– bringing them into the email sequences is just as important as the communication, just to make that clear.

I mean, I’m passing the segmentation, anybody who will watch that video, who will click that link, they’re into leg locks enough to be at least in the market to potentially buy. I don’t know if they have a card yet, but they’re at least in the market. So they’ve opted in and I already know their interface, they’re not a ‘BJJ lead’, they’re a ‘YouTube I’m into leg locks and watching leg lock videos lead’. Which means if I’m trying to sell you leg lock videos, there’s a decent chance you’ll at least consume that content? So that’s a good box for me to check before I start pitching.

So, what happens is, they’ll end up getting let’s say a 24 to 36 email sequence, which will be a combination of great interviews I’ve done with world champions, exclusive educational content particularly about all the different dimensions of leg locks and how they can use leg locks, and around email five or six, we’ll have a very easy front end offer on– with– about leg locks that might be, you know, sending them a DVD or sending them a downloadable course as well as a free trial on a leg lock membership program or you know, different cool and fun bonuses all related to getting really good at leg locks and we’ll give them one of those offers.

Now that offer will last maybe four or five days, and then you know, we’ll go back in education mode and we’ll go teach them some other cool stuff, other cool interviews, other cool competition breakdowns and then we’ll take another swing. Most people will take only one swing, we like to take at least three. So we’ll take another swing, we’ll do a different cool bonus, we’ll send two different DVDs and maybe there’s some other cool extras that come along with it like a drilling sheet and some other stuff to help people learn. And then you know, we’ll relate that to our educational content then we’ll go back to education and then we’ll go back into another offer at the end and that takes us about 36 emails or so.

And now somebody buys one of those front end programs, then they’ll automatically go into a higher [Inaudible] [0:14:32] follow up sequence, where we’ll start to talk about 97, 77 dollar products and we’ll have maybe a 12 or 15 email sequence to move them to that level. And that will move me to broadcast and it gets a little bit more complex but that sort of a basic front end funnel is we know what you’re into as soon as you come in the door, we already know what you’re into, we feed you the best stuff we’ve got and we give you amazing deals and super cool programs about that stuff, and then we repeat that process with multiple what we call roller coasters. So it’s like it’s all education then it’s kind of you know, some cool offer stuff and then back in education then it’s a cool offer stuff and we really ride people right through those and we don’t like to give up early.

Steve: So, a quick question on the initial sequence, so do you not even mention any products at all in the first four or five emails?

Faggella: Sometimes. So for example, I mean, there is a bit, so every now and again, like we’ll have something in the PS, we’ll have something in the signature, that will at least be a link to it. and often Steve, in fact, probably most of the time, as soon as they opt in, there’s a thank you video, that talks about you know, why we’re literally giving away one of our leg lock DVDs, just for the price of shipping, and why you know, why it’ s a good idea to check it out, right?

So often there’s an offer thrown out there right on the thank you page or on some kind of a ‘read more’ page after the ‘thank you’ page. They are exposed, but what we generally like to do is– I think about it like this in general, so, general best practice in info-products style is ‘let the hot people buy’ so if someone’s super hot, they should be able to buy, but if we don’t know if they’re super hot yet, let’s kind of heat them up a little bit and then sell.

So is there an opportunity to buy? Oh yeah! Right on the Thank you– if you’re looking for it I mean, it’s there. And sometimes email two, email one in the PS there’ll be a link to the store or link to a special so, if they’re hot and they open up that first email, they can buy but we’re not going to go you know, kind of pitch mode so to speak, no, not at first. So we’re not going to pitch mode till later. Yeah.

Steve: Yeah, the reason why I ask is, there’s a lot of practitioners out there who recommend that you don’t pitch anything but with my own personal email funnel, I found that people either buy on email one or the last email at least in my experience and I was just curious what your…

Faggella: That’s very, that’s very interesting. Now, if I’m not mistaken you’re selling physical goods?

Steve: No, no, no. This is for my email train– my ecommerce training course.

Faggella: Oh! This is your course? This is your course– very curious. Well, you know, I suppose it’s not all that uncommon, let me ask, I mean, is there a scarcity element at the end of these emails sequence like, ‘hey guys, you know like this is the last email about this, you know, here’s the last bonus you get’ is there anything like that? Or is it just like ‘hey, another email from Steve’?

Steve: It’s a pretty straight forward– there’s no scarcity element. I was debating with myself whether to add that element because it would be in a way some sort of false scarcity element in a way right?

Faggella: Yeah, you don’t have to actually I mean, I’ll tell you know, I do it in and on, I don’t like false scarcity really, but usually I will say– I’ll often say this, ‘hey, I mean, this is– this is the last email you’re going to get about this.’ So, that doesn’t say the software won’t exist but here’s the think, who the heck is going to go back into an email that got sent to them four months ago and find a crazy link that isn’t listed on Google for a special? Nobody does. So–so I won’t say this offer is going down, I’m taking down the website, I do think that’s deceptive and I don’t like to do that, but I will say something like, ‘hey guys, you know, we’re going to be headed right into some educational stuff and honestly, it’s the last mention, you know, I mentioned in the last email I want to make sure you can get in on this, because we’re moving right along into other stuff.’ You know, that kind of thing is a bit of a [Inaudible] [0:18:07] you know, last chance without you know, saying something that isn’t in fact true.

Steve: That’s very interesting. So, do you have separate funnels for each one of your niche videos?

Faggella: Yeah.

Steve: So you mentioned leg locking, there’s– I imagine there’s like an arm bar video or whatever.

Faggella: Yeah, yeah, yeah. You’re right so, we have a certain number of core continuity programs. And there’s sort of this principle in information marketing of splintering your offers and particularly of splintering continuity. So the idea is, we have a number of different free front end products, that people can download, like free eBooks and video courses and other stuff that we’ve created based on interviews of world champions, based on match break downs, all kinds of different content that people like to consume, and what we’ll do is you know, the opt-in for the arm bar video, the opt-in for the escape video, the opt-in for whatever, and they’ll get a very tailored email sequence leading to a continuity program.

Now, we only have three continuity programs, and really true, I mean we have five total but there’s only three we care about, and then– but we have probably 20 of 18 different funnels. So those different funnels take people down different kinds of trickling paths to our core offers.

Steve: Okay, wow, that’s very interesting. So your email funnel’s a lot more tricky than mine. I only have one product and it goes– everyone goes down the exact same path, they’re interested in starting an ecommerce store.

Faggella: Yeah.

Steve: But in your case, I can see how it’d be useful because many little intricate skills involved in Brazilian Jiu Jitsu, and you kind of all take them as individual splinters and you just kind of funnel them towards your three main products it sounds like, right?

Faggella: This is– this is true, now, I would say it sounds like you know, I mean to be frank, this– it’s so much like you know, what Dan invented for this crazy little online business. It’s kind of like these are general best practice for maintaining the highest open rates and getting the highest [Inaudible] [0:20:01] rates and ultimately making the most profit per prospect. So for your businesses you’re learning how to build an ecommerce store, what are like the three main motivations that people are into to build an ecommerce store, some of them want like let’s say they want to it to be– you know, grow a really big business, and kind of scale it, some of them want to kind of live at home and be able to kind of take care of the kids and have some fun like yourself, more of lifestyle oriented, and maybe some of them want an income on the side, is it safe to segment folks those three ways or you let me know if there’s some other segments.

Steve: That is a good question but yes, certainly those are three segments that I target.

Faggella: Okay, so here’s the how this applies to your business, because again, I want you thinking like this is some fancy Jiu Jitsu trick that the folks at home can tune into. This is you know, this is– this is email marketing so for you it might be you know– so we sell all other kinds of stuff and other niches to the point of we’re being redundant if we talk too much about it but if you’re coming in for let’s say learning ecommerce store, oh, okay great! You know, what’s your name, email and what’s the main goal for you for starting an ecommerce store? Then every educational snippet, every testimonial and every call to action is all about why this is going to build your lifestyle. Every educational snippet, every testimonial and every call to action is about how you can grow this to a million dollar business. Every testimonial, every educational snippet and every call to action is all about building a great side income.

So that’s how you get every single email opened at a higher rate because you’re appealing and that’s how you get higher click throughs appealing to particular values. So a simple drop down on the front end, and you can apply the exact same tenet to your business. You can do it by motive, you can do it by interest, you can do it 50 different ways but front end [Inaudible] [0:21:35] up all your opens and your click throughs, it definitely is not a Jiu J4itsu specific thing.

Steve: Sure, yeah absolutely and clearly you’re very good at what you do, and so that’s why I thought I’d ask.

Faggella: Oh yeah!

Steve: Just curious, what do your open rates look like on some of your funnels?

Faggella: Yeah, I mean it’s been a very front-end funnel and to be frank, it also varies on lead source so I imagine– I don’t know what you’ve tinkered around with but if you are getting folks from reddit and stuff like that, you know, nobody in internet marketing really does all that much with that, I mean I’m sure there’s some people that do but you know, within the first eight emails or so, you know, getting higher than 33 or getting higher than 25 is you know, pretty rock solid from let’s say either paid or Facebook.

Steve: Okay. Okay, I’m sitting around 40– between 30 and 40 I think in my funnel so.

Faggella: That’s good.

Steve: I just want to gauge what a good number would be.

Faggella: Yeah, yeah.

Steve: Sorry Dan, we won’t have big tangent because I thought…

Faggella: That’s fine.

Steve: Well, let’s go back to your business. So your business is– it sounds like it’s email marketing focused and you need people to actually come into your funnel, so…

Faggella: Yeah, yeah.

Steve: How do you actually get people into your funnel in the first place?

Faggella: This is a big question and there’s so many ways to skin this cat and it’s an interesting game. So, one of the ways we’re doing now is paper clicks. So I think that having a functioning paper click segment of any kind of online or ecommerce business is a very, very important simply because if you have anywhere you can spend one dollar and make about 50, you should have that dollar being spent a whole bunch and have that buck 50 coming in a whole bunch and you should be aiming to up those ratios and instead spend 10 bucks and make back 15. So, paper click is one channel, mostly Facebook for us right now, just giving the level we’re targeting. The next big channel for us is our YouTube channel.

So, you’ve probably seen some of our, you now, stuff kicking around there on the YouTube, but we have a lot of different niche and specific videos, we’re always popping up new stuff and fun interviews and those all have specific links to squeeze pages. Another way is posting and guess posting so, earlier in the game I wrote for a while the Jiu Jitsu magazines and the bigger print publications and that made it pretty easy to get on any of the websites like ‘hey I just did an article with this world champion for this you know, Jiu Jitsu magazine in our Jiu Jitsu style on the United Kingdom, you know, is it cool to shoot you a draft of some other interview insights that this you know, seven time world champion gave me about you know, arm bars or something. You know, usually, people don’t say no to that. So you get a lot of articles up on other sites and then eventually get log-ins on those sites.

So, another way that we drive a lot of traffic is, we guest post on you know, eight or so other decently size blocks in the Brazilian Jiu Jitsu niche and we’re able to drive a trickle of traffic from there, more importantly from that though Steve, is also search engine optimization which I’m sure many of you folks you’re doing, you guys are doing pretty well with and the idea there is when we’re guest posting on a whole bunch of these different sites, so long as you’re not black hutting it up, and so long as you’re not being kind of silly about your anchor text, and your link patterns and whatever else, we’ve been able to get certain portions of our core website, to rank very high for terms like BJJ over 40 because all of our buyers are over 40 years old that just is…

Steve: Interesting.

Faggella: Yeah, it’s just– it is what it is. A lot of people think I make all my money from 22 year old tattooed guys, very much– very much not the case. So…

Steve: Was that on purpose by the way? Do you specifically target or?

Faggella: Not at all, when I started, you know, the way I learned Steve was you know, learn about your customers right? I mean start up the concept so I just called all my buyers when I got into this game. ‘Hey barber how’d you find me? What do you like?’ and you know, I decided to build stuff that these guys would enjoy. I figured that was kind of the best way for a win, win and you know, they’re all 42 year old dudes who you know, can’t train on the mat seven days a week and they have disposable income and they don’t know how to legally download stuff. So they’re the– they’re the people that buy. So we found that out and decided to rank the stuff that people wanted.

So we did a lot of pooling, a lot of research, a lot of talking to our actual customers and decide to rank on things like BJJ escapes. Biggest trouble areas, a lot of people really have trouble with a couple of key positions so we use those guest posts to rank for those terms. And then some of those terms drive the most traffic to our blog and of course we have opt in opportunities right on our blog. So SEO guess post in YouTube– those are all some pretty major in bound channels for us to drive leads.

Steve: Okay, and so which one would you focus on if you would start all over today in the beginning?

Faggella: Oh, well, I would say focus on joint ventures so–all those are really slow man– those are slow. I don’t think we’d have a 25,000 person list if we only did those so, I mean, maybe but you know, I would have had to do that fulltime we’re doing a lot of other stuff. So, joint ventures are really big so finding a way you know, one thing that we did early on, I think this is replicatable for anybody who’s listening is we did a lot of guest posting, we became featured writers on six or so other websites, and then we went to the major players in the niche. People with fan pages, with you know 50k plus people on there people with email lists that were you know, substantial compared to ours at the time, and luckily we kind of caught a good deal in the last 12 months.

But you know, they were substantial at the time in the martial arts space and say, ‘Hey, you know, I write for these six sites, you know, I’d love to interview you for a blank, blank, blank and then once you interview them if you could be an affiliate for some of their products and help to kind of spread the word on a bunch of different websites you write for. Now writing for six different websites is a hot berried entry because you actually do have to be on the right but it’s not nearly as hard as building a 20,000 person email list. So, normally in order to get somebody to mail for you, you have to mail for them. When I heard a zero flipping person email list, instead of saying I‘ll mail for you, because I couldn’t, I said hey I write for six websites. I like to interview you about blank, blank, blank and if you are able to send me email to in all this particular squeeze page you know of giving 90% of whatever you sell down this funnel.

That was actually an interesting value plot and despite the fact that I was brand new fresh in the game, I was writing for six websites a day never been thought to write for, and they would have to go through the wrong address process I did and they did not write for any of the magazines I wrote for. So I had this entrenched position that was hard to get to, I had something of value to offer that they didn’t have themselves, so instead of taking the time to build a continently size email list, I gave them a hook in angle of something that I built in a matter of a month and a half and I was getting better aisle of 15,000 plus email list pomp into an opt-in funnel and that’s ultimately how we built our business.

Steve: I see, so you are already writing for these six publications so you pitch people with larger lists and you give them all the revenue from any– almost all the revenue from any proceeds any sales that regenerate from them.

Faggella: Yeah.

Steve: Okay and then meanwhile you get the subscribers from their list onto your list.

Faggella: This is true, this is true yes and then of course they get the benefit of hey we’ve been featured on, featured on, featured on, featured on and now they have back links back to their site from these other relatively authoritative websites so they would not have gone otherwise so it’s a win on both sides.

Steve: So how do you pitch the guest posts on these six sites?

Faggella: Yeah, the first thing is– the easiest way to pitch a guest post and man, I’ll surely write something about this, I mean it is so– it’s so simple though, like I use the same algorithm over and over and over again and it’s almost like sure fired stuff. It’s– I interview somebody who is a big deal, so I interview somebody who that publication would love to have unlike the first page somewhere, right who would make them look good if this person was there, because they don’t know me. They want to look good though so I pitch– I get an interview with somebody that these people would love to feature even if it’s only email correspondence and they send me back eight paragraphs about, you know, something or even three paragraphs, that’s good enough, it’s a correspondence.
So I say, hey, you know I’ve had a correspondence with blank about blank, and you know, and I read this, this and this on our site recently and you know, again I just talked to this world champion and I have a feeling that you readers would seriously resonate with his stuff and I like to make it timely as well. So the world championships had just ended and you know Tenkino [phonetic] who just hacked Medes in the finals actually broke down a lot of how his training strategy worked out for that actual match, I think it will be a great thing for your spa and nobody else’s got this content, you want me to send you a draft? Very hard most of the time for them to say no especially if you’ve written for bigger publications.

So I have written for blank – you see you say I have written for blank, blank, blank I have interviewed blank expert, here’s why it’s timely and here’s why you’ll the only one that will get it, do you want me to send you a draft? Very inviting very low berried entry all they have to is a yes email. You send them a draft and you do the same thing with three other people, and someone is going to buy and normally I will just write a different article for each one of them and put them up on all those websites.

Now, once you are writing for these websites two, three, four times, you simply ask, hey man this seems to be good fit, you know I hate to be bothered every single time with an email, does it make sense to just have a log in and be able to kind of post some stuff up and most of the time if they post it two or three of your articles and they’ve been very good, they’ll say yes at which point you now have a log in? So when I interview xyz world champion, or xyz you know a person who wants my help with getting their content around, I take their interview, I turn it into great content and then these websites are happy to have me distribute it because I’m talking to the best experts all the time.

Steve: So if you were to take a step even further back, how do you get the attention of the experts that you want to interview?

Faggella: Yeah, well this is kind of a– this is a pretty easy numbers game actually, so I mean if you‘re already writing for a couple sites that’s a good way to go about it, but you know relatively simple approaches – I’ll see if I can pull up one that we did recently so – I’-l-l- b-r-i-n-g t-h-e g-r-e-y. I’ve done this in the kind of the tech niche in the emerging tech space as well, so I figure out, I mean, if even have a nominally size podcast or blog of your own and then you have, you know, two or three places that you’re going to depend to put up content, what I like to say is, it’s usually something along the lines of, hey my name is blank with blank you know whoever you are writing for.

I recently saw and then you know something that they’ve done whether it’s a blog post, a competition, a video or whatever and you know, I’m going to be putting together some articles for blank, blank and blank and then you list some other publications you can be writing for and you’re like you know literary my interviews are literally 18 minutes long or so, so it’s pretty short stuff but I figure if we can catch up on Skype it’ll be great to get your name out there and I’ll be happy to plug any of your websites, your events you have coming up as you know– is there a time we might catch…? So this is the closest, is there a time in the coming three weeks that might paint out well to grab 20 minutes? Or, you know is there a time in the next two weeks that might paint out well to grab twenty minutes?
A lot of the time I’ll get a yes to that, and if you do a numbers game, and you have somebody on Odesk get 24 names, you put them on a spread sheet, you set down on a template, you know normally– you normally get a really good number of people, even people like, wow man like this guy is given like 18 different ten talks and he’s like multi, multi millionaire and you know, you never think you’d talk to these guys, and you get them to buy in.

Steve: That’s very interesting here, the reason why I’m asking all this questions is because I get readers who come to me and they are unable to get any traction with their blogs or their stores and that sort of thing, and often times it just borders on the leg work, right, which is reaching out and contacting people. Yeah, these people are just mainly waiting for the SEO speaker to turn on and it never does and then they get discouraged, and then here you are hassling and contacting people and getting traffic deal fashion way which kind of snow balls in the end.

Faggella: Yeah it’s real fashion, I mean now we have one of the, you know, it’s not like the biggest because I never focused on it to be as such, really I care a little bit more about my email list and my monthly hits. But yeah, now we have a really good size blogs simply because we did the hassle of what we talked about we got, you know, the biggest names. I want you to check three or four boxes as you already know Steve, you’re good to kind of have a fuel in the door to interview almost whoever you want, if you do a great job. So now that I write for essentially all the sites and I’ve interviewed, you know, a good majority of you know – it’s hard to say majority it’s a lot of blackmail job there but so many done black belt world champions, it’s hard to even shake a stick out of them anymore, it’s not all that tough to get anybody else out there but the initial grind is same as the grindest today and you know it’s not all that tough but I just gave you the template I mean that’s literally what I do to get on those sites to write for them. It’s literally what I do to talk to experts. I’m doing the same thing in the technology niche now as they did in BJJ same process.

Steve: Okay sounds good, so you mentioned that you have this email photo is there particular piece software that you use to help manage all these photos?

Faggella: Yeah, Yeah, I can certainly use whatever I need to get my hands on because I’ve had twos and other we were working with other folks that were doing photo related stuff it’s, you know, poured out on fusion soft et cetera. My correct photos are in fusion soft 95% of the way so I’m…

Steve: Okay.

Faggella: infusing guy really helps with segmentation and I’d recommend him for anybody else out there.
Steve: Okay, so, wow, okay this is a lot to information, so how did you become such an excellent email marketer? Were there any books that you read or were not–

Faggella: Yeah.

Steve: Courses that you took?

Faggella: You know I’ve always done these weird things, so I have this thing Steve, and I call it the black Lamborghini test and I don’t know if I’ve ever talked about this on an interview but it’s a very interesting habit that I have, where whenever I’m interested in doing something, I essentially find someone who is doing the same thing I am doing in terms of business but they drive a black Lamborghini. Now this is important not particularly because of the car, but because they’ve made that much money from that business.
So I don’t find who has the biggest blog about how to be successful, I find who drives the black Lamborghini because of that business. So when I got into email marketing I just said, you know who is making the most in information marketing? Who is really doing it? And I found people on the martial arts niche, and I found people outside the martial arts niche and well before, you know I had the safety net to go out and do it, I invested in myself to learn from these guys.

I mean I bought a Infusion soft for, you know, 2000 box down and I immediately spent six more grants to work with six division which is the one kind of top consultancies for a fusion soft for like a big two day thing for my martial arts gym as soon as I got the software. So the short story is I always found learning from the best in person to be really the way to go not the best because they have a blog that say so, but the best based on the black Lamborghini test of which I’ve already told you. And then the other thing is, you know, the people I can’t learn from the other black Lamborghini test in terms of paying for their expertise may be they are too expensive may be they are just not available. I will muddle what they are doing. So one thing I did earlier on, this is more valuable for me than any book I‘ve read. As I said, hey I am trying to build a monthly membership program that makes– that funds me and I can eventually sell and, you know, become a virtual investor in Cambridge.

You know, who makes enough money in information marketing they can do that. Raso Branson [phonetic] is like one of these people. He used to have 100 employees in a call center and now it’s a little bit smaller but he’s a very big name in the internet marketing space may be you’ve heard of him. And Raso Branson has a number of different continuity programs and you know relatively similar price plans. So I said, great, what does Raso’s emails look like? What is his videos sales really look like? What is his sales page look like? And what is his kind of flow to that sale look like? Cool replicating BJJ, run in BJJ and then iterate from there. So it wasn’t a book it was iterating from best practices based on the black Lamborghini test and that not only with the biggest accelerators of my learning because there’s nothing like riding somebody else’s successful sales letter in your niche.

I mean how about that for getting a good copyrighting immediately, it’s in my opinion it’s way, you know that’s the higher– that’s really good stuff so long as you understand the basic principles and then you know– and it’s a good place to start testing because somebody else is driving a black Lamborghini because if it’s so by galley, I mean unless you’re really screw it up, you should be able to get some traction. So in terms of learning that’s what I would advice anybody else out there to do.

Steve: So what are some news letters that you recommend that people look at in order to gain ideas of how to do the final and the correct way?

Faggella: Yeah, Yeah, actually you know, interestingly enough a lot of the time the email side and the internet marketing in the real tailoredness of the follow up is not something that is really all that talked about. If you want to get an email list that make a bunch—what is it? There’s something about extra viable, I forget…

Steve: You can send these to me after this interview and I will just post them here.

Faggella: Okay that’s fine, I mean, easy stuff I mean guys to follow I would say tune in to automation clinic which is a guy by the name of Jermaine Griggs. He’s probably the most famous infusion soft marketer and in terms of like his own success story. He does – I forget what he does like 12 million box a year selling essentially how to play music by ear. And that’s the business he is in, very interesting business and he’s one of the best infusion soft technicians that lives and breathes on earth. So I drink in with his guy, and then otherwise I just hop in on the email photos of Rione Dias [phonetic] and Rosa Branson. Now these are guys that are big in the internet marketing space. I’m eventually moving into other business, I’m not going to be here forever. But they do email marketing far better than most, and if you are going to pay attention to them or Josh Moore with an e-book book, I would say them.

Steve: Okay that’s good news, I’ll link that stuff up. So just curious you know once the funnel is done in your email marketing sequence, what do you do with your subscribers after that?

Faggella: Yeah, so I’m– [Inaudible] [00:39:22] waste to kind of again skin that cat too. So sometimes I have a funnel that’s really designed to be a front end funnel. It’s not necessarily designed for me to hit my current list with, but you know I can test it before I start paying for traffic to send to that funnel, but you know, one thing that I do if I want– if I build something like for example I just put together the copy for a sales pay join take downs it’s not all that long ago, and it’s going to be this week or next where we do some kind of 127 dollar offer to my Brazilian to get two lists– four for that particular course.

Pretty big course, lots of stuff in there haven’t really formerly relisted. So once that sort of built, I will take a segment of my list and expose them to that but here’s the segments that I’m going to expose that Steve. So I think what a lot of people would do is they take– okay it’s time to test this page. I’m going to send my list to this page; I’m going to send this to my list. List is a really dangerous term. You’ve probably heard the term like blast emails or whatever. So blast email is really just unsophisticated boat a ride offensive marketing, and you know it’s what people do when they don’t how to market stuff. So they just send the same email to everybody whether you bought or whether you didn’t buy, whether you– you know no matter you’re interested in, no matter what level you’ve purchased at, no matter what lead source you’re from, everybody gets the same message you are a customer, a year ago you’re a customer now.
You’ve been on lead for two weeks. Everybody gets the same email all the time. That’s just called like you know sucking it marketing basically. I mean the short hand for that is just being actually bad at legitimate marketing. So what we do is you know we’ll say okay who’s raised their head and explicitly said, I’m interested in take downs. Take downs is what I’m here for Dan. So we have a survey that everybody on our list will eventually get a send to them in about 11 days deep into being in our system, and then they’ll be reminded that if they don’t fill out which asks them for all their various interest areas, and they can tell us what they care about and what they don’t, because I don’t want to hear about take down Steve, if they are not here to learn from me about take downs, then why would I want to bother?
You know, I only want to send them what they like, so we have a survey that helps tailor those messages. So what happens when a final list is built or a new offer is constructed is all saying, who’s told explicitly they want that? And maybe who has spent at a relatively consummate level in the past.

So we are not going to send this 127 dollar offer to zero dollar buyers, we are going to send it to people that have spent 100 box or more in the last 60 days. That’s who’s going to get that offer because that’s not going to offend them. The seven dollar buyer in the brand new guy, I probably not going to send it to them, probably not, and the guy– but the guy who said even if he didn’t buy, the guy who’s said he was interested in take downs, I probably still will expose him but only because he raised his hand. So you can see Steve how we calibrate exposure based on standing interest?

Steve: Yes so, It sounds like you really need a program like infusion soft and just a regular email marketing program will probably not be adequate enough to do this.

Faggella: Yeah, yeah with some of it right. So you can do some basic segmentations some other programs, but at the end of the day like it boils down to this and I actually nothing against infusion, in fact I– I mean they’ve built a far – they’ve built a fantastic company. Their logo is adorable. They are– all the staffs love them because they have a free trial. I think their emails honestly look great on phone and everywhere else but when you get to a certain level, you don’t use mail chip, period. You know it’s just– it is what it is, it’s like you know if you are raising cars, you know it’s like a certain level of cars raising, you know, like a certain level of a car partition where you no longer take, you know, your jail prison or whatever.
You know it’s not like mail chip is a bad product or it’s not a rickety product, but it is good for a certain number of things it does not– if you say I am going to make as much money from my email list as humanly, visibly, considerably possible mail chip isn’t your bag, point blank period. So yes you do need something that can actually segment, that’s infusion, that’s product, that’s entrepreneur, that’s something with some actual functionality.
Steve: Okay, sounds good that’s extra advice. Well Dan I don’t want to take up too much of your time, surprisingly we’ve already been talking for almost 45 minutes. So, yeah, exactly and you’ve given me a lot of things to think about as well with my own email marketing.

Faggella: I’m glad.

Steve: And for that I’m very appreciative and– so where can people find you if they want to contact you about anything.

Faggella: Yeah of course man. My main sites though orderly enough now when I moved to Cambridge, I am planning on selling the martial arts business and where I share all my stuff about email marketing and marketing automation is clvboost.com [inaudible] [00:44:01] for customer live time value boost but clvboost.com is one of the site for our consultancy. We have a basic white paper that kind of breaks down a lot of plug-in play strategies, so people are like ah you know I’m interested in doing some other segmentation. I do want to understand email a little bit better, that’s about a simple soot to not break down as we have this right down that site. So people want to get a hold of me, they can reach me that way.

Steve: Okay, sounds good Dan. Well, thanks a lot for coming on the show really appreciated.

Faggella: Thanks for having me Steve.
Steve: Hi man, take care. I actually learnt a ton from Dan today about email marketing. Now this episode was recorded about a month ago and after talking to him, I completely revamped my own email auto responder sequence and my info product has actually been converting like crazy. Now I’m not sure if it’s the new mail sequence or the podcasts that’s been bringing the business, but business has been picking up dramatically ever since Dan’s interview. For more information about this episode go to mywifequitherjob.com/episode24 and if you enjoyed listening to this podcast, please go to I-tunes and leave me a review. When you write me a review it not only makes feel me 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 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 also 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 www.mywifequitherjob.com for more information, 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 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!

023: How Joe Cochran Started A 25 Million Dollar Company Selling Outdoor Products Online

Joe Cochran

My buddy Joe Cochran tells us how he started a 25 million dollar company selling outdoor products online. Joe really knows his stuff especially when it comes to pay per click services.

What’s crazy is that his store stocks well over 15000 products and is capable of processing over 1000 orders per day. Compared to my puny shop, Joe’s store runs on a much larger scale. Stay tuned and check out his story.

What You’ll Learn

  • Why Joe started out selling rubber duckies online
  • How he grew Northline Express to 25 million dollars
  • He he got into the business of shipping fireplaces
  • How he decides what to carry in his store
  • How he convinced vendors to allow him to sell their products
  • When Joe decided to transition to carrying more inventory
  • Why Joe is able to beat the brick and mortar stores with his products
  • Joe’s content medium of choice
  • The key to working with vendors in China
  • Why Joe thinks paid traffic is king

Other Resources And Books

Transcript

Steve: You’re listening to The My Wife Quit Her Job podcast where I have successful bootstrapped entrepreneurs take us back to the very beginning of their journey and delve deeply into the exact strategies they used early on to gain traction for their businesses. Now, before we begin, I just want to congratulate Ken Schneider for winning this month’s free one on one consultation. For more information on how you could win a free 30 minute business consultation, 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 is your host, Steve Chou!

Steve: Welcome to The My Wife Quit Her Job podcast. Today I have Joe Cochran with us on the show. Joe is actually someone who I met virtually via the ecommerce forums at EcommerceFuel.com. So, what’s really interesting about Joe’s story is that in 2003, 2004, Joe joined his dad and started an online store called NorthlineExpress.com which sells fireplace and outdoor products. And what’s really awesome about his business is that in the past decade, his business has grown to doing over eight figures in annual sales. Now, they started this online store in their spare bedroom and basically shipping out of a detached garage and today they’re operating out of a 24,000 square foot facility.

And you know, Joe operates multiple ecommerce sites as well as a wholesale business and just get this; these numbers kind of blow my mind, their store now offers over 15,000 products and is capable of processing over 1,000 orders per day. You know, if you just compare his store to my little tiny store that’s just pretty crazy in terms of scale. So today what we are going to do is we’re going to take a time machine back to the beginning when Joe started. Now, Joe is a great guy and I’m really happy to have him here on the show today so, welcome Joe.

Cochran: Thanks Steve.

Steve: So, you know, for all those who’ve never heard of you, can you just kind of give us a quick background story and just talk about your baby here Northline Express, and how it all started. How did you decide what to sell and how did you come up with the idea?

Cochran: Yeah, so… back in the late 90’s early 2000’s, my dad and I both were working for Fireplace & Hearth, literally the wholesaler and retailer. So they wholesaled spas and fireplace products to a chain of their own retail stores as well as to other brick and mortar retail stores. And I had been working there right out of high school, I did installation and service on fire places and spas and hot tab and things like that, and he had been in the business really since like the 70’s, I think back in the mid-70’s. He owned his own fireplace retail shop in Michigan and it eventually sold out and, you know, and then went to work. So he sold the business and then went to work for the people who he sold to, and eventually became the GM so he was running a lot of the operations for that company and…yeah. So I’d got in so, we essentially knew that business really well but the funny story is that, that’s not where we started sort of, we actually launched this back in 1997 and it was in the car stereo and home audio market.

And it was kind of funny just because my dad had this idea, he wanted to start a website, I was not a computer guy whatsoever. He– he’s really the computer guru. And so he wanted to start a website but he didn’t know where to start, and I was installing car stereos for my friends on the side in high school. I actually had a wholesale account with a distributor where I would buy big sub-woofers and stuff like that and sell them to my buddies and then charge them for installations. So I was doing my own little entrepreneur thing out of the garage and… yes! So he needed an idea I had a whole sale connection, so we started there.

And we shut that site down, made about 10,000 dollars in six months but we ended up shutting it down because there was so much fraud and I think it was just the age group that we were targeting with people trying to burn us with bad credit cards and back then the checks and balances weren’t nearly in place like they are now. And we just– we ended up just shutting it down but few years went by and he started thinking, wow, you I know this other business really well and so it wasn’t, you know, I’d love to say that it was a very calculated, you know, we saw a big opportunity and jumped at it but, I mean essentially it was just something we knew and so we got in.

Steve: I actually remember really being into car stereos back in the day also, I think got all my stuff at Crutchfield.

Cochran: Yeah, that was one of the things we realized after we launched our site we were like, wow! We’re competing with these guys and even back in 97 they had a pretty robust website and here we were, just this little kind of pathetic looking yahoo store but we saw the opportunity because we still sold like 10,000 dollars worth of products in six months so…

Steve: Yeah, so [laughs] I remember I used to look forward to getting that catalogue every single month. It was pretty sweet. Yeah.

Cochran: Yeah, oh yeah! I was– I was– you know, you always had to have a lot of stuff around so that people would come to you to ask what you did and then that’s how I would sell them basically.

Steve: So yeah, back to Northline Express, so I’m just trying to think you know, in our store we sell really small items that are easily shipped but I was just looking through your website and for some of the stuff that you guys sell, I can’t imagine how the logistics work in terms of shipping let’s say a fireplace– an outdoor fireplace– and selling that online. Yeah, so, how do you make a customer comfortable with buying that stuff online?

Cochran: Sure, so, if…if– we kind of revisit the start over conversation when we were talking about how we got started. The first products we added to the site were rubber ducks [laughs]. Like rubber ducks that go and then float around on your hot tab. Okay so we figured nobody is going to spend that much money online so we’ll just start with this small item and it’s cheap and we started selling some but, really not much and then we started selling spa chemicals and then we started testing with small fireplace products. All with the idea that people probably aren’t going to spend more than 30 or 40 bucks online. And you know, we just kind of kept pushing that envelope. So every time someone would buy one of our higher end products, we would start adding more higher end products.

Eventually we did get to the point where we were adding wood stoves that sell for 3,000 dollars and selling them you know, and we were probably more shopped than anybody else that– that people were spending that kind of money online, but there is a need for that stuff, it’s hard to find some of these items depending on where you live. So that actually kind of adds to the complications that, typically the people who buy a wood stove online live in a remote area where they can’t get one locally, or the pricing just doesn’t, you know, there’s no benefit, or they don’t have the option they want or the type that they want so they go shopping online and as far as delivery goes, we essentially just ship it out free, I mean it goes…it goes LTL carriers, so a semi truck delivers it and it usually shows up with a lift gate and the driver will lower the freight out of the track on a pallet and a pallet jack and then wheel it up to your garage and that’s it. They leave it there and then it’s the customer’s job to get it into the house from there.

Steve: So you mentioned that you kind of gradually built up your product portfolio, so how did you kind of decide what the next step was in terms of what to carry? How do you decide what to carry in your store basically?

Cochran: Yeah, well, so for the first few years that was really– my role in the company was just adding everything we could get our hands on because back then, most people wouldn’t even sell to us. We didn’t have a retail store so, when we would go to our industry events like the expos and things like that, I mean we would actually like turn our badges around or just hide them under our shirts so people couldn’t see that we were an online retailer. I mean, frankly sometimes we would just lie [laughs] and say that we had a showroom because people just wouldn’t sell to you back then.

And so when we were getting started it was really tough to even find a company who would be willing to wholesale your product as an online retailer only but we built it up. So what we essentially did was took anything we could get our hands on and added it to the site, and so it was pretty funny because back then we didn’t have all the fancy stuff we now so, I would take a catalogue and scan the pages of the catalogue and then I would use like Photoshop and crop out the image and then just use like a paint thing to paint the background in and that was our images for back then.

Steve: So that’s crazy, does that mean that you didn’t actually carry the product then when you listed it on site? How did it work?

Cochran: Yeah, so we would get you know, essentially, we would get a few people to sell to us and so once we were approved as a dealer then we would go to work adding the product on the site and– but no, we didn’t hold the inventory in the beginning, most of it was drop shipped…

Steve: Okay…

Cochran: Some…some of it we did stock, we were shipping; we had a little–a two car garage that we were shipping out of it at first and so we had a couple of hundred items in there, 20 rubber ducks and…seriously.

Steve: [laughs] so you were not joking about the rubber ducks, you…you– rubber ducks was really your first product?

Cochran: Yeah [laughs].

Steve: That’s hilarious.

Cochran: Yeah, yeah so…So yeah I mean, that’s…that’s really what we did and so I would spend all day scanning catalogue pages and cropping out images and writing descriptions and just adding– you know, I got a system down to the point where I was personally adding about a hundred products a week to the website, doing it that way which you know, back then was– I was cranking you know, now it’s like I look back at then I’m like [laughing] yeah.

Steve: So, I’m trying to think– so these vendors that you were working with they had huge catalogues right? So that’s what you mean you were adding products…

Cochran: Yes.

Steve: Oh! Okay. So, how did you– and this is actually a question I often get in my course. How do you get around some of the facts that some of the vendors who require you to have a retail store in order to sell online?

Cochran: Well, I mean, back then we just told them we had one and it was new enough where some people just took our word for it, you know, and if they showed up, we’d open the garage doors and say, ‘here it is’[laughs]. Busted! I mean we just kind of took chances with it back then that…that a rep wasn’t going to come up to the house. Nowadays a lot of them tell you they want a picture of your store front, they want to see an ad, if it would’ve been that way when we were starting we wouldn’t have been able to do that but for the most part, people just didn’t really check up on that, and so we were able to get around it.

Eventually, when we built our…our warehouse, and our call centre and such, we did build in a little spot that we call our show room. And so that’s how we get around it now, technically we have a show room which has like computer station at it and a couple of products and a counter…

Steve: Okay…

Cochran: Where we can talk to people but you know yeah, back then we just kind of told them we had one and gave them our home address and hoped that they didn’t come up to look. Yeah [laughs]

Steve: That’s hilarious; okay so today it sounds it can be a little bit harder to get around that.

Cochran: Yeah, I think it can be, I mean, I talk to people still today that won’t sell to us because we don’t have a show room; even with what I show them they go like…well yeah but… you know, you don’t really have a show room, you need to do a 10,000 dollar order, and have inventory on display and you have to have five display units and all that kind of stuff which we don’t really mess with.

Steve: I see, and so for those vendors you just kind of skip them.

Cochran: Yeah.

Steve: Okay.

Cochran: Yeah, I mean we learned that– and because we did…we did get busted from a few people back then and it turned into a situation where it was like you know, they didn’t want to work with us, and so it just made the whole relationship bad right off the start anyways. So we kind of learnt at this point in time, I think nowadays really, there’s enough people wholesaling out there that you can find people; if you look hard enough and you know where to look and you’re much better of working with people who want your business than trying to get around it and scam someone into working with you, that’s going to be unhappy if they find out because you do a bunch of work, you add a bunch of products to your site and then you know, they find out you weren’t honest and then they pull the line and now you just did all that work for nothing.

So we don’t really play games any more, the reality is, due to the size of our site, once we started gaining momentum, people were coming to us. And so for the most part, I spend most of my time now turning people away, because they’re not going to– because adding their product won’t really add value to our site.

Steve: Right.

Cochran: I don’t have to go in search of products too much often anymore in our current market now. When we go into a new market obviously we’re starting afresh but that’s the nice thing about gaining momentum and building a site is that once you’re up and running, you’ll find that people will come to you if you can get your site listed in some other directories and such.

Steve: Okay, so you started out drop shipping and then when did you decide to start carrying inventory?

Cochran: Well, we started carrying some inventory right off the bat and for a few vendors that required it, but it wasn’t much so we– I would say when we got started we did a mixture of both, we had some inventory and we were drop shipping, but one of the vendors that we found earlier on was a big drop shipping– they were a big vendor, they had thousands and thousands of products and they were drop shipped, so we really grew the business based on that one vendor because we essentially added their entire catalogue to the site and just drop shipped the majority of it until we saw what volume moved, and then we started bringing in inventory on the heavy movers.

Steve: Okay, and do you build any of your own products?

Cochran: We do, we do some manufacturing in China and then bring it in containers, so we’ve slowly grow– been growing that department and that’s where we started into the wholesale side of things. So we actually developed our own products and then both sell them retail on our site and do some wholesale.

Steve: Okay, so we’ll get into that a little bit at the end but I was just curious, since your space is, in my opinion at least, pretty competitive and since you’ve been handling all the marketing and sales for your company, what were some of your strategies early on at least, to generate sales? So you have this website now what?

Cochran: Yeah so we– for the most part we built the business off of paid traffic, so…

Steve: Okay.

Cochran: We used you now, it wasn’t Google PBC back then, I forget what it is called now but, we used paid traffic right from the get go and pretty much have used that– has the majority of our business driver for traffic and revenue and our business. SEO kind of came later you know, as we grew the site and just gained SEO but I certainly wouldn’t consider myself as an SEO expert. We did most of our stuff with Paid and we still do.

Steve: So, what are some of the Paid avenues? So I imagine you use Google today?

Cochran: Yeah, Google– we use some advertising like the PLA’s through Google as well and then we use Yahoo– Yahoo and Bing for paid ads as well. We don’t really do anything on facebook or much social media stuff, it’s mostly going to be Google and PLAs. I think we do a little bit on Amazon with their end Platform but that’s pretty small.

Steve: Okay, so the majority of your business is just from Pay-Per-Click service, that’s pretty amazing. .

Cochran: Yeah.

Steve: So how does it– how do you– so how does this grow? Do you just keep increasing your budget, are maxing out? How do you manage your– these campaigns, I mean, you have 15,000 products?

Cochran: Yeah, so for– like up until around 2012, we managed it all in-house, and my dad and I are really just kind of self taught, figuring it out as we go. In 2012 we did hire an agency to kind of take over and you know, paid dividends I mean they’re definitely experts much more that we are in it so now we work with them but up until then it was just– it was a daily thing. We had an in-house guy that we trained, and we would meet once a week to cover the strategy and just keep working those bids. So it was a huge– a huge job, yeah [Laughs] for one guy but he– he tried.

Steve: So primarily Pay-Per-Click, so how do you compete with like the Brick and Mortar guys and the guys with show rooms? Is it price? Is it you know, what are your value propositions for your business?

Cochran: Well, I mean, we add a lot of content on the website so the reality is that we typically give a lot better information than you are going to get if you go into a Brick and Mortar store and that’s just what we are told. So we knew that in our industry, you know, if you want to go buy a barbecue grill for example, where are you going to go? Unless you’re going to buy something from home depot in which you’re not going to get really good information. Not everybody has a high end barbecue grill outlet that they can go and actually get any information from, or look around or see much option. So in certain categories on our site it’s a matter of having a large selection and having unique things that nobody else really has available in their local area, and then combining that with giving high quality information…

Steve: Okay.

Cochran: and videos and things like that. We have a lot of the common stuff like free shipping and easy returns and– but I consider that stuff these days to be part of the requirement.

Steve: Of course, yeah.

Cochran: I mean that’s just kind of what you need to offer to be in business online. So– and then we do have a call centre. And that’s one of our biggest things is, we’ve got an in house call centre, with really highly trained people. We get emails from people who are impressed with that every day. Really, I get complements from people saying, ‘Wow! I talked to so and so in your call centre and it was so nice to talk to someone who actually knows what they’re talking about– because we sell some complex products so….

Steve: So, how did you handle all that early on though? Like you… [Laughs]

Cochran: It was crazy [laughs] we– everybody was also a customer service rep, so my dad and I both took phone calls, our accountant who you know, our in house person who did our books–she took phone calls, everybody in the business took calls and there was actually one of our– one of the first years that we really started to do some volume in like November, it got so busy that we couldn’t take calls, like none of us had time to take calls. So we actually put some message on our answering machine saying, ‘we’re sorry we’re just too busy we can’t take your phone calls right now, we’ll call you back in January’ [laughs] and we just shut the phones down, you know, so…

Steve: That’s crazy.

Cochran: But the online orders were coming in so hard that it was just you know, impossible to keep up with it all and, looking back we still laugh about it, but that’s how we did it and we just kept adding to the team as we needed more people.

Steve: So walk me through the process, so someone orders online, and then do you have a tie end to your vendor’s database or?

Cochran: Well we have– no, so we don’t do any– there’s no like EDI or anything like that set up with our vendors into our database. It’s pretty much all run on our end so, if we’re drop shipping then we don’t actually know necessarily if the vendor has inventory on our site, so we’ll just post out the time frame that it’s going to ship within, and if it ends up out of stock or back order or something then we just pick up the phone and call the customer and work with him that way.

Steve: Okay.

Cochran: But you know, we stock a lot of products now, we really have pushed more towards the stocking model, so we stock a lot of our big movers anyways, and when we run out we– well we try not to run out but when we do we back order until it comes in.

Steve: Okay. So I guess the customers don’t really exp– they expect that there will be some time of lead time.

Cochran: We post the lead time on every product on the site, and so if it is stocked product, then we’ll probably say one or two business days for shipping for– to leave our warehouse and then if it’s not on stock it’ll have whatever the vendor’s lead time is, and we hope that it’s in stock and if it isn’t, we deal with it then.

Steve: So let’s talk about more of the content that you’re talking about. You said that you started creating videos and reviews of the products that you sell on your site. How is that kind of like formulated into your overall marketing strategy?

Cochran: Well, we found you know just a few years back that shooting videos, basically adding a video to a product page, immediately increased conversions…

Steve: Okay.

Cochran: and so we’re really the type of people– my dad and I are the type of people where we don’t really tend to over think, as a matter of fact we usually just jump in and go nuts with something, and then try to make it better as we go, you know [laughs]…

Steve: Sure.

Cochran: So with video, we shot a couple of videos on some of our best products, the conversion rates immediately jumped, and we immediately bought lighting and another couple of cameras and stated shooting videos like crazy. And so, we have a real simple formula and we basically intro the product, talk about some features and benefits, we try to talk about practical use of the product, and a little bit more on the benefits side of things and features and then we close it out with a pretty light call to action.

I mean, our videos are pretty simple, we don’t go high editing or anything like that, we just shoot them– try to shoot them one shot, you know, one take, one shot and edit the front end and the tail end and get up there, but that’s where we spend most of our time in content because video is– ultimately it’s the most leverageable type of content I can find so far. So we can shoot a video, have it transcribed, turn it into a blog post, upload the video on multiple video sites with YouTube and Vimeo and things like that, and so we’ve just been able to take that one piece of content and turn it into multiple pieces of content and it’s actually easier for us to produce a video than it is to try to sit down and write a blog post. So I would much rather jump in front of the camera and give a five minute video on a product than try to sit down and type that all up. So that’s you know, that’s kind of our content method of choice…

Steve: Okay.

Cochran: Just because it’s pretty fast for us and it’s leverageable.

Steve: So, do you hey– do you get a lot of customers from YouTube? Do you find or…?

Cochran: We get a pretty fair amount of traffic…

Steve: Okay.

Cochran: from YouTube. Yeah, I mean I– we watch the actual sales, and so through Google analytics we’ve got a funnel set up so if they come in from YouTube we track that, if they specifically come from You Tube and buy, but it’s not a real exciting number, it’s not a huge number for us but I think what happens is, by having those videos embedded on our pages, the conversion rates easily justify the effort.

Steve: Sure. Absolutely. So, what sort of lifts were you seeing with– once you started adding video?

Cochran: It’s really been all over the board, based on the product but I mean, we’ve seen some products have you now, double– instantly double conversion rate on a product just by having a video added to the description so– we’ve also seen it where it doesn’t seem to make much of an impact and that could be video or the video or the content in the video didn’t really hit the hot buttons so it’s– we do a lot of testing with it but so far there’s not one thing that I could say is right or wrong because we get so much sporadic data from it…

Steve: Sure…sure.

Cochran: and the only thing that I’ve really been able to realize is that in almost every situation, we get at least a small bump from video so…

Steve: Now that makes sense, I mean, what you’re selling is kind of complicated and for me at least if I was shopping for a barbecue grill like your example earlier, I would definitely want someone explaining that to me because–actually recently, when shopping for one, a year ago and I had no idea, there was like a bajillion barbecue grills out there. So it totally makes sense.

Cochran: Yeah…yeah, and that’s really not even the more complex products, you know, when you start getting into fireplaces, and things like that you end up with tones of technical questions and installation questions and all kinds of stuff so between building learning centers and all that kind of stuff, I mean we try to go as deep into that information as we can.

Steve: Okay, so outside of Pay per Click, where does the rest of your traffic come from and so, where does most of your other business come from outside of PPC?

Cochran: Well, I could say we’ve got– you know, we get some traffic from You Tube, we don’t get much from facebook, and I wouldn’t say that we spend much time on it, we’re not real focused on social media–yet–we see the value in it and the potential but we’re just not, we haven’t quite developed a strategy for it yet or how we’re going to deal with it, but I would say that between paid traffic and the SEO traffic that we get, that’s really the bulk I mean, we don’t really have much coming in from other sources.

Steve: Okay, are you doing anything special on the SEO front?

Cochran: Not besides the video marketing, we optimize our videos and we just really put most of our eggs in that basket right now.

Steve: And what about in terms of email marketing? Do you have a strategy there that…?

Cochran: Yeah, yeah, so we have, you know, we have an opt in when you land on the site there’s a pop up that will offer a coupon if you opt in, and so we build a little– we’re always list building with that, and then we do have other segmented lists on certain areas of the site. So if you land on say areas of wood stoves you might find there’s a list that you can opt into if you want more information about wood stoves specifically, but generally once you opt in you’re going to get a welcome series which just kind of introduces the company, what we’re about and why you should buy from us and some of our policies and then, yeah, we go right into marketing after that.

I’ve talked to other people about what we do and we’ve looked at it and some people would say we go too heavy with the marketing and we should add more value and add more content because we hammer people, I mean, we pretty much send out a minimum of one email per week and it’s almost a 100% focused on marketing. It’s– you know we’re pitching product constantly.

Steve: Okay, obviously it’s working for you so…

Cochran: But yeah, I mean we do that because we measure the results, and the return is there so that’s why we do it and some people get upset and unsubscribe. But we are focused on the people who are buyers that want that kind of information and the ones who don’t, then they can unsubscribe and that works too. So, it’s– that’s just our strategy with it and yeah, we use email marketing, you know, we send like I said about one email per week…

Steve: Uh-huh.

Cochran: and then usually when holidays come around we’ll send out multiple emails for each holiday as well.

Steve: Okay, and so I was just curious, you said you had a pop up, how has that performed? I’ve always been a bit weary of including a pop up on you know, pages where I have actual product. What are your experiences with your pop up?

Cochran: Well, before we had the pop up we had the typical you know, sign up for our newsletter box hidden somewhere at the bottom of our website, and we would get like four or five opt-ins a day maybe. And we lure traffic so I mean, we drive a lot of paid traffic to this site and so for four or five opt-ins a day was like basically nothing.

Steve: Right.

Cochran: And when we started posting– when we started testing the pop up, we immediately went to 40 or 50 opt-ins a day.

Steve: Wow, okay.

Cochran: Yeah, so it was an immediate kick and to my surprise, other metrics actually improved like bounce rate actually went down, which is because I think people were looking at the opt-in and looking at that offer and staying at the site a little bit more.

Steve: Huh, okay.

Cochran: So some other metrics actually improved with it as well which we actually tested it multiple times. We added the pop up and then we pulled it, and then we added it again and we pulled it again because we actually had a lot of conflict in our own business as well, our own employees telling us, ‘oh God! I hate that pop up’ you got [inaudible] [00:32:43].

Steve: Yeah, yeah!

Cochran: And so, we just let the numbers talk and speak for themselves and we finally realized that, yeah, we can add about 600 people per month to our list, and that’s after we talk about unsubscribe so for us, it was a no brainer. It is– you know, our strategy is to offer discount which can be looked at as a giveaway and also here people are already to your site they’re already interested and now you’re offering them a discount, that might confuse them or whatever but we’ve tested it for us, and it’s worked well across the board and to be honest, the funny thing is, as many opt-ins as we get not too many people actually use the coupon. And so we constantly–our whole marketing department– we just crack up because people will opt into the list, buy something that we’re specifically offering at 10% off discount on, and they won’t use a coupon.

Steve: Joe, I’ve had the exact same experience and in fact during check out on every single page I had a coupon code at the top and a lot of people just did not use the coupon code.

Cochran: Yeah.

Steve: It makes absolutely no sense but, yeah it’s funny to hear that someone else has had that experience too. So let’s switch gears a little bit and you know, I don’t want to take up too much of your time but I did want to talk a little bit about your wholesale business, and I just wanted your take on kind of the differences in running a wholesale versus retail.

Cochran: Yeah, we’re not great at it, so it’s not a big part of our business. We started offering wholesale because we got a lot of installers wanting to buy wholesale from us, and for a long time we just told them, ‘no, we don’t do wholesale’ and eventually it was just like, men! We’re turning away– let’s say you got landscapers who are building out a custom you know, outdoor kitchen, and they’re wanting to buy the grill, and the customer already knows what they want and they can’t get you know, they don’t have a wholesale account so a lot of these guys go online to buy stuff but we weren’t offering the wholesale account.

So we were just basically blocking people out and we decided we would start the wholesale business to gain those customers and so we eventually worked it, and now most of them still don’t buy. So we have a few brick and mortar stores that buy products from us through the wholesale network and it’s specifically the products that we get manufactured now, but it’s not a big part of our business, and so as far as running that side of it, I mean, we do some of it but we almost treat it more like the same as our retail. We don’t really spend a bunch of time on it.

Steve: Okay, what is the margin difference, just curious between retail and wholesale, typically?

Cochran: It’s– it depends, I mean, you know, that’s the beauty of importing is that, when you
are manufacturing your own products and importing them in and you know, you can get some pretty huge margins, I mean, 60% margins aren’t unheard of…

Steve: Okay.

Cochran: and 40, 50% depending on how you’re buying, so at the wholesale level we’ll be able to do as much as 20 or 30% margin.

Steve: Okay, that’s pretty good.

Cochran: Yeah, and for other areas it’s only 10%. I mean it really is product by product, and I’m sure you’ve seen this too you know, it’s just a product by product.

Steve: Absolutely.

Cochran: Product line by product line, you’re making 60% on this product, and 20 on the next and they’re in the exact same category you know.

Steve: Yeah.

Cochran: But it’s just– it’s price points and so it really depends. Margin is so all over the board, there’s really no rule of thumb that I can really throw out there for it.

Steve: Where do you have your stuff manufactured for the stuff that you do create yourself?

Cochran: It’s– we have a mix of both US manufacturers and China manufacturers.

Steve: Okay.

Cochran: Yeah, so.

Steve: Any comments on why you’ve mixed the two or?

Cochran: Well, just some– I mean, essentially some products are made better in the US, and some are made better in China as far as the value that you’re going to be able to deliver. So typically when we decide to manufacture something, we look at what the price point is going to be for volume because essentially to manufacture it, you’ve got to move volume too, to make that work. So you know, we’re looking– if the price point has to be in a certain range, and we can’t hit that range in the US, then we’ll go to China and we can almost always get to where we need to be with price point there.

However, if we can’t hit the range, then what we find is that we can deliver a lot of value in the product if we can get it made in the US just because people will buy simply because it’s made in the US. You know, we are focused, I mean, 99% of our business is US based.

Steve: Okay, right that makes sense.

Cochran: Yeah, so our customers definitely find value in that, and we’ll make sales just because we put a made in the USA symbol on it. So that’s why we have that mix, but it’s more price point for me. I mean if I’m trying to hit a specific price point in a category with this product, then I’ll start usually domestically, and then start moving out from there if we have to.

Steve: Okay, I imagine the headaches are a lot, they’re increased when you go overseas, at least that has been my experience. Do you actually…

Cochran: Automatically yeah.

Steve: Do you actually go over there or is it…?

Cochran: I’ve never been, no.

Steve: Okay.

Cochran: We have a guy on the ground there that we work with…

Steve: Okay.

Cochran: And actually we find it that’s just– it’s easier anyways than trying to break through the communication barriers and everything like that, then going over there. I have, I know people that go over there and if we were doing a lot, if we had a bigger business in the– especially in the wholesale side where we doing 100 container a year or something, then we’d probably have to go over there to check quality control and stuff but…

Steve: Okay.

Cochran: We’re small enough where we can rely on our partners to handle that kind of thing.

Steve: How did you find your partner?

Cochran: Through Alibaba.

Steve: Okay.

Cochran: Yeah. We started there and just– we ended up doing a couple of small buys through one manufacturer and then they kind of had a middle man that we were working with that found this manufacturer for us, and we started asking him for other information and help and we’ve been working with him ever since. It’s been great, I mean he– I’m sure we pay a little bit more to go through him but if I need a product I can take a picture and send it to him and he’ll go outsource it for me, figure it all out, doesn’t charge me anything for all of the leg work to find the manufacturer, and get it all figured out and then essentially he’ll help me with all the export and everything so, works pretty good.

Steve: That’s awesome.

Cochran: Yeah.

Steve: That’s awesome, cool.

Cochran: I think we locked out. I’ve heard some bad stories too on Alibaba and stuff and I’ve actually had a couple of bad experiences there but ultimately, we– I think here’s the key which is; focus on building the relationship. I mean, that’s whether you’re talking with the manufacturer or a middle man like we are; build a relationship. They’re you now, they’ve– we’ve been treated really well with everybody we’ve worked with because we focused on that relationship portion of it, not just hammer, hammer, and hammer for the best price you know.

Steve: Yeah, I mean, I’ve had the same experience in fact we should share our horror stories and success stories some time. [Laughs]

Cochran: Sure.

Steve: So, any advice that you would give to new entrepreneurs out there who want to create an ecommerce store of their own today?

Cochran: Yeah, I’m in love with ecommerce, I mean, I absolutely think it’s one of the best start up opportunities for any age group. If you’ve got the entrepreneurial spirit, and you don’t have a lot of start up money, I think opportunity is an awesome opportunity to grow a business.

And I think the biggest piece of advice would be to– if you want to get into it, commit to it, like for two or three years, not just two or three weeks, or two or three months. I think that’s the biggest mistake that the opportunity seekers have in any of the online spaces. So a lot of people who listen to your podcast probably follow information marketers and things like that, I do too and I love most of the stuffs that I see but you know, if you spend every other week or month reading the newest, latest way to make a buck online, you’ll never get there.

So if you feel like ecommerce is going to be for you, then unsubscribe from all that other stuff and listen to guys like Steve who know their stuff and you know, I read your blog every week. I mean, when you come up with a new blog post, I’m on there reading it because as somebody in the business, I want to be up on ecommerce. I don’t spend a lot of time listening to the newest way to make money with Facebook, or the newest way to make a dollar with selling information products or any of that stuff. I focus in one area and we’ve done that for a long time and so…

Steve: Yeah.

Cochran: The key is just staying focused, don’t look at it as a fast way to make a buck, it’s a business and if you look at it that way and think about it that way, then you’ll be a lot further along.

Steve: That’s great advice and in fact, you know, a lot of times it takes some time for a business to develop. Often times it takes more than a year for you to start getting traction. I don’t know how long it took for you guys to start seeing traction, if you can think back.

Cochran: We went from very small to you know, multimillion dollar business within the first couple of years but the first year it was like nothing.

Steve: Right.

Cochran: You know, so the first year was like, ‘men! Is this really going to work?’ And then the second year maybe we did like a million dollars…

Steve: Uh-huh.

Cochran: in sales and then the third four or five million. So I mean, it grew very fast once it started growing and the reality is for us, and I’m a huge proponent of paid traffic. It wasn’t until we figured out paid traffic that we were able to really scale. And so I don’t want to get up on my soap box and start hammering SEO and why I hate it, but I’ll say that if you want a truly scalable ecommerce business then you need to learn paid traffic because I can go out there and get into a new market. I mean, this is what’s cool about it now.

It’s now that we’ve had this experience, we can literally pick what market we want to move into, and be in business and going and selling hundreds of thousands of dollars in product in months because we understand paid traffic and we understand the math behind making that work and we’re willing to test and stick with it and keep putting money towards it until we make it work now. So I think that’ll be the biggest thing– is stay focused and if you can learn paid traffic it’s a much more scalable Model than trying to figure out SEO, and hoping that the Google gods are going to be kind.

Steve: That makes a whole lot of sense and in fact, with all the recent updates in the past couple of years, people who have depended on SEO have really been hammered whereas the PPC guys, you know, it’s much more steady. You have more control, so I totally agree with you there Joe.

Cochran: Even our business got hammered on PPC around SEO with the updates, I mean, we don’t really do much for SEO and we still got hammered. We see that our organic traffic is probably less than half as it was just a few years ago, and the revenue is even less than half of the revenue just a few years ago but because we don’t really focus on it, I mean, it was a hit, but it certainly didn’t put us out of business whereas yeah I have friends with large seven figure websites that practically went out of business because their whole focus was SEO and now all over sudden they’re looking into paid traffic and starting to learn it but, you know, I love SEO, I love free traffic and I’ll take it any day I can get it but when it comes to scaling your business I think the paid traffic is just so much more reliable and consistent, that, that’s where we spend the bulk of our time because of that reason.

Steve: Okay, so I didn’t want to take up too much of your time. Are there any online services that you recommend for your business that you just can’t live without?

Cochran: I don’t know who your audience is, I mean, some of our services are probably going to be larger than what somebody starting out would use. We use like Rackspace and we use Magento for our websites.

Steve: Okay, [inaudible][00:46:36] edition?

Cochran: Magento enterprise.

Steve: Oh! Enterprise, okay.

Cochran: Yeah and most of our email stuff and all that is not where we started, so I like you know if you’re getting started, I like as many of the free services as you can get, some mail chimp and some things like that are…

Steve: Okay.

Cochran: are great for getting started. I love Shopify and Bigcommerce, we’ve actually run site samples for those as well, and really our big site is what we run on Magento but if I was starting a new site today, I wouldn’t start there.

Steve: Okay.

Cochran: I’ll start somewhere where it’s a little easier and a little less expensive to get moving and try to stay small in your expenses for as long as possible.

Steve: That’s great advice Joe . So, thanks for coming on the show, for all those who want to be able to get in touch with you and maybe ask you some questions, do you just want to give the audience an overview of all of your sites and where they can find you.

Cochran: Yeah, so, I do have a site with just my name and it’s Joe, my middle initial is R like Robert, my last name is Cochran which is C-o-c-h-r-a-n.com and I do offer some consulting for other ecommerce entrepreneurs there, but other than that, our main site is NorthlineExpress.com. You won’t be able to email me directly through that site though, that goes in through our customer service department so, that would be it. I don’t have any– I don’t usually give out too much direct contacts though.

Steve: No, that’s fine. So I’ll point them over to JoeRCochran.com. So if they’re interested in consulting I imagine there’s a form on their way they can get a hold of you, right?
Cochran: Yeah, absolutely and it’s a really kind of lame site with like just you know simple opt in on it basically so…

Steve: I hope so, okay.

Cochran: Not so many detail, does have my middle initial so it’s JoeRCochran.com.

Steve: Okay, yeah. I’ll go ahead and put those– all those links on the show notes so…

Cochran: Okay.

Steve: So people can easily click and find you.

Cochran: Cool.

Steve: All right well, thanks a lot Joe, thanks a lot for your time.

Cochran: All right, thank you.

Steve: All right, take care.

Cochran: Have fun. Bye, bye.

Steve: What I admire about Joe is his hustle, even though he was denied by some of his early vendors, he kept at it and found ways to succeed. It’s also a great example of how someone can start out with little or no capital by drop shipping their goods and then gradually transition over to carrying inventory. For more information about this episode, go to MyWifeQuitHerJob.com/episode23, and also 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 also giving away free business consultations to one lucky winner every single month. For more information; go to MyWifeQuitHerJob.com/contest, and if you’re interested in starting your own online business, be sure to sign up for my free six day mini course where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information. 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!

022: How Phil Taylor Started FinCon And The Financials Behind Running A Popular Conference

Phil Taylor FinCon

My buddy Phil Taylor of PTMoney.com joins me on the show today to talk about how he started one of my favorite conferences in the world, FinCon.

Seriously. I look forward to attending FinCon every single year and PT has done an excellent job of bringing together an incredible community of like minded people.

I’ll definitely be there this year and I’m proud to say that I’m giving another talk. In case you missed it, you can check out my speech last year by clicking here.

Anyway, if you are considering putting on your own conference or event, then this podcast is a must listen. And in case you were curious about the economics of running a conference, I’ve posted FinCon’s financials for the first few years below.

FinCon Financials

What You’ll Learn

  • The benefits of starting your own conference as opposed to just attending one
  • How to mitigate risk when starting your own conference
  • How to get great speakers early on when you are a nobody
  • How PT structured his conference so that attendees felt a sense of ownership
  • The economics of conferences
  • The advantages of holding a conference at a hotel as opposed to a separate venue

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.

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

Steve: Welcome to the My Wife Quit Her Job podcast. Today I am thrilled to have a have a good friend of mine on the show Phil Taylor, but everyone actually just calls him PT, so I’m going to refer to him as PT for the remainder of the show. Now, I met PT probably around four years ago, and he reached out randomly to me to do an interview and we’ve kind of kept in touch ever since. Now, PT blogs at PTMoney.com, but I actually brought him on the show to talk about how he started FinCon, perhaps the greatest conference in the annals of all conferences that I have been to.

Now, you probably heard me talk about FinCon multiple times already on this podcast, and that’s because it’s my all time favorite, now, lots of high quality people attend every year, and I‘ve met so many new entrepreneurs from attending, many of which I now call my friends, and, quite frankly I owe this all to PT. Now, anyways PT is an amazing guy, and did you know that he also raps? And I’m going to post a video below this podcast for you guys all to look at, but welcome to the show PT man, how’s the going?

Phil: It’s going great Steve, thanks man; great intro I appreciate you.

Steve: Yeah, so PT, let’s start briefly talking about your blog and give us the quick back story of why you started PTMoney.com and then cut to how this all evolved into the greatest conference on earth.

Phil: Yeah, sure. So, in 2007, I was totally passionate about the subject of personal finance, reading as many personal finance blogs as I could get my hands on, just really absorbing as many books and like Dave Ramsey, all this stuff about personal finance just totally kicking out about it. Eventually I just started, hey, you know, I’ve got a financial background, I’m a CPA, I’ve got some things to offer here a voice of my own, and so, that’s when PTMoney.com was born, and I just started to share my story with money, my tips and advice as well as kind of my experiences, what’s going on, getting well that beginning out of debt or starting cycle soles, or learning to invest, things like that.

And, what I discovered also was that having my own blog and they allowed me to tap into that community as well, so, not only could I continue to read those other blogs but now those folks who were my buddies, like those guys and girls who were people, who I could reach out to e-mails and say, hey I’ve got to this site as well like let’s talk shop a little bit, let’s talk about blogging or whatever it is. And you know, I eventually started going to you know, conferences, things like Win Press Conferences, Word Camps, New Mini Expo or affiliate summits and I just started meeting these people face to face, and it was through those kind of initial interactions where I saw the power of online communities coming together in real life and, especially for the financial community because a lot of those at the time were anonymous.

And so, we are out to share financial details online, and so there is this real connection between each other, and being able to sit down and have, you know, a drink with someone or have a meal with someone or just kind of talk, it’s pretty powerful in this community, and so I think that’s what makes things and will lead to kind of makes FinCon so special is the community, this sort of ready to corner face to face. And so, I just got tapped into that when I decided to eventually to start FinCon as well, but still the PTMoney, it’s a cool place I can still share whatever I want that’s going on with my finances, and how are other stores as well, like I did with you back in what was this– 2011 may be…

Steve: I think so, yeah.

Phil: When we talked about how you built your online store business and what– the great thing you’re doing there on your blog. So, that’s kind of a quick intro of me, and ready to dive into all conferences, yeah.

Steve: Yeah, I just thought I’d make a quick note to what you just said, so, prior to going to FinCon, I felt like I was just blogging in a vacuum, like I wasn’t really talking to a whole lot of people, and FinCon was actually the first time where I got to meet a lot of these guys face to face. People who have been sharing content for many years, I finally got to see eye to eye and that was just awesome, and so I’ve been hooked ever since.

Phil: Yeah, and there is going to two ways you could do that when you have your own media company like you do, I mean, you could have a lot of media companies– they have an event for the actual readers which I think is a cool idea, but for me it really resonated to have an event for the people who are also doing what I’m doing, like have an industry conference, right? And so, that’s really– really gave me energy with what I was doing with my blog and it still does to this day and so that’s why I think FinCon came about because that was really passionate, something I was passionate about was being close to those people, so.

Steve: Yes, what are some of the personal benefits of actually just starting the conference yourself as opposed to just attending other conferences?

Phil: Well, it gives you a lot more work to do, so you do a lot of work [laughter]. Let’s say, you know it certainly, you know, positions you I guess in a place where a lot of people– more people might know about you or know what you are doing or be grateful through what you are providing, and so, it puts you on a position where you can serve a lot of people – put it that way. What is the cool thing? You know, giving to a bigger group of people and giving them something that they didn’t have before, you know, it’s pretty special, and so being in that position is great. Also, back to me face to face, you know, and I’m close to a lot of my sort of blogging heroes, guys like you, Jeff Rose and Luke Landes from Consumerism Commentary and just so many others that, you know, are read for so long, and just kind of held on this, you know blogging pedestal but now it’s like they are speaking in my conference.

So, there’s kind of a cool factor there I guess you will, but, just in general– just to me the benefit was being at the conference myself because I’d really created event that I wanted to be at, and so I think that’s important with creating events if you are in their planner or you want to be inspiring. The biggest benefit is that you need to craft this thing that is perfect from meeting your needs right, that’s what FinCon is or at least when we started and unusually was– is something that met my needs, you know. So that sort of it made a huge benefit and also, kind of another benefit for me is that I struggled for a long time for having a real physical product or service. PTMoney has been a great business but it’s really passive, and it’s also out of my control [Inaudible] [00:08:15] with the businesses that are out of my control or the way I have structured now they are out my control. And so, I always struggled with, man I really need a real product or service that my blog can support, and while FinCon isn’t necessarily that, it is a real business.

You know, it’s something that has like real customers, real customer support, real, you know face to face customer interaction as well as like real monetary exchange like physical exchange, and so, it’s really been cool to have like a real business, you know, to sort of balance what I’m doing with my passive business of PTMoney. And they are– luckily they are sort of indirectly related as well because certain folks , you know, a lot of people knowing now just from FinCon, and that has a lot of added benefit when it comes to PTMoney because some of that love comes back to that site and gives a low light to boost. So, yeah, lots of benefit I would encourage anyone who is looking to be– who’s passionate about a community or a set of people, who you can tell want to be together, if you can put yourself in that position to be the guard and bring together, I mean there is a lot of benefits to do that. I would highly encourage that, yeah.

Steve: So, just curious, I mean, you mentioned out of control– out of your control the PTMoney. Can you just elaborate a little bit about that?

Phil: Right, well, PTMoney is primarily a site that gets its traffic from Google search engines or other search engines…

Steve: Okay.

Phil: In addition, I don’t have a product or service to offer my– the people who do come there, from that other source. So, what I do is I pass them off to a relevant advertiser whether that be through an agents click or through an affiliate marketing purchase. So, I’m getting the customers using someone else’s channel, and I’m selling them a product or service that is not my own, that I can’t control and I can’t– there is no guarantee that I can continue to sell it. So, I’m just a middleman, a pure middleman information marker, and so…

Steve: Okay.

Phil: …Because I don’t have full control of what’s coming in and I don’t have full control of what I can offer, you know, you are handicapped, you are limited and things can be good for a while, you know, if that person sending effect– if Google sending you great traffic. They can be bad if they stop, and it can be really bad if in addition to Google stopping those customers– I mean those advertisers don’t want to work with you anymore either, so, you know, you are putting yourself in a bad position. This is not a real– it’s not a business that you have enough control over in my opinion. So, always see ways to correct that, or learn how to create your own traffic and learn how to create your product or service that you can offer. And so, that’s something I need to do with PTMoney eventually, but I got sidetracked with this other real business.
Steve: Yeah, I know, so that’s a really good point you just brought up, the fact that, because you are referring people to other people’s products you are not really establishing a brand or a product for yourself. And that’s why you are at the mercy essentially of other traffic sources and if those things dry up or one of your affiliate decides to stop the affiliate program, you are in trouble, right? Yeah.

Phil: And in fact I have one more note in this conversation is that, when you don’t have the product or services of your own, it’s harder to do marketing, it’s harder to do customer engagement, it’s harder to do these things if you don’t have that sort of in goal, like what you’d have with My Wife Quit Her Job is awesome but because you’ve got a product now and back in the back end there. Everything– nothing has to lead to that, but it can lead that, right? And so, you have this like security in your marketing that, hey, at least at the end of the day, at least we can move people toward purchasing that product, and so, that feels like it’s cool, it’s like real business, and so, the speaker one time I heard things like it’s going to work out, it’s like real business ass, like real business sharing, you know.

Steve: Hey PT you’re actually breaking up here, I’m going stop and then call you right back. Go on where you left off really.

Phil: All right, I think I was talking about the benefits of having your own physical product or service. And so, for me it’s given me a lot of confidence in my business skills and in pushing the life like, email marketing is so much easier for me now, because I have something to offer and I can speak to– I can serve a community, and eventually lead them to a product or service that I’m matched in with. And so, within conscience, it’s really fine to do an online business that has a real solid in goal. I want to encourage someone out there to do that. You may be working on something that’s more passive or more sort of out of your control, to kind of put something out there that they can lead people toward– anything, just your business skills– keep shopping so much quicker when you have something like that to offer.

Steve: Okay, so I know that making money was not the primary motivation for starting FinCon, but is the conference profitable?

Phil: It is profitable, I haven’t lost money on it yet which is great. Well, I guess if you considered the time I put into it maybe I have lost little money, but it’s been profitable on a couple of ways we talked– we eluded to how it sort of indirectly helped what I am doing at PTMoney which has been great. It gives me a lot more contacts there, a lot more relations– great relationships in the affiliate marketing world as well. So that’s how PTMoney– but the conference itself– it is hard to make money with an event, and especially an event that I consider to be a community or industry tagged event , right, because I am not the star of the show necessarily and I am bringing together a community that is making the thing great, right.

Well, I’ve got to figure out how to, you know, partner with the right folks and continue to make it exciting and fun, but also make a little, you know, it will be nice to make a little return for the time I’m putting into the thing. And in the past it, and you can see this on my blog– I was just going to tell you, in 2011 the first year of the conference we made between I think 15 and 20,000 dollars. So, you know, a nice little fly income but probably not worth the time I put into it. Then next year, we probably make 5 or 10,000 more than that, and then same rules as last year we probably made around 30,000 as well. So, it’s not been a big money maker for me yet, but I really treated it like a side business up to that point. So I don’t want to fool anyone to thinking that, you know how to start it off, is a 100% full profit kind of thing, let’s crank this out money wise, I would not have made that amount of money, I mean, I was how doing FinCon for different reasons, right one of which was to make a little side income, and I did that.

This year things have changed, and so I’ve set my sights higher, I do want to make six figures off the conference this year, that is what I’m planning for, it’s what I’m budgeting for, and I was putting all to you know, put the numbers on the paper and it looks to me like it’s going to work out up to this point, so a few things we need to do, but you know, I’m heading that direction. So, I’m really thankful that this year I finally sort of grabbed it by the reigns a little more to ownership of that, and my ability to do that, and we can talk about some little ways of– some of the things have changed if you want how things have evolved there too.

Steve: Yeah, I was going to– actually start from the beginning. So, first of all, this is– is FinCon going to make more than your blog or is your blog still your primary bread earner, at this point?

Phil: I expect FinCon to slightly surpass my blog for 2014.

Steve: Okay, so, one thing that you just alluded to is– personally what I like about FinCon is that when I go every year, everything is pretty much covered, there’s awesome events day and night and you actually feed us during the conference. Now other conferences I’ve been to don’t provide nearly as much, and they actually cost many times more too. So, clearly, you know, I was just I surprised at how inexpensive FinCon is. How do you manage to provide so much value for so little cost at your conference?

Phil: Right, so, it is heavily subsidized by the sponsors that we get to blog. Whether that be a corporate sort of sponsor or a specific sponsor, or exhibitor type companies also come and exhibit there. So, you know we’ve build it up to where part of the ticket price is or the ticket price is covering so much of the cost and then sponsorships help cover the rest and so, that’s primarily where we do it, you know…

Steve: So, how does it? Sorry go on.

Phil: And I wanted it to be– I wanted FinCon to be compared to a Word Camp, or some other type of industry conference like TBEX or lets travel blog’s exchange conference, or you know, some of these other events, where it’s more of that bringing the community together than it is about, you know, provide– I guess, meeting like the needs of like meeting you. You’ve established our business, right. So, I wanted [inaudible] [00:17:55] there, I wanted people who were generous that might work for company who is not really necessarily paying them to be there. So I really wanted to have the feel of like a complete community there, and so when you shooting for that, I think you need kind of be flexible in terms of who or how much you charge. And so that was my goal and I was not just interested– I was more interested in having everyone there than I was making money individually off those people. Because people are at different spectrums, some people are doing great with their businesses, some people don’t even consider themselves as business owner, they are just blogging.

So, I’ve walked in there too, and so what I have learnt to do, and you can see that in the pricing this year is that I have created experiences, or more value for people who are serious about it. And they can come to the conference and get sort of a higher level of interaction and business and sort of a more mature experience–that’s a bad word, but more involved experience I think calling for a higher price. And so, that’s something I have done to try to sort of solve that kind of conundrum, the fact that yes, you Steve are doing real great with your business and you all have to pay not hand boxed some of them make actually I mean that’s ridiculous. And you just mentioned that, yeah you gain a lot for being there, a lot of food, which is a big expense and so, yeah, certainly, that’s difficult to do but sponsorships help a lot.

Steve: So, with the tradeoffs, I suppose so you’ve been to World Domination Summit, which does not have any sponsorships at all. I imagine it’s quite a hassle to get sponsorships for this conference, right?

Phil: Well, you know, surprisingly it wasn’t that tough, it’s something you have to work at and you have to kind of continue to pay attention to I guess, but with PTMoney I had sort of existing relationships built in. So, I was working with a lot of these companies with PTMoney. And so, I just called up the person I knew from Prencence [phonetic] ID-Direct, or at the time or Ally bank at the time and said, “Hey, I’m in your affiliate program, we do some content exchanges, by the way I’ve got this conference going now, and you can be in front of all these bloggers and, you know, help support what we are trying to with this little community.” And so, that worked out really well, so the financial companies got up really quickly and they wanted to be a part of it from the onset.
So, we really do well with the financial side of the house because they see the leverage value of the conference, right. They don’t look at it as hey, there’s just 200 bloggers in the room. They look at 200 bloggers times the number of readers and followers that these people have, and so, they see a lot of value for that. Now, what’s been challenging for me is convincing web service companies to be there, hosting companies, you know, marketing companies. I mean, they sort of want to be involved, but they don’t want to spend too much money, because they are looking at it from all our perspective as a one on one thing, right, they see five or 500 people in the room, that’s the 500 people they want to reach by marketing in this event.

Steve: That’s not necessarily true, right, because even bloggers can blog about their service and they can get money that way as well, right?

Phil: Right, Yeah, solely and solely folks like yourself who sort of touch on small businesses as well as finances, so.

Steve: So, this conference mainly target bloggers then?

Phil: You know, I started off as a financial blogger conference, and certainly that was the community I was heavily tapped into when I first started it, but I can tell you from it, from– as soon as I opened the doors on the thing, that all different types of folks wanted to be involved, so just generally internet marketers wanted to be there, folks like freelance writers wanted to be there. So people who may not never had a platform already, who were just writing online for different publications wanted to be there, traditional journalists wanted to come out and be a part of it, and because they know that they are needing to learn those sort of on your own short skills, to try and create their own platforms if the one you are working for, you know, goes [Inaudible] [00:22:08] which they are doing every day.

Also financial planners wanted to come out, because they are using online marketing to– and counter marketing to get people attracted to their service. So, lots of different types came out and we quickly realized that this is bigger than blogging, and from that point I’m really pushing FinCon toward really being a new media conference. A mere what you see going on with blog or next door which not New Media Expo…

Steve: Right.

Phil: …And so to try to move my brand in that similar direction which is why I only call FinCon, FinCon now, and I don’t speak about being a financial blogger conference, because I want people to recognize that it’s something that’s bigger than blogging. Blogging was at the core of it, you know that’s what of what– there was a true community of bloggers, that helped build it and make it awesome, but it’s just become– the demand for it is outside of that skill, and so I need to meet the needs of the people who want to be there, I think, but still honoring the spirit of what made FinCon so great to begin with. And so, that’s what I am trying to balance and do, and that has added benefit of growing the conference– helping to grow the conference too, which is something, you know, I’d like to do, so yeah.

Steve: Right.

Phil: It’s been interesting to kind of follow that.

Steve: So, most people don’t know this, but a while back PT and I were actually thinking about starting another conference focusing on site also businesses, but the idea fizzled when I realized that I still had two kids, and all these businesses around and PT just had another kid. So, we don’t really have the time, but if someone wanted to start a conference of their own where would they start? So, take me back me to the first FinCon and just walk me through the process.
Phil: Yeah so, when you’re thinking about doing this, having an event, you sort of have a vision in your head, it’s maybe what you think this thing might look like, and that’s great, that’s great to have that vision and to hold onto, but it’s also good to have a community to test this idea against, and what I did was I started with a sort of a bit of group of folks, ten folks who I knew really well and I was talking with online every day. And I knew that if I made a conference for these folks that a lot of other people like minded may be at different points in their experiences, if building something online would want to come as well. There was also the factor of inviting folks who like J Ross, who really people just wanted to see and meet who are really super stars in the community, and so there was a little bit of that as well.

So I want to encourage everyone, now to tap into the existing community if there is one. If there is not then find some stake holders that you can kind of create a community around. I used a little baby group, and what I did was just kind of put out on to them “Hey, if I did this event would you guys come?” It’s this simple question, you know, and I mean, I could just– I got the feedback I got was just overwhelming and it was just powerful like, yes, yes, yes let’s do it, a 100%.

I mean, just to validate my idea immediately and really strongly, and then connecting with those super stars like JD to be a part of it, and figuring out a way to make it what to offer them to show up and be there was also huge stuff in terms of marketing it. And then once I built up the site, for the financial blogger conference, the first thing I did in there was put some kind of social proof, so I kind of put a Facebook like box somewhere, really front and center so people could see who was liking it, so that they could see the other bloggers who were digging it and into it as well as an email form.

And I kind of mentioned this earlier, but my email marketing became so easy for me because these people– I had something to offer. I knew I was going to eventually have something to offer them. And so holding up this email list and saying “Hey, join this to find out more information about this upcoming conference, you can help me build it, you can help me make it great, join this list”. And so that was one of the coolest things I did, and before I knew it, like a week or two later, you know, like a 100 people on that list, and I was really getting real feedback, and real engagement in terms of, you know, trying to build up something great, so…

Steve: So, this list, you just put it out and what was the incentive for signing up, just for more information about the conference?

Phil: Totally, yeah, not even– no incentive at all really just hey, if you want to hear more about this, you know, when we announce dates, when we you know announce speaker information, things like that. I mean, people sort of understand how a conference works, but inherently– but certainly, you know, engaging them is something I wanted to do, because again I wanted to be a community over there, I wanted to be something that when people came they thought, “Yes, I help build a little bit of this, I was kind of a part of this in a little way.” And so, that was pretty important to me as well as it ended up being something that helped the marketing and helped make the conference cool, and it helped give people a sense of ownership of it. And so, they would want to come back and be a part of the thing that they helped create.

Steve: So, how did you attract some of the bigger names, like this is a no name conference in the beginning, right, so how do you attract the big names like the J.D. Ross, the Luke Landes’s and those guys?

Phil: Well, I am blessed in that from the most part they just wanted to be involved, you know, I asked them how they wanted to be involved, and they wanted to speak at it, and so I gave them sort of a platform there, and I made as much of a superstars they wanted to be at the event, I tried to make them that. And so different people came in at different times and wanted to participate and that’s cool. I’m so thankful for that, I asked guys like Pat McClendon to be involved early on and just asked.

I just said I’m having this event, and I really dig what you are doing, and you know, some I knew for a while, so I was like you’ve been a buddy for a while, I want to put you on stage in this conference and make you the star of it. And that had enough of an appeal, and again, you know most of the stars that I pulled from– or people who were part of the community too, and they just wanted to meet the other people in the industry as well, so, it’s kind of a no brainer for them as well. And that’s the power of having an existing community to tap into. I can’t stress that enough, if you already got that, it’s easy, you know, and really running event is really easy, if you’ve got a group of people who already want to be together.

Steve: So, how did the economics work, so did you pay these speakers in the beginning for the first conference?

Phil: I did– I let them come to the conference for free, and then I surprised them with a small payment once they got there, because, you know, I had some left in the budget and I just wanted to at least give a little bit of the money to help out with a little bit the travel. It wasn’t much at all, but it was unexpected and I gave them a personal note along with it, and I think it was something they all appreciated. That’s when I realized I wanted to maybe continue doing that. And so you know, having those people all born the feature meant a lot to me.

And, so I was really thankful for what they contributed and I am every year for the speakers like yourself who come and really bring like an awesome talk and so, you certainly want to reward those people and make it valuable for them. You should have figured out what valuable is, is different for different people. I mean some people want a payment, some people want some kind of a different exposure. With my keynote speakers now, some want payment, some want may be help with some book they’re promoting, some may be want a booth at the event, some want like a meet and greet type of thing to kind of make– kind of raise their status a little bit, and it’s just different things to different people. I’ll try to figure out what that is and I’ll have a– you know, everyone who speaks in FinCon, who prepares to speak– prepares to speak something certainly gets a free ticket to come.

Steve: Right.

Phil: And so, but that’s kind of the starting point.

Steve: So, in terms of the economics, you kind of have this chicken and egg problem, in the very beginning, right? In a nut shell if you’re going to sell these tickets and yet do you have to put a whole bunch of money down to plan the thing, before you even collect money?

Phil: Well, luckily the first hotel didn’t require a big down payment, but backing up a little bit, yes that is scary, that’s the biggest fear I had was “Hey, I’m going to be spending a lot of money, and then something is going to blow up, and people don’t come, and I’ll lose all this money.” Well, to the most part, you know, you can structure your events to where you can reduce your risk. One of thing I did was– as I told you I kind of had a grand vision initially of what I wanted this event to be, and then what I did was, I decided I was going to have– I was going to plan for two versions of the conference.

So I had that big vision of what I wanted the conference to be, and then I scaled it back probably 50% and said, okay, just [Inaudible] [00:31:08] for these many sponsors, this many attendees, and this much spent and budget and all that, and then, if we hit those marks, say within the first couple of months of marketing this conference, then we will open up the doors for conference B the big vision, and we will go for that.

So, I sort of had build in my mind two versions of the conference and, not out of my mind but physically, you know on paper, I put it up there then hey, this is conference A and we are going to shoot for this and at some point if we meet these marks, sell out all these– the base level sponsorships, sell all the tickets, then hey, we are going to open up the doors and so make it a big conference. And so, any new event planner that’s something I would advise you to do is going to have a two step process where you have the safe thing you can create, but if you hit it really quick in your marketing then hey, go for the big thing.

Steve: But, don’t you have to have the venue down ahead of time, and that venue can only have a certain capacity, right?

Phil: Well, you know, I was probably seven, eight months out– and yes you are right, but most events can handle– if they can handle something like for me a big conference for me was 300 people, so that was my big vision. And so, a small conference would have been 100 people.

Steve: Okay.

Phil: So, any– most places can handle both of those capacities pretty well. So, but I guess to answer your question more directly, you know, you don’t have to have the event– for me I didn’t have to have the facility initially because what I did was that I asked people, hey, where do you want to have it, you know I was like, what weekend do you want to have this thing? I got that granule with the email list in the early days of planning.

I helped them actually pick the date– help used them to help me actually pick the date, and I think I even like offered a couple of hotel options, and said, hey, would you rather have it here or would you rather have it here. And that’s how I got their input on both those things to kind of attract me six figure and I knew I eventually needed to have it. So, sort of buy that, you know, buy that– after that getting a little bit of that feedback, you know, I had like 100 tickets sold. So, I kind of knew at that point, hey, I needed to go this corporate B option anyway. So, I just sort of evolved while I was planning that it just so happened that I could kind of experiment with that bigger thing.

Steve: So, when does the sponsorship money come in place? Does it come in the end, and you don’t have to pay the venue until the end after the event? Is this how it works or?

Phil: Some hotels are going to require some type of a deposit but…

Steve: Okay.

Phil: But in all the ones that I have worked with, none have. They just want the agreement signed and then you are bound by that agreement and typically in a conference, the agreement spells out a specific spend on food and beverage. And in that case, I got all the conference rooms for free as long as I spend 30,000 dollars on food and beverage.

Steve: Okay.

Phil: And so, that’s what hotels want you to do, they want you to come in and buy their food, because that’s something that they can really mark up and make a lot of money on, and same thing with their [Inaudible] [00:34:16]. That’s really high margin products and services they can offer and so, that’s what they want to nail you down on. They can give you the space for free because they value build up space is not – it’s not going off their to give it to you as long as you’re spending money while you’re there and guaranteeing rooms as well.

So, that’s one thing that each of the hotels that I have worked with in the past have done. They will ask me to guarantee a certain amount of food and beverage spend and a certain amount of rooms guaranteed as well. And so, I’ve heard since, that you don’t have to do that, like you can get away with one or the other, a certain amount of food or a certain amount of rooms, but I think most will at least require a certain amount of rooms that you guarantee that you are going to need for you to freely come and be there– come there and use their space.

Steve: Okay, so that’s interesting, so, you’ve chosen to have your events at hotels, which I like by the way, everyone’s crushing in the same place and it’s awesome. Other conferences I have been to haven’t– they have like just linen spread out avenues, so I guess going the hotel route is just convenient, because it is like a one stop shop for everything. Is this why you chose the hotel route?

Phil: You know, I debated that early on, and I agree there is kind of a cool factor for may be having like a theatre or like an alternative space or something, and that’s cool and I like that, but I really liked having it– since we are a community of people, like who want to be together a lot, you know, and so, having stuff in the lobby of the hotel, having stuff at the bar and the hotel, I mean, people just want to be around each other the whole time.

And so, it just made a lot of sense to like all be together in the same place, physically like staying in the same hotel. And so, yeah, that’s been important to me in doing that and, yes, hotels do make it easy, I mean, you have to pay them, you have to figure– they are more expensive I think, and it’s harder to control the cost because you are depending on them so much, but, you are– they certainly take– they do these every weekend, they run these events every weekend, and they explore that, I mean, they don’t skip a beat, and they really make me as a conference planner look like I know what I’m doing, you know, they take a lot of the headache away.

Steve: Okay.

Phil: The staff, and their planning and their facilities, I mean they just know how to do these events, and they just make it so easy for you.

Steve: Okay, yeah, so I just thought I’d add one of the things I really like about FinCon is that, since I walk in the lobby, I see all these people that I know and it takes, and usually a couple of hours just to get up to my room in the first place. And I like how everyone’s just crushing in the same hotel, you don’t really get that at other conferences where everyone is just kind of spread all over place. At one of the other conferences I went to, it was like a struggle for me to meet up with other people, and that’s what I really like about FinCon.

Phil: And we have the benefit of being a smaller group too which makes it easier, but as we grow that is becoming more of a challenge of having to look for hotels that can accommodate more people. But I love that aspect in FinCon, and yeah I’m glad you noticed that, and that’s something that’s been intentional, so.

Steve: Yeah, so, let’s go back to the launch, right. You’re trying to sell tickets, so do you– is there a strategy involved and just– yeah, you mentioned two plans, right, so do you just release these tickets kind of piece of meal, or how does it work?

Phil: You know, after some initial planning, doing some surveys, and getting on the– sort of the email list going, with getting people’s feedback, there became a point where I said all right this is going to be my day when I release tickets and answer to the list. I went in on Eventbrite.com, that’s a tool I use to build out the ticket options, and you know, I just came up with a number that for me sounded reasonable compared to other conferences, as well as sort of calculate it up to a number that based on, the number of sponsorships I was going to bring in as well would ensure that you know, I didn’t lose money on this event. So, yeah just Eventbrite.com is hugely helpful advertising with PayPal and they have– even have like a widget where you can add the Eventbrite.com tool to your website as well. So, it’s really seamless, they have a great tool and have a lot of control behind the things, behind the scenes, sort of wedges that can kind of help, you know, do the event a little better, but yeah.

Steve: So, yeah, one thing I kind of noticed was that, you started kind of releasing the tickets out in phases so to speak, like you have this kind of…

Phil: Yeah, yeah, yeah so, certainly with events yeah, I mean good point, and that was part of my plan initially with the two different conferences, was so that I can have confidence in meeting at least conference A, I needed people to buy tickets, buy certain times, so that I can make the decision of, hey let’s go to conference B. So, certainly I set a date for myself and said, okay, if tickets purchased before this time, we’ll call early bird tickets and then after that will be normal ticket pricing. So, if you buy before this point, you know, you will get a big discount. And so, I think it was like 30 or 25 bucks discount. It wasn’t much, but we are talking to financial bloggers here, they are not looking to save…

Steve: Yeah.

Phil: …25 bucks if they can so, that was huge in marketing the event, and that’s not something that’s put out there from an event marketing stand point to, you know, trick anyone, or to harm anyone. It’s not like negative marketing I’m trying to do there, it’s this– the realities of having an event and holding yourself up there and the far that you get down the pipe with all your marketing spend, all your commitments to the hotel, to speakers, things like that, the more confidence you need to have in that people are going to be there. And so, that’s certainly why we do the other word pricing, and reward people who are– know they are going to come back and faithful to you purchase the tickets early on and really help support what you are trying to build, right.

Steve: Yeah so, that’s so really smart, so just to summarize you let out these early bird tickets at a discount, and then those early tickets go on and that just kind of gives you the confidence that things are rolling, that you have the confidence to invest even more and then release that second round of tickets.

Phil: That’s right.

Steve: Okay.

Phil: And with this current FinCon we’re on now, we’ll hit that point at the end of June, so June 30th is when ticket prices go up, you know heavily. And so at that point I have confidence that I’ll know, I’ll be calm looking at the type of Con. That’s what you want to do with an event, as early as possible you want to build the stair down the event that you are going to have on the day– on day one of the conference, like if you can sort of vision that and see that a couple of months out two, three months out, then you are really doing great in terms of your event planning, and so having ticket pre-sales, trying to get your sponsorships knocked out really early, key speakers knocked out really early.

I mean those kind of things help to formulate a conference where two, three months out, you know, you see the vision for the conference, not just a vision but you see the conference that you have at that point. And you could sort of extract an idea out, pick up a few more sales here and there, but for the most part this is the conference that you are going to have, and then the last three months become so much easier because you just kind of plug in holes where they are, and really refining the conference and making it special.

Steve: Right, so after you’ve kind of reached that breakeven point so to speak, it’s all good from there. So, how do you get the word out about your first conference? You mentioned the email list…

Phil: Yeah.

Steve: …And what else to do.

Phil: So, I did the email list, I was a part of forums and some other communities online where I just tapped into that. I also gave people– I believe I gave people some type of button to say they were going to the conference, they could put on their site especially the speakers I think. So, I gave them something to highlight to their communities as well. User usually leverage the power of the folks who you are involved with. I mean there is so many things we do now, that we didn’t do that first year, like, you know, a lot of conferences will have webinars or podcasts or some type of content offering from the speakers who are going to be at the event, and then that leads to more exposure and more awareness of the event for new folks as well.

So, with– for instance with FinCon this year we are doing podcasts with all of our keynote speakers and those who are in the back they are on iTunes now, so I knew where to pick those up and learn about the conference. So, but also more than that those speakers have big audiences. So guys like Chris Tucker, Path Lenn [phonetic], Fernice Trobby [phonetic] who’s one of our keynote speakers this year, I mean they have big communities and when they share the content that they are offering up, it leads to more exposure as well. So I definitely earlier on especially leveraged the fact that, hey you know, some of these speakers have bigger audiences than me, and more influence in the personal parts of blogging communities than me, and so to try and leverage those relationships, was key, you know as well.

Steve: Okay, yeah that’s great advice. There’s actually also a whole bunch of set up too. You mentioned the hotel staff takes care of a lot of it, but you’re by yourself right, so how did you manage all that stuff for the first FinCon?

Phil: Well, I just spend every waking hour on it Steve.

Steve: Okay, did you get help from others or was it just…?

Phil: You know, there were certain elements of the conference that I knew I wanted to work on for instance the scheduling and the speaking, who I wanted on the stage, things like that. I just really wanted to do that myself. And so, I took them on myself, but then there were things like, you know, building up the badges which was very, you know, technical from our ad perspective and logistical perspective. There were so many things like that, where I knew I could do it, but I was busy spending my will a little bit, so I started relying on a couple of freelancers that I had worked with on PTMoney.

So Jessica who was my VA on PTMoney– I started leveraging her to help with some of the event planning, as well as she likes carrying the menu, planning for the hotel, she chose some of that stuff, she also calls some of the outside vendors, some of the places we would go for like parties and stuff at night and sort of set those things up. She also did a little bit of like speaker management, where she sort of gathered their bios and their pics and built up some things like that, and then also hired a guy to do– but my friend Ryan, who still works for me– with me today freelance basis. Then he did all the badge design, he did some other total designs for me, sort of took care of the T-shirts, things like that.

So, yeah, I’ll leverage a couple of freelance people– people I’ve worked with PTMoney before, and people who I really trust in. And then in certain aspects of the conference itself, you know, I again I listen to what the community was trying to tell me. I think even once I made some initial selections on speakers I sort of did evaluating process to– for the attendees who are already signed up to say, hey, here are the people who I’ve submitted speaker proposals, what’s about on these, like you guys tell me which one of these you want to hear from, or which one you– you know, these topics you want to see at the event. So, I use a little bit of that to help crowd source kind of coming together with the event, but yeah, I mean just a lot of time and energy spent on myself worrying about every little aspect of it, you know.

Steve: Yes, I mean, I just– thinking about all the little things that I notice at the conference, you have swag bags, you have all these banners, and indicate design, you even have a magazine that goes out, it’s just crazy amount of work. So, I really appreciate all the things that have just come together with the conference, and I look forward– it’s like one of the one things I look forward to, you know, every single year is going to FinCon, So thank you for that.

Phil: Yeah, thank you.

Steve: So, I don’t want to take up too much more of your time, but so I’ll link up all the resources you mentioned in this podcast, but where can people find you?

Phil: Yeah, so hit me up at PTMoney.com or @ptmoney on twitter, and then starting with the conference, finconexpo.com. This is the website and like Steve and I mentioned early bird tickets are still on sale so get those before June 30th and then on twitter we are FinCon or @FinCon.

Steve: Okay, awesome, so, I will be there for sure, so if any of you guys want to come out and meet, I’d love to meet out with the people that that are listening. All right, thanks a lot PT, thanks for your time.

Phil: Thanks to you, pleasure being on.
Steve: Yeah, pleasure having you, thanks. I wasn’t joking in the podcast. FinCon is easily my favorite conference in the world. PT has created an incredible community of people that really care about each other and he’s really put in a ton of work into this conference. So this year, I’m going to be giving another talk at FinCon, so please come and support me. Last year I talked about how I made over 300k over the last two years with an email auto responder, and this year I will likely talk about e-commerce. For more information about this episode, go to MyWifeQuitHerJob.com/episode22, 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 always makes me proud, but 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 you can give me, is to provide a referral to someone else either in person or to share it on the web. And as I did say it, 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. 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!

021: Nemo Chu On How To Create A 7 Figure Ecommerce Business In Just A Year

Nemo Chu

I met Nemo Chu randomly at one of Noah Kagan’s entrepreneurship events and I’m happy that I did. Turns out that Nemo is a genius when it comes to analytics and he has a pretty cool strategy with which he uses to find products to sell online.

In just a single year, Nemo has managed to create a 7 figure ecommerce business which is pretty darn amazing. This episode is chock full of information so be sure you check it out.

Also, you can sign up for Nemo’s newsletter here.

What You’ll Learn

  • Why real estate didn’t work out for Nemo and how he found ecommerce
  • How to use Ebay to find out what is selling and where to look for inefficiencies in the market
  • Why he uses the American Express Plum Card
  • Why Nemo tries to sell stuff that weighs less than 13 oz
  • Tips on how to use Ebay and Amazon to do research

Other Resources And Books

Transcript

You’re listening to The My Wife Quit Her Job podcast where I have successful bootstrapped entrepreneurs take us back to the very beginning of their journey 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 am giving away free one on one business consultations every single month, and I thought I’d just share a testimonial for the last consult I did with Laura McLaren.

She said, ‘In talking with Steve one on one, I quickly learnt that he is experienced and extremely knowledgeable on starting online retail sites. Steve and I discussed a few different ideas with this analytical approach and market place knowledge combined, it was much more clear which idea would be the most logical to pursue. I came to our consultation with a laundry list of questions and he was able to fire back responses.

Steve is extremely experienced and strategic in what he does. Talking to him for just thirty minutes probably saved me weeks, maybe even months of pursuing my online store from the correct angle. 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 a 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 is your host, Steve Chou!

Steve: Welcome to The My Wife Quit Her Job podcast. Today we are going to be talking to my brother from another mother, Nemo Chu. Now, we might have similar last names but we actually aren’t related but we both do ecommerce and we do it well. Now, Nemo used to be a director of marketing at KISSmetrics until he stumbled upon ecommerce and like myself, he worked on his ecommerce stores while working a full time job, except that Nemo managed to make over seven figures with his ecommerce endeavors in a single year. Now, today Nemo is semi-retired, spends his time volunteering for young life at a local high school, and what’s cool is that Nemo and I have somewhat different strategies when it comes to ecommerce. So, it’ll be very interesting today to hear how Nemo does it. So, welcome to the show Nemo. Great to have you.

Nemo: Hi, thank you so much. That’s a very nice intro.

Steve: So, for all these people who actually don’t know who you are and I actually scoured the net looking for information about you and the information is quite scarce so, can you give us a good brief intro on how you got into ecommerce and exactly what you sell.

Nemo: Sure, so you know, I got into ecommerce thanks to a book actually. I like to read, I read a lot and one of the people that I respect, he was my old boss. We built a company together, he introduced me to a book called “Rich Dad Poor Dad” and up until that point the term financial independence wasn’t really in my vocabulary. I mean, I understood about retirement, I get what that is but that’s what you know, people do in their 65 and have a nest of grey, at least that’s what I thought and from a conservative Chinese family, that was kind of the norm.

So, after reading that book my mind was completely open to this idea where you know, there’s a new goal of financial independence and that’s when I started kind of digging around and framing my life around that goal. To make a long story short…

Steve: So hold on, let’s back up, why ecommerce and not like real estate for example which is Rich Dad Poor Dad…

Nemo: Yea, that’s true, that’s true. So, I really delved into real estate for wild reading, and it’s like they make it sound easy, but then when you start reading it you realize that it’s not easy. At least for me and I’m not very smart and I’ll tell you straight on I’m not smart– actually t-scores are not that [laughs] high. It’s like a 1240 when we were doing 1600.

Steve: [laughs] That’s heresy for Asian parents.

Nemo: I know, I know. I still feel hurt about that. You don’t have to podcast that one.

Steve: I am revoking your Asian card right now.

Nemo: But the real story of the ecommerce is a friend showed me the business model and so he–Chris Thinken, I love that guy to death– he came to join the company which was eventually sold that’s the one that I say we built a company together. He was another wonderful person and he showed me how a person– he was in his like early or mid 30’s okay or early 30’s. Hope he didn’t hear me say mid 30’s [laughs] and he actually built the online stores while working a fulltime job, doing sales at I believe a call centre. That’s where it started.

Eventually he was making so much money that you know, he didn’t need to do that call centre job. He ended up still continuing the stores while joining two friends in building a marketing agency from scratch to– I think in five years they went from three people to 120 employees. They were Inc. 500 firm, and he did that as a co-founder which to me is amazing because I was never really a co-founder, I was just an early employee but he did that as a co-founder while doing the online stores. So as I rubbed shoulders with this guy, and worked for him it became clear to me that this is a business model where if you are smart about it you don’t have to spend a lot of time.

It’s not hard and if you stay focused, there is a healthy return, and it’s worth your time. And so that’s what really intrigued me about ecommerce plus you know my skill set, I used to build websites for people. People would pay me, I was like 16, 17 at the time and I would make these little websites. So I had technical ability to build and use the internet to my advantage and my early jobs growing up were all internet marketing related. So it was you know– that’s all different from real estate right? I don’t have a real estate background at all.

Steve: Okay, so you actually got me really curious now. So let’s talk about this awesome business model where you can sell on the side while working.

Nemo: Okay, sure.

Steve: So, first of all, what do you sell?

Nemo: I sell a lot of nutritional supplements and I also sell some consumer electronics, some beauty products and one line of children’s drum set which is fun for me since I play drums.

Steve: So that’s interesting. So I teach a class on this subject and in general, I try to steer students away from kind of common goods, so to speak, so beauty supplies and that sort of thing so it’s going to be quite interesting to hear how you manage to choose what you sell. So why don’t we just pick one of those products that you sell and just kind of walk me through how you decide to go about selling it.

Nemo: Yeah, sure. So, let me pick– what’s the product that’d be interesting? So since you mentioned beauty products, I’ll talk about a product that I used to sell.

Steve: Okay.

Nemo: It was– it’s from Joan Rivers or is it Joan Rivers? I don’t know how to pronounce her name, but even as celebrity she makes a beauty product that I think you use on your hair, and it will hide the white roots if you dye your hair, forgot the exact name of that product but it’s just a compact with a brush and a mirror built into the compact. That’s it.

What– how I found it was actually using a tool called terapeak. And so Terapeak– T-e-r-a-p-e-a-k.com is a data company which mines the data on eBay, and they’re a part of eBay’s then they service the data in these pretty charts and graphs that are relevant for people like me who are looking to find products that sell. So you can basically look up categories inside eBay and see–Oh look! In the health and beauty category which is huge, these are some of the best sellers, this are their sell through rate, this is the amount of revenue in the last seven days that have sold etcetera, and from that you can start picking things that may interest you.

It’s kind of like working for low hanging fruit, like one product might sell one unit every seven days. That’s not nearly as interesting unless you know, there’s a massive profit margin as a product that sells maybe a hundred times in seven days and so Terapeak will help me know what’s hot and what’s not and trust me, I’m not an affiliate of Terapeak’s, I don’t make any money from saying this, I just find it to be a fun tool and I actually got to meet some of their guys at a conference and they are really nice.

So I found Joan Rivers through that– the product, and then what I did was, I figured out okay well, it it’s selling well on eBay, it’s got to sell well on the other ecommerce sites out there. There’s Amazon of course, you can also build your own store nowadays it’s not too difficult and it can rank in Google with paid ads if you need to, or if you want to do the organic ranking game you can take some time and slowly move your way up through the rankings if there is room, [inaudible] [00:09:29] is there and I discovered on Amazon there was– there was competition, there was someone already selling it but the competition was thin, and I know I can beat it and I’ll give you an example on how you can beat competition.

If someone is selling one unit of that product so it’s a one pack, what’s stopping me from selling a two pack? There are always people out there who buy in bulk right, especially in beauty products where you have your favorites and you buy them over and over again and you want to save some money. And so I can then list a two pack on Amazon and still make money that way, and so you kind of go around your competition instead of going head to head in which case you and the competitor will have your prices driven so low that nobody is making money, and that’s kind of pointless, right? So, that’s one very concrete example of how I approached my business.

Steve: Okay, so let’s back up a little bit, so how did you get these compacts also once you decided that you wanted to sell them?

Nemo: That’s funny, I bought them on eBay.

Steve: Oh…

Nemo: Yeah, I actually bought the product on eBay in bulk, and I sold that on Amazon and I made money on the difference and there was just a big enough difference to make it worth my while. To make it worth my while– to make it more worth my while– pardon my English I emailed the seller on eBay and asked for a bulk discount for larger quantities, and so there’s just a little bit negotiation and one trick I learnt with negotiation is you know, always ask after the– make the other person state the first price and then after they state the price always ask, you know what, can you do better than that price? And ask that three times– can you do better? I mean not like can you do better? Can you do better? Can– you can kind of rephrase it but you get the general idea and often times people will budge on their first price.

Steve: Yes, I’m giving you back your Asian card because these are standard Asian negotiation tactics. Every time I go to china I use these, yes.

Nemo: Thank you– thank you for that.

Steve: Yes, okay–so, when you were look at these products on eBay then, so what is an acceptable margin for you?

Nemo: 20%, 10 or 20%. It really depends on say the virtual profit per unit. I’ll take 10% if I make like a 100 dollars of profit for every unit sold; a really large, large ticket item.

Steve: So, let’s take these Joan Rivers things, how much do they sell for?

Nemo: I think at the time– I think– I think they sold for like 24.99 or 50 bucks for a two pack.

Steve: Okay.

Nemo: Yeah.

Steve: And you were buying them for 25% less or?

Nemo: You know what? I can get my notes out.

Steve: It doesn’t have to be exact, I’ll just borrow a pack, it’s fine.

Nemo: It’s something like that. I keep a lot of notes on these products. My notes are so messy on that. That was a long time ago.

Steve: So just taking an idea there, how many did you buy in bulk?

Nemo: I bought like over a hundred something like that.

Steve: Over a hundred, okay so not too many so we’re talking [inaudible] [00:12:24].

Nemo: I was testing out the market because I knew that– this is how I typically approach things right, the first time around I just, I’m just trying to figure out if there’s traction. If people are actually buying, and then I want to know the velocity of sales. I’m I selling one unit per day, 10 units per day or more? And then once I know that I’m better able to make a decision on, okay–how much do I want to commit to this product line? How much risk do I want to take and usually I’ll buy about a maximum of one month’s worth of inventory. I actually used to buy in half months so I’ll buy half month’s inventory. I make two buys, one at the beginning of the month, one halfway through the month and that’s just to avoid cash crunches and things like that, and also because my financing is purely offered by American Express Plum Card which is a great card for anyone getting into ecommerce. Check it out; I’m not paid to endorse them.

Steve: Yes so, just a real quick aside; so the Plum Card allows you to defer your payment for 60 days as opposed to the regular 30 right?

Nemo: I believe so, yes. You get to pick either the deferment option or you can pick the– I think its 1% or 1.5% cash pack.

Steve: Okay, so in a way what you’re doing is that you are buying off of credit and then you’re selling off the goods for a profit before you even have to pay the bill off the credit card bill.

Nemo: That’s right, that’s right. And the benefit– one huge benefit for that card is the no limit nature of it. I mean, they don’t say it’s no limit, they say it’s like no preset spending limit or something like that and they will cut you if you spend an inordinately large amount of money, but you can basically work your way up so that you can be spending tens of thousands of dollars on your card and for those of us who’ve gone into credit cards and have tried to get a large credit line on credit cards, it’s really tough to get something that’s north of 30,000-40,000 unless you have a very extensive credit history. You know, I’m 26 years old so my credit history is not tremendous.

Steve: Right.

Nemo: So, yeah.

Steve: Okay, so you mentioned that you like to buy half month’s worth of inventory. How do you even know what a half month’s worth of inventory is?

Nemo: That’s when I have to rely on my test. So with the Joan Rivers product I bought a bunch on eBay. That’s the easiest way to get some product and I actually bought only a handful at first. I bought like three of four just to sell and see if it sold and they sold out like, right away, in one day. So that gives me an idea of the velocity and I go okay, well if I am a conservative with my estimate then let’s say three to four per day for the next, you know, 15 days, how many units is that? Do I want to commit to that, and so I go for it.

Steve: So, are you still selling this on Amazon right?

Nemo: Yeah, for that product I sold it on Amazon.

Steve: So, those are– are you using the fulfillment program by Amazon or–?

Nemo: It depends– I use the fulfillment program if it helps me get an edge on my competitors or win the buy box– how are you– is your audience familiar with the buy box?

Steve: No, you should talk about that a little bit.

Nemo: So in Amazon if you look at any product, and you look on the top right where there is the buy button; you will see a little box. I think it’s usually shaded in blue and that’s the buy box, okay, and so the seller that wins the buy box wins like 99.9% of sales pretty much. And so the game for most Amazon sellers is winning that buy box for that product page. Keep in mind that there are multiple product pages sometimes for the same product.

Sometimes all products are consolidated into one product page working to the winds of Amazon, but that won’t matter if you want to jump into this and so to win the buy box, it’s not just about having the lowest price, there is also seller history and at the end of the day it’s a secret algorithm of course that drives Amazon’s decisions on who wins the buy box and no one can game it. I’ve learnt that– and they make it very clear, if you use Amazon’s fulfillment program, you are more likely to win the buy box.

Steve: Okay.

Nemo: And so when there is tense competition I will pick– I will consider using fulfillment by Amazon to win the buy box.

Steve: Okay, so of course there is a bunch of fees that are incurred in selling on Amazon, so are you looking for like an even higher profit margin when you buy on eBay accounting for all these Amazon fees or? I’m just trying to get an idea of what your margin threshold is when you are deciding something to sell.

Nemo: Yeah, so it’s always around 10, 20%, often times my best selling products are north of that so we’re talking about 30, 40, 50% even, but earlier on when I start, I’m happy with the 10, 20% and then over time I can grow my margin by negotiating directly with the manufacturer for large quantities, like at first I bought Joan Rivers at eBay seller, that was a northern manufacturer so if it sold a lot I can approach the manufacturer and go “Hey, I’m interested in buying X hundred X thousand units, can we talk about that”? And depending on whether or not they have the wholesale program, they might talk with you or they might not.

Steve: I see, so can you walk me through product where you actually did do that? Did you do that with the Joan Rivers product or?

Nemo: I tried to and I learnt that the Joan Rivers folks did not have a wholesale program and they seemed to have an arrangement with QBC and QBC seemed to have an exclusive and they weren’t giving out products at wholesale prices. I’m sure that if I dug deeper at some point I could talk to someone who would get me some kind of wholesale deal. I just didn’t bother. It wasn’t the lowest hanging fruit for me. I have a lot of products that I’m working on.

Steve: Yeah, so let’s talk about that, so, how many do you have– how many products do you have [inaudible] [00:17:53] at any given time?

Nemo: I might have– oh cheese– several dozen in play.

Steve: Several dozen in play, okay and how long does it last before you feel like you can’t sell as many as you did initially?

Nemo: It might be too early to tell for that one because some have sold for like years and others will sell for half a year and then the competition becomes too crazy where it’s not worth my time any more. So it’s really tough to answer that question.

Steve: I guess what I’m trying to ask is you don’t really have set suppliers for these goods, right?

Nemo: Some of them like do like the ones I’ve sold for years, I work with the same person, the same people over and over again, it’s often times the manufacturer at that point.

Steve: Okay so, walk me through why someone on eBay won’t list on Amazon as well or vice versa.

Nemo: I don’t know, I don’t know why people on eBay don’t list on Amazon.

Steve: Okay.

Nemo: It’s too bad I mean, I hope they continue not to because that gives me opportunities.

Steve: Right! Okay, okay, I think…

Nemo: Don’t spread the word too far [Laughs].

Steve: [laughs] I won’t post this interview don’t worry. Okay, so let’s– let’s go on a little bit more depth since it sounds like the secret source to your method is figuring out which product that you want to sell, right?

Nemo: Yeah.

Steve: So let’s go over some guidelines here, so what are some guidelines? Walk me through any one of your products, it doesn’t matter which, it could be something that you haven’t sold in a while or what not but, walk me through the process.

Nemo: Guidelines– so I’ll probably pick nutritional supplements because it’s the closest thing to subscription, that isn’t subscription, because it’s consumer product that is, you know. People finish their supplements and usually a bottle is 30 days worth so then at the end of the 30 days they will buy again, and so there is repeat customers and us marketers know that it’s always easier to keep a customer than to acquire a brand new one. So I can always re-market to my same customers and get more sales if I want to, I can put in the work to actually do subscription. Supplements will often– in the industry anyway they often sell something called auto delivery. It’s kind of like you sign up, you pay a monthly fee and every month a new bottle arrives at your doorstep.

Steve: Okay.

Nemo: If I were to put in the work that could be an option. Another thing about supplements that are great or just anything that I try to sell– I try to sell small items that weigh less than 13 ounces. Now why 13 ounces? First class mail baby.

Steve: That’s right.

Nemo: That’s the threshold. Now you can actually move that up to 15 ounces if you have high volume and you talk to US parcel, you negotiate something. So that’s the little benefits as you sell more and more over time, but for most beginners, 13 ounces. Keep it small. Also the size of it, make sure it fits in a nice little packing envelope and that way you can buy the same size envelope for everything.

You know, I have– I’ve been using the same size envelopes for a very, very long time. This padded mail that’s from Jiffy. They’re called jiffy mail number four. That’s the one! So those are all conveniences that save me money downstream because I don’t have to train my employee on you know, “Oh! This time use this one, then use that one”. That just makes things more difficult for people, right.

I want to have a business that runs smoothly and the people who happen to help me out can pick everything up really quickly. That saves me time right, which saves me money. Those are kind of the main things that I look for up front. Of course you mentioned the margin, there must be margin, that’s going to be key and I also sometimes will look for products that happen to be backed by advertising.

I don’t watch a lot of TV or listen to a lot of radio but I know I should because I know some of my products are marketed through those channels and what happens is, these companies will talk about their product on TV, they might use infomercials or just use straight up 30 seconds commercials. And then people will call in to buy the product but some people won’t want to call in, instead they’ll kind of add it to their shopping list and the next time they are on Amazon they’ll buy it there, which benefits me. So, having that advertiser– having the manufacturer advertise the product for you, that takes a lot of work off, off of me.

In fact, I’ve reached a point where I don’t even bother advertising my own products. It’s a requirement of mine to only sell products that are being advertised already, that are being searched for already, because I don’t want to spend the time to do all that. That takes a lot of effort and I’ve done it before. So…

Steve: I see, okay– so, and then the secret to getting the buy box on Amazon, you get a little bit creative with the packaging.

Nemo: That’s one way, that’s right.

Steve: Okay. Are there other ways that you care to share?

Nemo: There’s another way, for example sometimes if you go and look at a product, you go to the product page and maybe it’s a bottle of– I don’t know, like some bottle of pills, like vitamins or whatever. You’ll see that the page defaults to a one pack and it’s on the same product detail page. And then under– it’s going to be like underneath the price, you’ll see these little square boxes that will say two bottles, three bottles, four bottles and you can click on those little boxes, you stay on the same page; which is important and then the price changes in the buy box.

That’s actually a little bit different than creating another product page which features only the two pack. It’s like merging the two pages together if that makes any sense and it’s an important detail actually. When that happens you know there’s an opportunity because some people– some products only sell one version a price so one pack and you actually inject that additional little box that’s a two pack onto the same page which is already trafficked and searched for by a lot of people and then if you inject yourself in there, you’re the only seller and you can make money that way too. To do that you often have to contact Amazon’s customer support.

Steve: Okay, so let me– you said a lot there, so let me just back up here, so, you look for an already trafficked page for a product and then you try to offer something unique to create this little box on that page that will steer the person away to your product page.

Nemo: That’s, that’s basically right except that the last part where I said steers people away to my product page, that’s not true, it’s– my product page is that product page.

Steve: Okay.

Nemo: It’s just like another face to it, which dynamically appears when people click on that little box.

Steve: But then you get the buy box at that point.

Nemo: Exactly, but then now I win the buy box because I’m the only seller for that. It’s interesting; the Amazon world has all these little new answers where if you look at the pages a lot over time you will pick up little tips. Another one is, people have a new model out and then, I bumped into this not that long ago. There’s a product the consumer electronics product, and a new version of it came out, but the Amazon page was still selling the old version. So, what do I do? Every– all the traffic is going to that page. That page is the one that ranks well in Google already, so you want to take advantage of the traffic going through that page, but there’s a new version and you can’t sell the new version on the page featuring the old version.

You kind of camp but you take a risk because people might really want the old version so what do you do? Well, it turns out Amazon if you contact customer support will let you plant a little image with a price tag next to it and a title that says a new version of this product is available and it appears a bit further below the price and you can get that there which then points into a completely new product page if you talk to support. So that helps you take advantage of the traffic and it helps you own a product page just for yourself.

Steve: I see, and this is in addition to actually creating a brand new product page with this new product as well, right?

Nemo: Yes! That’s right.

Steve: Okay.

Nemo: That’s right you have to create a new product page as well to do– to make that play work.

Steve: I see, so do you actually sell any products on your own site or is it primarily through Amazon?

Nemo: Yeah, I do. I do sell some of products on my own site– sites rather it’s plural and its plural because I don’t want to become the next WallMart.com or GNC.com that’s not my goal. I will often just create little mini sites that sell only one product.

Steve: Okay, so that’s like sales pages essentially.

Nemo: Yeah, kind of like sales pages. That’s right.

Steve: Okay.

Nemo: Great, I’m glad your audience is familiar with that. So you have little sales pages or little micro sites and it really depends on whether or not that play might actually work and to know if it actually works you just kind of study the Google search results page for the product that you want to sell so if the product is back to Joan Rivers right, if people type in Joan Rivers hair– I forgot the exact model, but like call it hair 3000, for crying out loud okay, Joan Rivers Hair 3000.

You search that yourself in Google and look at the results page and you might see oh! Look, Amazon takes an ad out for that page already and I know right away oh! That means a lot of people actually buy from Amazon. It’s hard to compete with Amazon, right, but if Amazon hasn’t taken out an ad and Amazon is not appearing organically then I go, oh wait! Okay, so I can maybe buy an ad and beat out the other person who’s bought the ad who’s like from you know, ArkMepillWarehouse.com [phonetic]. They’re not hard to beat right? So I could just beat them by making a better ad, not too difficult.
.

Steve: So what– so you mentioned buying ads, so which platforms do you use? And what have you tried?

Nemo: I use adwords and I use Bing, so the Bing ads. Over time I only do the Bing ads for products that are searched a lot because if a product is searched a lot on Google then there will be some searches in Bing and so it’s just easy and the cost is low for Bing.

Steve: Okay, have you tried Facebook or anything else?

Nemo: Yeah, I’ve done Facebook actually not for my own products but in the past when I was a marketer at a software company, at two different software companies. We used Facebook quite a bit and back in the day when I had my own t-shirt business, I did Facebook ads as well, yeah. It’s just– I know that Facebook ads can work very well for the nutritional supplement space, I had the benefit of being at a marketing analytics company and so our clients, some of them were nutritional supplements companies. I could see kind of– I heard from talking with them you kind of know how it’s working and so I know that it can work. I just know that to make it work, you might have to use like videos, you might have to use some long copy, it’s just a lot of work.

Steve: Right, okay.

Nemo: Again, back to the nature of what I do, every minute counts and so I don’t want to spend too much time on those things. I just want to get the lower hanging fruit.

Steve: Okay, so it sounds like since you’re shipping stuff yourself you kind of have to hold some inventory right?

Nemo: Yeah.

Steve: So have you ever had any products that just didn’t sell and resulted in a bunch of stuff lying around in your garage or whatever?

Nemo: It has happened where I’ll buy like a hundred units of something and it sells for a little while then some competitor creeps up, and decides to try to cut me out, and then things get difficult, and then I just focus on something else because its lower hanging fruit and I’m making more money there and I still have 70 bottles of whatever sitting. To me It’s kind of its crappy when that happens, right?

At the end of the day though I recognize that overall revenue growth and overall profit growth is more important than that one product line and so I just focus on where the low hanging fruit is. I know that if I need to blow out that inventory I can either sell it at a slight loss and just kind of recoup my cash, at least what’s left of it, or I can really work hard to check out some other channels to sell it. Maybe it’s, maybe I’m squeezed out of Amazon, well, what if eBay still has an opportunity, maybe I’ll push that product in eBay but…

Steve: I see.

Nemo: It’s just– It’s all effort.

Steve: So all of the products that you sell, you actually don’t use or sometimes you haven’t even really played around with them. Is that– is that accurate?

Nemo: That’s very accurate outside of like one of the consumer electronics products which is a portable battery pack for your laptop. Other than that I don’t really use any of them.

Steve: So everything is purely data driven– all of your decisions?

Nemo: That’s right, as data driven as possible because data doesn’t have emotions, data will get me high or low, data is very objective and it can help quite a bit when used appropriately.

Steve: It also sounds to me that your interest also is not in building a brand for your shop. These are all just straight arbitrage plays you know, from either the manufacturer or eBay and selling at Amazon, and that sort of thing.

Nemo: Yeah that’s– it’s really the easiest play possible and it’s often arbitrage. I know from experience having helped build a couple of different software brands, I just know how much work it takes to build a brand and how much capital it takes to build a brand. Now, of course there are niche brands and [inaudible][00:31:22] it’s, it’s just one of those things where I choose not to get too involved lest I be sucked into it and waste a bunch of time.

Steve: Okay, so I know after hearing this podcast interview, I know a lot of people are going to want to actually try what you are doing. So if you could just– for– let’s say I’m brand new to this, what advice would you give to someone who actually wants to try to do what you do online, and what tools and what software and what not would you recommend to help them out? So, okay, so earlier on you mentioned Terapeak right? Is that still a piece software that you– would you recommend people look on eBay first or use it?

Nemo: I recommend– so if you don’t want to pay for Terapeak, one thing you can do is when you are on eBay if you want to know if a product is actually selling, there’s a little box on the left side part, this is completed listings. They added a new one called sold listings. I like to look at completed listings because they will show me which listings sold or didn’t sell, and that gives you an idea of how successful that product is on eBay, right? It gives you the dates, when they sold, if they sold and the dates if they didn’t sell and so very quickly you can see from like literally red and green because they color code it, how much traction there can be on eBay.

Now, Terapeak you know, you can obviously go in and use a seven day free trial and play around with that too. That gives you that stuff and more. So that’s definitely an opportunity. I know that the Google keyword planner is a tool I use quite a bit.

Often times marketers run will into the question of, “Hey look! Samsung”, all right? I’m just staring at the Samsung TV right now. Okay, Samsung! That’s a brand. I wonder how many people search for Samsung and so you go to Google Keyword planner, you type Samsung into there, you might even use some little brackets or things to get the exact match, I’m getting very specific right now but then you click the button and the Google keyword planner will spit out the number of average monthly searches for Samsung. Like globally and I think even within the US. Very quickly you can determine whether or not Samsung is searched for by a lot of people or not a lot of people, and it helps you determine whether or not it’s low hanging fruit for you. Now…

Steve: So, what are some of your guidelines in that respect in terms of number of searches before you go on?

Nemo: Yeah, so for my business model, I know that it’s not really worth my time if there are fewer than 380 monthly searches. So I draw a line there, at 380 monthly searches.

Steve: That’s really low actually.

Nemo: Yeah, that is really low. However, I’ve learnt that from the channels that I sell on, it can still be worth my time. Some of my best sellers though are at like 9700 average monthly searches–

Steve: Okay.

Nemo: 7,000 monthly searches, so you can kind of quickly know what’s low hang or not and focus your efforts accordingly.

Steve: Okay, okay so go on, so okay, you use the keyword planner, Terapeak, eBay if they want and then, how do you validate the product?

Nemo: So let’s say I’m making my play on Amazon, right? And there are a lot of products there. If I look on Amazon, and I don’t see the product I want to sell, that can just be a massive opportunity where people are actively looking for this product on Google, which also means they are looking for them Amazon, because Amazon captures I think there is some data like 30% of shopping traffic, I don’t know how you quantify that to be honest, but you know, I think it makes sense.

So if it’s searched for in Google, it’s searched for on Amazon. Unfortunately, those on Amazon are seeing nothing, so I should just list something on Amazon and it will sell and that’s often the case. Now, if there’re already is someone selling that product, that’s helpful for me because I can look at the product page, scroll down and look for the Amazon seller ranking. I think that’s what it is, Amazon seller ranking. Next to it there will be a number and if it is over say– if it’s higher than say 12,000 for nutritional supplements because it’s category specific okay, keep that in mind.

Steve: Okay.

Nemo: For nutritional supplements I know that if it’s more than– if it’s higher than 12,000 so, between one to 12,000 it’s worth my time. I used to have– I used to still work with products that were ranking like 40,000 but just because of number of products that I have and I’ve worked through, I have to pick and choose now.

Steve: So this ranking is just number of transactions or…?

Nemo: Basically I know that if it’s 12,000 searches, sorry– if it’s ranked around 12,000 and the competition is thin, that will roughly equate to maybe two or three sales per day for me.

Steve: Interesting.

Nemo: And if the margin is sad enough, that can be worth my time right?

Steve: That implies that the seller rating– the seller rating is determining the sales I suppose of the product itself? I didn’t– I must have missed something there.

Nemo: Yes, I’ll– I’ll just repeat. The Amazon best seller ranking will appear on every product page in Amazon– almost every, there’re some that don’t have it and I don’t know why.

Steve: Okay.

Nemo: If it appears, it’ll– it’ll be lower down the page, you have to scroll down to see it and you will– it’ll tell you– it’s like a relative ranking system, right? Something that’s has an Amazon best ranking of 1,000 sells at a much higher velocity than a different product selling at say 12,000 ranking right?

Steve: Okay, I think I understand now. So, that number is not just really a seller’s rating in terms of how many transactions they’ve done. It really is a rating that determines how fast that particular category of products moves. Is that– is that accurate?

Nemo: Yeah, oh! Not category but it’s that actual product that…

Steve: That actual product, okay got it.

Nemo: Yeah, and you just learn over time that if it’s at 12,000 that means it’s roughly three sales per day, if it’s at 1,000 then it’s X.

Steve: Okay, so one question I have in my mind at least is it sounds like you can kind of snatch the buy box on a daily basis like little minute tricks that you make and snatch the buy box from time to time so, is it a lot of management to make sure that you are always having the buy box?

Nemo: Every morning, I’ll check and in on OSX machine on a Mac computer, you can use your dash board and create what’s called the web clips. It’s a safari and dashboard kind of hybrid where you can move to your dashboard, inside your Mac computer and immediately, you can basically see a bunch of little browser windows highlighted onto wherever you want to be. For me, it’s my products, so it’s like a one glance there’re all my products selling on Amazon, who’s winning the buy box right now? I can see that.

That’s a little trick. If you really want to get into it you can use repricing software, there’s a lot–there’re a lot of them out there. I honestly tried them for a little bit and I realized that I can just eyeball, I don’t have to pay extra to buy repricing software.

And what repricing software does, is it’s kind of like a robot that keeps an eye on the page and if you lose the buy box, the robot will change the price for you automatically with pre-programmed instructions that you kind of put in ahead of time. You kind of set like a floor and– you don’t really set a ceiling, I mean, it’s– you can kind of let it sell for a little higher price if you want to, but you can kind of control that and then it will try to win the buy box for you as often as possible. It can get really complicated inside repricing software, like all these rules that you can set into it. I’m sure you know, there’re people out there who– who’ll get a kick out of that and it is a lot of fun.

Steve: That sounds dangerous, like I would just lower my price for like 10 seconds to see what everyone’s low threshold is and then just kind of raise it back up. I don’t know.

Nemo: That’s clever, see that– that can help you probe and see if your competitors are using repricing software, right, great way to do it.

Steve: And get an idea what their margins are actually.

Nemo: Yeah, and what their floor is, and if their floor is so low that you can’t make any money, don’t spend thousands of dollars buying a half month’s worth of inventory right, at least if you’re going to stick with that play because it’s going to be a pain for you.

Steve: So here’s a question I have since I’ve noticed this on Amazon that there’s a lot of people selling products at like ridiculously low prices, why does that actually occur on Amazon?

Nemo: So, some people especially the book section, will actually sell books for very, very low price and they might even lose money because they’re boosting their ranking all right? As a seller, you have a transaction history and you have ratings; like five star, four star, you know, one star, also you have the number of transactions or the number of ratings that you’ve collected. All of those things factor into– all those things factor into your account’s ability to win the buy box, right?

Steve: I see, so it’s not price, it’s just some more complicated formula that’s a combination of your rating plus price plus…

Nemo: Yeah.

Steve: Whatever makes them more money most likely right?

Nemo: Probably, it’s a secret you know, but there’re some things that kind of make sense right? It’s kind of like common sense says that if someone has only sold one thing on Amazon ever and lists a product for the same price as someone else who’s sold products for years and you know, I’ve sold tens of thousands of products, guess who’s going to probably win the buy box right? Who– who’s– Amazon is probably going to give it to the person who has a longer track record and who’s delighted more customers.

Steve: So, what do you recommend starting out? Do you recommend just building up this rating initially?

Nemo: Unless you have a lot of money, right, because that takes every– if you want to build up rating fast, one of the quick ways is to lose money on every sale. I mean it’s not– if you’re smart about it you might not do it that way, you can find something that is profitable, but that’s the quick way and if you have a lot of money, sure go for it.

If you don’t have a lot of money, I’d just say, you find a niche, kind of like what I said, maybe something is searched for in Google, some product– some particular product model or whatever and then look on it on Amazon. If it isn’t sold on Amazon, guess what? Chances are people are actually searching for that product on Amazon, they’re just finding nothing. If you list that, then they’ll find you and they’ll buy from you.

Steve: It seems like there should be a tool that will help you do this. Is there– are there any tools that you use that just do the direct correlation for you between Google and Amazon?

Nemo: Not that I’m aware of, Terapeak is getting close, they’re building in some things, some Amazon features now because they were– they started out on– in eBay. They just mine eBay data, and it’s great for that and they’re kind of diving into Amazon a little bit. So if– then again I’m not– I’m not like an expert in the tools out there for this since I have a very specific strategy and a very specific play, but for those who might want a short cut, Terapeak could be a good start.

Steve: Okay, and so it sound like with your business model that you literally can just start making right away, right? You’re just buying something and you’re just listing it. There’s no real set– you don’t have to start a website or anything, right?

Nemo: Usually not, you don’t have to raise money either, you don’t have to go from– to friends and family you know, collect the whole bunch of money before you get started, it’s pretty straight forward.

Steve: And you just really need your plum card and then you just buy a certain inventory and then okay.

Nemo: Yeah or your existing credit card, right?

Steve: Okay.

Nemo: Yeah.

Steve: Yeah, okay that’s a pretty unique business model, I’m just curious how things are going to play out as more and more people start doing this, and kind of start squeezing the margins but I guess you can always find some low hanging fruit out there.

Nemo: That’s right, I think– I think when that happens, when there’s more and more people because it’s not a matter of if it’s a matter of when, I just recognize that my edge will be my ability to find products quickly. The benefit of kind of this society that we’re living is– and the entrepreneurs out there is, there are always new products coming out. So, that’s fine for me because I’ll always find another hot product, another new product that’s hot or whatever and then I’ll be the first to list that, or the second to list that or find an opportunity somewhere. So I’m not too concerned.

Steve: Okay, so in any given month, how much time do you actually spend looking for new products as opposed to managing your existing ones?

Nemo: I kind of go with sparks when I feel like it, I try to be disciplined though so let’s say in the last month I probably spent two full days, invested two full eight hour work days, working through my process for finding new products and testing them out.

Steve: Okay then as products kind of stop selling you just find new ones to replace them and that’s just kind of how the cycle goes.

Nemo: Yeah, usually I mean, I try to put up a fight at first because you can still get pretty far just by defending your position, and you know, that’s where the marketing experience that I have comes in really, really handy. So I defend and I defend and if there– I just get squeezed out, then, all right that’s fine. I have other products.

Steve: Okay, okay. That’s pretty unique. So in a way you’re kind of diversified with just all the breadth of products that you sell.

Nemo: Yeah, I’ve probably rotated through, I mean right now like I said I have dozens of products in play, I’d say less than 100 in play but I’ve rotated through maybe 300 some products.

Steve: Wow! Okay.

Nemo: Yeah.

Steve: And how long have you been doing this?

Nemo: Think I’ve been really focused on this for like a year and a half now.

Steve: Okay, okay so not even that long.

Nemo: Yeah.

Steve: Okay. Cool, Nemo we’re coming up on 45 minutes, I don’t want to take up too much of your time. Can you recommend– you already mentioned Rich Dad poor Dad, are there any other books that you recommend to just kind of instill that entrepreneurship spirit in some of my listeners?

Nemo: I’ll be honest, I don’t read too many entrepreneurship books, I tend to read books that are on the fundamentals of marketing, so the signs of marketing or the nut and bolts of marketing. So I can recommend a free book out there called ‘Scientific Advertising’ by Claude Hopkins, you can Google that. It’s an old book and I think it hit the public domain.

There’s another book which is just fun, it’s the Biography– I think autobiography of one the world’s best direct marketers, left by the name of the guy is Lester Wunderman, and the name of the book is called ‘Being Direct’. It’s a story of this person who basically invented the ‘1-800 number’, he invented the ‘Columbia Record Club’. He’s the reason why American Express actually has cards– credit cards rather than traveler’s cheques. So, wonderful marketer, great stories, that also helps you understand what it takes as a marketer to grow some really fast growth businesses.

Another book that I like which is based on the signs of persuasion and marketing is ‘Influence’ by Robert Cialdini.

Steve: That’s a good one.

Nemo: Yeah, that’s a fun one, and then for those who value time management and– yeah who value time management and personal productivity, I recommend anything by Brian Tracy. I actually– you can buy the books from and by Brian Tracy, just kind of search I think time and Brian Tracy. I know it’s not super specific for you, I can probably just email you something later.

Steve: Yeah, I’ll put those in the show notes yeah.

Nemo: Yeah, I’ll find the one that I really like because often times I just YouTube these titles and I’ll listen to the audio book because many of them are free on YouTube.

Steve: Okay, and lastly Nemo, where can people find you online?

Nemo: They can usually find me on LinkedIn, Nemo Chu, or if you want like my little about.me website just go to about.me/nemochu

Steve: Awesome, well thanks a lot for your time Nemo, I know personally I learnt a lot, and I’m sure the listeners have as well.

Nemo: No problem Steve, thanks for having me.

Steve: All right man thanks a lot.

Nemo: Yeah, good luck everyone.

Steve: All right, take care.

I don’t know about you but I learnt a ton from Nemo today, and what’s cool is that Nemo’s strategy is very different from my own. By leveraging his background in analytics, he is able to quickly find and test profitable products to sell online. For more information about this episode, go to MyWifeQuitHerJob.com/episode21. And also, 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 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, go to MyWifeQuitHerJob.com/contest, and if you’re interested in starting your own online business, be sure to sign up for my free ‘six day mini course’ where I show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information. 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!

020: How My Student Sean Aquino Created A 6 Figure Online Store Selling Leather Working Supplies

Sean Aquino

Sean Aquino is a student in my Create A Profitable Online Store Course and I’m really happy to have him on the show today. Sean runs FineLeatherworking.com where he sells very specialized leather working supplies online.

What’s cool about Sean is that he has managed to create a 6 figure business in a little over a year and a half and he has done so in a niche that he is very passionate about. Similar to the last student interview that I conducted, this podcast provides a very realistic, in the trenches account of someone who just started their online store.

Enjoy the interview as there are a lot of details that Sean shares that can help anyone get started.

Want To Learn How To Start A 6 Figure Ecommerce Store?

Create  A Profitable Online StoreDid you enjoy listening to Sean’s story? If you would like to create your own profitable online store and join a community of like minded entrepreneurs, then sign up for my full blown course on how to create a profitable online store.

My course offers over 60+ hours of video and includes live office hours where you can ask me questions directly.

If you want to learn everything there is to know about ecommerce, be sure to check it out!

What You’ll Learn

  • How Sean came up with his niche
  • How Sean tested his niche prior to investing a large sum of money on the business
  • All of the mistakes Sean made in getting started and how to avoid them
  • How Sean attracted customers to his store early on
  • The secret to Sean’s success.
  • How Sean continuously manages to attract repeat business for his online store

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 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 is your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really happy to have Sean Aquino on the show and Sean is actually a student in my creative profitable online store course. Now several weeks ago, I sent out a poll to my readers and an overwhelming number of people responded that they wanted to hear from real people who just started out with their shops, people on the trenches so to speak. So I’ve decided to bring on different students of mine to the podcast and incidentally if you want to learn more about my course, go to www.profitableonlinestore.com.

Anyways in the coming weeks, I will have different students on the show who took different paths to starting their shops. Now some students chose to go the free open source route, some students decided to go with the fully hosted shopping cart, some students decide to drop ship, others decided to carry inventory etcetera, etcetera. The goal of course is to give all would be shop owners some different perspectives on the whole process of starting an online store.

Now let’s talk about Sean a little bit. Sean is among one of the earlier students in my create a profitable online store course, and he’s actually doing quite well. In fact his stores are already doing six figures per year and he’s been consistently doing five figures per month for the past several months. Now his store is called fineleatherworking.com and he sells suppliers for leather workers. Now, it’s actually been a very long time since I’ve spoken to Sean, so I’m actually very interested in hearing how he has grown his business. So welcome to the show Sean, how are you doing men?

Sean: Pretty good, how are you Steve?

Steve: Pretty good. So Sean you know your niche is pretty unique, so how did you actually come up with selling leather working supplies?

Sean: So I’ve been a maker for my whole life. In college I made theater and after college, I actually was making television and then after television I was– got into traditional woodworking, so I did that for a number of years and then after– not after, I still do a lot of woodworking. One of the things that I wanted to do was to build a furniture that had leather wrap like leather cushions and leather aspects of it as well as making leather goods for myself. So I started learning everything I could find about leather working and through my experience of making other types of things be it, TV or woodworking, you know, I knew that I wanted a certain level of quality and so I started taking from a couple of different teachers, all of them were great, but what I discovered was that the tools that these teachers would use and the tools that many of the high end leather workers that I knew used were not readily available either online or even in the US. So I decided to open my own store which sells leather working tools for making high end leather goods.

Steve: Interesting so you actually studied how to do this. So you are actually very passionate about leather working in general.

Sean: Yeah, you know and I think that’s really important to wherever niche that you choose, for your store is that, it’s not just something that– you know Guy Kawasaki always talks about ‘make meaning’ and so if you go set out to just make money, you can do that to a certain extent but especially in like the maker community and like the DIY community and in the community where people make things, it’s much more important to make meaning as well as to sell the things. So we and as much are about not just selling tools but selling the means to make something into, make something for yourself.

Steve: That’s really interesting because you know for us at least, I’m not really particularly interested in the stuff that we sell on our shop, but I did really get passionate about just running the business and providing the best possible products within our niche. So it’s just interesting that you are very passionate about your niche.

Sean: Yeah totally and you know but I think that extends out to even making a store, right. So some people like you know there is like this idea of being like a maker and people who make stores like in my view are also makers as well because it’s like you are either dissatisfied with the customer service that you received when you maybe were buying those linen cloths or like the experience that you had so people set out to make their own store, to make their own experience that hopefully make other people happier and have a more enjoyable experience and purchasing those products.

So too with us, with fine leather working is that you know we really focus on the customer service aspect of it but then since I have an interest in leather working and in making things in general, you know, I really try to optimize store not with like the profits in mind but more of like, you know, if it were me and it is me who uses these tools what would I need. And so what I put into the store were all of the things that I myself would need, if I was trying to either, if I was starting leather working today this is what I would probably get if I wanted to start that.

Steve: So what are some of your goals for the business then, is it– I imagine it’s to make money also, but is this going to be like a side project or you want to make this you’re full time gig at some point?

Sean: Well, I really love my job now so I don’t know that I would ever leave that job but certainly I could create more time into the store and I would like to. I think that it’s not– right now we focus mostly on finding the right tools for people but more and more we are trying to provide tutorials on like how to use those tools. Like even how to think about it, right. So this is actually something that if you subscribe to our newsletter is that something that I talk about which is that you know you… When I started woodworking it’s a good metaphor for making anything. I had a notion of– I started with mask curving. And so I had a notion of what I thought would be the process of making a mask like out of a block of wood and you curve it. And then at the time I was living in Japan, so I had the fortunate ability to have like this master woodworking teacher who made masks. And watching him for the first time make masks was like amazing. Like he was probably in his 60s or 70s at the time, but he like tore through that mask like it was crazy like he just took a piece of block of wood, and he willed it down to like almost nothing like in a really short amount of time.

Well knowing what’s possible, I think is really important to somebody who is about to get into tools because you can really misuse tools and really misunderstand tools. There is this notion that if I buy the right tool like then my work will be better. That is true to an extent, but the knowledge of how to use that tool is really the more empowering thing. And as your ability grows you of course will need better tools, but you have to focus on you know being better at your craft as well as trying to find the best materials and the best tools that you can have.

Steve: Yeah, that’s probably why my golf game hasn’t improved even with nice clubs, yeah.

Sean: Yeah that’s true right. So we just don’t say okay, buy the most expensive tools and then you will be better. It’s like we also provide information of okay so if you decide, if this is what you are looking for, if this is the quality that you are looking for, this is how you use this thing and this is how you should use it and this is the result that you get. And what is helpful, and what we are trying to get more into as well, it’s not just here is the tool, this is what it does but this is what it looks like right like when you are– if you know nothing about like how something should work as far as whether it will be wood woodworking or leatherworking, anything even like signing a website, you know making a television program, you need to be able to see and to understand what’s possible to increase the range of what you think is possible, right, because going into it, you know.

I only thought when I first started leatherworking since that’s a more recent example I thought that okay so the best way to do this is this way, right and it wasn’t until I found certain teachers who were way better than me or had been doing this for a really long time that I was like okay so if I really want to do this, this is what it really should feel like, right. And I think that’s also important to understand even about taking your course too and why it’s really super useful is that people can kind of flare about if they want to make their own business but it’s good to have good role models or good examples of how that works so that you can understand like okay so I may be doing this right or wrong doesn’t matter, but I understand how he got there and so now I can tailor that to my own experience and you know, make it my own but I now have a template for understanding you know how to get better at something.

Steve: Sure yeah that makes a whole lot of sense. So, from what I understand then for your store, you sell the tools and you actually– the vision is to provide tutorials and how to use the tools and that sort of a thing and that in a way you are going to be trying to create some sort of a community for leather workers?

Sean: Yeah.

Steve: Is that accurate, okay.

Sean: Yeah, that’s pretty accurate. I mean right now and actually since we started the store we focus a lot on customer service.

Steve: Okay.

Sean: You know when people call me up, like I’ll spend as much time as I need with them. Like they are always– people are always shocked like I’m willing to write like you know paragraph after paragraph of emails. I’m willing to talk to them for like 20 minutes. Usually you know with most crafts these days like it’s usually like this old school company you know it’s a good bunch of old guys sitting like in this old shop like they don’t want to talk to you, they don’t want to know what you are doing, it’s like either buy or you go away. But so it’s a really shocking experience, sometimes I think for a customer because you know, they’ll call us or they’ll write to us and I will reply back, you know. And that even in itself you know especially like in these sort of old school types of experiences where it’s like, “Yeah I will answer the phone maybe the fifth time you call me or I will answer your question maybe the third time that you email me like barely.” We actually focus a lot on our customer service so that we can understand more about what are people trying to achieve and what are they trying to do.

Steve: So you still have your full time job, how do you actually take support calls while you are at work?

Sean: Oh my God, I try to do that either in my off hours. So I know that it doesn’t always work for people who are on the East Coast, but I’ll usually get a log of calls and then if I either you know when I get home I will try to answer calls, or if I get a lunch break you know like if I get five minutes here I will try to call somebody back. Usually I try to schedule the time to just sort of call them back.

Steve: Okay.

Sean: So often it goes to a voice mail because we, you know this is our full time, like we, me and my wife both have full time jobs but while I can answer people like I will usually call them back and they are usually happy to talk to me like kind of an off hour because people work too, so they don’t necessarily want to talk to me when they are at their job too, so it kind of works out.

Steve: So how many calls do you get in a day?

Sean: No, not that many.

Steve: Okay.

Sean: I mean, we get like you know probably you know in a week we will get like three.

Steve: Okay.

Sean: But what’s interesting is like for every call that we get we almost always get a sale because not because like you know, I’m like selling them on the phone but because they legitimately just have this question that needs answering and like nobody is providing the answer to. So we provide the answer and then like oh this is great, so maybe I will buy some tools too.

Steve: Yeah, I would say our conversion rate for our phone customers is very high also. Almost always there’s sale.

Sean: Yeah.

Steve: Yeah, so you know I wanted to talk to you specifically because you went to the open source route. You chose open cart for your shopping cart, right?

Sean: That’s right.

Steve: So, I want to get to know, did you even consider some of the fully hosted guys like Shopify or Bigcommerce and what was your thought process involved in deciding what to do?

Sean: I’m really cheap so that was why.

Steve: So am I.

Sean: Right, so we are both agents so we both know like it’s about saving money. Also too in my– in the job that I had at the time, I was doing a lot of friend development and also design as well as video and everything. So I had experience in building my own website in designing my websites, so I had the ability and actually– although I will say that even though I had that ability, it was somewhat that even being good at doing website design was not necessarily an asset first and it’s something that came up.

So for people who are listening, Steve actually has focus groups within his course so that people who are building stores can get together and talk about it which is really helpful. And one of the people asked like, “Well you being a web designer like you know did that give you like instant access to your store?” And it did but it also– what I would say for somebody who’s aspiring is that you don’t necessarily need to be a web designer per say or to have a background experience in backend development because for me, I would spend I think inundate amount of time like kind of fixating upon like one little aspect of it, without keeping the like the eye on the price and like okay so it doesn’t matter if this button is green or red necessarily, we need to get the store like out the door.
And I think that my web design experience certainly helped me a lot in you know it was invaluable in making the store, but for people who are aspiring to do it, I would say that it’s as important to focus on what you are really after which is to open a store, right. So, it was really easy for me to do the design aspect of it but what I was really learning was like how to run that as a business.

Steve: So did you end up buying a theme or template or you kind of just started with the base theme?

Sean: So being an agent I was also an over achiever. So I was planning to do two stores at once. My first store was going to be selling open cart themes, so I ended like put my face into it, right. Like so I was trying to, I built this theme from scratch like and then my idea was to sell that theme like in a separate store and then to open my fine leather working store. It’s like about like economy, right.

Steve: Sure.

Sean: Like I was like trying to do two things at once. So I still had that theme and I still use that for the store but I totally built it from scratch because I had this notion of like oh it’s going to sell the theme. Which is also interesting too because this is something else that we talked about in our focus group was that, I didn’t know necessarily how like my experience in my success with fine leather working was the culmination of a point. If I hadn’t tried to create like an open cart theme and trying to sell it, I probably would have done less well on the fine leather working store and similarly so like that was like my like this site was like my fifth niche, right. Like I had tried like five completely different things to get to this point and all those things led up to that and I think that’s something that’s important too is that whether you chose open source or whether you choose something that’s out of the box, like I think that it’s more important to get it out the door so that you can test whether or not what you are doing is valid, right.

Like we both always look at the value so we are always talking about validating your assumptions and validating your niche and I think that’s super important and it took me like five tries. But in each of those tries I was optimizing one, like a different aspect of it like whether it was a copy or the images or you know the niche that I was picking, how I was evaluating it, you know or just even my connections to that product. So even though I’m a designer, I don’t have great jobs at backend development and once I build that theme I quickly realized like I’m never going to maintain this for people who are paying money because in a way like I knew a certain amount about PHP but is it really my passion to update this theme and I was like no, not at all.

Steve: Yeah, totally hey so you know you mention a lot of great points there. So let’s talk about validating your niche. So what are some of the things that you did to validate your leather working niche before you went full blown into the whole idea?

Sean: Well, so it wasn’t just the leather working niche but it was also other things like the other products that I tried as well. The first mistake that I made was to build an entire store without testing it, right. That was like my rookie mistake, it was like me and a friend of mine were trying– this is like way back so when IOS first came out, like we were thinking we were going to make like you know bags of cash by making icons for iPhone apps and for like mobile optimized icons. And so I spent a whole lot of time creating the store and then we were like oh we need to make some products and so we made a couple of icons and we put them out there. We went to a bunch of like IOS meet ups like in the valley and then like you know, we got like two sales and icons being icons it’s like three bucks. So we spent like 40 hours making a store and then we made like three bucks, right.

So that was like the first mistake was just like to build everything and then like, then go to market so lesson from that iteration I understood like okay so really validate like what you are doing. So for subject on products what I would like is, I would really try to dab it down like I’m kind of hard headed as well as it’s like as well as sort of like into different things so it took me a couple of iterations but you know my next store I built it just like a little bit less than like my previous store. So I always spent like instead of spending 40 hours, I could spend like 30 hours on it. And then I tested my assumptions right and like I fell flat on that too.

So all of that says that you know when I finally got the leather working, what I did was that I did even try to build the store first. I actually started an E-newsletter right, like I just put out a large page that said, “Hey we are going to be opening leather tools store for people who want to buy high end tools who is interested?” And then I did a bunch of ads on Facebook to see who signed up. And based on you know the rate at which I started getting subscribers which was pretty fast it was like I think I put up the ads on– I put up the adds and then within maybe a couple of days I started getting subscribers. So that was solid to validate my niche, right.

So I was trying to optimize okay so how many people are actually interested in this. And so I did different types of experimentation on advertizing to determine whether or not to lose interest and then before I built a store, I just started selling stuff like you know, I would– I went on to the leather working forums and people were looking for certain things and I was like, “Okay so I have these things so who wants to buy it?” You know like one person bought from me.

And then you know I tried different forums and like you know I was looking for a good gig so people were actually saying like, “Hey I have it, like who wants to buy it?” You know and so, I started to get like a little bit of traction and so only at that point where I think okay so I can kind of go onto a forum and say, you know, “Who wants to buy this and somebody invites because it’s something they need, it’s something that I like, it’s something that I think is necessary, I think other people do too, let me see if this works.” And is started to– and it did that’s when I started to be like okay so I think what I need to focus on is fine leather working supplies.

But even within that, you know I still totally messed up like the first packs that we did. Like you know I chose certain colors, I chose certain products and those first products which I chose weren’t actually the things that ended up working out like as far as like you know, the bulk of what we sell, they were much different. Like what we sell the most of today is totally different than what I thought was at the beginning, or what I started off with and what was important though is that you know, I was constantly looking at to see okay so I’m willing to bet like X amount of money on like maybe purchasing this inventory and then let’s see how it does but I was always looking out okay so who is really interested in this and that’s kind of how we came up with a current inventory on top of the knowledge that I had that you know maybe people, maybe it’s an awareness thing, maybe people ought to know that they need this so we also worked on you know explaining more like you know what is it that this thing does, what will this tool do and how does that benefit you and also kind of optimizing for okay, so we know people like a certain– we don’t know what colors people like for you know in our niche, so let’s figure out, let’s put out a couple of colors and see like which ones work, which ones don’t and then find tune from there.

Steve: Were you doing this on the forums or through your email list?

Sean: At that point we had already opened the store.

Steve: Okay.

Sean: But it was really low. It was really like low traffic, right. Even today we don’t have that much traffic it’s mostly like we are super fine tuned to what people are looking for, so we don’t actually do that high volume of traffic but we do really well I think because we are really specific about the products that we are choosing now because we’re always listening to what people say. That’s part of the reason why, I’m willing to do longer customer service calls, because I want to hear what is it they are trying, what is it that our customers are trying to do? And then it makes me both think about okay, so if they are really trying to do this maybe we should carry this other thing, and also to understand okay so that’s what most people are trying to make like let’s try to make that easier for people in the form of explaining things or in form of tutorials.

Steve: Yeah, so you’re traffic isn’t that high but the traffic that you do get converts at a very high rate?

Sean: Yeah and I think that’s because of our– I think that’s because of our unique knowledge like we are now more and more subject matter experts in this category. And also again we are like really fine tuned to our customers; we really put them first where other people maybe don’t.

Steve: Okay and you mentioned early on that you carry very high quality materials and tools on your site, right. So how did you actually approach the vendors you know for your online store to supply you with this stuff?

Sean: It was through trial and error. Certain teachers of mine carried– used different types of tools, you know some are from Japan, some are from France, some are from other places. So it was really you know trying to go out there and learn as much as you could about leather working and then seeing like what was useful. And then what was really– what I felt was important to people who make things is like knowing like where those tools come from. So most of our tools are actually handmade as well. So people who make things by hand also like their tools being made by hand so most of the tools and most of the thread are actually like sort of small scale manufacturing, right. Like the knives are not like stamped out by like the machine it’s like some old guy in France like shoveling them.

Steve: Really?

Sean: Yeah.

Steve: Okay.

Sean: From like pieces of steel. He makes like this nice knife. So that history and that whole
chain from beginning to end, I think it’s important to people who are buying the tools because they are also making custom bags and custom wallets that they know that this isn’t just something they can just stamped out of like buy the thousands it’s actually some person is like sharpening each and every tooth that is part of the tool.

Steve: So how do you get in touch with these people to actually carry their tools then?

Sean: It was like– it was a combination of contacts. So, you know it was like knowing somebody who knew somebody and networking and you know and then getting into contact with some, and then figuring out okay so you know trying to negotiate like okay so we can’t buy a whole lot now, but you know can we try to come up with like a system so we are like we can eventually get more discounts if we increase our volume and then from there it just kind of snow balled right.

So like now you know we order a lot of stuff all the time and our vendors are super happy with us. You know so like it’s sort of like this mutual benefit relationship where you know we are increasing awareness about what they do, and then we are able to increase the business that we give to them by ordering more stuff.

Steve: So since you were kind of into leather working, you had the contacts so that you could actually ask for referrals and then it was through referrals that you managed to find people who were actually manufacturing the stuff that you wanted to carry in your store. Is that kind of accurate?

Sean: Yeah that’s right. I mean there are certainly like a wide range of tools and we are constantly like increasing our network and we are also exploring what else is out there, but yeah that’s definitely like– that’s definitely how we grew our manufacturing contacts and how we understood like you know what’s important. But also too you know again we made the store to solve the problems that we had, right. So first and foremost is like is this working for me you know because– a good example was like, there is like a certain type of knife that one manufacturer makes, another one makes and if you just look at them knowing nothing about them, like you wouldn’t know like which is better. So you know we choose the one that we think is going to, that we think is better and that we think that more people will find better.

Steve: Okay, so you actually buy both knives in your example and then you try them both?

Sean: Yeah.

Steve: Okay.

Sean: So it’s like this, I have like a pile of tools that I’m like yeah this doesn’t work, this isn’t great.

Steve: I’m sure you wife loves that.

Sean: Oh my God. We have boxes it’s like really we need to keep this and I’m like you can’t just throw this away.

Steve: So, would you say then that you carry like completely unique products? Because I noticed you do have a bunch of competitors.

Sean: Yeah, I mean our products are pretty unique. I mean you could go to the manufacture and buy the same thing, but we are unique in the sense that nobody else really is like has a context for like how to use this and nobody is really advising people. Nobody is really tested to the degree I think that we have of you know what’s going to work and what’s not going to work. And plus you know there are no costs all the time because we make high end leather tools where people will then like try to knock that off, and so it’s sort of like the world west in some ways was like you know what is the actual origin of this item, whereas we can trace it back. One of the suppliers for leather actually we have just starting our relationship with, you know there are super old school too and they can trace it all the way back to the farmer who raised the cow, who gave, who you know, who is the leather coming from.

Steve: Right.

Sean: Like that’s like a whole supply gene right. Like so it’s unique in the sense that we are really committed to like understanding like where everything is coming from and that it’s high quality product and our manufacturers as well can trace it all the way back to you know to where it came from.

Steve: That’s pretty cool. So was drop shipping ever a consideration here or was just the nature of the relationships you had to actually carry inventory for your products?

Sean: I considered drop shipping but again because I imagine that I’m cheap, I thought you know, I’m willing to put in the time to pack all these boxes, so that I can save a couple of bucks, and also we also take really good care of our packaging. Like actually a lot of people write back to us and it’s like they write back to us like, “Oh my God I felt like Christmas because your packaging is so good like we really like wrap things like really carefully.” And then pack things in a way like you know we cover all of our knives blades and we really like we both wrap all the sharp ends of the tools to make sure that nothing breaks and- -.

Steve: Right.

Sean: And so when people get that the mail they are like, “Oh my God, this is like the best packing I have ever seen in my life.” And I don’t think you would necessarily get that with drop shipping.

Steve: Yeah, you know it’s funny I’m asking these questions Sean but I already know the answers because it seems like we had the same thought process. It must be an Asian thing.

Sean: Yes, quality and keeping the money for yourself, exactly.

Steve: So let’s talk about your first sale, how did you make your first sale?

Sean: So again you know, I had been doing sort of like tests with the firm posts so I had made like a couple of sales here and there but the first sale that we actually had in our store didn’t happen until about, I would say three weeks after we launched. Like we launched and then it was just like, “This is nice.” You know it was kind of just spamming, refresh button on your email like every hour like nothing happens anyway day, anyway two days and you are like, “You know what maybe this isn’t working, I don’t know if maybe we should pick something else.” And then we finally got a sale and it’s like, “Oh wow, okay.” And then that customer you know emailed us right away. He said, “Hey this is great, like you are selling exactly what I’m looking for, do you have this thing?” And I’m like, “No but we can get that thing.” And so then you know and so like on the next shipment which was small at the time like we started to carry this you know I think it was a pricking iron and so then we started carrying pricking irons and it’s like and he was like, “Great, hey do you have, happen to have this thing?” And I was like, “Nope, but we can order that on our next order.” And then you know and so our first customer was like a repeat customer for probably five orders, right?

Steve: Wow.

Sean: And it was because like you know, he would write to us and if he would actually send us pictures of what he was doing and I was like, “Hey, you know,” because I asked him and I was like, “Hey if you have pictures of what you are doing I’ll help you take a look at it, you know and if you need advice about construction, I’m very happy to tell you.” And you know and so he did that and you know he asked like “okay, so if I’m making this thing what will I need for that?” And I’m like, “You know you probably use what you have but you can also try this other thing.” And he was like, “Okay, I’ll try that thing.” And then it’s kind of snowballed from there. So actually most of our customers are repeat customers because we build a rapport with each and every one of them. I mean not literally each and every one of them because that will be like insane because we would be on phone all day.

Steve: Right.

Sean: But for most of my customers like they can ask this question, and we will reply it back and it’s not like we are trying to sell them every single tool in the book right, because they’re usually looking for specific things that they have a question about “okay, so how do I use this thing?” And I’m like, “okay, well, I think that you might need this and you might need this,” or sometimes we end up busting a sale because it’s like you know do I actually need this thing and I’m like no you don’t need that thing, you already have, you know you already have a tire, you don’t need a full iron like you just get by with what you have.

Steve: Right.

Sean: And people find that to be refreshing right because we are not trying to always sell them. We are just trying to help people to make the thing that they want to and because of that you know we are injecting loyalty into our customer base and then they’re coming back not because you know, we necessarily have the cheapest prices or like even like the most of us like products, but because we are really fine tuned into understanding what is it that they are trying to do and to try to have you know get the resources or have the means to help them out.

Steve: So would you say that a large portion of your customers are repeat customers?

Sean: Yeah. I would say- -.

Steve: Okay.

Sean: At least half of our customers are repeat customers.

Steve: Wow, okay so it’s really in your best interest to establish a relationship with these people?

Sean: Yeah you know and it’s helpful for them too because you know they can ask us questions about what I should do next and then you know and we help them out. And it’s funny because it is a small community actually people, people will get a lot of referrals through our current customers and again it’s just sort of like a positive influence right, it’s like we are helping people out they in turn refer other people to us and then we help them out and then everybody is happy.

Steve: Yeah totally you know, I always tell people not to underestimate word of mouth because for our shop at least you know a third of our business is direct traffic. So word of mouth is clearly in play here. So how did you, you know that first sale, was that just organic search or did you pay for any marketing or that sort of a thing?

Sean: We paid for advertising in the beginning…

Steve: Okay.

Sean: Like right now– and that may change but right now we don’t do any advertizing. It’s all through organic search and referrals.

Steve: Wow, okay so you mentioned in the beginning so was that first sale from advertizing or was it from organic?

Sean: You know I don’t remember. It might have been from organic search.

Steve: Okay.

Sean: I can imagine that it was because we weren’t very high up in the beginning.

Steve: Yeah three weeks, I can’t imagine you ranked that much.

Sean: Well, you would be surprised because we were so specific at our copy and actually that level reminds me, I actually took a Neville course on copy writing.

Steve: Okay, yeah, yeah.

Sean: Who was a guest on your show and actually– that was actually really inspirational too because it’s you know it reminded me about being specific to what you are writing for, right. So maybe it was the way that we talked about our linen thread and it was like yeah it will do this, this and this what it is for and nobody else had written about it that we got in through organic search or may have just been page search.

I think it was organic though because like I said, like advertizing today hasn’t really like worked out like as far as like how much money that we are putting in versus what we are getting in return. That said again since I’m Asian and because I’m cheap like I’m talking about like 25 dollars and I’m like, “Oh my God we spent 25 dollars in advertizing and now we get, we didn’t get anything from this, we got like no sales, that’s not worth it.”

Steve: I know exactly how you feel, that’s hilarious. Okay so today you don’t do any paid advertizing for now?

Sean: That’s right. But I think, I think that’s going to be, that’s going to change because we, I think have gone to a point where it’s like I think a lot of people know about us but not a lot, lot of people know about us and so I think advertizing is probably the next horizon for us as far as how to increase our audience. Also too, we kind of got, we were kind of late to social because I was more focused on the customer service and the website experience of it. I focused less on the social aspect of it. So we recently launched our facebook page. We had a twitter account for a while and we did Pinterest for a while too but we hadn’t been actively promoting it, we were just kind of lurking on the sideline and kind of building our content but now we are also doing– we are not also; we are doing a push into our social channels because we haven’t focused on it because we have been focused on other areas and then I think after that, after I feel comfortable about like the quality of our social channel then I think we will try advertizing again.

Steve: What about email marketing?

Sean: So we do email marketing quite a bit and actually that again that was something that I also learnt from Neville as well was to have an auto responder. So we have actually a really– a fairly robust email responder that takes people through how to think about leatherworking and you know and what’s important because again for most people who are trying to do leather working, their model for what it is in America anyway is kind of western wear. It’s like making sandals and making like kind of more of cowboy type stuff. What I find it’s like this– what people come to ask for and it’s not for everybody it’s about what people come to ask for is like okay so, I don’t want it to look like you know I’m a cowboy, what I want it to look like is I just stepped out of, off a plane from Rome, right, like I want like this nice European looking bag, and so for that, that’s kind of more of where we are aiming.

Steve: Incidentally if you could produce a bag for my wife since you wouldn’t have to spend 1000 dollars on it [Laughter].

Sean: Well that’s funny because that’s why people come to us, right. That’s the whole point of our store but also of sort of makers in general is that you know if you think about it you could spend you know 200 bucks on our tools or even spend a 1000 dollars on your– on a handbag and in the end you could make exactly what you want and it will be yours and or you need to buy this bag for a 1000 bucks. So what we try to– what we believe and we try to promote is that, it’s not just making things on your own but it’s like having more control over what it is that you know, you are adding as part of your life.

To your original question, what we talk about in our newsletter it’s not just, okay here is this tool like you hold it here you hit it here and that’s how it goes. It’s like how do you think about this, right?

Steve: Right.

Sean: Because there is a ton of people on that sit who are making leather goods and like you know, it’s kind of like how many three pockets wallets can you make? Like you know what I mean like they all kind of start to look the same and what I try to teach people like in our E-newsletter is like you know what you have very specific needs, make what– and it’s what we did for our store. Solve your own problems first and there will be other people who have that same problem. You don’t necessarily have to copy other people’s designs even though you may start that way so that you have an understanding of how to make something. If you think about it really as somebody who is a creator, you are thinking about it more, not so much as, “hey I’m going to copy this and I think this is great.” But based on what I need, this is I think what this thing should look like.

Steve: This is just like starting a business same thing I mean. You might start out trying to emulate someone else but ultimately you are going to have to come with your own flavor of whatever you are trying to start.

Sean: Absolutely.

Steve: There is a lot of people listening who are kind of on the sidelines wanting to start their store. So I was just wondering if you could tell us, what were some of the biggest challenges for you to start your store and then you know what sort of advice would you give people who are just kind of waiting on the sidelines and just kind of itching to begin?

Sean: You know being a perfectionist, I think was one of the challenges right because since I was a designer in my job, you know you try to work towards a certain level of perfection and that’s important, but what is it that you are really trying to perfect? And for me, you know, again being a designer was a blessing and a curse. I can work to perfection in that area, but in actuality what you are first tying to perfect is, you are trying to perfect your business, right because at the end of the day, you are trying to create something of value and then finding people who also find that valuable and then paying a little bit something for that. So if you don’t work on that, it doesn’t matter whether or not you have the best logo or whether or not your website works the best. If you don’t fine-tune what it is that you are offering to people– and it can’t be junk right, like you can’t just in my view buy all these tools from all the manufacturers that we have, and then put it out there, and then open like fineleatherworkingtool.com.

Steve: Yeah.

Sean: It’s not about that, it’s like, it’s not just about the things that we sell, but it’s like the whole experience like the knowledge that we impact, and also the perspective that we get as well, and that’s the thing that you are really perfecting. You are not perfecting like which is the perfect product that I’m going to get necessarily although that’s does come, like what you want will always be working on I think and what as somebody who is a designer sometimes lose sight of it like you know, what is it that I’m really trying to perfect here. It’s not just how this looks but what is the mechanism of this endeavor like what are we trying to market? Is it a value, so and you know do people find that valuable?

So I think that’s like kind of the biggest handle. It’s like really being honest about what it is that you are providing to people and whether or not they find that useful because sometimes the answer is no, right. So like I said I had five other ideas before this all of which I tried to put into play and then the more because I don’t think I was really giving all the value that I could have, right, like I wasn’t, like with the icons for example, like you know, me and my friend like I said me and my friend were working on this. We just kind of put up icons that we thought were cool, you know and that worked to a degree but we weren’t really asking people like, “hey so you are building an app, what kind of an icon would you need?” We were just like, “hey, you know, I think this would be good.” And then we put it out there and then unsurprisingly like nobody bought it.

Steve: Right. Yeah, so basically what you are saying if I might summarize is you need to spend some time validating your niche and providing what customers are actually looking for before just throwing up the site and just selling a bunch of products which you had no idea whether people want or not?

Sean: Yeah, you know in that actually that answer, might be– the question might be then actually what is it that people get stalled out on most. To get started I think people just need to get over themselves right. So like there is a lot of reasons why you wouldn’t start something like this. I think like you are not going to get it right on the first try. So I think to actually answer your original question is like, what is the thing that’s most difficult when people are just starting out, is to just start you know, to put like one foot in front of the other and just kind of go for it, because you won’t create the perfect store from like you know from the gate. Like it took me like I said five tries to get to where I am, to get to a point where– a store that I was actually you know was half way decent and making any money.

Like it wasn’t until I got to that fifth store that I really understood what it took. You know, if I had only, if I had put all this like thinking and like hesitancy and nervousness into making my first store and then that didn’t work out and I gave up, like that would have been the worst, but also if I had put up all these barriers about whether or not, “oh, I’m not a designer, I’m not a copy writer, I’m not a photographer, like I’m not a developer,” there are all of these reasons not to do it. Sometimes, like you just kind of have to go for it.

Steve: Yeah, so in that same vein some of the common questions I get, so how much money did you risk to start your business?

Sean: How much did I– I think our first inventory buy was like 300 dollars I want to say.

Steve: Okay and how much did it cost you to put up the website?

Sean: Not very much because like I said its open source, it was an open source platform, and I did the theme myself so it was just hosting which was I don’t know, it was like 20– hosting is like 20 bucks a month if something is even testable.

Steve: Right.

Sean: And then it was just the inventory really.

Steve: Okay.

Sean: I would say though that you know if you are thinking about starting a store to really put a block on your time as well because I think that’s where people kind of get stuck to use like they throw all this time into it like they will throw like a 100 hours at launching their first store. And in my view now looking at from the other side it’s like invest what you think you are going to– what you hope to make in it and limit the amount of time that you are going to work on before you actually go for it right, because as a designer like I said I could spend 200 hours on this website but I really and I started to go there, but by the fifth time that I was doing it, I was like okay I’m willing to invest this much time into trying this idea, but that’s like the real cause to me, the way that I was measuring it was how much time that I put into it because my time was more valuable at that point than you know the 300 dollars, right.

Steve: Right, right. So you know incidentally how long did it take you to put up your site?

Sean: So it took me– it took me about like a week’s worth of work.

Steve: Okay.

Sean: Like including the theme, the copy, the photographs, the logistics of you know getting supplies. I don’t count like the networking aspect of it because you know like I wasn’t really tracking the time and you can’t really measure that anyway.

Steve: Right.

Sean: But in terms of like when I was sitting on my computer and putting together the store is probably like 40 hours over the course of you know a week or two or something like maybe two or three weeks, and then I put it out there.
Steve: Okay and so you just launched it right afterwards, essentially?

Sean: Yeah but like I said I had already in some ways I already knew, right because, I had already started validating what my products were and like whether or not it would work, so…

Steve: Yeah, and you had an email list full of people who wanted to buy from you also?

Sean: Exactly and that actually was not a lot of time at all. I probably spent two hours and a copy of the email and the landing page before I actually launched that. I think I spent some advertizing dollars on that, but I think I signed up for free facebook ads so you get like 50 bucks. Again because I’m cheap. So I got like that waved. So it was like a minimal amount of time to, and a minimal amount of money, and a minimal amount of time to validate my assumption about whether this would work and then by the time I started building the store, I actually had a pretty good idea that this is going to be okay, but even then I kind of limit that too. I didn’t put more time into it until I started getting more sales. So after that three weeks you know nothing happened until I got my first sale. I didn’t really start tweaking the store again until I started getting more sales, right.

Steve: Right.

Sean: Like I would tweak the copy a little bit maybe because like I said we were doing a little bit of advertizing in the beginning, I would tweak the ads, but I was trying to be measured in my investment of time.

Steve: Okay and how long did it actually take you to come up with your niche or did you just know all along that you kind of wanted to go into that space?

Sean: That was, you know that’s really hard to peg. You know…

Steve: Okay.

Sean: In some ways it was like a couple of weeks in like again like validating whether or not this would work and in some ways it was years because you know I have been trying to come up with my own store, and to try to see how it worked and so I went through different iterations. So if you think about it from the first time that I opened the store to this store, it’s actually quite a long time.

Steve: Okay.

Sean: But this particular niche was actually very short, and again it was about continually trying and continually adjusting what it was that I was doing until I could be good at all little, little things that you kind of need to be good at to get your store up running.

Steve: Okay, hey Sean you know we’ve already been talking for 50 minutes believe it or not and I don’t want to take too much of your time.

Sean: Like we are out?

Steve: Yeah, but thanks for coming on, you know if anyone would like to ask you some questions either about your shop or the course or that sort of thing, is there a place where they can reach you?

Sean: Yeah, so our store is fineleatherworking.com and my email for the store is Sean or store like you can also start they’re both addresses @fineleatherworking.com.

Steve: All right. Well thanks a lot Sean, I really appreciate you coming on the show and I think the listeners will have learned a lot based on your experiences and what you’ve said this far.

Sean: Thanks Steve, and it was a real pleasure to be on the show as well.

Steve: Yeah, well thanks a lot Sean. Take care.

Sean: Bye, you too.

Steve: Here is what’s cool about Sean. He pretty much followed all the guidelines in my class and has managed to create a six figure business in about a year and a half. Plus you know overall he’s just a great guy, and I really love how he pursued his online store in a niche that he truly was passionate about.

For more information about this episode, go to mywifequitherjob.com/episode20. And also 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 to 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 me with 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’ll 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. 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!

019: How Dave Lu Started FanPop.com A 7 Figure Business That Profits From Crowdsourced Content

Dave Lu And Dave Papandrew

Today’s guest on the show has created what I call the “Holy Grail” of online business. Why? It’s because the content for his business, FanPop.com, is based entirely off of crowdsourced content.

This means that the founders, Dave Lu and Dave Papandrew, do not have to worry about generating quality content for their site. Instead, they have created an environment that incites passion among their users and as a result, the users do all of the heavy lifting.

How did they accomplish this amazing feat? Listen to the interview as there are a lot of details that Dave shares that teach us how he did it.

What You’ll Learn

  • How Dave came up with the idea for FanPop.com
  • How to generate traffic for a crowdsourced based site
  • How to solve the chicken and egg problem regarding traffic and advertising dollars
  • Key strategies that Dave used early on to generate interest.
  • How FanPop makes money

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 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 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 is your host Steve Chou!

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I have a good friend of mine on the show, Dave Lu. Now I’m trying to remember exactly how I met Dave, and I believe it was actually through a mutual friend Vivian from Stanford back when she was starting her own company. Anyways back when I didn’t have kids and I was able to stay out past 8p.m, I kind of got to know Dave at various social events. Now he’s a great guy and extremely knowledgeable and humble, and we could actually hung out more if he just was willing to make the move down to the suburbs, but he’s a city guy and we’ll see if that holds up when he starts having kids.

Anyways he is the co-owner of the site FanPop.com, which is a seven figure business that has a really cool business model. And in fact I would even go so far as to say that what Dave has created with FanPop.com is what I consider the, “Holy Grail,” of online businesses. So first off FanPop.com is a network of user generated fan clubs for different topics of interest that is maintained by the community. So for example if I like the movie frozen, I can go on FanPop and interact with some of the other fans and incidentally I was just on the frozen FanPop site, you know for my daughter of course but the key here though, is that all the content is user generated. And FanPop generates money off of advertizing revenue. So without introduction welcome to the show Dave. It’s been a longtime.

Dave: Thanks Steve. Good to be here.

Steve: So can you just give us a quick background story. Just tell us, take us back to when FanPop got started.

Dave: Sure, so I started FanPop with an old colleague of mine from Yahoo. We had worked together back in 1999 together. We were one of the first, you know early employees at Yahoo and we were part of management together and we re-united again because we were both working in down town San Francisco about, I would say about six years later or five years later and you know we would meet up and a lot of– we were seeing kind of a lot of new businesses launching like Delicious and Dig that were kind of you know the open source movement was happening and we felt like you know it was a lot cheaper than when were at Yahoo back in 99” to start a company and we thought, “Hey, we could probably do this on our own.”

And we felt like sites like Dig and Delicious were very tacky focused and we wanted to build something for the masses and you know we started testing out different models and ideas and I think originally we were trying out a travel idea but that was way more difficult to do back then and then we decided to try out this. We felt like there was lack of evolution for fan sites online. It was like GO city sites and really bad you know PHPBB open source forums that were from like the 90’s, and we just felt like there should have been– there should have be another new iteration of community groups for people who shared you know same interest topics like passions.

So we basically started you know working with a friend of mine who was a programmer and we picked up another programmer who also actually you might want to interview who runs cooking for engineers. He was running that at the time I was working at Intel and I went up, I talked to him about it and he was interested. So he quit Intel and joined us, and so we had a team of four and we’ve you know bootstrapped the company and have stayed for you know since we launched and we basically built it from scratch, this platform that allows people to create these communities and these condos around shared topics of interest. So like you said frozen fans, walking dead fans, people who you know love Justin Timberlake, it could be anything and everything and this…

Steve: I heard you started that one.

Dave: Yeah, definitely. That’s Justin Beamer that I started up. Timberlake is okay, but we actually you know the funny thing is when we originally started we had no idea where the audience would move towards and we started off with you know thinking okay, “We will be like [Inaudible] [00:05:31] or you know wine club, wine kind of stores are you know people babies.” They are different people who had shared experiences or interests or you know more hobbies. We had no idea that it would move towards entertainment and pop culture topics which is fine because I think you know all of us are very much into pop culture. You know sometimes it has to be a little younger towards the Justin Beamer’s in the one directions, but you know it pays the bills and there are a lot of people out there who likes that stuff. I don’t judge, I just build the site for them.

So yeah we’ve been, we launched the site in August of 2006, and we started working on it back in, I mean brainstorming back in until late 2005. So it’s been a long run so far.

Steve: Was it always called FunPop even back when you were thinking of doing the cigars stuff?

Dave: Yeah, good question. It was actually– the original name was, we went through a bunch of iterations when they were all the friends stars, we were originally, we tried fan stars and fan starred. Originally we changed the name to fan spots and the idea was that each fan club was kind of a spot and we just had you know a whole network of spots but the day or two before– and we had checked fan spot singular, we had fan spots plural. We in fact checked fan spots singular and it was actually owned by Carnet Media.

They do like the baseball card valuations, so we thought well we were not going to do anything with it, and it was in conflict at that point but two days before we were about to launch our data, we– I looked it up again and they had launched a sports social network. So since we also had sports fans in our mix we could not do that. We were afraid that it could cost too much money to pay for legal fees, to fight anything, even though we had launched our data before they did. We launched our data before then we were going to launch our official site, but we didn’t want to launch it when we had that problem.

So luckily we had kind of scored a way a bunch of domains and FunPop was one of them and it worked out. I guess it was kind of, for twitters because we ended up being a pop culture site. So it actually worked out pretty well and we ended up with a nice six letter domain that has really, the branding’s really helped. I mean users have, they love the brand, we’ve had users who’ve gone out and– even though we had short printed out a copy press for our own team to go to you know networking events and other stuff, we’ve had users who actually gone and paid good money to have sweat shirts and mugs and other stuff printed out with FanPop because they love the brand so much.

Steve: Interesting, is that a revenue source for you guys or…?

Dave: I mean, it’s pretty marginal. I mean, I’m buddies with the over the dictionary guy and he makes a lot more money out of this stuff than we do.

Steve: Okay.

Dave: Yeah, so it was funny, I mean the community that the users created, the brand helped but it was also a tines of like the community itself, and they launched all sorts of things like talents shows on our site and awards ceremonies for people who brought the best trivial questions or best polls. So we’ve seen a really strong kind of affinity towards the community as a whole, so it’s kind of cool.

Steve: So walk me through this. So let’s say I was interested in something, how would I interact with your site. Like how does it work exactly?

Dave: Sure, so if you– say you are looking, you are a big fun of X-men and you know, you go round the web and you find a lot of fragmented fan clubs who are X-men on Wikis or X-men and where blogs and even like you know some marvel or wherever and it’s kind of pain because you end up, you had to go all these sites and you know, you might have some interactions with people, but it’s mostly a one directional thing where someone is posting and you kind of comment. Well we wanted to change that and a lot of people that come on to our site look for X-men, go there and then basically anyone and everyone can, you know post an article or like you know a video or any fan out that they’ve made, you know create a poll question or you know play a trivia game. And so we just wanted to give people the features and just allow them have their own small community where people who understand them or were like them can relate to another and discuss all of their, you know their favorite topics.

So the goal was when you have one person– when you are by yourself and you are scaling the web for, you know all things X-men, it’s a lot less efficient than when you have a whole community of fans kind of contributing it to one place, one repository where you know, you might not have found something that someone else have found, and you can really appreciate it when you log in to FanPop and check out the X-men fan club.

Steve: So do you aggregate any of the other blogs that are out there or the information is already out there?

Dave: Yes, that’s I mean we– there is something we were working on and now we were originally grabbing headlines and other news feeds from other places but we are starting to build relationships with some publishers to bring in third party kind of articles and content. So anywhere from like Hooloo to other sites like Kid Fix and Just Jared, we are going to be– you know I think there is a lot of folks we want to talk to get their part of the content out there. So for people who don’t really use our access Orases readers this would be kind of a new solution for them.

Steve: I see, so would you pay these people to have their…?

Dave: We were just having, a lot of them just want traffic leads. So you know obviously we’ll take snippets of their content, but it’s at least it’s one destination that the people can go to and look, at least browse through all the stuff, and don’t have to search you know a bunch of sites for.

Steve: Okay, yeah that’s makes a whole lot of sense. Orases it’s kind of dying at least and your site will act like a more modern version I guess of…

Dave: Yeah and even more simple because I think a lot of the mainstream just I mean, they never adopted, I mean that’s just from my much knowledge, they never fully embraced Orases anyway so it seems like people were just going to the destinations sites versus aggregating themselves. I mean I don’t know why that’s why Google reader shut it down but– and it seems like even companies like Sleepboard [phonetic] who relied on that are having to move away from that model because I think it’s not everyone necessarily adopted it.

Steve: Yeah so you know, I’ve been thinking about your site a lot before I came on this interview, and I was just thinking about you know starting a user content generate site takes a ton of work and there is kind of this like chicken and egg problem in the beginning, right?

Dave: Yeah.

Steve: So how did you guys overcome that early on?

Dave: Yeah, it was tough, I– my mom always teases me or I guess makes fun of me in front of people because she’s like, “Oh, you are like a genius, you created a business and you don’t actually do anything,” because, I guess it did work out that way, but you know I think when we started it was tough because when there is no community, no one is going to be there. When there is no content, no one is going to come. So it doesn’t really make for good SEO when you don’t have any content. So I think one thing we did was we went around– early on we had to create a lot of fake users ourselves to like pretend that there are discussions going on, that’s kind of sad talking to ourselves, but you know we wanted to make sure when people came they didn’t see like an empty house like you know party.

But then we started kind of paying forums and groups around the web that we thought might appreciate it, and so we surely picked up on different, you know couple of different blogs and once we had, once you get a small– you only need a small subset of users to create the content, I mean and all we added like yolk and other sites at most it’s like 3% or 1% even contributors and the rest were all kind of consumers and so we only needed to get like a handful of the right people to start adding content and that just took off.

And slowly but surely we tried to reinforce that by giving them social recognitions like medals and banners and stuff so they could show that they were experts or good contributors and I think that incentivized them more. So we never got them rather having to pay our contributors or top contributors, it’s been all about you know the social reward of being considered an expert or you know a top fan of our site.

Steve: So earlier on you guys were trading a lot of your own content?

Dave: Yeah, we had to write our own articles, we created some threads for forums, we added you know videos we found or you know articles. I mean we just– or images, wall papers and things like that. So I mean, I think we just had to give people an idea of what it could be because when you start from scratch it doesn’t work like that.

Steve: Because I know just from my experience blogging that even if you have the content, even the people who are willing to make a comment on a post or wherever it’s a very small percentage. So how did you guys kind of encourage people to actually give their inputs and make comments?

Dave: Yeah, I mean I don’t know I guess people when they are already– I think it’s difficult when you are starting a topic that might be somewhat new and not that you know you are trying to build the traffic, but when there is in store base that you pursue like walking dead fans they all have an opinion and so everyone is on one like you know for Twilight they are on team Edward or team Jacob and they are already kind of, they are going to voice their opinions no matter what. So I think it’s that aspect that you hit, that you get to hit upon when you doing standard related topics that people are just passionate about and vocal about, and so we didn’t have much trouble getting them talk once we had the right topics up.

Steve: I just noticed you are very familiar with these female vampire series [Laughter].

Dave: Here it goes; I’m not going to lie.

Steve: So where did you grab these people from initially, did they just find you on search or…?

Dave: Yes a lot of these– a lot of them did find us through SEO but I mean like I said we reached out to some of these fan clubs as well, and we ended up getting typical folks coming from like forums and other places so we kind of like invited people to come check it out and they did.

Steve: Okay.

Dave: Yeah.

Steve: Because and just judging, you know banking on my own experiences in the past like you can’t just walk into a forum and…

Dave: Oh yeah.

Steve: And tell them to come to your site, right?

Dave: No, I think we reached out to the owners sometimes and I think they saw it wasn’t us, I don’t know, I don’t think they think of it as a threat, I think it was just a complementary tool that people could use to post poster fans so yeah I think I mean some of them like really embraced it and so they wanted to know that there are users about it.

Steve: Interesting, I think I might have an opposite reaction. Like if I run like the most popular fan club for one of your favorites like twilight, I would be a little reluctant to…

Dave: Sure.

Steve: Follow my traffic over to your site, unless there was a mutual benefit somehow.

Dave: Yeah, I mean I think we gave them links from our site as well so we didn’t do a sub co-links for their reasons but I think some of it was that the features that we offered that they didn’t really have appealed to them, and so there was like more, I guess they saw, some of them saw it was a complimentary feature.

Steve: Okay, that makes sense then and they are probably diehard fans as well, right?

Dave: Yeah, exactly.

Steve: Okay so let’s talk about the business model. How does FanPop make money?

Dave: We make money by splashing ads all over our site. Now we do make money through advertizing and a lot more, you know this– advertizing is since we started has evolved a lot. Before it was you know really cheap running networks and then you know some direct sales stuff, but we’ve worked with a couple of sales represented partners that sell large campaigns to you know, I think they were from TV networks, the movie studios to the Walmarts and T-Mobiles of the world, and you know they’ve made us money and then as the programmatic remnant of the world has continued to improve, places like Google and other kind of programmatic network businesses have really figured out a good way to generate high CPMs for– and optimize the whole ads base with like real time bidding and other solutions.

So things have definitely evolved and the ads side of things. I think there is still room for it to evolve on the mobile side and that’s something that we are shifting towards. Everything is moving towards mobile, and I think we need to be prepared for that. So we’re actually in the midst of redesigning our search of a mobile responsive site.

Steve: Okay.

Dave: And so when you see on our mobile site right now, it’s very different than we see like sort of the desktop, so that’s kind of emerging soon, but we want to be a much more visual site than we’ve been in the past.

Steve: So let’s– you said a lot in that last statement. Let’s back up a little bit. Regarding– eventually you guys only have four guys, and at least in my experience with blogging if you are trying to get direct sponsorships that’s almost a full time job in itself. You have to contact sales reps, kind of do negotiations and just work out how ads are being displayed. What percentage of your ads are direct versus remnant networks, versus you know other structured deals?

Dave: Yeah, so it does fluctuate from month to month. I mean like in some months it’s very slow and we can get back with like 10%, 20%. You know some months it could be 30 or 40 % so and usually isn’t more than you know 40, 50 % because the direct deals you would– there are a lot of websites out there, and it’s pretty noisy so you know in terms of revenue split, I would say most of your revenue is going to be especially if you are a display advertizing site, it’s going to be on remnant programmatic and the direct is you know when you can get it, it’s very high paying but the fill rate is just not always there.

Steve: Okay, and do you– are you using DFP?

Dave: Yes we are.

Steve: Okay so just for the listeners DFP is Google’s like real time ad serving. It allows other advertisers to bid and you only show the ads that pay out the most so…

Dave: So, I mean we use that as our subject P and stands for double click the publishers one the small business platform and you know we serve any campaigns that are sold directly to us, so say right now we have couple of classic campaigns for some books on our site, we use DFP to launch those sites and manage that but we also manage the whole [Inaudible] [00:20:17] chain ups and networks through DFP as well. So basically that handles all of our ads serving on the front end and we fill in on the backend with you know different networks and partners.

Steve: So what are some of the ads networks that you work with?

Dave: So we’ve basically, you know in the past we worked with so many you know from travel fusion to MTV networks to now it’s like all networks to cash programmatic everyone. And we’ve basically now that Google is just– since everyone goes to Google anyway; you figure all the demand is there so they had a supply of inventory. So we basically, we mostly rely on Google ad exchange, but we also have open X-exchange in the mix.

Steve: Wow, okay.

Dave: It actually helps with losing CPMs on both sides because when you’ve you know less supply who pushes out demand and the price, so the CPMs are higher on both sides. So it’s good to always you know put pressure on the prices more in the mix. So, but yeah those are basically our big ones for now.

Steve: Do you guys use adsense at all or…?

Dave: Yeah, I mean an exchange apparently pays a little better than adsense so the best, I think much of the, more of the high impact display ads are coming from ad exchange.

Steve: So outside of advertizing, do you guys try to sell products that are related to some of the fan stuff on your site?

Dave: Yeah so you know we experimented for a little while with Amazon and they have a unit called the omacasa [phonetic] unit that should read the cut on the page and target content based on the topics but contextually is not so good. It’s not so accurate so we stopped that one. EBay also has one and we were going to explore doing that but yeah we haven’t turned into the E-commerce side of things. We could but at the same time I think, it’s not like doing electronics websites where your revenue would flow or do much higher because you are on you know really high, you know high priced purchases. For us it will be like a cute t-shirt or paraphernalia and so we haven’t focused so much on that.

I think the one thing about our business is that because we are lean and small, we focus mostly on the product side. Our [Inaudible] [00:22:39] you know they cover our bills and we don’t, you know we don’t ask sales guys. I try to optimize it as much as I can but in the meantime we spend most of our time doing product stuff and you know the coding for getting the features in place so, that takes up more of our value.

Steve: Okay, so at least for me in my experience like the mobile ads stuff tends not to pay as much. So do you find that a lot of your traffic is kind of shifting over to mobile now, and how are you kind of making up for some of the, I guess the little revenue aspects of going mobile?

Dave: Yeah, I mean so the funny thing is we didn’t even have a mobile solution before. Basically what we had was when you go on you know your phone and you looked at our site you just get the top left corner of the page, it was pretty horrendous. We were trying some demo solutions like dedicate m.FanPop.com, there was someone else who was going to host for us and we were going to do a mobile version, mobile version of and we ended up shifting towards a mobile responsive site. So we have a mobile web and instead of a dedicated website. It’s now you know just responsive flow from our [Inaudible] [00:23:53], so a lot of those ads the same ads that we put on our mobile site because we’ve changed to a more tiled UI.
It gives us the facility to actually serve the same 300 by 250s and 300 by 600s…

Steve: Okay

Dave: in our phone view, but at the same time– so CPM’s on that all the same. We don’t have dedicated you know 300 by 250 or dedicate 320 by like 50 whatever units those mobiles are, and we tried out some mobile units that perform well, but I think we are looking at different mobile solutions that perform better on better CPMs. And so there are things out there, they are a few and far between because I feel like no one’s really tapped into the mobile web, advertizing space that well, is we had [Inaudible] [00:24:39] from a company called, “Mobile Theory,” and they seemed to monetize these certainly well.

I think it’s just like any creative and there is different start ups popping up here and there to do things like appleflows [phonetic] like the things that you see Facebook making a lot on with appleflows within their work. There’s companies that are trying to do that for like mobile web versions of sites. So I think it’s just about getting creative with what kind of you know units that are out there, that are available.

Steve: You know early on when you guys didn’t have as much traffic, how did you actually get signed on to some of these ad networks?

Dave: It’s very difficult like it is like there is a chicken and egg thing where if you don’t have the traffic they don’t really want you but I mean Google was always been you know you’ve got three pages a day or a month and you still signed up for Google. So we’ve always had Google mixed in there but in terms of getting the bigger networks, I think we had to definitely work on getting traffic out there before we even got their attention or had their interest to work with us.

Steve: So, I’m just curious from my own knowledge you know, how long did it take before you actually started generating a lot of traffic?

Dave: It was probably a year and a half or so, a year to a year and a half, I think so, yeah.

Steve: Okay, and was a lot of that SEO or was a lot that people just coming back for more stuff?

Dave: SEO takes a lot more time. We did have an SEO consultant come in and help us fix things and that definitely helped a lot but that takes time to build up. Initially it was definitely you know links that people hosted up or that we posted on our different sites that they got, yeah.

Steve: Oh, okay so did you make any mistakes early on and…?

Dave: Oh yeah.

Steve: If you could talk about some of those and how you overcame them.

Dave: We shot ourselves in the foot for a while. So like when we were, one of the things we did when we were testing some page if we had a little like star TXT blocking any callers because we were still doing a test and when we rolled up the page to the live production server, I guess it was like a few months before we realized, we were like, “Why isn’t Google indexing any of these pages anymore?” And then we started develop a TSC file up there in the page and we were like wow we just shot ourselves in the foot. So there are some silly things that we did like that. There is just a lot of other things that I regret and don’t really want talk about but there were mistakes made in contracts, you know contracts and other negotiations that we regret and you know there is certainly a lot we’ve learned along the way and I mean, it hasn’t you know, it hasn’t killed us, so they haven’t been fatal but it’s definitely an interesting learning experience the whole way, every step of the way.

Steve: So just curious going forward, you know the web has changed a ton in just the last couple of years in terms of Google updates and just the way websites are structuring themselves, how do you see kind of FunPop transitioning in the next coming years to grow?

Dave: So we are– I mean we are basically currently trying to redesign the site to become a lot more visual and a lot more user focused. So whereas before we were focused on the topics, we are much more focused on the fans now. So I think we want to provide them a feature set that allows them, that empowers them to share their fan dome whether they are on our site or the other sites and I think we are you know when we look at the pinterests and the tumblrs out there we see that platforms are the way to go. We were going to go down the path of trying to hire a editorial staff and have people write you know content, but we decided we’ll clear that because we are product guys that’s how we build the best. We– and we know that there is a lot of people out there who do a better job with that, so why would we you know try to re-write the same articles.

For us it was about what can we provide people that you know that are out there , that are fans that they don’t have today, and so you know we are playing with a feature set right now and we are trying to you know build it out so that you know we have a product that really speaks to fans, and allows them to express themselves and I think that will be the next iterations and yeah I mean if pinterest and tumblr can be that big as platforms I mean , I think our goal is to become that big as well.

Steve: That’s interesting so you are kind of going not towards the content, and you are more going along the lines of kind of aggregating and…?

Dave: Yeah, let’s, I mean it’s not just, well it’s not just well we are going to go the call on contract side only aggregating, but that’s kind of complimentary to the focus young user and giving them a tool set to be even more empowered to create content.

Steve: Okay.

Dave: So for us is more of a how do you get the user security content even better than they had before and make it easier for them to secure the content?

Steve: I see that’s very interesting. I would have thought that you would want more content on your own site and just kind of own more content going forward so that people definitely…

Dave: Oh yeah, this will be on our site. It’s just that…

Steve: Okay.

Dave: It would encourage them on their own profiles pages and other you know areas to create content for themselves. You can just…

Steve: Oh, okay, got it, got it. Yeah because you know the things with these fan sites; at least, I actually have very limited experience in this but you know if another site would have come on, let’s say I’m really into a TV show if a new site would have come on, that was better than the old I might grab a take towards that one, but I guess what you have is since a lot of your users have invested a lot of time into the content that they place on FanPop, there is less likely to leave? Is that…

Dave: Yeah, I think there is commitment on investment that they’ve made so they definitely stick around.

Steve: Okay. So what are some of the challenges then in just running a community based site? I’ve never done it before myself so I’m just curious.

Dave: It’s a lot of work. There is a lot of you know people get– it’s almost like being a teacher because you have to manage like kids like fighting in class or misbehaving and doing other stuff and we build that social kind of recognition system in it. We both try to cheat the system and they want the recognition from people so they create fake users. I mean it can be a big headache, but at the same time the users please themselves, and they are very vigilant because they are protective of their community, and they don’t want you know bad actors joining in and messing things up. So they definitely are very vigilant and let us know if there is someone misbehaving. And so we have a pretty good moderation kind of a queue and we have moderators on the site that manages it for us because there is no way that the four of us can do all that. But you know we’ve managed to– whether be using third party services like Mechanical Turk or others to get help, we’ve found ways that we can you know keep the site clean and safe for everyone.

Steve: Okay so you have designated users which are probably the most active ones to kind of moderate and handle the day to day stuff so to speak?

Dave: Yeah.

Steve: Okay, that’s pretty smart and they are just doing this not for money, they are doing it because you’ve given them a title?

Dave: Yeah.

Steve: Okay, wow that is really, that’s a great idea.

Dave: Yeah, I know, a lot of, I think my mom’s pretty impressed that I’ve really done absolutely nothing. Now, I mean I think the right way to do it when you are trying to scale, it’s just not– unless you want to hire a whole bunch of people, it’s just not a very scalable thing to do and basically by being small we are forced to you know come up with ways that we can scale by using the masses of our users to help support us.

Steve: So do you have any advice for people who want to start some sort of a crowd sourced site like your own if there were to start today?

Dave: Yeah. I think one thing I would say is we started off pretty broad which is I think the chicken and egg problem is the worst when you have to start off from a broad topic because you don’t have any, you don’t know where to start and where to target and even if you have, even if you have people coming, if they start coming to all different points in the site and different topics, then it will still be too thin and too shallow. So I think the most important thing is, I think to focus on a niche because that’s a lot easier to build up critical mass in than trying to reach critical mass in a lot different areas and we’ve gotten lucky. I can’t say that most people would have that you know fortune but you know doing it again, I would probably spend more time focusing on one specific you know topic of interest, or one kind of group of audience target because that makes it much more easier to target when you are trying to recruit people.

Steve: I imagine that’s kind of how you guys started too, right? You can’t possibly cover all the things. You probably just focus on a couple of them.

Dave: That’s right, we focused on a few and we went out to people on them, but for us is because since people have multiple interests anyway once you get into one, they get to add and register things. They will start themselves to build other communities around their other topics that they care about.

Steve: Okay. So what about in terms of platforms you mentioned you coded everything from the ground up. Are there tools out there today that makes this a lot easier now?

Dave: Yeah, I mean they’re definitely are. I think a lot of the CMS’s out there like Jupo and others have become a lot more play and play and easier to use. Ours because we started way back and we felt like so many nails and bolts on it that I don’t know that you could choose just like ours but I mean there are so many things with models out there that you could use, like Trupo [phonetic] and other you know CMS’s and even there is still programming languages and others like Nagios that make it a lot easier and quicker to build these things, but I think the hard part is knowing if you can scale it or not. So, I mean we’ve had to learn the hard way by building a site that was forced to scale so we had to make it you know work. So we probably had to get– it’s just targeting in a lot of time but out team is gun pretty good at managing this process, but I think for our future, for people who are developing now or building sites, if you are not a coder, I do think that there are some programs out there but I do feel like it’s a lot more difficult especially when you want a lot of customizations.

Steve: Okay, yeah that makes sense. So maybe some of my gold [Inaudible] [00:34:58] you…

Dave: Yeah.

Steve: Okay.

Dave: And they are very pretty robust and verse domino.

Steve: Yeah and I think if they had to scale to something your size, I think a lot change would need to be made regardless?

Dave: Yeah but then you– it’s you know let’s that’s good they probably had to get that big.

Steve: That’s true so.

Dave: Yeah.

Steve: So are there any business books that you would recommend or your favorite business book that kind of you know influence the way that you decide to run your business?

Dave: Yeah, I really enjoyed and it’s funny, I wasn’t very fortunate to meet him but those few books were great because they kind of– when you are getting started you feel pretty alone and unless you have other friends who’ve gone through it and even then they don’t always share everything with you. Hearing their personal stories of some of these guys and the stuff they went through when you are going like the tough dark times which a lot of my friends do, and then also focusing on the important stuff, programs, essays and, I guess since then they’ve probably published a book version of all those essay’s. Those are very helpful too because I think they just gave you the common sense and practical advice that a new entrepreneur needs to know that they don’t always teach in school, and it’s like simple things like the order of how you divide up equity and you know different struggles that you have along the way and you know, I think that hearing kinds of the follies and metaphoribles [phonetic] of previous people who’ve gone through this path is very helpful to avoid them, but you still end up making your own mistakes and that’s inevitable, but I think that it just gives you confidence that you don’t have to be perfect when you are doing, when you are going through this process. It’s okay to stumble and fall and that’s how you learn.

I remember when I started this or I guess when I started giving talks one I think I’ve done this– said this analogy a couple of times but I was like into the near Jones and the tumble of, none of that would do, it was last crusade where Andy has to walk to get the, “Holy Grail,” but he has to walk across the bridge to get the, “Holy Grail,” but he didn’t see a bridge it’s like just his bottom was casent [phonetic] . I think when you step off and take this journey towards entrepreneurship or starting your own business, it’s, you have to take that legal faith and step out and when you do you’ll realize that it’s going to be fine because all the friends and colleagues and you know co-workers that you’ve had from your past will all come out to support you and help you in any way and they build that bridge across so that you can be secure and I mean no one is waiting for you to fail unless they are a jerk, but there are people that care about you. They’ll connect you to the right people; they’ll introduce you to the right people. They’ll you know a lot of them will go out of their way to help you out because I think especially here in the valley it’s everyone’s dream to start their own thing. So when you actually do it I think people– they just feel like they want to do their part to see that happen and they are rooting for you, I mean hopefully and I think that’s one thing that I think every entrepreneur who is scared to step out– and I talk to so many people. I try to encourage them to start their own businesses but you know giving up their health care plan or their salary and other benefits is scary, and I think as you get older and you have more obligations that’s gets harder and harder so…

Steve: Yeah you know I’ve, I tend to preach everyone starts something on the side while they are still working. And just build it up until the point where they are comfortable quitting.

Dave: Yeah, I mean, I think the one thing is that I will say about that is, I started something probably on the side like that proved this model to me because I was working as a product strategy for EBay on a field in marketing and then that’s when I saw these guys were making tons of money on the side for referrals and affiliate marketing stuff like selling stuff on EBay and other sites and easily driving transactions, and so I build this project on the side for camera enthusiastic websites for you know canon digitalized horizon and saw people were– I was actually making some money on it, so that’s what gave me the confidence that this would actually work. It wasn’t making enough for me to pay the bills, but I think that model, seeing that actually worked gave me the reinforcement that it could be done on a larger scale.

I would say that the people I know who tried doing things on the side when they have full time jobs, it is much, much more difficult to do especially if you believe in an idea that can be big enough, but you are being held back because your best hours of the day are spent working for someone else and you know when you are like running around doing your product and personal life and trying to start something. We tried to do that in the beginning and it was you know pretty much hectic because we could only give it our late, our worst times of the day and we basically decided you know what if we are really serious about pursuing this, we just going to have to quit and go all in on this because you know it just wasn’t our best and so my co-founder and I– we just decided we had to quit our jobs to make this a reality, and if it didn’t work out, it didn’t work out but we wanted to know that we gave it all our best– put our best foot forward and not just kind of dipped our feet in the water.

And you know some ideas, I don’t think they require– I think for someone like new comers site where you are selling stuff, you can do that and see that people are buying and when you get pushed to the limits then you know better about whether you can afford to quit or not, I mean that’s a scalable model, but for us we would have build a lesser site or a lesser product and that could have ended up disastrous if we spent just half time on it.

Steve: Yeah, that’s makes a whole lot of sense. It really just depends on what your business model is going to be. So hey Dave I don’t want to take up too much of your time. Thanks a lot for coming on. If there is anyone out there who has any questions do you want to provide some contact information and just talk about your sites?

Dave: Oh sure. Oh sure, yeah you can reach out to me at Dave@FanPop.com and yeah www.FanPop.com is our site.

Steve: Okay, well thanks a lot Dave. Thanks a lot for your time.

Dave: Thanks Steve.

Steve: All right, take care.

Dave: Take care.

Steve: Here is what I like about Dave and his business FanPop.com. Unlike a blog where you either have to create your own content or hire a team of writers and editors, Dave has essentially created a business that pretty much populates itself with quality content by leveraging his audience, and as a result his business is generally hands off and it generates cash like a machine. Now while the end result is impressive, it clearly took a lot of hard work to get there and that’s why I admire him.

For more information about this episode go to mywifequitherjob.com/episode19. 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 also helps keep this podcast in the ranks so other people can use this information, find the show more easily to 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 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 will 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?


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!

018: How Adam Gilbert Created A Profitable Personal Fitness Coaching Business Over The Internet

Adam Gilbert

Fitness and staying in shape is a large part of my life which is why I’m thrilled to have Adam Gilbert on the show today. Adam started the popular online fitness site MyBodyTutor.com where he provides personalized fitness training to clients over the Internet.

What I like about his business in particular is that he has transformed an inherently unscalable industry into an extremely profitable business. And as you’ll soon see, he exudes passion for his coaching service.

Like my other guests on the show, Adam is not a technical person yet he has managed to create an incredible business over the Internet. Enjoy!

What You’ll Learn

  • How Adam Gilbert started an online fitness coaching program
  • How Adam got his early customers
  • How to scale a traditionally unscalable business online
  • How Adam differentiates his business from regular personal fitness trainers
  • How Adam hustled his way to grow his business
  • How Adam leveraged Facebook early on to grow his business
  • How Adam gained trust for his early fitness customers
  • How Adam decided between a lump sum vs subscription based model for his coaching
  • Adam’s main source of customers
  • How to design a website with no experience

Adam’s Sites

Transcript

You are listening to the My Wife Quit Her Job Podcast, where I bring in successful boost 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 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 is your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today I’m really happy to have Adam Gilbert on the show with me today. Now Adam runs the site MyBodyTutor.com, where he provides fitness and wellness training, completely online. Now what’s really interesting about Adam’s business is that personal training has traditionally been in person type of activity. Like you go to the gym and you kind of hire someone to train you, but Adam has managed to create his business doing this completely virtually.

Now not only that but I have three friends that are 100% vouch for his fitness program. Now the personal fitness niche is actually extremely competitive and saturated and traditionally it hasn’t really been scalable either. So I’m very happy to have Adam on the show today to talk about MyBodyTutor.com. So, welcome to the show Adam and congrats on your brand new child.

Adam: Thank you very much, I appreciate it.

Steve: Before you even tell us about your business, I’m just kind of curious how having a brand new child has kind of affected the way you run things so far. I know it’s only been a month.

Adam: Yeah, first of all thank you again for having me, it’s awesome. Having a child has changed everything. I am very structured in my day. I have everything kind of planned and you know having my little Zachary has definitely changed everything. So I’m certainly getting used to it but it’s definitely a challenge.

Steve: But it’s nice that you have your own business so things can be a little bit more flexible than if you had a regular day job, right?

Adam: Absolutely and the wonderful thing is I get to spend time with him in the middle of the day. I get to hung out with him, I get to go for walks with him. It’s always a wonderful break for sure.

Steve: That’s awesome men. So give us a brief overview about your business and how you make money exactly.

Adam: Sure. My Body Tutor as you said is an online service. And really you know what separates us from the billion and one other companies out there, you know weight loss companies, wellness companies, whatever, is that we provide daily and personal accountability right. So when a client signs up, we match them with their very own body tutor and that tutor will give them a customized plan to help them reach their goals. And then really again what separates us is that not only do we have that phone call and say, Hey good luck let’s touch base in two or three weeks.” It’s, “Hey now it’s been communication every single day, right?” The fact that we are in communication with our clients every single day, giving daily accountability, daily support, and really system to monitor and track their progress is key. And you know it’s because we are in communication with our clients every single day, our clients gets the results they do.

Steve: That’s kind of different than a personal trainer which you might only see maybe once or twice a week, right. So what you are saying is your clients actually touch base with you every single day right?

Adam: Yeah. We have our very own website, our very own back end system. It’s really easy to use. They enter what they ate throughout the day or at the end of the day their choice. They can upload a photo of their meals they want as well and then they tell us what they did for the exercise. And again this is all a diet plan, an exercise plan that we spoke about with them right so we are on the same exact pages on that. And then they submit their report at the end of the day.

And then the very next day their very own body tutor is writing back with expert routine, suggestions, feedbacks and encouragements to make sure they are staying on track and being consistent. And of course you know when they are having an inevitable, tactful challenge or mental roadblock, we are right there with them and that’s the key because it’s so easy to kind of rationalize and justify poor choices because we are in communication with them every day we can really get them right back on track quickly.

Steve: One thing, I’m just speaking from my own personal just the way I am. Sometimes I’m kind of too lazy to enter stuff in online. So, is there something that you guys do to make me accountable for everything that’s been specified in the program?

Adam: Yeah, I mean so definitely centers around you entering your food into the system. We made it really, really easy to use. I mean, entering your food and exercise really doesn’t take more than four to five minutes. And we work with some extremely busy entrepreneurs, people who are running very large businesses and are extremely busy. And just very busy people in general and I think the best part is they wind up enjoying it. They really look forward to it and they also look forward to getting the feedback every day.

Steve: Okay, so if I’m entering my food then what does that get me exactly?

Adam: So you are entering in your food at the end of the day or throughout the day, but at the end of the day you submit your report. That just kind of lets your tutor know what you ate that day, what you did for exercise that day, if it wasn’t exercise day. And then the real bread and butter of the program so to speak is that the very next day, your body tutor is going to be writing back with routines and suggestions and encouragements.

Steve: I see, okay.

Adam: With that you are kind of owning to what you ate, what you did for exercise is key because we are really holding you accountable on a daily basis. We are giving you daily accountability.

Steve: As you said it is the food that I enter is kind of get converted into calories and that sort of thing. For me at least just human nature I might lie if I had like this triple fat Sunday or something. So, I was just curious how you guys kind of very gently, in a very non-confrontational way give critic and feedback for someone’s program.

Adam: Right. Well I think that is where the art coaching comes in right. It’s definitely not shame based feedback. Shame based feedback is not going to help anyone change their behaviors and habits. I think we do have the advantage that if someone signs up for MBT they are clearly you know want to make their health and fitness a priority, they want to change. And you know lying to themselves and us is only a waste of their time.

And of course this has been, this business is seven plus years old now. I mean, of course it’s happened throughout the years but we are really good at kind of identifying when that happens. And you know I think one of the key is that we remind our clients like, “Listen we are not judging you, this isn’t shame based, we are here to help you, the more you tell us, the more vulnerable you are with us, the more we can help you and the more we can help you get to where you want to be.”

Steve: Right, okay, that completely makes sense. And I imagine the way you are priced actually kind of weeds out the people that aren’t going to be serious about the program?

Adam: Sure. I think you know the price, I mean the reason why we charge what we do is just simply because we are giving so much attention to our clients. We are in communication with them every single day giving them real human feedback. It’s not cookie kind of feedback or a computer. Obviously it’s a real person sitting there writing them feedback, personalized feedback on everything they ate and everything they did for exercise.

Steve: Okay, I see. One thing that I want to know also that I was kind of curious about is, let’s say I wanted to get in shape, so what is my incentive to sign up for someone virtually versus a real life human person that I can actually see, touch and yell at me?

Adam: Right. That’s a great question. Personal trainers are great. I’m all for personal trainers. But I think the difference between a personal trainer and us is you know personal training you might see two or three times a week and that’s it. The real result mean– a lot of people don’t realize this but its 70% to 80 % of our results comes from what, why and how we eat our diet. On the trainer you always see those two or three times a week but the key thing is, it’s what you do between gym sessions. That’s why you see so many people working out with the trainer month after month and not looking any different because again what they are doing between gym sessions is entirely wrong.

Steve: I see, that’s completely makes sense actually. Yeah because I recently tried to get a six pack and I found that it was more about eating as opposed to exercising.

Adam: Oh yeah, I mean I was definitely made in the kitchen, there is no question about it and you can out exercise a poor diet.

Steve: Yeah, I was going to ask, do you actually give a meal plan as part of your program as well or?

Adam: Yeah, absolutely we give a customized meal plan, a customized work out plan. This is what we talk about with our clients and their initial phone consultations. So we really make sure they have a game plan. But again the key thing is, it’s one thing to have a game plan but it’s another to actually implement it and stick with it on a day to day basis. And really, the key to getting the body you want, the key to losing weight, whatever is eating right, exercising and doing those few things consistently. And as we know it’s the consistency part is all, that’s really what we focus on helping our clients do is stick with the plan day to day.

Steve: Okay, so a lot of it, it sounds like largely it’s not automated. You actually get a nice human person that’s really giving you actual advice. And that’s– it’s not like you are getting some cookie kind of advice so to say?

Adam: Not even close not even close and going back to your question the difference between an online thing versus in person. Also trainer you can easily be spending 60 dollars a session, that’s 180 dollars a week if you go three times a week. It’s like what 720 dollars a month to see a trainer. And again that’s only a small part of the battle really. Then you have nutritionists who are of course great as well but the thing is if you are lucky you get to see the nutritionist maybe twice a month. Usually once a month in their office for like 20, 30 minutes and you can easily spend 300 dollars on a session. And again it’s– they give you a plan but there is no follow through. There is no– they give you a plan and they assume the compliance is the easy part but I have always been under the impression and the belief that in 2014 a lack of knowledge is not so much of a problem; it’s the lack of consistency and action.

Steve: Okay, you know that goes with entrepreneurship as well. It actually goes hand in hand with personal fitness which is what I found out. So, let’s switch gear a little bit and let’s talk about the very beginning of your business. Take me back to the beginning. How did you actually get your early customers, like I mentioned before this is a really competitive niche?

Adam: Yeah, it’s crazy, I mean you know first I was working at Ernst and Young, I quit that job. I was doing that out of college for two years, I quit that job in January 2007. Then I launched MBT in February 2007. And I really got my early customers actually on Facebook. So, I actually launched MBT as kind of a spring break company. Basically, the goal was to help people get ready for spring break just because when I went to school everyone was obsessive over looking good for spring break.

And you know back then Facebook had– they had ads. Actually it was ads or I forgot what it was called but I don’t even know what it– that was fliers, Facebook fliers. When you went to the school, you would get more impressions, right and what I realized is if you go to the school you get more impressions. So, I had a few friends in different schools and they gave me their log in information and then I was able to like log in into their account, advertize at those specific schools and would get like double the amount of impressions.

Steve: Okay, so this is back on Facebook was for priority just for the colleges?

Adam: Exactly.

Steve: Okay. And so you could only advertize to colleges and the way you got more advertizing space is if you actually brought your stuff to a different college or something and so you got, you used someone else’s account in a different college and that’s how you kind of spread the word?

Adam: Exactly. It just basically got more ads by using other people’s accounts.

Steve: Right, okay. And did you have a website?

Adam: I had a website. It was very, very basic. I mean if you go to the way back machine you can see it’s completely different from the way it is now. Back then it was really, I was really focused and you know I hated doing it but it was necessary. I was really focused on selling myself because we had no testimonials, we had no success stories, we weren’t featured in the press or anything. No one knew who we were; I mean I was just starting out. One of the things that I vividly remember doing, I had my hero screen name on the website. Back then people still actually used aim and I actually had it on the website. And I would actually sit there for hours having I am conversations with potential clients talking about the program. Literally I mean hours. I still, I vividly remember this and like, it was just like, “Listen, try my program and if you don’t like it, I will give you your money back.” I really believed in what I do, I know it works. That’s how I did it, just client after client, one conversation at a time.

Steve: And so this website didn’t have anything special about it. It was just a static page or…?

Adam: It was pretty much just a static page. I mean there was a few pages to it but there was, again there was no success stories, no testimonials, no press. We weren’t featured in anything. No one knew who we were. It was just me selling myself.

Steve: And so Facebook got you the people to that web page where you would then chat with them through aim?

Adam: They could sign up on the site but I also made my aim screen name very visible at the bottom just because I wanted to interact with potential clients and customers. And you know I even had like my facebook profile because ultimately like first of all the site looked awful, it was very amateurish. I made it myself and it was just really about establishing trust. And there was just so many fly and like companies in the fitness world and they are still are and I knew that and I was very aware of it. And just kind of– I guess I was just naive that I just felt that what I offered really worked. But I knew I had to work extra hard to gain people’s trust.

Steve: So how did you gain their trust earlier on when you had nothing? I was just curious. What would you say to these people?

Adam: I would say listen like, “Here is my facebook account.” Like you know I had a personal blog. So I was like listen I’ve been writing online for– since 2004, basically just to proving and showing them that I’m a real person. Like I’m not just some dude in some closet trying to rip people off. I even think I wrote on the website back then, “This isn’t a scam.” I just– I tried everything. I just wanted people to give me a shot. That was really ultimately the goal.

Steve: So, you actually had a personal blog which kind of, which you had maintained for quite a while, is that right?

Adam: Right and I actually had the link to the personal blog on my website. I had the personal blog link there so that they can read it and that helped. Because again you just want people to realize you are a real person. I mean, it’s online, it’s a scary place. And for me the biggest thing was offering a money back guarantee. So people could literally my program for a month, not feel or see any results and they can ask for their money back. And you know that was powerful. I mean it’s really just a testament to, I think this is the right thing I do but it’s also, I just know what we offer works. I really sincerely believe in what we offer works, and I still offer a guarantee because of that.

Steve: So, today you actually have a subscription based model. What is it like that before when you first started as well? Like how did you kind of come up with the business model?

Adam: Yes. When I first started it was actually like a six week program and that was it. We had two levels basically one with phone calls every day and one without which we still have to this day. But it was just the six week program and that was it. And what happened is, after a few weeks many of the clients would say like, “Listen I love this program, I want to keep going.” And you know kind of very quickly I realized that like it should be a subscription model because of instead of having to ask people sign up every six weeks again, these people are asking me just make it subscription. So, it was kind of a no brainer and just kind of listening to my clients on that. But then instead of a six week we made it a four week subscription and it’s been like that. I changed that in like May of 2007 and that was helpful certainly to do that.

Steve: Okay, so now it’s purely subscription based?

Adam: Yeah.

Steve: Okay. So, now you get this kind of early trickle of customers. How has the way you’ve actually attained customers changed over the years since the very beginning?

Adam: It’s really funny. We live; I mean I always like to say in results we get referrals. I guess one of the biggest early mistakes I made actually, I started MBT in February 2007 and by like April 2007 we had so many clients that I actually had to stop advertizing. And that was I think probably a big mistake just because back then it was working. If something is working keep doing it and I just couldn’t handle the growth. I wanted to hire other tutors. I wanted to build that sophisticated system. I had this whole dream of sophisticated system where I can manage other tutors, where I can manage and see what they were writing to our clients.

And I eventually did that in 2009, two years later. But that was kind of this whole like pipe dream of like, all right once I do this or when I do this then I will start advertizing. Then I will start focusing on growth and kind of, I quickly realized that I’ve always been obsessed with quality and while growth is– growth is just a byproduct of getting people results. It’s really never been a focus. It really hasn’t. There are so many things we can be doing to grow more and more, we just really focus on our current clients. Make sure they get their results and they are happy and thankfully they will refer us to their friends and family and that’s basically how we’ve grown.

Steve: So, when you mentioned you stopped the advertizing, was that the Facebook advertizing?

Adam: Yup.

Steve: Okay. Have you tried any other forms of advertizing? I’m just curious.

Adam: Yeah, I’ve tried Facebook advertizing. Again I was just curious as well. I tried that probably a year ago, couldn’t get that to work. I tried Google adwords couldn’t get that to work, spent a lot of money in that. One thing that we really do and I think it’s a huge driver of traffic is just write a blog. I write a blog. I love writing; that is a huge passion of mine. A lot of people come to our site because of that, and that’s definitely something that has helped a lot.

Steve: So, do people find your blog just naturally through Google or it’s just- -?

Adam: Yeah. That’s always, they’ll just you know– because one of the things we always do when clients sign up is we ask them how they found us, and more and more throughout the last few years especially people are finding us just on Google. That always is a very nice thing.

Steve: So, you mentioned that you had this dream about this back end for your site and presumably you have something much more sophisticated today right? So, are you a technical guy at all?

Adam: No, not at all.

Steve: Okay, so can you walk me through like just designing this website when you had no technical knowledge at all.

Adam: Sure. I mean the first site that I started with, I designed on like Yahoo, I think it was Yahoo Web Hosting. I had done it through there. And basically for me it was just a proof of concept. I really wanted to make sure it worked before I spent all this money on a designer and building up this whole back end application. And then once I realized we really had something, and the program really worked as well as I thought it would, then that’s when I started looking for someone to help me take the website to the next level. That was only after two years. So, I hired this firm in Colorado actually.

Steve: How did you find them?

Adam: How did I find them? I think a friend recommended them to me. I really liked it. They were going to do the whole back end design and they were going to do the front end design. It was a huge amount of products. I remember writing like a blog post on my personal website and saying like, “When it comes out to it if you truly believe in what you do like you’re money talks,” and it was like when I would cut this cheque to this firm like it was wow, it was scary. It was definitely scary but I did truly believe in what we were doing.

Steve: So this is a fully customized website. It’s not developed on any sort of standard platform? Am I right?

Adam: Right.

Steve: Okay. Wow okay so I’ve done this before and it’s kind of what I do for a living in terms of creating computer chips. It’s not a trivial task, so can you just walk me through the process of how somebody who is not technical, and probably hasn’t designed any complicated website in the past, can work with the firm and fully specify exactly what you want on a website.

Adam: Yeah. So I had this very clear vision of how I wanted it to be. We had tons of conversations. I think I actually flew out to Colorado to meet with them. I drew it out on paper. I would like scan it to them so that they can see it, tons of wire frames, just really lots of alterations. Just a really kind of thrashing up front to really make sure they understood exactly what it is I was trying to achieve. And they did an amazing job. They really did.

Steve: So, do you still have them on retainer for maintenance of your site? Presuming you still have to add features from time to time right?

Adam: Right. So that was back in 2009 and one of my dreams is always to kind of build a team around me of people who believed in MBT so much that they actually signed up as clients. So the firm I worked with actually was really good. They actually went and really focusing on much even larger scale projects like multimillion dollar projects and I basically became too small of a client for them. That’s site kind of the application and site kind of stayed that way for a few years. And then this guy named John signed up as a client too great actually. And then he told me he was a software developer and we just started talking. And he actually wound up working for me for free for a year. He just really believed in what we were doing so much.

Steve: Wow, okay.

Adam: Yeah, amazing guy. Had amazing results with the program too and then long story short he’s actually now the CTO and he wound up actually rebuilding the entire application from scratch himself. And the cool thing is we’ve added so many features. Like one thing I’ve always wanted to do, being able to do was like add photos of meals. So now a client can easily snap a photo of their meal, upload it to the site and done. And like, that’s something that we launched last year. Just so many little features now that whenever we think of them or whenever we know that will really add to the client experience we can add it.

Steve: That’s a lot more convenient than having someone in house that does all the work?

Adam: For sure.

Steve: So, how many trainers do you have, at most?

Adam: We are about like 15 now. My site I haven’t updated with trainers in a while. So, yeah I mean it’s cool. It’s nice when you are– you get people reading your site and they are like I love what you are about and they want to work for us and it’s awesome. It’s very cool.

Steve: So, if someone, let’s say one of my listeners wanted to start some sort of training program not necessarily in fitness and what not. What would be the best advice for them if they wanted to do this? Would it be to start a website, a blog, just go round and just try to get some business in the beginning? How would you advice them to proceed?

Adam: Yeah, I think in 2014 that’s a great question. I would definitely advice them to start offline. I think it’s always better to go where people are, and I think there is so much noise online now. We really get most of the client’s offline now really because we have a client base but there are other people who are not reading blogs necessarily or they are not up with all the latest and greatest websites or wherever. They are just referring people that they know in their lives.

So if I had to start all over, I would definitely just start with your own personal facebook page. Ask you know say, “Hey who here wants to improve in this, you know experimenting with watching something?” And just get two or three people right and focus on those two to three people. Get amazing results for them right and if you really get amazing results for them– and it’s not about the money at all. Do for free. And then if that’s works then you can find two or three more people. And before you know it, if you have 10, 15 people that’s a nice little business.

Steve: Okay and then so you wouldn’t even worry about the website or the blog at all until much later from what I’m getting from there?

Adam: If I have to start all over in 2014, I would definitely just make sure you get customers first. That is the most important thing. And I think a website is just delaying the hard work or the most important part of getting customers.

Steve: Okay and what about the various forms of advertizing, do you feel the same way?

Adam: I personally, I’m not an internet marketing or internet advertizing expert. If you are then I guess that’s a huge advantage but unless you know you can make it work. Then again I would much rather deal with people I know rather than try and attract people who you’ve never met at all, and have no idea of who you are.

Steve: Okay, fair enough. The nature of your business is– it’s not entirely scalable in the traditional sense right, because of the human interaction? So is there a plan for you to scale your business or you are just perfectly happy the way it is providing quality to all your customers and not really worrying about growth so much?

Adam: Yeah, I mean that’s something I’ve wrestled with for a while. And ultimately coaching is not a scalable business and that’s why giving people daily and personal feedback every single day is not scalable whatsoever. It’s a very, very time and labor intensive business. And honestly I just absolutely love it, but if your goal is to build an enormous company then I recommend not starting a coaching business.

For me it’s more about just a lifestyle business and just impacting our current clients, and I’m happy with that. My goal is not to build a business for 10 thousand or 15 thousand clients or anything like that. It’s really just to take care of our current clients. Certainly of course you want to help more people but that’s not– that’s really not like… For me, me and my team focus on obsessively how we can serve our current clients better.

Steve: Yeah, and incidentally that’s the theme of the podcast, its lifestyle businesses. So, that’s why I kind of want to steer this conversation a little bit back. You just had your first kid and I want to hug a little bit more. So, how hands off are you in terms of the business right now and how has having your child and being wanting– I suppose you want to spend a little more time with your child. How has that kind of affected your business?

Adam: Yeah, I will tell you it’s hard. I’m actually very hands on with my business. I mean this is definitely a calling. It’s my passion, it’s my life. I always kind of joked around my wife that said you know “My business, my body tutor is my first baby.” It really is and she doesn’t like when I say that. Really it’s like you know for me I love working on it. I love writing emails to my clients. I love interacting with my clients. That is what I love doing. So it’s really a challenge actually to kind of find time for it. Find time for my son. Find time for my wife. Find time for myself a little bit. It’s tricky, there is no question about it but thankfully I can work anywhere. I get to see my son and wife all day which is great if I wanted to. There is definitely time for it for sure.

Steve: Okay, explain since a lot of this is just one on one interaction. Can you kind of explain how you find the trainers that you’ve hired and so that they all kind of have a consistent message about your company right, since it is so personal?

Adam: Yeah, I was told that was going to be a really big challenge. Just because we are only as good as our tutors and our tutors have to care a lot and that’s for me the most important thing. Certainly knowledge is important all but our tutors are experts and know a lot but they really have to be passionate and in it for the right reason. Thankfully throughout the years we kind of get two to three emails a week of potential tutors reaching out to us.

Steve: Really?

Adam: Yeah. And it’s always been a wonderful position to be in because I would rather not hire any tutors at all if they are not the right fit. But just again because our clients, our business is only as good as our tutors. They will write these emails, these wonderful emails and saying how this is what they would love to join, they would love to be a part of it and then we usually go from there.

I will tell you something interesting and it’s kind of one of my hiring something a little test I do is. It’s amazing to me how many people will write me like page long emails, “I love what you are doing, blah, blah, blah” and it’s great and I really appreciate and I will just say, “Hey I’m really busy today, would you mind emailing me in a week, right?” And it is amazing to me how many of these people will like not email me in a week or forget to email me in a week, not email me like 10 days later or whatever. I will say, “Hey today or whatever day it is can you email me a week from today?” And they wouldn’t do it. And it’s like, if they can’t pass that simple test then I know they are not, that little thing I know they are not going to be a good fit for sure.

Steve: Adam you are like, “Hey Steve can you contact me again in a week about this podcast interview?” Very interesting, okay how do you- – sorry go on.

Adam: It really weeds out some people because I would like to say, one of the keys to our success, one of the reasons why we are able to help our clients so much is we have this what I call, “A gentle relentlessness,” right. We have to be relentless to an extent, but we also have to be gentle. A potential tutor wants to be a tutor so badly they should definitely be able to email us in a week, that’s no big deal.

Steve: Okay and how do you incentivize your tutors? I don’t know because they are just working for someone else. How do you differentiate the experience working for you versus working for a gym and doing personal train there?

Adam: Right. I think one of the benefits is that they can work from anywhere. They don’t have to be in a gym.

Steve: Okay, right.

Adam: So, that certainly helps a lot. And it’s also really making sure you get the right people. I guess one of the reasons why– this isn’t again my goal is not to have like a billion tutors, a billion clients.

Steve: Absolutely, right.

Adam: So I don’t want to, I’m very careful who we select as tutors. Then probably we will limit our growth and that’s okay. So just finding the right people and making sure they are in it for the right reasons. Certainly yes they need to get paid and they do get paid well but if they are in it for the money, just for the money then they are not going to be good fit.

Steve: Okay, these are just all– the questions that I’m asking, these are all just kind of fears that I’ve had as I’ve been hiring and stuff and we’ve actually had a couple of doubts here and there with our businesses, and so I was just very curious to know how you kind of screen out your employees and that sort of things.

Adam: Yeah.

Steve: Cool. So, what kind of inspired you to actually go out on your own and start this business? Were there any books that you recommend that you read that kind of inspired you?

Adam: I have always kind of– in college I had a business. I mean what really inspired me was just the fact that my first day of concord procedures job, I had a stomachache and I just knew that was not for me. I wasn’t happy for those two years while I was there. So, that really was what inspired me; I just knew that, that’s not what I was meant to be doing. In college I had this business and like I have never felt so passion in my life. And I knew that existed in me. And then when I had this corporate job like I just felt like, I was like it just wasn’t me. And I had to get back to that, that’s what inspired me to really pursue my passion.

Steve: And as someone who isn’t very technical and that sort of a thing, were there any sort of web services that you would recommend to actually find the people, to find the developers or services that kind of just helped your business out that you might recommend?

Adam: I mean the technology now is so much better than it was seven years ago. You can easily, fairly easily start a blog now, work for a site. There are so many sites where you can just bid on finding people to do work for you. I mean that stuff didn’t really exist seven years ago. To be honest I don’t really do that now because I have a CTO that kind of handle all that stuff. But I know there are sites we can easily bid out work and it’s no big deal. I have friends that built out business for like only 100 dollars they got their entire website. Now they are like multi-million dollar businesses.

Steve: Yeah, I know I was just trying to see if you would do it all over again, will things be different in terms of the website and everything as well but it sounds like you don’t handle that, and it will be more of a question for your CTO.

Adam: Yeah, sorry.

Steve: No, that’s cool. So, what would you say is like your secret source? Like why did you succeed in this business, where a whole bunch of other personal trainers who have tried to do this in the past have failed?

Adam: Yeah, you know that’s a good question. I think, I like to think it’s just because some people say I’m extremely persistent and honestly I’m really just so persistent because I really, really believe in what we offer. And I have been at this now for seven plus years. And it’s just you know like for I’ve been writing a blog for years now, right. There were times where people weren’t commenting on it at all. Actually we really didn’t have any comments, we were like, I wasn’t getting any interaction right.

And like you know it’s just been interesting throughout the years like I post my blogs then slowly by slowly people start emailing me saying, “Hey this really, really resonated.” It’s just about, for me I’d be doing this whether we had clients or not, like I would be putting content out there about weight loss, about the psychology of weight loss. We got all the stuff we help our clients achieve no matter what, this is what I love doing. So I think the key is really, really picking something you actually love doing because then it really doesn’t matter if you succeed. Success is going to happen just because you are willing to put the work and because you love it. And I know this sounds chizzy and like cliché but for me it’s like I had no problem staying up until three, four in the morning working on my site or writing things because it was fun. I truly enjoyed it.

Steve: You know what’s really funny about running this podcast is I ask this question a lot and I get different answers. Some people say you don’t really have to love what you are selling, what not; it’s all about the numbers. And then on the flip side here you are telling me that you just have to be so passionate about it, and so into it that you know it’s going to succeed in the end because you are so passionate about it?

Adam: Right, I mean for me I couldn’t, I can never run a business, just for me personally. Yes those people will say, “Start something, be good at it and then you will end up loving it.” But for me it’s always been about, life is too short why not love what you do for a living if possible. And I just, I have to love what I do. I can’t just sell something just for the– you know for money to be the goal, it’s just not me.

Steve: So, I noticed you mentioned a lot of your business is just word of mouth. So, is there anything special? And I notice a whole bunch of testimonials on your site as well. So, is there anything that you do in particular to actually encourage these testimonials or encourage these people to submit their before and after results to you?

Adam: Yeah, it’s really funny, I mean it sounds, it’s like I actually just started with less fears like asking people for before pictures and after pictures. The one challenge with the weight loss business, I mean we really have like thousands of success stories but a lot of people don’t want their pictures online. So, we ask people, a lot of people say, “Hey enjoy them but I would rather you not post them” so of course we don’t. But, it’s something I probably should have done from the very beginning is being more aggressive in asking people for before and after pictures, and you know testimonials and things like that. A lot of people just want to share, give us a testimonial but it’s something we definitely been more aware of last year is asking people for.

Steve: Okay. Cool, hey Adam I don’t want to take up too much more of your time. We’ve been talking for quite a while. If anyone wants to get a hold of you or ask you any question about MBT, how can they reach you?

Adam: Best way is just email me adam@MyBodyTutor.com and I will be more than happy to help you out in any way I can.

Steve: Okay and in order to sign up for your program actually, is there some sort of free consultation one on one or do you sign up first and then you get the call or how does it work exactly?

Adam: Yeah you sign up and then we will have the initial phone consultations. Of course if you have any questions or anything comes to mind about my program certainly email me, we will talk and certainly you want people to feel comfortable before they join. And I would love to– I think one of the cool things and I think we talked about this a little earlier is just, the cool thing about fitness is it really helps you to do everything better right? And whatever you do is worthwhile investment of your time.

Steve: Oh, absolutely. I have lost like 35 pounds in like the last six months, and I feel a lot more alert since I’ve changed my diet. So, yeah, I can totally vouch for that.

Adam: Yeah.

Steve: All right hey, well thanks a lot Adam. It was a pleasure having you on the show.

Adam: Awesome. Steve thanks so much for the opportunity, I really appreciate it.

Steve: All right men. Take care.

Adam: All right.

Steve: Here is what I like about Adam. He’s taken an industry that is inherently unscalable and he’s turned it into an extremely profitable business that pretty much transcends geographical boundaries. Now he can literally train anyone across the world. And just that aspect of his business, I think it’s just really cool. For more information about this episode, go to mywifequitherjob.com/episode18. 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 make me feel proud but it also 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.

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 will 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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017: How Jessica Larrew Created A 6 Figure Ecommerce Business Using Fulfilled By Amazon

Jessica Larrew

Today I’m excited to have Jessica Larrew on the show. Now what’s unique about Jessica is that she got laid off from her job where her husband was actually her boss. But instead of wallowing in pity, she decided to start a business selling goods on Amazon and now manages to make a nice 6 figure income in doing so.

Today, her husband quit his job as well and they both run their business together. A very inspiring story that you all should check out!

What You’ll Learn

  • How Fulfilled By Amazon works
  • How Jessica makes 6 figures a year working one day a week.
  • How to find clearance goods to sell on Amazon for profit
  • How to find profitable goods to sell
  • Jessica’s criteria for finding goods to sell.
  • The advantages of using Fulfilled By Amazon versus carrying your own inventory.

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 have them take us back to the very 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 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 100 K in profit in our first year of business. Go to www.mywifequitherjob.com for more information, 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 another edition of the ‘My Wife Quit Her Job’ Podcast. Today we are going to be talking to Jessica Larrew, and I initially heard about Jessica from Pat Flynn’s podcast, and when I heard her story I knew I had to have her on the show.

Now, Jessica runs a business where she purchases surplus goods from stores, and then sells them on Amazon using Amazon’s ‘Fulfilled By Amazon’ program. And as a result, she doesn’t have to carry any inventory. Amazon takes care of shipping, fulfillment and returns, and you know, her story particularly struck a chord with me, because it reminded me of the old days when I used to kind of comb the craigslist Ads for bargains and sell everything on eBay. And I even got to the point where I wrote a script that would instantly alert me of potential craigslist deals so that I could be the first one to pounce.

Anyways, Jessica’s operation is obviously much more sophisticated than mine ever was. So I’m really happy to have her on the show today to talk about her business. So welcome Jessica.

Jessica: Thank you for having me Steve.

Steve: Yeah so, can you just give us a quick background story, I mean, I gave a very quick overview, but if you can just kind of give a background story and tell us about your business, and how you got started, and kind of what your motivations were for starting your business.

Jessica: Sure, I wish I could say it was all so smooth in the beginning, but of course it wasn’t. Like you I had other online endeavors, and so I started messing around in eBay first, and that was a lot of going to the yard sales and picking up used items, and selling them on eBay, sending them myself, doing what the customer returns etc.

So, it got where I couldn’t move forward, there was just nowhere else to go. So, I was doing that while I was working, my job, I was working full time, and at that point we didn’t have any kids or anything. And the day came whenever I lost my job, and it was really devastating for me, and I didn’t know what I was going to do from there.

And I had heard about people talking about using Amazon’s fulfillment by Amazon program, and I thought that’s going to work for me. I can make that work. And so, I really started looking into it, and I learned a lot, and then I started implementing what I learned, and I was able to quickly replace the income that I lost from my previous job.

Steve: So, can you give a little bit of… oh sorry.

Jessica: Go ahead.

Steve: You could just give a little bit more detail about, you know, what fulfilled by Amazon is, because I’m sure a lot of the readers don’t even know what that is.

Jessica: Yes of course. Web fulfillment by Amazon is– it’s a program where sellers like myself, we can use Amazon’s system, where we can– it looks like we have a store frame, but we don’t have to do any outside advertising, everything goes on the main Amazon.com website.

And if you go to Amazon and you look up your favorite item, you will see on the site right bar where it says, ‘also available by’, and there is all these seller names listed. Well, those are people just like myself where they’ve put those items available on Amazon. Well the thing is Amazon does all their own advertising, so that takes out a huge thing for people who do e-commerce.

And then the other thing is, they will store all of our products, so when we buy things, we send everything to their fulfillment centers. They have fulfillment centers all across the United States and even in other countries now, but I just do the United States.

So I package up all my products and I send them to their fulfillment centers all over, and they hold all of my items for me. Once those items sell, I am able to not have to do anything with that order, and Amazon takes care of it all for me. They will pack it up; make sure that it arrives safely to the customer, if there is ever any customer issues they get notified first. If there is any major problems like a complaint about the item and the customer isn’t satisfied, and they don’t want to just ship it back, then the e-mail would go to me directly, and I would respond to that, and take care of it.

But other than that they take care of like 95% of everything once I purchase the item and send it to them. So it’s a lot of upfront work, and finding the products and sending it to Amazon, but once it’s listed, it’s pretty much, it runs itself.

Steve: Okay, so does Amazon handle all the returns as well, they ship it back to Amazon and not you I would imagine is that correct?

Jessica: That’s correct. And that’s actually one of the things that’s a little frustrating for people if when they first come to Amazon because, if you’ve shopped on Amazon they have like, 100% you can send the item back for any reason. And so, if you come from any type of e-commerce background, you like to have control over that. And so with Amazon, if a customer says, “Hey, I want to return this”, for whatever reason – buyer’s remorse, it’s damaged, defective – whatever, Amazon just takes that item back, but the good thing is we don’t have to deal with it.

So, they send the customer shipping label, the customer sends it back to their warehouse, and from that point the sellers have an option to either have the item sent back to them, like, we can decide okay, ‘is it broken, or is there nothing wrong with it’, if they just had buyer’s remorse, we can send it back and then resell it. If it’s damaged then we just take a loss.

Steve: Okay, okay, sorry I didn’t mean to interrupt your story, so, you actually have a very interesting background with how you actually lost your job. So if you want it just tell that story real quick, it’s actually quite interesting.

Jessica: Yeah, it’s kind of one of those stories where it’s almost– it’s kind of sad to tell it. But, my husband and I were working together, and he was technically my boss, and that happened over a period of time where we got transferred around from stores, and eventually he was technically my boss.

And so, we had gone through, when the economy really collapsed, and we were in the housing market, and so our company had done a ton of layoffs. And I made it right up until the end, and I just never thought that I would get let go because my husband was my boss and – it’s kind of embarrassing to say that – but I mean, that was job security for me, you know. And what happened is, they did have to make more cuts, and so I was pretty much the last on the chopping block.

And they pretty much said, “Hey, we are letting your wife go, we won’t make you do it, but she is going to get let go.” And so it was really a rough time for us because– for him too, it was like he had no control over that. And so they kind of moved him out of the way, and then called me in, and when I came they said, “This is your last day”, and I’m like, “Really? I didn’t see that coming”. Because you know how in a company when they start to do layoffs, you kind of have that idea like, ‘Okay, this person’s gone, this person’s gone, if they have to do more, where am I?” Well, I didn’t see myself on the list, at least not for like, four or five more but…

Steve: Yeah, I can imagine especially if your husband was your supervisor.

Jessica: Right.

Steve: So, did you actually, when that happened, did you think about looking for another job, did you have kids at that point or?

Jessica: We didn’t have kids, and we just have one now, but we had known that we wanted to start thinking about having kids. And for me I always wanted to be a stay at home mum, but it didn’t seem fathomable to do at that time. And so, now when I look back at it, it was really a blessing because it made that decision for us. That we could do things without me working a regular job, and so I knew right away I didn’t want to go back and work for somebody, I just didn’t know exactly know how I was going to do that. And so that’s why I was really experimenting with eBay trying to make that more. And once I realized that wasn’t going to work, then I put all my eggs into the Amazon basket.

Steve: Okay, so when you lost your job, you already kind of had started experimenting with these services, and so that kind of gave you the courage to not even bother looking for another job, is that…

Jessica: Yeah exactly. I knew that there was definitely potential, and I didn’t know how big it was at the time, and so I’ve definitely been surprised at what we’ve been able to do in the last few years. But I knew that there were options out there to make money online.

Steve: Yeah, and so that’s probably another reason why your story resonated with us, because you know, my wife had the same thing. We wanted to start a family, and she wanted to stay at home with her child so– yeah it is a very valid reason for wanting to start your own business. So if you can just walk us through– and so let’s start with the good stuff first, so how much did your business make last year?

Jessica: Last year our gross sales were just under $300,000, like $297,000, and our profit after all of our inventory expenses and Amazon expenses, we netted just over $100,000.

Steve: That’s amazing, and how many hours would you say that you spend on this, and how much time do you get to spend with your child?

Jessica: Well, we get to pretty much spend unlimited time with him. What we do– in the out this, and what I’m telling you now is our now story, you know, it took a lot more work in the beginning, and we’ve just gotten to where have a good system down now.

But what we do now is, we try to work one full day a week, and that means five hours to us, so you could always say that that it’s like, “That’s not full time.” So we work five hours on Mondays, and that’s when we buy all our inventory. And then we take one to two days the rest of the week to send that inventory to Amazon.

And we do that with our son here, and so we can only do two to three hours at a time, because he doesn’t like us doing it, because you know he can’t really work in it. So we either do it when he is in bed, or we’ll do it during the day where one of us can hang out with him, and the other one can work. And so we spend the ten hours between the both of us on Monday’s, sourcing for inventory, and then we spend between five and ten hours the rest of the week getting that inventory to Amazon.

Steve: So if you can just kind of just walk me through, you know, a typical day or a typical week I should say, you know, how does your business work exactly? I would imagine that the finding the deals part is the hardest part because Amazon takes care of the rest, right?

Jessica: Right. It’s pretty much the selling thing that you have to worry about. And so I tell people that if you want to make $3000 a month in profit, like that’s what you need in order to survive or to quit your job or whatever, then you have to be actively sending in at least $3000 worth of inventory a month, and that would be your cost.

And so for us, we want to be making between $4000 and $5000 a month. So we have to be spending four to five thousand dollars a month because we are always trying to double our money. So if we can go to one store and we can spend $700 then that makes a big cut on what we have to spend the rest of the month.

So it is always a numbers game, we’re just trying to find enough inventory to meet our quarter. And there will be months where we buy a whole bunch of inventory, like we’ll spend $10,000 on inventory, and so that will make the demand that we need to meet the next few months lower. So if we spend $10,000 this month, we can just spend two to three thousand next month, and two to three thousand the next month, makes sense?

Steve: I see, so does the inventory that you buy, does it go straight to Amazon or does it come to your place first and then go to Amazon.

Jessica: Oh, sorry I should probably clarify that. So we– actually we go to stores physically ourselves and we look for items. So we bring it home with us. So if we are shopping at like Target, we’ll buy the items, and then if we have things that we know are going do well, then we’ll go to multiple Targets and buy the same item. And we bring all those home, and then we process them here.

So there are ways that you can purchase inventory online, and you would have that shipped direct to you, or there are third party services that you can use that will actually label and process your inventory for you if it’s purchased online. But for us and the way that we run our business, everything comes to our house with us, and then we process it from here.

Steve: Okay, so you mentioned Target as one of the options, so what would stop someone from shopping on the Target website directly as opposed to just going to Amazon and paying more.

Jessica: Well, the main source of our inventory is discounted items, and I don’t know if you’ve ever looked at the same item on Target’s website as looking at Target in the store, is there prices are different. So we can find things in the Target store that’s local, that’s 70% off, but if you look at the website it’s still full retail price.

Steve: I see, okay.

Jessica: So it’s totally different schedules.

Steve: I’m actually no stranger to the sales section on Target, sometimes they have these killer sales, so I imagine those are the ones that you are talking about, right? So when you see something that’s good you kind of just snatch it up and buy it all, is that-

Jessica: Right, exactly.

Steve: Okay.

Jessica: And we do, if I find something or watch it on target.com and see if it gets discounted to that same price, and then I’ll order it online as well. But the thing is, for a consumer when they are looking at the item, they may not need it in that exact time frame.

So if they don’t catch it when it’s on clearance on target.com, then they have no idea whether even was on sale, and they don’t want to do the hunting, we like to just go to Amazon. I don’t know if you shop on Amazon, but they make it super easy, so I even buy just for convenience a whole bunch of stuff on there, because I don’t want to have to go and hunt for it myself.

Steve: Absolutely, I’m a prime member, and I will just buy really small items because the shipping is already included, so it’s very convenient, yeah. So, in order to be able to spot these deals, you kind of already have to know how much things are worth in a way, so do you have some sort of tools that you used for that or do you just know what the prices are for the stuff that you want to buy.

Jessica: I wish I did because that would mean it could have been a whole lot easier. But after a few years there are things that I can recognize brands, and I try and stick the things that I know. But for things I don’t know, there are great tools that you can use. There’s the app set, you can download on your smart phone and you can scan the bar code and see what the selling price is on Amazon. And if you have an app that is made for sellers then it will tell you what the Amazon fees are, and how much profit you are going tomake on that item. So all you have to do is look at your cost of the item, and then you will know exactly how much you are going to make off of that item.

Steve: I see, so as you are kind of going through these stores you have your phone on you, and you kind of just scan if you don’t know, and you just see instantly what the Amazon selling price is.

Jessica: Exactly. And the thing is that, you know, if you are dealing a lot with clearance items, you will look at things and go, okay well, this is 75% off, there has to be money, they are making it. And the funny thing is that there isn’t always a lot of money to be made in it. I was looking at this Wii U component at [indiscernible 00:17:03] yesterday, and the regular price was $30, and it was on clearance for $6. And I was like, “Oh wow, that’s going to have to be able to make money”, and so I scanned it and Amazon was selling it for $6. So I was like, “Wow”. So it’s like there’s this whole dimension to the way Amazon works, because their number one goal is to bring the best price to a customer, right?

Steve: Aha.

Jessica: And as for a seller, we want to make the most money that we can, and so we have to be able to find that happy medium if Amazon is selling that item then obviously I’m not going to be able to make any money on it. But if Amazon wasn’t selling it for $6 there probably would have been potential for me to sell it for a higher price.

Steve: Yeah, so, is there a particular type of item that you guys kind of focus on or do you just kind of just sell a wide variety of stuff.

Jessica: We sell a wide variety. You can sell pretty much any category, you can sell clothing or jewelry or automotive items, so we can go in any department. For me personally, I like to stick with like, health and beauty items, grocery items which is a big shocker to people, that people buy groceries on Amazon, and then also the toy category, I like to sell toys. Toys is one of the areas where you can actually buy things at retail price, and you can sell it for a markup. So it’s like it’s not always hunting just for clearance items like I talk about when I got started.

Steve: Interesting, I would love to hear some examples, so what is an example of a toy that you got at retail and were able to sell it for higher.

Jessica: Well just recently, the movie frozen came out, and so it’s like the biggest movie that Disney’s done recently, and it has a huge following. And so there is a lot of toys from that line that we are able to buy right off the shelf and resell for more. So for example, there was one doll that cost $16 at the store, but the problem is you couldn’t find the doll, unless you were like looking for it all over the place. And so that doll we were able to sell for between $39 and $45 a pop. So if we found ten of that doll then, you know, we would make $150, $200 after fees.

And so they are not as easy to come by, but once you find them they’ll last a couple of weeks and then you just kind of do it well at [indiscernible – 00:19:36] and then once supply gets back into stock then you just let it go. Which is frightening because that’s the song from the movie, I didn’t plan that.

Steve: What’s hilarious is my daughter is obsessed with that movie, and incidentally we’ve been looking for an Elsa dress, and an Elsa doll, so maybe after this interview I’m going to have to contact you and figure out where to get that stuff. So you are the one who’s been hoarding all that merchandise.

Jessica: Yeah, that’s kind of one of those things where you don’t really want to talk about it too much, because then people realize you cannot always the good guy bringing them the stuff that they can’t find. It’s like, you are also creating a little bit, which probably added that out. But that’s what it is, because you know, like sometimes you are going to an area that you can tell doesn’t get shopped that often.

And you will just find like this huge supply of something that is nowhere to be found in bigger areas, and so we are going to start and find like ten of those dolls, and then, but locally like, if I was to look for it at the Target down the street from me, it’s been empty for months and months and months. So it is just kind of like finding a little pockets and sell what we do as sellers is we distribute the inventory to where people actually want it.

Steve: Right, that totally makes sense, yeah, because it is definitely a distribution problem, right, especially when a big store has to service a whole bunch of stores in more remote areas of the country as well.

Jessica: Right, and you just never know where the demand is going to be for certain items and so if a store is sending it everywhere, of course there is going to be stores that sell out really quickly and then stores where it just never sees the time of day.

Steve: So walk me through how groceries work, that just seems counter intuitive to me, since there is an expiration date.

Jessica: Yeah, so with groceries there is kind a lot more rules that go into play for sellers. We can’t sell items that are going to be expiring within 50 days. So there has to be time for you to get it as a consumer and use it. So we have to keep track of those things. But the thing is, there is always items that I can find that you can’t find, just like we said with the Elsa doll and the Elsa dress.

I can find different flavors of cereal that you may not be able to find locally, or want to search for. And so what I’ll do is, I’ll just bring those to you on Amazon market place, and of course I am going to charge you a premium to do so, but you don’t have to go and look for it. And there’s items like that everywhere only you can find in your area.

Steve: Interesting give me an example, I’m very curious.

Jessica: You’ve put me on the spot, and I can’t think of one.

Steve: Oh, we can go back to it later, you know, you can have in the back of your mind, but yeah, it just blows my mind that there is flavors of cereal even that are just kind of geographically distributed, that’s amazing. Well you know-

Jessica: I have the blue diamond omens, are really local for me, and so, I may have flavors here that you don’t have, because the plant is here right by where I am

Steve: That makes sense.

Jessica: And so, I may have like a [whole opinions??] flavor, a chilly flavor, chocolate, and maybe you don’t have those ones. And so I can buy them locally at regular price and save $3 a can, then I’m going to sell those for like $12 a can.

Steve: That makes sense, because when I went to Hawaii, I noticed there is a bunch of flavors of some of their chips that I like, that can only be found there, and okay so, I kind of understand now.

So there is an expiration date associated with it, so let’s go back to how this whole fulfilled by Amazon works. So, let’s say you have items in their stores that are going to expire, so how does that work exactly.

Jessica: So we try and keep track as a seller of when our stuff is going to expire, and when we send it to Amazon we label it for them, so that they can see in a format that they are used to when it expires. And then once it gets to where it’s going to be close to expiring, what a lot of us will do is we’ll just discount the item so that it will sell quicker, and put in the notes that it’s about– that it expires on XYZD, and then try and sell out.

If it doesn’t sell out within that 50 day period, because they won’t ship it to a customer after that, because they don’t want the customer to be upset that’s it too close to expiring. So they will just pull it off of the shelf, and then we have the option to either bring it back or have the item destroyed. And usually with food items we just have it destroyed because we don’t really want it, it wasn’t something we bought because we liked it, it was something we bought because we wanted to sell it. And so instead of paying to have it sent back to us, we’ll just have the item destroyed, and that’s kind of last resort, because like I said we always try and sell out before that happens.

Steve: Sure, sure, so are there fees associated with storage, sending back and destroying on Amazon’s part?

Jessica: There are, and there are actually really minimal whenever you think about, especially for storage if you think about the cost of a storage unit, that’s really expensive, like you are going to be over $100 a month, and I spend on Amazon around $50 a month for my storage. And so it goes per item, so you can store a book for like a penny a month because it’s really small.

And so it’s actually not that expensive, but they send it in one big bill, so it kind of looks scary whenever people get their first storage bill, you know, because they have all these items there, and we have hundreds of items there, so it’s like for us, I will spend $50 to not have my garage full of stuff.

Steve: Oh yeah absolutely. So if you didn’t want to rent a storage place could you just ship all your junk over to Amazon, or-

Jessica: Well that would get pretty expensive because we do have to pay shipping charges to send our items to Amazon as well. And so one great thing about their program is, they have all these deals worked out with places like KPS, because they have so much stuff going through their system. And so they will give us as sellers the ability to use their discount, and so if I send stuff my cost is usually between 50 cents and a dollar per pound to send in an item.

If I were to send the same item myself it’s going to be like $3 to $4 a pound to send it. So it’s definitely discounted, but there is that fee. So we try to send as much stuff as we can at one time because the larger the weight is on our shipment the lower your per pound cost is. So it isn’t really beneficial or cost effective to send in just a couple of items, because they are going to have a minimum of like five dollars just to touch that box. So if you just send in two items, now your cost per item is an additional two-fifty, but if you were able to send in ten items with that same five dollar cost, now you are cost per item is only 50 cents, makes sense?

Steve: I see, now that makes sense, yeah.

Jessica: And then the other fee that you had asked about was like having it destroyed or having it sent back. We can have items sent back to us for 50 cents an item, so it’s actually not very expensive. And they will destroy items, I think, I can’t remember that one off the top of my head, it’s either five or ten cents per item to destroy it.

Steve: Okay, the fees are relatively small I guess, depending on what you are…

Jessica: Yeah, your main fees are going to be in their commission because they want a cut off of that sale price, that’s where they are getting their money is on the sale price, and then their handling fees. So that’s how we say that overall you end up spending about 30% on lower cost items, if you get higher up because the commission is set at a percentage in a lot of your other fees are based per item, you could sell $100 item, but not spend $33 in fees because they are going to take less overall because it is more expensive.

Steve: I see, so in general you are saying one-third of the cost goes to Amazon, but that varies depending on the price of the item.

Jessica: Right, and that’s why having those apps really comes in handy as because you can take out all of the guess work, it’s not like you have to go, “Okay, how am I going to make any money on this?” like you don’t have to do the math in your head. And I know whenever we are talking about it, and we are talking about it over the phone, it’s like kind of hard to picture it all because it’s not right in front of you.

Steve: Right, right okay. I am just very interested if you could just walk me through one of your shopping trips, you said you did it every Monday, right?

Jessica: Right.

Steve: And that’s basically the amount of time that you work each week is on these shopping trips, so how do you know, how do you decide where you are going to hit, the average dollar value of the products you are looking for, you know, what are some of the factors in that decision making process.

Jessica: Well, one factor on items that we are going to sell is that I prefer not to receive less than ten dollars profit on an item because it is not really worth my time to do. If I can find something, and it’s really an expense of like a dollar and I’m going to make five dollars profit on it and I can sell like twenty of them, then I will reconsider of course, because there is a lot of profit potential. But one of our main goals is we want to be making ten dollars per item that we find.

Steve: Okay.

Jessica: Finding where to go, we have a list of places that we go and we live in the central valley of California so we’ll go to a lot of neighboring towns, and so we work that all into our schedule. So if I go say to, Wall greens, Target, Big lots, and grocery outlet, all in one day. Well, I’m not going to go to those same four the next week. I want to give them time to replenish or to get new clearance items, things like that. So and we can only go to so many stores in five hours, right? So the list of places that we can go is a lot larger than the places that we go in one day, so we can rotate these stores week by week by week.

Steve: So do these places send you mailers and that sort of thing to let you know what the sales are ahead of time so you kind of plan your week or?

Jessica: No, because what we are looking for usually isn’t something that they will be advertising, it’s something that is going to be hidden.

Steve: I see.

Jessica: And that all depends too on what model you are using. If you are using strictly buying clearance items or if you are trying to find retail items– like one of the ways that we do grocery is we would check the Ads, so that’s one time that we would actually look at the Ads. But I usually would do that online instead of looking like an e-mailer, a flier Because I just throw all that stuff away, you know.

Steve: Yeah, yeah of course.

Jessica: But you can do research like that before you go into a store, so you can see what a store has on sale. For example, if an item is going to be at the grocery store and it’s going to be buy one get one free, that’s automatically 50% off. So if I was able to sell that same item for just three times that price then I would be able to make money. And it is not going to be that much more expensive to the consumer, because I only have to go like 50% above the retail cost.

Steve: I see.

Jessica: Those are the kind of sales that we would look for, for regular priced items, we call those regular priced items mono actually. You know what I mean, they are not on clearance.

Steve: Do you assume a certain percentage will go unsold or do you usually assume that it’s just going to sell.

Jessica: Well, Amazon they have ranks on items, and you probably never noticed that as a buyer, but it’s something that we as sellers use, and the way that I can explain it is you know how there’s like the billboard top 100?

Steve: Aha.

Jessica: So the number one song is the most requested song of the month, or the week, or the day, or whatever chart you are looking at. And as it gets lower down the list or higher up the list, they are requested a lot but they are not requested as much as the number one song. So what Amazon has done is that they’ve ranked all of their items by category. So, if I was to look at an item in the toy category, well, there is going to be like 300,000 total ranks. So when I’m looking at number one, I know that it is selling really really quickly, that it’s getting and purchased multiple times per hour.

If I see something that’s ranked like five thousand, I’m going to go, okay, this is still a good rank, but it’s not selling as fast as number one. And then it goes up in numbers like that. So we kind of have an idea on how fast things are going to sell and that’s one of the ways that we decide if we are going to purchase one of something or we are going to purchase multiples as by the rank that we can see.

Steve: I see, that makes sense. So do you look at the ranks first or do you find the item first and then look at the ranks.

Jessica: It’s all about finding the stuff first, and I can’t remember if I have mentioned this on the other interview, but, I will go, and I usually find like one in ten, is my average on something that I’ll buy. So in order to find ten profitable items, I’ve usually scanned about 100 items. So a lot of times I’m going in just kind of looking blind, and then I will just scan until I find something that looks like it’s either got a really good rank or has a good profit potential. And then I will check all the details on the item from there.

Steve: That actually sounds kind of fun.

Jessica: It is fun, it actually is really fun, and it can get frustrating because sometimes, you know, you didn’t find anything in the first sixty scans, but you find ten in the next forty. It’s kind of a numbers game.

Steve: Yeah, I love finding bargains in generals, so this is just that on a much larger scale, I guess.

Jessica: Exactly.

Steve: So you know, it all sounds very doable, so what are some of the challenges in doing this, and what are some of the mistakes that you’ve made early on that you care to share.

Jessica: Well, when I first got really started into the FBA side and putting a lot of money in, was actually during the fourth quarter which is right at the holiday season so things are selling really, really quickly. And so one of my first mistakes was that I was sending stuff in too late, like I didn’t really understand the time that it took from when I was sending the stuff in until it was going to be received and ready for sale. And so after my first fourth quarter in January I had all the stuff left over and of course the price was way better December 20th than it was January 1st.

Steve: Ah, I see.

Jessica: And so I ended up with some leftover inventory and I was able to sell it and make my money back which I’m always willing to do. I’d rather, you know, cut my losses and reuse that money somewhere else, but that was kind of my first mistake was I went too heavy too late.

Steve: Okay, incidentally how long does the whole process take of getting your stuff to Amazon and then having it listed?

Jessica: It used to take less time because we would send everything to one warehouse, and so it would take like three to five days from the time that we purchased it until it was received at Amazon.

Steve: Okay.

Jessica: Now the process is changed a little bit in the last year where we actually send to multiple warehouses at one time. So I’ll have some items that are received the next day because they go from California to a warehouse in California or they go from California to a warehouse in Phoenix, and so those arrive really quickly and get checked in and are ready for sale.

But then I have other items that go all the way back east, and those ones take five days just to arrive at the warehouse and then a couple of days to get there. So you are looking at between two and ten days for your items to go active and be for sale.

Steve: Okay, so what is the advantageof shipping to different warehouses, is it a shipping time thing or?

Jessica: It doesn’t have a real advantage for the seller, it’s more of something for Amazon to cut their costs because they are shipping everywhere, and because if you have a prime membership you get that free two day shipping. So they want to have our inventory spread all across the United States. So if somebody purchases it from California, they can ship it from California or Phoenix instead of shipping it from back east.

Steve: I see, and Amazon tells you the allotment that they want per geographical location?

Jessica: Yes, and that’s based– I don’t know what their calculation is on that, but they will tell us. So for instance, in ten, they can say, okay, send two to this warehouse, send five to this warehouse, send three to this to this one, and one to that one.

Steve: Interesting, okay, so they have it all down, they know the demand for what you are trying to sell, and they just work everything out for you.

Jessica: Exactly.

Steve: Okay, so does that imply then that the items that you sell always have skews and bar codes on them then?

Jessica: Yes, because we mainly deal in new items, so they would all have a UPC code on them. And people can sell used items, but it’s not something that I would start doing like in the beginning.

Steve: Okay, so you mentioned you made six figures last year, do you plan on expanding this business, and what are some of the next steps if you want to grow this even more?

Jessica: Well, one of the things that we’ve really been debating is, how can we grow the business without adding more time, because for me the biggest thing is, I don’t want to be spending 40 hours a week on the business. I want to keep the hours to a minimum and I am happy with making the six figures, right? Especially while our son’s small, so when he gets older we may decide, “Hey, let’s turn this into a million dollar a year business in sales.” But at this point we are not there yet.

So what I’m looking at now are some different ways that I can try and increase the number of sales without adding too much more time. So I am spending more time on things like online sourcing or wholesale sourcing. Things that I didn’t want to mess with in the beginning, because it takes a lot more to get figured out, but those are the kind of the things that will take you to the next level, because they don’t take as much time.

Sometimes the profit is lower, so when we shop in store, we are looking for at least 100% or more in profit. But if I’m looking online, I’m looking at wholesale, maybe I;m willing to take like 70% profit because I don’t have to leave my house.

Steve: Right. So these wholesalers are in the U.S. or they are overseas or-?

Jessica: Right now they are just in the US that I am dealing with. There are quite a bit of people that are dealing with going direct to manufactures, and I have done that on a couple items, but didn’t have a lot of success with it, or didn’t make the amount of money I thought was worth it. So it is something that you can do, you can do overseas wholesalers or manufactures, but personally that’s not something that I’m doing right now.

Steve: Okay, so do you have any advice for some of the people listening in, you know, if they want to try your method or try to sell surplus goods of their own?

Jessica: What I would say is, just give it a shot, you don’t have to do it with a lot of money, you know, when I started I just had like $500 that I was able to invest, and people go in with a lot less money than that. And you can start with items that are in your own home. You can just– we all have those things that were given to us as gifts or that we bought and thought for sure we were going to use it and then we didn’t use it. Well, you can go and just check those items on Amazon and see what they are selling for. And if you have a board game that’s never been opened, and even if you got it as a gift then your cost is zero, right? And if you could sell that board game for $25, that’s a great way to test the waters, because now you are going to come out with $20 of investment money.

Steve: Okay, so for these beginners, do you recommend they use fulfilled by Amazon, or do you just recommend that they just dip their toe in the water and just sell on Amazon.

Jessica: I always recommend using fulfilled by Amazon, because when you come in as a seller, people can see that you are a brand new seller, and so they are going to see you don’t have any feedback, and you’ve never– to them it looks like you’ve never sold anything. And so with the fulfilled by Amazon thing, is they trust Amazon as a company, they don’t have to trust you as an individual.

Steve: Okay.

Jessica: Because they know that Amazon is going to get it to them in two days, because you are not touching it. And so I always recommend starting with fulfilled by Amazon because you are going to get a lot more exposure as a seller, instead of trying to be like, ‘Trust me as an individual’ all you got to say, ‘Trust Amazon as a company’. And then Amazon is also going to put you in front of people who are shipping their sales.

Steve: Okay, yeah so I almost never buy anything that’s not prime, and the only way to get prime is to do fulfilled by Amazon, right?

Jessica: Exactly, and that’s the thing, is that so many people do have these prime accounts, and even if they don’t have a paid prime account, they can still earn free shipping from Amazon, but they can’t do that from a merchant seller. Right now, it’s like if you spend $35 in one order, then you get free shipping, but merchant order wouldn’t count towards that, only once it’s a fulfilled by Amazon.

Steve: Right, okay, so that makes a whole lot of sense then. Okay, hey great, so I don’t want to take up too much of your time, but if you can tell our listeners where they can find you, and you know, ask you more questions about this, I think you have some sort of book that you’ve written as well that outlines the process, if you kind of want to just share that information, that would be great.

Jessica: I do have a book about how to get started and kind of why Amazon works in a little bit more detail than what we talked about, and that’s at JessicaLarrew.com. So my last name is L-A-R-R-E-W. And then I have a beginner’s course as well and that’s at abctrainingvideos.com. So it is Amazon boot camp, is what it’s called, and so it is abctrainingvideos.com.

Steve: Okay great. Well, thanks a lot Jessica for coming on the show, and you know, this sounds really good, and actually I might give it a try myself.

Jessica: Yeah, do it and let me know how it goes or if you have any questions, for sure.

Steve: But first I need to track down that frozen merchandise first.

Jessica: Yeah, that [indiscernible – 00:43:10]. Well, I wouldn’t have mentioned it if it wasn’t starting to come back in the stock more, because I would be getting hate mail from sellers all over the place like, “I can’t believe you told people to buy that”. But, you will be able to find it really quick.

Steve: Okay, thanks Jessica, take care.

Jessica: Bye.

Steve: Here is something I have noticed about every single interview I have conducted thus far. Whenever someone gets laid off or loses their job, the ones who thrive are those who take the initiative to try something new. Now when Jessica got laid off, she didn’t wallow in self-pity, instead she did something about it, and her story is very inspiring.

For more information about this episode go to mywifequitherjob.com/episode17, and also 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 also helps keep this podcast up in the ranks, so other people can use this information and find the show more easily to get awesome business advice from my guests.

It is 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 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 a 100K in profit in our first year of business. Go to www.mywifequitherjob.com for more information. 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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016: How Harold Lee Designed An App To Teach Guitar Without Any Technical Experience

harold lee

Today I’m happy to have my cousin-in-law Harold Lee on the show today. Harold is the co-founder of RockProdigy.com, a company that sells an app which teaches others how to play the guitar.

Here’s what’s cool about Harold. He’s not technical at all and never wrote a line of code in his life before he started this company. But he taught himself how to code and then later drafted a world class team to help him create his app.

The is the best app on the Internet if you want to learn how to play the guitar. Check it out

What You’ll Learn

  • How Harold got the idea for his guitar app.
  • How to start an iPad app with knowing anything
  • How to find the right people to help you design an application
  • Why you need to start a business today
  • How a little ingenuity can make an impossible problem seem solvable
  • Why you don’t need a technical background to create a complicated app
  • The best way to test your product

Other Resources And Books

Transcript

You are listening to the My Wife Quit Her Job Podcast, where I bring in successful boost 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 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 is your host Steve Chou.

Steve: Welcome to the My Wife Quit Her Job Podcast. Today we are going to be talking to Harold Lee the founder of RockProdigy.com. Now Harold is actually my wife’s cousin. And to be quite honest he is actually one of my favorites out of all of Jen’s cousins. Now I actually don’t see Harold very often but when I do, we love to talk about entrepreneurship and starting businesses. And last time we spoke Harold started the company Rock Prodigy which makes this awesome app that teaches people how to play the guitar and it’s pretty sleek.

Now what’s unique about this app is that it can actually listen and know what notes and codes that you are playing on the guitar. And it actually uses this information to help you learn how to play the guitar and play the guitar better. Anyways, I’m going to let Harold explain to you the app in more details because I don’t want to get any of the facts wrong, but what I really like about Harold is his passion for playing guitar, music and it really shines with his business. Welcome to the show Harold.

Harold: Thanks Steve. Thanks for having me.

Steve: So, for all those who have never heard of Rock Prodigy can you just give us a quick background story and just tell us how it all got started and how you came up with the idea?

Harold: Absolutely. Rock Prodigy is stuff that runs on your PC Mac or iLess device and it listens to you play guitar so you can get better at guitar much quicker. And the thought came around because I went to school at Brooklyn College of music, UC St Barbra for classical. I’ve been playing since I was the tender young age of 16 years old and- -.

Steve: And you were in a heavy metal band too if I recall.

Harold: Metal band I turned as a professional guitarist for a while. All the while living on instant nodules every day, hey that is the only way to do it, right.

Steve: You wouldn’t be authentic if that wasn’t the case.

Harold: If a good 70, 80% of your diet is not instant nodules you are absolutely a success story. So that’s why we founded the company was, we the co-founder and I felt that you know there is going to be a better way to help people learn guitar and practice guitar and stick with it, and taking advantage of the computing power, mobile devices. We just said, “Hey we can help people learn guitar and fit into their schedules wherever they are.” So if you have an iPhone, iPad, PC, Mac you can learn just and you can be practicing in having somebody listen to you while you are playing.

Steve: So there is actually a lot of apps out there. I was just looking on the app store the other day. So what’s sets your app apart from the other ones that are available?

Harold: There’s is two things that sets us apart. One we actually got a patent this year. It was granted January 14 but we filed it back in May 2009. So this is entrepreneurship conversation that you and I are having. So this is a proprietary technology, and in terms of what sets us apart is the quality of the content itself. What you will see with other ways of learning are not as interactive, they don’t listen to you or they are too hard to get started.

With us you will be playing the guitar within the first several minutes. In addition to that the– we like to say is we like to try to hold your hand all the way through it. So we want to be with you every step of the way, much more like a just kind of a personal assistant, personal trainer, you know literally that’s our attitude. And I think it really shows when you start using our– when you start interacting with our apps.

Steve: Yeah, that’s pretty cool. One thing I noticed was that your app is, as I think one of the few or the only ones that actually can listen to what you are playing. Like you can play your guitar right in front of the app and it listens and then the notes. The app actually recognizes the notes that are being played. So just kind of give me a brief walk through of how you use that technology of yours to teach people how to play?

Harold: Excellent. The key behind that Steve is that the science officer of our little set of companies actually Professor of Carnegie Mellon. His name is Professor Roger Dannenberg and he’s the head of the computer music department. And if anybody is out there listening who is into the music information retrieval circles, Roger Dannenberg is actually one of the pioneers known worldwide in this field. So he and I are the co-investors of the app pattern and he is an expert at utilizing polyphonic pitch detection. And he’s done so in a way that, what that means is pitch detection will just listen to one note.

Polyphonic pitch detection listens to more than one note, which is the guitar, when you play a code is more than one note going out at a time. So to be able to have a polyphonic pitch detection that’s light weight enough to actually run on a mobile device is actually nothing short of an achievement. So what we do is we have his technology algorithms his method to listen to you. We show you what to play, we listen to you play it, and then we show you what you did wrong and what to improve. And all of that Steve is kind of set into a very easy to follow, very well organized curriculum that really gets you on playing much faster than when I started. Just to be frank I was like, “Oh my Gosh I wish I had this when I started.”

Steve: Yeah, I can imagine that. If there wasn’t the– an app kind of listening to how to play, you are kind of just guessing to see whether you actually played something correctly right?

Harold: That’s absolutely right.

Steve: And that value add is just incredible making it in my opinion a lot easier and to get feedback for actually what you are trying to play. And that’s probably what a lot of the other apps; I didn’t see do that in the app store. So that is pretty amazing.

Harold: Yes Steve.

Steve: What I can’t grasp and maybe you can help me with this, is that this isn’t exactly the easiest app to create due to these listening capabilities. So how does a heavy metal band guitar player managed to create an app? Do you have a technical background at all Harold?

Harold: No I don’t. You know what’s funny is that we will talk about this more but back in 2008 right, I was working at guitar centre. I was the marketing director for guitar centre for a long time. It’s a great company. I was there since the 90’s. But back in 2008– so I don’t have a technical background but the idea was so, was like “Oh my gosh we got to do this.” I just started hacking through it, like I would go online; teach myself tutorials and things like that and so on.

The biggest problem of course was the polyphonic pitch detection aspect of it. And the co-founder Tyson and I, we literally just kind of sculled the internet back in 2008 and believe it or not it was much different even in 2008 and we identified the kind of the expert’s leaders in that field. We actually called up– cold called Roger Dannenberg and talked about what we wanted to do which was make computers react polyphonically to guitars and he said, “Well I think you can do it.” First of all he said, “You guys are crazy who are you kidding.” But I’m being that kind of…

Steve: You didn’t know him at all right? I mean it was literally a cold call when you contacted?

Harold: Literally we picked up the phone gave him a call and he said, “who’s this?” And we said, “Hey, we are from Los Angeles and we have this idea that we would like to do this.” And what he said is, the first thing he said was, “that sounds great guys but just kind of let you know I’ve been doing this my entire life.” He’s been teaching other PHD’s for his entire life and he goes, “It’s not just that easy guys.” We were like, “Oh, okay.”

But what we said was, “Roger, this is what we are thinking, we know what you are supposed to be playing and therefore we can really control and limit kind of the possibilities of what we are expecting to hear, and because of that, that made the pitch detection, the polyphonic pitch detection aspect of it much more defined and the scope is much more defined.” And he said, “Oh, in that case yes because we know the signal is coming from a guitar, we know what pitches are expected when, and therefore the problem becomes much more fine eye than the general problem of polyphonic pitch detection.”

So what ended up happening was for our first revision back in, I think mid 2010, it was so funny, I was like and I asked my wife Virginia like I literally played 100s of 1000s of notes on a bunch of different guitars and sent them over to Roger. And what Roger does is he uses machine learning to generate the optimal algorithms based on the different pick apps, based on the different guitars, based on the different musical styles, codes and things like that.

And you put all this data in there and what get’s spit out is an algorithm that literally is responsive to a bunch of different guitars using a bunch of different picks apps, playing in much different styles and it’s stuff is way over my head but that’s how we got started. When he reported he said, “Hey this is actually providing a very accurate representation.” We couldn’t contain our excitement because that was the first real thing, was to make the polyphonic pitch detention work in a real time situation that can handle virtually any type of guitar with any type of pick app configuration for a bunch of different musical styles. And so it was that winter, spring and summer of 2010 where I was just playing like 100s of 1000s of notes. It was so fun.

Steve: Just, you don’t really need to enter the type of guitar that you are playing, right? It recognizes any guitar, right?

Harold: Yes the software right now it doesn’t matter what guitar you are playing literally. You don’t have to plug in. Like for instance an iPhone has a mic right. You can just literally sit in front of your iPhone and play and the microphone will pick it up and it will show you how you are doing. So literally if you have an acoustic guitar you don’t even have to plug in.

Steve: That is awesome.

Harold: Yeah that is something that we are really thrilled about and it’s not for the fame. So I think the original question Steve was like okay, the tech part of it?

Steve: Yeah.

Harold: Not for the faint of heart. Like there are so many things like for instance I didn’t know this when we started but iPhones had different response curves from the microphones and so you have to compensate for that. And then iPhones, 3G was different than the 3GS then different in the phone. So all that being said was for me personally, surrounding myself from the get go with people way smarter than me. And then I just kind of learned from them as we went, and part of the learning process was learning how to code, learning how to hack through things. But basically it’s whatever it takes, hey you know it’s like, “hey take out the trash,” “you got it,” “wash dishes,” “no problem.” “Hey fire up that squad fire up some simple flash,” “sure.” It’s like…

Steve: That’s pretty cool and in fact I was the same way with our online store. I didn’t know anything about web programming. But you know you just realized that you need to learn some of the stuff in order to get started. So did you write parts of your first app?

Harold: The first app was mostly done out of house. There was a bunch of stages to that. This is more kind of how we got started. When we got started, it was just two people, Tyson and myself and we had a third person who Chris Owner who we think is also a founding member. But really it was Tyson and myself kind of shopping the idea around, talking to people and almost everybody said– and this will get back at you, sorry. Almost everybody said, ”Oh it can’t really be done, you can’t do it, who are you guys, you don’t even have a technical background.”

So what we had to do is, we had to find a third party developer to help with a prototype. And so there was a number of stages. One was we found it in just single person to help us integrate monophonic pitch detection into an open source engine. And so this person named Zack and myself, we put together the prototype. And so back then it was done in python, python and read on a Marcus X. Now, at that time I think it was a Marcus X 10.5 or something like that. And so I literary– so for the very first prototype it was two people mostly me because he worked on one specific aspect and then I took everything else and just kind of crank, crank, crank.

Then we had to get a better prototype that is polyphonic pitch detection so we had a company help us with that. And I did very little of the coding there except specking out how they would actually in just content and that’s very important only in so far as if you don’t have a good content pipeline or one that’s too encumber some that’s going to be a huge expense for you to figure out how to get code content in there. It’s like so the example is, let’s say Netflix could only add one movie a day, they would be out of business but they have a great pipeline and it’s relatively easy now to convert things into digital. So the same thing with our prototype was to say, “If we don’t have a pipeline that’s going to be able to support a bunch of different lessons, a bunch of different exercises, a bunch of different songs, then it’s almost like a no go, don’t start.”

Steve: That’s kind of one of the other questions I wanted to ask. This isn’t your regular run in the mill iPad app. It requires a lot more technical expertise in my opinion than your typical app. So how did you actually find the right places to contract the work out to?

Harold: The first major one we run an RFP process and we did research online, we contacted people. Many of them were not here in Los Angeles. We interviewed them over the phone. We asked for proposals, then we selected them that way. That is indicative or that’s kind of consistent with what we would do say out of a corporation like guitar centre where, if there was a new project we issue an RFP or anything we have we would get three or more bids. We would have a process for proposals and things like that. So we run the first one like that. We started with video game developers and went from there. Then when we brought it in house since we had a much better understanding of each of the tasks required at this specific point, it was easier to just to find individuals to help us.

Right now actually in 2014, I’m pretty confident there is more people that would be able. If you started this today there is probably more people out there, the tools are better, the IDE’s are better. There is this thing called, “Android,” out there you know like it’s a completely different environment. So back in the day when we were walking up hill both ways to school, things like that and there is no underground. Back in the old days there wasn’t that many so we started out with an RFP. In retrospect I would probably wouldn’t have done it. It would probably just would have been less formal and much more sit down with a person face to face and literally be more integrated.

Steve: Did you use any of the online services like elance or anything to find developers that way or was it just connections or?

Harold: A combination of everything. One of the people we did find through at the time was called, “Cyber Coder.” I think they are called something else now and actually maybe even Elance now. We met a gentleman named Ellen through there who worked with us full time for several months. He was a fantastic person; he was here in Los Angeles. A lot of it was word of mouth; we tried craigslist which I don’t recommend. Don’t do craigslist. Bur a lot of it was somebody knows this person, they know that person and that person knows this person. And then what we also did was we kind of looked at the boards on UCLA, USC, C-son so on and so forth and so kind of starting with the University in mind. Those are the ways we kind of found the people that worked with us, yes.

Steve: So now you have this really awesome app. What’s the business model to become profitable? What’s the strategy? How do you get this app in the hands of the people, how do you make sales earlier on, what was your strategy for that?

Harold: I would love to tell you the strategy but it didn’t work. And so we are here today because we literally started out with one thought that we will be able to kind of have this sell, give you the razor so you buy the blades type thing. It didn’t really work out that way. We started out with a much different emphasis which was to play songs. We thought we could get back Prodigy and you would then spend a lot of songs; buy a lot of songs from us to play within our Prodigy.

It’s not an illogical thing and there were for instance at the time there was rock band, there was guitar here and there were other kind of music games out there that were talking about how that model was working for them and so that’s how we started at. And it didn’t yield the return; there were so many different aspects about that which was… When you sell songs people focus on the songs you don’t have than the ones that you do I suppose than you do. And then because of the iTunes culture at that point was, you know people were– people had an expectation of either not paying for songs or paying you 99 cents for a song, which didn’t work economically.

Steve: You have to get permission for these songs too, don’t you? Do you have to pay the record labels or?

Harold: Yeah. You have to license it. When it comes to music there is two people you have to pay. You have to pay the record label which we actually had to pay the quote, the mechanical which is usually a record label. But anybody who owns the recording you pay them. Then on the other side you have to pay the person who owns the composition that was recorded. What we found out very quickly was very rarely are they under the same roof and so for instance let’s take [Inaudible] [00:22:10] everybody wants to play free bag, right so we are like okay, “We are going to get free bag.”

Talking to the label not that much of a problem but literally on the composition side everybody who was in the band at that time owns a little piece of that song. So you actually have to go and hunt down everybody in the band at that time to get permission to use their song.

Steve: That is crazy.

Harold: Yeah and it turns out that unless you had a department or you can outsource to a company who will do that for you to literally track down all of the different rights holders for any one composition– because it really absorbs a lot of your resources and expenses in time.

Steve: Is that what you did?

Harold: Yes, we started as a combination of doing stuff in house as well as hiring a very young and small really quick company to help us track down the licensing. Another thing of saying, not for the faint of heart.

Steve: Yeah, totally. Plenty of barriers to entry and making one of these types of apps already. So, I interrupted you though. So you are talking about initially you had the razor blade model but that didn’t work out?

Harold: Well it didn’t return the way we had projected. The best thing that we ever did was we invited a few people into our office at the time, they came in, we put the app in front of them and we left the room. We turned on the video recorder and we just sat there and they interacted with it, with no help from us. We literally pulled these people off the street and said, “Hey are you interested in playing the guitar?” They said, “We would love to.” We said, “Come on in.” And we sat them down, gave them guitar and then literally left the room and that was the most important thing I think we have ever in our entire company because at that point we literally learned, oh my goodness all of the things we assumed, all the things that we took for granted, every step along the way was oh my gosh, we are doing this wrong. Only because it was so unfiltered. It was so– these people had no reason to like what we were doing or hate what we were doing.

They didn’t have any attachment to us and just sitting there and watching kind of how they stumbled because our interface for them really fell short, that was the thing. The reason why that was important was because that lead us to really focus on where we are now which is music education because so from watching the people, getting emails from them, interacting with them through our support desk, through the facebook and we did a number of kind of small surveys. People were telling us, “Hey we want to learn, we are beginners, can you help demystify that for us?” So that’s where we are going to focus on. Now we are a different company.

Steve: Do you still have to buy the songs though. So, describe how it’s changed?

Harold: We used to have a free app, right and there was a free new model. You download it for free and then you pay for stuff, right. And so now you can actually still download it for free but how it’s changed is, we instead of songs, instead of having 100s of songs which we have 100s of songs in, but we also have what we call, “Guitar courses.” So you can take guitar course one, course two, course three, course four. A lot of it present like [Inaudible] [00:26:15] and that’s where the revenue comes from is that there is really nothing like it.

Steve: So you are charging a premium for these lessons is that correct? You download the free app, you get charged for the lessons?

Harold: That’s right.

Steve: So how do you get around the barrier that like in my mind I don’t pay more than like five bucks for an app. Is your app, are these inner purchases priced similarly or?

Harold: Yeah the course one is 2999 which is a temporary price. It’s actually if you, the retail price is 4999 so you can– so right now you can get it for 2999 but it’s temporary. So each course is 4999 right now but if you buy all four you would get it at a bundle price for that. Now so the story behind that is when we started at free, then when we found out people want to learn we started putting it in the bundle content. Then we said, “Maybe it’s a 99 cents app.” Maybe its 99 cents, maybe it’s about 99 and so we kept raising the price. This is an entrepreneurial conversation. So I’m not sure that’s the best way to do it. I also have an MBA also so I’m breaking all the rules like Steve. I’m throwing all the rules out there. I’ve got a total MBA, UCLA wherever, it’s all good but all the rules got in there. So we kept raising the price, and I think we just landed on a nice price of 4999 and right now it’s 2999 but 4999 per course.

Steve: Okay, so how do you get like I said before, earlier in this interview. There is a ton of guitar learning apps out there. So how do you guys get customers in the door to download your app?

Harold: Right now we really rely on word of mouth and reputation. It turns out that we don’t have a big footprint. What we have done that’s allowed us to kind of swing above our weight is to use kind of a boxing metaphor, right, boxing technology whatever similar or wherever you want to call it, is we actually have a partnership with Fender. We got– last year we started being included in some of their packs. We are carried by Amazon guitar centre and those are– those are ways where we don’t– there is not a lot of cash outlay to get iBalls and so for us it was really about developing the relationships with them.

Well I had a lot of experience because I was at the guitar centre for so long. And just working with them to see how we can help what their objectives are. And so for Fender it’s more about yes, we would love for people to play guitar more, if it gets easier for them to start. So we felt a good synergy there. So that’s how we kind of get the word out there right now. We spend very little if we spend anything at all on advertizing which is ironic since I was the director of marketing that’s all I did. All I did was spend money and so it’s ironic we don’t do that. We haven’t been doing that. I think after we get our– after this year what you will see it’s a much more kind of outward phasing campaign to get people to try us. But right now literally we are just focusing on making the product the best it can be with what we have, and which means a lot of long days and nights for everybody who is on the team right now. So that’s kind of what we do.

Steve: So this relationship with Fenders so when someone buys a guitar do they get, do they refer you to the app? Is that how it works or…?

Harold: Right. We are currently included in the Fender DG-8S Acoustic Guitar Pack and that’s a very quality entry level guitar. So if you are just learning guitar and you want your first guitar the Fender DG-8S is really good because one it’s a Fender, it will stay in tune, it’s easy to play. If you have ever tried guitar you will know that they are guitars that are quote out there that don’t stay in tune and they are really hard to play. This one is a Fender, so it’s literally like a standard you can rely on. So, if you get that guitar pack, it comes with Rock Prodigy. Now, so that’s how we are currently packaged in their bundle.

Steve: That’s pretty smart. So if I can just summarize what you’ve just told me. Up to this point you’ve been primarily focused on product development. And you have a couple of partnerships here and there that get people to download your app. This year you are going to be focusing on proliferation now, is that pretty accurate?

Harold: Yes, that is cool.

Steve: Okay. This is the year Harold.

Harold: Steve this is the year for you and me. Your family, my family. This is the year but I do have to say it’s like I have never, personally I’ve never been happier and if you asked me this last year, I would have said, “I can’t imagine being happier” If you ask me two years before that I would have said, “I can’t imagine being happier.”

Steve: I forgot to ask you this. I mean you left a pretty good job right, to start this?

Harold: I’m telling you I was at the guitar centre for I think 13, 14 years and I was stalked. That’s a pretty cool job. I’m like yah you get to sell guitars, you get to do music, you get to– but this was just to– now that we are doing it, I can’t imagine doing something else.

Steve: Great, so if you had any advice for people who wanted to start like an iPad app, do you have one single piece of advice to give them based on your experience?

Harold: Yeah, I would say pretty much don’t do what we did. Don’t follow in my footsteps, don’t follow our footsteps. The advice due is draw it out. Take a few pieces of paper draw out literally on that paper. You can use Microsoft word or wherever but literally it’s going to be, “Hey this is going to be screen one, this is going to be screen two and sit with people. Let them poke holes in it, let them– so before you spend a whole bunch of money or before you waste a network. Before you spend a lot of time to imagine this shining utopia of whatever you are designing to do, a lot can be– you can learn a lot by just saying, “okay, hey this is what it’s going to look like in getting the reaction from there.” What I found myself doing a lot was like, but it’ll do this, but it’ll do that. If you find yourself doing that a lot, then just be prepared that you are going to have to probably spend a lot of time flushing that out when you don’t know if it’s really going to be what people want. So, if you want to start an app, start as cheap as possible and then that will help. So, don’t do what we did.

Steve: That’s actually a great piece of advice because so I run a course and a lot of people go in to do web design. They hire a developer but they don’t really have a crisp idea of how they want everything to get laid out and they give broad generalizations to developer and before you know it what they produced isn’t what the person was expecting. So yeah, you are right, it’s absolutely important to put everything down and have a little blue print of how everything is supposed to work before you start.

Harold: That’s a great example.

Steve: Great advice.

Harold: That’s a great example.

Steve: So I would like to end this interview since I’ve taken up a lot of your time. What is, is there any book that you would recommend that kind of got you fired up to take the courage to start this business? Do you read Harold?

Harold: What is this thing called reading, why do people keep on talking about that? I think for me what we keep coming back to and it’s not necessarily to get fired up about it but it’s more about what to do if you are fired up. ‘Crossing the Chasm’ has been, it turns out it keeps being true, right. So, like there some mentoring books like ‘7 Habits’, there is ‘Eating the big fish’, there is a bunch of management books, right and they are all true. Like there are true things that they tell you to do but in terms of now that we are fired up and what you can apply to literally what your customers are experiencing, for me ‘Crossing the Chasm’ just keeps ringing true. Like if you don’t think about it for a week, you’re the next week you will come up something and you will be like, “Oh my goodness this is one of those things they talked about in crossing the chasm.” And it just keeps popping up.

Steve: Okay, awesome. Well, hey Harold I don’t want to take too much of your time. If anyone has any questions about Rock Prodigy, is there a place where people can reach you?

Harold: Yap, HaroldAppRockProdigy.com.
,
Steve: Okay and then in the show notes I will go ahead and put a link to your app and then include your email address and a link to your favorite business book as well. So, hey Harold thanks a lot for giving us your time today. And you know the best of luck to you and your app. I think we want our daughter to actually learn how to play the guitar. So maybe we will download the Rock Prodigy and fire it up.

Harold: Steve, thank you so much, and I will see you soon.

Steve: Yeah definitely, in the next family function.

Harold: Thanks so much Steve.

Steve: All right, take care.

Harold: Take care.

Steve: Here is what is awesome about Harold. He was a guy who wasn’t technical at all. Never programmed a single line of code in his life and here he is put together an incredibly complex application to teach people how to play the guitar. For more information about this episode please check out the show notes at mywifequitherjob.com/episode16. And also 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 also helps keep this podcast up in the ranks so that other people can use this information, and find the show more easily to 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 share it on the web.

As an added incentive, I’m also giving away a free business consult 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 will actually 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. 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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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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015: How Ed Han Bootstrapped His Way To A 100 Million Dollar Company Selling Stationery Online

ed han

Today I’m happy to have my friend Ed Han on the show today. Ed is the co-founder of Tiny Prints, a stationery company that he bootstrapped and later sold for over 100 million dollars.

Ed is probably one of the most successful entrepreneurs that I know personally and I’m extremely ecstatic to have him on my podcast. The business model for Tiny Prints was ingenious and Ed’s story is truly an inspiration to us all.

What You’ll Learn

  • How Ed got the idea for Tiny Prints
  • How to bootstrap your business early on and leverage your relationships to gather business
  • How to start a company with 2 other co-founders without a lot of strife
  • Which marketing channels Ed used early on to grow Tiny Prints
  • The one pivot that allowed Tiny Prints to gain traction early on
  • How to leverage partnerships to keep costs under control
  • How Ed convinced designers and publishers to take a chance on Tiny Prints early on

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 have them take us back to the very 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 actually 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 will show you my wife and I managed to make over 100 K in profit in our first year of business. Go to www.mywifequitherjob.com for more information and sign up for the newsletter. 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: All right, welcome to the ‘My Wife Quit Her Job’ podcast. Today I am honored to have Ed Han with me on the show. Ed is actually someone I met through Polly, the owner of Beau-Coup.com whom I interviewed previously on the podcast. And as luck may have it, it turns out that Polly is married to Ed, the founder of tinyprints.com, a 9 figure company.

So, talk about your power couples here. After having kids, we views ‘Tiny Prints’ several times in the past to create baby announcements, imitations, you name it. And what I really like about ‘Tiny Prints’ is the ingenious business model. The site started up by working with local printing facilities and encouraged designers to create awesome looking card designs in return for a royalty on the sales. And so he ended up with this really nice business model where designers were creating great looking card designs for free, and the fulfillment was handled by a third party as well.

So, Ed is just a true inspiration to us all and I just want to formally welcome him to the show, how is it going Ed?

Ed: I’m blushing over audio.

Steve: It’s all true.

Ed: Thank you Steve. How’re you doing?

Steve: Pretty good, pretty good, and really glad that you could take some time out of your business schedule to talk to me today.

Ed: No, my pleasure, any time anyone takes interest in the story, I love to talk about it.

Steve: Yes so, you know, speaking of the story, can you give us the background, and tell us about the early days of ‘Tiny Prints’ and basically how it all got started?

Ed: Sure, well, the very very early days of ‘Tiny Prints’ was just a group of wannabe entrepreneurs who didn’t know they were going to be working on ‘Tiny Prints’. We had a handful of business school classmates, a couple of years after graduating, start to get the entrepreneurial itch And we would get together once a week on average, over burritos, and sort of both socialize and also banter about different business models, and start-up ideas.

And over the course of probably about a year and a half we had some attrition, we had an idea or two that we took to a prototype stage, and ultimately canned for various reasons and then settled upon Tiny Prints. One out of some of the personal needs that in this case my wife and I saw as we were expecting our first child, and also as we dug into this category more just found some of the characteristics about the products so interesting and easy to work with, with an ability for technology to make an impact.

Steve: So you mentioned attrition, was there a larger group of folks?

Ed: Yes, as is often the case business school students, grads, business people in general just like to talk, and so we were never exclusive and so anyone could come and go as they pleased. It was certainly our closer circle of friends, and it did start off with a much bigger group. I would say six to eight folks, and you know, after you work on something for a year and a half and you ask folks to get together for that amount of time, you know, some of the folks lost hope that this was ever going to go anywhere, or they just became too busy. You know, life got in the way and ultimately it kind of came down to three of us. And luckily, you know, before we all kind of surrendered to the idea that we’d never come up with an idea, Tiny Prints came along and started to get some traction.

Steve: So, you started out with a larger group of people that were meeting every day, or weekly, or…

Ed: Yeah, we were meeting weekly.

Steve: Okay, and it was just kind of one gigantic brainstorming session among your business school members, is that right?

Ed: Yes, it was mostly business school members, and they did start off with, primarily just brainstorming which I think was our problem. For many many months it was just people [indiscernible – 00:05:15] and just kind of throwing out ideas, you know, that was in their head versus having had some rigorous analysis. Which we eventually came down to, and I think at that point when we were assigning homework to folks and making sure that the conversations were a lot more meaningful with, you know, sort of backed up by data, some of the folks left at that point as well as I think this had turned into more of a social thing for a few people. And for others like me and the other couple of people that did end up surviving, we felt more desperate as time went by that we were not finding the right idea to work on.

Steve: Were you working a full time job at the time?

Ed: At various points in this window I was, I was working at a start-up called ‘Danger’, and then I was also helping Polly with the business that you had mentioned.

Steve: Okay, so it’s weird, so you started out with three people and often times in the very beginning, you know, opinions somewhat clash and that sort of thing. So, did you guys all agree on the business model and how ‘Tiny Prints’ was going to be run early on?

Ed: Absolutely not, and I think that didn’t matter as much because none of us really knew exactly how it should be run, or which direction it was going to go. And as you hear about all the time, it certainly didn’t go in the perfect direction that we ultimately we thought it would as we got the business off the ground.

So there were many tweaks and certainly a couple of bigger pivots that eventually led us to get greater traction. But in the early days one of the most important things that our group did was kind of step back from the business, even as we were running a thousand miles an hour to try to, you know, build the backend, build the website, you know, have all the commerce capability.

We really stepped back, given that the three of us had started off as friends before we were business partners and talked about a lot of personal things, a lot of things that we had probably had never shared with each other. Our goals, aspirations, what we, you know, cared about and mattered to us, as well as how that would largely impact the culture that we’ll build as a company and so it sounds a little cliché and probably kind of overdone.

But you know, back in 2003 we really thought hard about that and felt that it would be a shame to work on a business, perhaps have it, you know, gain some traction but we are on a bunch of relationships along the way. And it just so happened that the three of us cared much more about our relationships with each other, with our spouses and other folks who were going to have to be on board to support us.

And so we took great care to have those conversations very, very early on, which I think helped navigate some of the choppy waters that you, you know, ultimately come across as you try to build a business together.

Steve: Yes, what were some of those challenges, I mean, was the business model that ended up being ‘Tiny Prints’ was that how it was in the beginning, or has it evolved a lot over time?

Ed: Well, you know, I would say that it has evolved a lot, but there was certainly a couple of very big sort of step function evolutions or, you know, they like to call it around here, pivots. So when we first started the business given that it was bootstrapped, and thus needed to be low capital, we had really no capital in the business. We couldn’t go off and own our own printing machines or do anything that had any sort of capex involved and so we took designs from existing stationery designers that were sold in stores, we scanned them using a fifty dollar scanner.

And we took those images and put them up on a website that had pretty primitive personalization so that you could enter some text, and have us receive that information, allow us to print that off as a fax form and send it to the actual stationery designer for them to fulfill through whoever print partner they were using.

So if you know anything about the stationery industry certainly offline it can somewhat still work that way but if you have much experience ordering personalized stationery, premium stationery online or certainly in bigger boutiques you know that feels pretty primitive. But that is really how it was done over ten years ago when we got started, and we did really nothing much more destructive than bring that process online.

So as we kind of bumped along for, you know, a year, a year and a half we recognized that this was never going to be a big business. I mean, we could potentially scale to the size of you know a very small store that you might find in the main street, it’s just that we would happen to be online or perhaps our cost base would be a little bit better, but we recognized the fact that it would just never go to massive scale.

And that’s when we started to explore, I guess what you’d call our first pivot.Which as you allege to us to become our own designer, vertically integrative and that was more of a virtual vertical integration by partnering with designers and printers, and automating that entire flow from acquiring the designers. That’s again in a very sort of technical ways so that we didn’t have to manually do the equivalent of scanning albums into a website. And on the backend be able to convert, you know, files that were being done by our customers on our website into a format that could be then automatically sent into our print partners for fulfillment.

Steve: So back when you were scanning these cards, did you have licensing agreements with the card designers at the time?

Ed: Yes, so, we were probably one of the first if not the first to partner with independent designers. We had a couple of, you know, bigger brands over time, but really, you know, we pioneered the idea of working with very cool regional or up and coming designers who were independent looking for a way to, you know, make their mark on printing stationery without having to go into all the printing and customer service and fulfillment and all those things.

Which we were able to offload, and so we were able to somehow convince even with no track record, a half a dozen or so really wonderful designers early on who gave us exclusive rights to their designs, worked out a licensing arrangement, which allowed them to own their designs, but be paid a royalty based on sales performance. And that was really all we needed to, you know get the new business model off the ground.

Steve: So it’s basically an up-front payment for the design itself followed by royalty payments.

Ed: No, actually it was all variable, so it was 100% dependent on whether the design sold or not.

Steve: So what would be their incentive to give you an exclusive deal like that?

Ed: Yeah, I think the incentive changed over time. In the very early days certainly most of them said exactly what you said, ‘why would I ever do this, especially if I have to actually spend time coming up with designs for you specifically?’

I think we had in the beginning a couple of personal relationships that allowed us to make that case so that the designers would do us a little bit more of a favor, and submit a handful of designs. But for the most part, you know, in those very, very beginning days, we were working with designers who already had designs. Perhaps for, you know, their own line of stationery or, you know, for a different product that they could easily translate to stationery. So there was really not a lot of up-front cost. There was certainly no up-front up-side, but there was no major up-front cost to asking them for, you know, just kind of a translation of their designs into stationery templates.

Now over time the incentives changed in that as we became a bigger and bigger distribution platform, there were certainly stationery designers who had a nice business that thought, gosh, I could actually off load all of my customer service, all of my fulfillment, all of my technology and just go back to what I love doing which is design and potentially even outpace the income and the revenues that I’m doing on my own.

And so that was an attraction for a certain number of, you know, smaller designers. And then as we grew, I think just the sheer size of distribution and income opportunity certainly attracted a whole host of other designers.

Steve: So, how did you find these designers early on? I don’t think Etsy was around back then, right?

Ed: Etsy was probably not around at the very, very beginning when we started this, correct. So, you know, luckily one of our business partners, Laura, who really is the merchandizing genius, and probably the entire genius behind ‘Tiny Prints’ just had a wealth of information and resourcefulness for hunting down these designers that, you know, could be hard to find back then.

So, we lucked out in having someone like Laura on board as well as a couple of us had some personal relationships with folks who run that design community, and I think we were lucky that just a handful of designers that we were able to convince to come on board allowed us to grow faster than we were growing. That then proved the opportunity to sort of second and third degree type designers that we could reach out to and show them proof that there was an opportunity here. And so we were very fortunate that one thing led to another, and certainly didn’t happen overnight, but it allowed us to grow the business pretty consistently.

Steve: So just to get an idea, what would the arrangements of the royalty arrangements kind of look like on a percentage level?

Ed: Sure, you know, that evolved as well as is often the case or is always the case. It is all about you know who has leverage and at the beginning is, you pointed out, we had none. And so, you know, we were, you know, convincing designers early on with bigger and bigger percentages. I think at one point we had designers who were making a fee of, you know, 15% possibly even slightly even north of that for every sale. And, you know, we are in the business of selling in bulk, so stationery is purchased in bulk whether they are holiday cards or birth announcements, and so the average ticket size was pretty high for e-commerce.

Back then the average order size was around $126 and so you would be making $15, $20 per order, and you know, when we were tiny that was not a lot of money in absolute, but that was a pretty decent percentage. And that has floated down candidly as we’ve gotten bigger and the checks became again an absolute much, much bigger.

Steve: Now that makes total sense. So that’s one side of the equation, you know, working with designers,and then you had to work with the people who actually print the cards, right. You guys didn’t do anything in-house at the time, is that correct?

Ed: Correct.

Steve: Okay, so describe the experience in getting the printing presses and convincing them to come on board as well.

Ed: Yeah, you know, one would think that, again a very insignificant player like us trying to convince these massive commercial printers to take on a new venture, you know actually become much more of a technology company themselves in order to integrate with us, would be a pretty tough proposition. And I think that probably was the case, but we got really lucky with the first printer partner that we really took on serious discussions with, a company called ‘Progressive Solutions’ right here in SantaClara.

They were one of the premium partners to HP which made the digital equipment that we thought we wanted to use for their quality and upload. And so, we were able to use the incentive that HP sales people have, their sort of agnostic tube who is calling on them they just want to provide leads and have their machines work harder.

And so my other, one of our other founders Kelly called HP, talked to a very eager salesperson and said, “Hey look, we have this great idea about stationery, we’ve got a little bit of traction, but we think if we could actually print our own, that, the business will really scale”.

And luckily for us the salesperson took us seriously and introduced us to progressive who, right from the get go just kind of really, you know, got what we were trying to do, and ou know more than half believed in our vision.

So they were willing to do some of the upfront work, experiment with us on pricing, on process, fulfillment, shipping, all that stuff, and took what was more or less kind of an analog commercial business to, you know, experiment in the consumer space. And you know, so I think had we reached out ten other printers, nine probably would have said, ‘you are crazy, don’t ever bother calling us again, until you can promise revenue amount of X.’

But we were extremely fortunate that progressive also saw this great future in digital printing and the promise of higher margins by being a consumer driven company versus an enterprise driven company which they had been for the last twenty years, and was willing to take this journey with us. And as we did that we both, I think really lucked out in catching an important technology with that, you know, I think this was a blessing to all of us. Because digital printing was just starting to take off, it was at a point where the quality and output was good enough to meet consumer demand. Whereas sort of in a previous era they were great machines, but really mainly used for commercial reasons.

And so we happen to kind of hit a window by luck, when the technology was ready, we by luck found a wonderful, kind of visionary printer partner, and I think just exploited that, you know, for the years to come.

Steve: So walk me through the ordering, like early on at least. When someone places an order, goes on your website, configures their card, and then, did you have some automated way of sending all that information to the printing press.

Ed: Are you asking after we had become our own designer?

Steve: I was just thinking in the beginning when you first…

Ed: Oh sure, in the very, very beginning what would happen is– and this may be hard to imagine, but you would actually come to our website which was, you know, back then one of the only ones where you could actually personalize. But you couldn’t personalize for anything but text. There was no such thing as a picture card. So forget photos, we are talking about text only.

So if you are talking of the very early days you would end up on tinyprints.com, you would find a design that was again scanned in from some album somewhere, and you would personalize that card for text only. When you check out, our system would send us an alert that an order came in which wasn’t a big deal because there would be like three a day. And we didn’t need anything automated for that. We would get an alert, we would go and effectively print out a fax form. So the customer information had been translated and converted into a PDF of a fax form that the album designer used to then send on to their printer.

And so we would physically print out this fax form, we would fax it, not even e-mail it, we would actually fax it to, I think most of our designers who by then could read half of it, of course. Who would then send it to their printer, again probably by fax, wiping out the half of what was legible, to ask for a proof. We would get the proof back through the same sort of communication channel. By the time we got it, we could hardly read it, we would send it to the customer, who could then hardly read it themselves, and there would be multiple back and forths, which would ultimately cause one of the greatest headaches in opportunities that we saw, which was like ordering premium stationery, custom stationery back in 2003, 2004 was extremely laborious and time consuming. It would often take three to four weeks to get your order.

And you can imagine if you are thinking about Christmas on December 10th that’s not going to work. Or if you’ve had your baby, and the baby might be six months old by the time you send the birth announcement, that’s not going to work.

And so this became one of the interesting drivers of trying to become our own designers and using digital equipment. Certainly there was a huge cost advantage and thus an ability to bring prices down, but really the other major factor that I think allowed us to convert customers quickly after that was, just the ability to turn orders round very quickly.

Steve: Okay, so the today processes, someone configures everything on their site and then you generate the fonts yourself and that just goes straight out to the printing press, right?

Ed: That’s correct, they are basically just bits at that point. The printer is a very high tech machine that takes input from our system and generates an art file. Actually the art file is generated on our end because we’ve had the philosophy that when somebody is ordering $100 of stationery and putting photos and valuable text in it, we should not– we should hold ourselves responsible for blurry photos, red eyes, typos, edicate mistakes and those types of things.

And so that was another differentiation that we had early on was that we actually had human eyes review all this work. And so what would happen or what does happen now is, once the customer checks out of our website, an art file is created that allows our designers to look for those mistakes, find out opportunities to improve and only when it’s completely blessed and signed off, does that art file essentially get translated into bits that can talk to the printer over the internet, and out on the other end spits out large sheets of paper with the customer’s stationery. Which then goes through a cutting, and fulfillment, and shipping process.

Steve: So are the cards shipped by you or they are shipped by the printing people.

Ed: The cards are always directly shipped at the printing facility, for just efficiency reasons, and also to save time, you know, Tiny Prints has now become part of a much larger platform, having gone through a merger with [indiscernible – 00:26:00] who at this point owns almost their entire production.

So when you say do you ship them or did they ship them, it’s both but it’s all internally owned equipment and it is, you know, certified Tiny Prints equipment that is printing and shipping out of our own facility.

Steve: Yeah, I was just referring to back before the merger, when you guys… yeah. So we are going to printing press, so you guys were separate entities, so did you have to tap into their system somehow, I’m just kind of curious how it all worked.

Ed: We did, there was a lot of systems integration, which again we can thank Kelly and his team early on to do that work. And there was a lot of just inventing that integration because it had really never been done before for consumer product like this.

And that process was extremely frustrating for many, many years. It also, you know, went through many iterations. And as the equipment changes, and software changes, and capabilities change, it’s still constantly changes. It’s a never ending set of work that I think, you know, we tackle still today.

Steve: Right, but the point was it started out very manual and over time you gradually automated things over time, right?

Ed: Right.

Steve: Okay, so let’s talk about sales now. So you have this stationery company set up, what were some of the challenges in getting sales in the early phase of your business?

Ed: Well, like any consumer facing company, or any company, customer acquisition is of course the thing that makes or breaks a start-up. And so in our case, you know, I think we were early to catch the e-commerce wave for personalized products. Certainly by 2003, you know Amazon was a big business, eBay was a big business, but the idea of actually customizing products and having that be it fulfilled online was still relatively new.

So I think we were unique and faced less competition than perhaps a lot of the other e-commerce categories as a result, but that doesn’t help you either if nobody is stumbling across your website. And so we really committed to certainly the product and design but committed equally to being unique and defensible in customer acquisition.

And because of our capital constraints ended up betting on Search Engine Optimization and PR. And we had great success with both. I think over time really the dominance and SEO that we were able to build because of that early start and commitment to that channel, really eclipsed everything else including PR. But in the early days, you know, we were stalking celebrities, we were trying to get into every inStyle, people magazine we could, with product endorsements at the same time, building a website that was both dynamic and static, that was extremely Search Engine friendly.

Unlike today, it actually had impact pretty immediately; we would see results within a couple of weeks to a month. After making certain changes and the algorithm wasn’t moving as much back then and so we were defaulting two three four five pages at a time until relatively quickly we found ourselves in the top ten or top five position of, you know, all of our major head terms. And as we plugged in new businesses, you know, we just kind of rode the wave of having an already great SEO site that could then again position really well for new terms.

And so that became just a really great virtual cycle for us that grew with online traffic and search engine growth, and provided just a massive advantage because it was zero customer acquisition cost.

Certainly today it is not free to do SEO but, you know, in the early to mid 2000 you could just do so much through sweat equity which is all we could afford. And we were just able to get you know a lot of free traffic that as we continued to focus on the product allowed us to convert at a pretty decent rate, that allowed us to be cash flow positive, and kind of restart the cycle.

Steve: So, I’m sure a lot of the listeners are familiar with Search Engine Optimization, but on the PR side, how did you get your cards in the hands of celebrities and that sort of thing, did you have an agency or?

Ed: You know over the years we experimented with agencies, I have to be candid and say we haven’t had much luck with them. In the very early days, again we couldn’t afford anything, we couldn’t afford any agencies, and so we did it on own, and you know, it was a very ego destroying humbling experience. A lot of rejections, but again all credit goes to Laura who was able to work with our designers to come up with this amazing modern unique look that a lot of our, you know, our customer base at that time was mostly young mums.

And that group really sort of embraced the design direction that Laura was taking the company in. And as a result all the magazines that they read also took notice and so we had a pretty decent hit rates after the early going, and that really propelled at least a brand recognition for the company. So that you might go to Google and search ‘tiny prints’ which at that point we would be at the top of the search engines and then bring you to the site. So they worked really well hand in hand.

Steve: So did you reach out, and try to contact, you know, these magazines, and…

Ed: Oh yeah, we would go to the library and look at the latest directory of all the publications out there, and the editors and editorial staff, and just talk to them.

Steve: Okay.

Ed: Yeah, we would send unsolicited FedEx packages with tons and tons of cards in them.

Steve: Ah, very clever, okay. And then you know just based on the design they would become interested and want to feature you in their magazines.

Ed: Exactly.

Steve: Okay, and then on the SEO front did you do anything special, were you pumping out content, were you reaching out for links, how did that work on that end.

Ed: Yeah, I think we again lucked out a bit in that, you know, our cards were all content, so as we added more and more cards that had lots and lots of keywords, they were only the birth announcements, the baby showers invitations, the birthday invites. There were many ways to automate the content management system that allowed us to, you know, vary the keywords, but really explore the content that was on our site.

In the very early days of 2003, 2004 everyone was doing link exchanges, so we were part of that. We found ways to, you know, contribute to sites to get one way links. And then we were just very smart about publishing our HTML whether they were dynamically driven or not as largely static pages. Which back then was heavily rewarded by Google, because there was a time when Google actually had trouble crawling java script, or pages that were hidden behind you know dynamic or PHP pages.

And so we would certainly use a database on the backend to manage all the content that we had, but we would make sure that when they were published on the website they were published as static HTML pages. I think that helped a lot. It helped grow the size of the site, so that the content could actually be crawled.

Steve: So in terms of the website, are you technical at all, like how did you develop your own platform or were you using something out there already?

Ed: Yeah, I’m a total technical poser, I love it, but I am severly incapable of doing a good job. However, again we had no choice in 2003 but to do it ourselves and so our business partner Kelly who is very technical and incredibly just thoughtful and creative about building technology really did you know 99% of the work. I, you know, mainly for just shear lack of time, shear lack of his time, I built some of the front-end, the website, the html around all of the great things that he was doing on the backend. Some of the forms and things like that, you know, I was using out of date html tables and, you know, CSS wasn’t even much part of what we did back then, and I was using some of the macromedia, which is not around anymore. You know, things like fireworks and other other kind of html editors to edit the html and you know…

Steve: Basically you just did what it took to get the site up there.

Ed: More or less.

Steve: Okay. So how long did it take you before the business actually started getting some traction?

Ed: Well, it’s depends on your definition of traction, we got an order probably within the first couple of weeks of launching the site, in March of 2004. But then it was probably just that one order for another couple of weeks.

So that’s kind of how it started, you know, every order was cash flow positive, if you think about the economics of what we were doing, throwing off 50% gross margins, zero customer acquisition cost, and that was for getting paid, and we had hired no one to do anything, you know, every order was cash flow positive. And that allowed us to kind of chase the next order.

And so the flow of orders was, you know, a few a month in the very beginning and then it turned to a few a week, to a few a day. And then at some point over the course of the next year or so, it felt like there was enough cash flow that we could actually hire somebody to help us with customer service, as we were completely buried in, given how manual the process was back then, just buried with even trying to serve as a handful of customers.

Meanwhile the back log of things that we had to do to automate to actually make things better, and to work, and to not have errors on the site kept growing. And so we had many employees, long before we were able to pay each other, and you know, truly consider the company profitable.

Steve: You know that’s a similar story to our business. Like it started out, you know, very few orders, and then they just started trickling in and before you know it, you know, it’s enough money to support you and a bunch of other employees as well. So what would you say were your primary marketing channels then and even today?

Ed: Sure, back then it was, you know, we like to say it was PR, we did have a little bit of success there but it was probably 90% SEO. A few search engine traffic, we didn’t even do SEM for the first three or four years of the company’s life. Long after we had probably busted through, you know, single digit millions, maybe even double digit millions in revenue, we were so thankfully successful in SEO, that we just didn’t feel the need to try to go even faster. We were barely able to keep up with the growth that we were experiencing through SEO.

You know, today now we probably employ twenty different channels of marketing, and certainly CRM is a huge one now that there is an actual customer base and the least expensive if you can re-engage customers.

SEO is still incredibly important now that supplemented with SEM and all the very essence of SEM, whether it is product list Ads or display Ads or whatever. There is a ton of partnerships that are important to the company, business development became an interesting opportunity as the brand became more noticed and bigger distribution platforms wanted to, you know, potentially work with us. So that was great.

You know, I would say that we are probably doing about as much advertising as you would expect a fairly large e-commerce company to be doing. And so, you know, whether it is You Tube Ads, or Google Ads, or other Ad networks. And now novel is becoming incredibly important critical on so, I am no longer at the company, but I’m sure they are doing way more in mobile advertising, and marketing, and apps and things like that than certainly what I’ve seen.

Steve: So if you were to give some advice to entrepreneurs out there who kind of want to create a similar business to one that you’ve already created, what sort of advice would you give them?

Ed: Are you asking about e-commerce or just a start-up in general?

Steve: A start-up in general, but, you know, with an e-commerce bent, because you know after all you have to sell something to make money, right?

Ed: Sure, right. Well I think e-commerce is getting, I think it’s getting both, you know, much more interesting as migration happens from physical to online. At the same time getting much harder with the likes of eBay, and Amazon and Wall Mart really kind of dominating the space. So, I would say be cautious and be incredibly thoughtful, and be incredibly just kind of honest with yourself about defensibility and uniqueness of the product or line of products that you are planning to market.

And then I would focus on the two things that I think are just kind of generic recipes for anything that you start, which is to again being credibly thoughtful and creative about product definition. And a lot of times people think about product definition in the context of software companies, but I think it’s relevant across anything that you want to do.

So whether you are opening a restaurant or starting an e-commerce company, or a mobile app, ensure that you are doing something unique and well defined with a road map that will not run out for many, many quarters. So that you can continue to improve upon, you know, what you’ve built and ultimately, you know prove to yourself that you’ve thought about a very, very long term product vision.

And then the second thing that I will focus on is having the same amount of obsessiveness around customer acquisition. You can build the greatest product, software, whatever it is that you are going to go and do, and if no one ever comes across it, it’s meaningless.

And so, again it is very easy to have a generic recipe for either or both of these to say, “Hey, I’m going to go and do SEO and SEM.” Can you really do that for the business that you are trying to build, and be honest with yourself about whether you can be unique and have a competitive advantage? And ideally have a proven, you know, sample of that working, even if it’s a very small scale, and so, you know, test a lot along the way, but test with the idea that your product is unique, well defined, and your customer acquisition strategy is equally unique and effective.

Steve: So in that respect that is how you would combat places like Amazon, right, by being unique, by being the only person to offer that sort of product.

Ed: You could certainly to uniqueness, or you could potentially find niches that Amazon would not be as interested in, or find ways to out-market Amazon for your particular product. Which may sound quite unrealistic, but I bet if you sat down and thought about it– for example, in our category of personalized products, Amazon has yet to make a big push into custom T-shirts, custom stationery, photo books. They’ve done very light weight partnerships, but they have not actually tackled that on their own because it’s just a much more complex– not complex for them, but it’s a different process than what they specialize in. Which is to create, you know, ten football sized warehouse and just stock them with things that you can put on shelves and ship as fast as you can.

You know, allowing customers to actually go in and, you know, put user generated content on the products that you ship for them, is a whole different type of capability than, you know, something that eBay, and Wall Mart, and Amazon has decided to take on.

So be thoughtful and look for those air pockets that present opportunities. They give you the, you know, headroom to go, you know, go pretty far before they take notice, or before you know you will get squashed. Because hopefully by then if you’ve been thoughtful about your product, you are again one step ahead in the direction that they are either, uninterested in or just isn’t a priority.

Steve: Okay yeah, that makes a whole lot of sense, and that area specifically regarding personalized products is something that I think will be a lot more difficult for Amazon to just automatically fulfill. So, great advice.

Ed: Let’s hope so.

Steve: Yeah, let’s hope so, for sure. So okay, I don’t want to take too much more of your time Ed so, one question I always ask people is, is there a particular, business book that has really influenced the way that you looked at businesses in starting, you know, your ventures?

Ed: That’s a really good question. I love to read, unfortunately I don’t have a whole lot of time for it. I am not going to say a particular book, I’m going to go a little bit un-conventional which is sort of my mission in life. But I grew up reading a ton of biographies, and I learned from other people. I think business books are great, I tend to avoid them, so I haven’t read a whole lot.

I’ve read chapters of, you know, probably some of the famous ones, but I find, you know, I learn a lot more from the examples that other people have set. You know, the name escapes me, but I did enjoy the first half of Blake Micoskie I believe who started Tom Shoes. His book, I thought it was a very, very thoughtful, written not to be kind of a prescriptive business book. But really had a lot of great things that you deal with as an entrepreneur, and he is of course got a slightly different business model and much more mission focused, which really spoke to me and I really enjoyed that book. But I would say that generically I would just recommend books on everyone from J.C. Penny to Collin Powel, to Warren Buffet, to Bill Gates, to Steve Jones, Jeff Bezos. So I just really enjoy reading about the personality, the mindset, how you know, their kind of brains and hearts work over, you know, what I consider pretty dry and generic business how-to books.

Steve: Sure, sure and if you ever decide to write a book, I would be the first one in line to purchase that book, because, you know, one thing I noticed as I was interviewing you, as you mentioned luck like 15 or 20 times. You got lucky doing this, you got lucky doing that, but in my opinion, you know, there was really no luck involved. You went out and you hustled and you created your own luck, and that’s one of the reasons why you are such an inspiration to me.

Ed: Well thank you, I think we can have yet another phone call on that whole topic, I do believe that luck plays a big role. I think it’s important to seize the luck that you see coming your way, but I appreciate what you said, it’s very kind of you.

Steve: Well thanks Ed, I’ve already taken up a lot of your time, so I think we’ll just call it a day right here, thanks a lot for coming on the show.

Ed: My pleasure thanks again Steve.

Steve: All right, take care Ed.

Ed: Bye.

Steve: Ed is the man, and I have a tremendous amount of respect for him. And the best part, the guy is incredibly modest and humble even though he is a business genius. For more information about this episode go to mywifequitherjob.com/episode15, and also 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 also helps keep this podcast up in the ranks, so other people can use this information and find the show more easily to get the awesome business advice for my guests.

Incidentally it’s also the best way to support the show, and please tell your friends also 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.

And also as an added incentive, I’m also giving away a free business consultations to one lucky winner, once a month. For more information about this contest, go to mywifequitherjob.com/contest. And while you are there, you know, 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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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.

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014: Jordan Harbinger On Building The Right Social Skills To Elevate Your Business And Relationships

jordan harbinger

Today I’m happy to have one of the most popular relationship coaches on the planet on the show today. Jordan Harbinger runs The Art Of Charm podcast where he teaches self-motivated guys how to boost their businesses and their social lives by improving their social skills.

I have to admit. Even though I consider myself to be reasonably socially aware, Jordan takes this to a whole different level. In this podcast, you’ll learn the right way to build relationships for both business and pleasure.

What You’ll Learn

  • The real reason money changes hands in business
  • How relationships affect business deals
  • How to establish relationships with people who are more successful than you are
  • How Jordan runs a 7 figure business teaching others how to build powerful relationships
  • How Jordan’s podcast went ballistic and how he uses it as a lead gen for his coaching class
  • The number one strategy for building a solid social skill foundation

Other Resources

Transcript

Steve: You are listening to The My Wife Quit Her Job Podcast, where I bring in successful boost 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 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 is your host Steve Chou.

Steve: Welcome to The My Wife Quit Her Job Podcast. Today I’m really happy to have Jordan Harbinger on the show. Now Jordan together with his partner AJ run The Art of Charm Podcast, where they provide relationship advice unto men and women but mostly guys. Now I’ve actually listened to a couple of episodes and they are all really interesting because the study of human relationships has always intrigued me and it’s really fascinating to see everything spelt out for me in a podcast, that I can listen to on the way to work. But what’s even more interesting to me, is that they turn this podcast into a very profitable business. Now today The Art of Charm Podcast is one of the most popular podcast over all in iTunes. And they also have their own show on XM satellite radio. Now I for one since I just started this podcast relatively recently, I’m very interested in understanding how they monetize their podcast, and exactly how they make money. So welcome to show Jordan.

Jordan: Thank you very much. I appreciate the opportunity.

Steve: Yeah so give us the quick background story and tell us exactly how the podcast comes into play and what you actually sell.

Jordan: Sure. So essentially when I was in law school, I was mentored/ un-mentored by a lawyer who hired me and he was never in the office. Rumor had it he made more money than everybody else. And one day he sat me down for coffee and he’s like, “I didn’t care about the job at all because I didn’t really want to be a lawyer.” And he was like, “Ask me anything.” He probably figured I was going to be like, “So how do you, you know develop your career?” And he was going to give me some crap cookie kind of answer and I was like, “How come everyone says you make more money and you are never here.” And he was like, “Oh well actually all the smacks that are in the office on Sunday night at one O’clock in the morning are pretty much replaceable, like they have a lot of technical knowledge and they might be really good at structuring certain kinds of deals and knowing what to look for and that’s valuable but they are not as valuable as people who go out and get business for the firm which is me.”

And I was like, “Okay we have a really nice 10 what’s the deal?” And he says, “Well I was on a charity cruise for the last you know two weeks and I did jujutsu and I played golf and I go to these events and all those other stuff and what I’m doing is, I am making friends with people who make decisions at companies that hire the firm.” And I thought, okay wait a minute, let me get this straight. So you hung out all day and network with the right people and get people to like and trust you and give us business. And then you control the deal and take the line share of the income and these other guys work on Sunday night at one O’clock in the morning probably never see their family and they check for you know the right types of fillings and they do research all day? And he’s like, “Pretty much.” And he’s like, “There is a place for everybody but the more rare skill is the networking in business thriving slash rain making part.” Which is rain making is a Deutschbag word that us Wall street lawyers like to use, right?

So and that was a really big eye opener for me because I thought wait a minute, I like people sort of, maybe, sometimes, but I really hate checking for companies and documents. So if I want to be a successful lawyer, worry less about becoming the best lawyer, and the hardest working lawyer and worry more about making friends with people that can generate business for the company. And on top of that you can, if you had to fire one person and one of them was a work horse worked all day and night and had a great technical masonry, and the other person didn’t work that much but was responsible for the revenue generated by the company, you don’t actually have a choice.

Steve: Absolutely, you know in fact you know that’s how business works in China. It’s all about the relationships and less so about dollar and that sort of thing because for our business we sell linens. So one of the first things that we did is we hoped on a plane over to China and we started drinking with these guys. And after we met them face to face, they actually gave us much better deals on the products. I suspect that being a lawyer and that sort of a thing is all in the same lines, right?

Jordan: Yeah, I mean essentially if an investment bank can chose whoever they want to do business with and they want to make sure you are going to be responsive, responsible and capable, you can tell them and sell them all you want but at the end of the day if they are like, “This guy is cool, he’s not usually late for golf and when he is, he says he’s sorry and I know his home phone number and I met his wife, she’s a gem.” They are going to hire you because people buy you, they always buy you. And business is just people doing monetary transactions with their friends most of the time. And it’s funny because people will screw somebody over in business and be like, “Hey men it’s business.” And it’s like, “No, you are just screwing people over,”

Maybe that’s a business thing that you do but at the end of the day, you don’t really do business with people because they are giving you the best deals. If we did, we would only buy the cheapest food, we would only go to the movie theater that was close to our house, we would only eat at restaurants that were close to our house or that had cheap food. We don’t do any of those things as a consumer. You never do anything like that. Even the most hardcore like, I’m dating an Asian girl, right so her parents have like, you know they are very Asian which you know you understand as well, they don’t go, “Oh this place has the freshest sea food.” They go, “This is the place that your friend’s uncles, friend’s cousins who graduated from high school they own it, so we are probably going to get a deal.” You walk in there they are just like, “Here is the part of the fish that we just got that’s yummier.” And then it’s like, “Oh thanks.” And it’s probably all service, none of it is probably real, everyone in that restaurant probably knows somebody, that knows somebody that knows somebody that works there but it’s the perception of getting a better value. That is what matters and people do business all the time like that.

The Government does business like that as much as there is rules and regulations not to do that. Every company, every big company large or small does that, small businesses do that. Everybody does that. The people who don’t understand that or deny that or want to argue with that, more importantly are the people who don’t understand the game been played around them and they are therefore losing.

Steve: Okay, so that’s kind of what you teach in your podcast, right? You teach people how to actually become friends in order to improve their sales or different portions of their lives, right?

Jordan: Absolutely, so it can be related to business, dating, relationships, networking, anything like that can happen and that’s what we talk about in the show. You know we’ve interviewed everybody from Daymond John of Shark Tank to people who teach networking skills John Crockery. We’ve not interviewed guys like Noah Kagan of whom you had on the show to talk about all kinds of new on stuff and of course dating and relationship coaches because again people buy you. So you got to be the best.

Steve: So you mentioned that your podcast is a large part of your business. So I’ve listened to a couple of episodes and you do a great job but how does that actually lead to the money that you make?

Jordan: Well essentially the show started as a hobby and it’s still largely is. I mean I love it, but what happened was, in the beginning we were doing the show and we were interviewing people and enjoying our time, doing what we were doing and people started writing in and saying, “Hey, you know what, I’ve got a lot of value from your show, I would like to learn from you directly.” And so I said, “Well we don’t really offer anything.” And they said, “I will give you $150 dollars to talk to you on the phone for an hour, does that sound fair, it’s cheaper than your legal rates but you know wherever.” And I said, “Yeah sure.”

So I spent a whole lot of time when I was in law school sitting on a hammock in AJ’s backyard. AJ is my business partner, in his backyard on the phone and on Skype with guys in Denmark, Norway, New Zealand, Australia, California, New York, Canada and the UK and just really enjoying the time and thinking okay I guess I’m coaching now and I feel like a little bit of a sherlock in here. But this is like 10 years ago, because I don’t really have any formal training but I guess I counsel people at my law job so I understand how that process works. And they kept coming back, and coming back, and coming back, and coming back, and we would just have them on retainer like crazy. And there were like there is so much value here.

Steve: What were they asking you, what were some of the questions?

Jordan: I had so many different kinds. I had a mortgage banker who was making tons of millions of dollars per year. And he was working on getting people to like and trust him because that’s how he generated the business. So we were working on those skills set and then I jump off the phone with him and jump on a call with somebody in Denmark who is an Ethiopian immigrant who now lived in Denmark and he was like, “I don’t know how to meet people because I look different, I talk different, I act different and my whole upbringing was entirely different, where do I start?”

And we started giving him draws and exercises and he was with us for a long time and I actually heard from him about a year ago, you know granted this is five, six years after I coached him, he’s like, “I can’t even begin to thank you, you know I’ve got a girlfriend, a job, I’ve totally assimilated and I know it wouldn’t have happened this quickly without your coaching.” So of course we spent the next half decade and more learning everything we could about teaching this subject, working with people on this subject. Teaching other subjects to get better at this one, and now we have the premier program for this anywhere. In fact premiers maybe a strong word because it’s the only program for this anywhere.

Steve: Okay so this program is it live, like does someone has to fly and is it all in person or…?

Jordan: Yes, our, well, we have the free podcast of course on The Art Of Charm, we have a electronic contest that’s free, but our live training programs are in Los Angeles and I know people are like, “Where, it’s too far.” But we have clients; I’m looking in the office right now and I’m looking at the classroom and there is a guy from Australia, a guy from the UK, a guy from Canada, one guy from the United States not from California and a guy from New Zealand that just left. And we have a guy from Denmark who is not in the room right now but flew out for this.

So I’m looking around and I’m thinking there is one American guy in this program and I’ve got you know, you probably get somebody listening to the show right now on Arizona and they are going, “its five hours drive, I’m not going to do that, that’s ridiculous.” But it just shows you one the pole from the show and essentially the values that’s given there. And two the fact that if you are committed you just suck it up and you do it and stop whining about why you can’t. And that’s what I think differentiates a lot of entrepreneurs and wantentrepreneurs because guys who are doing stuff, they overcame crazy obstacles all of us have with a successful business. But the people who talk about why they can’t, why some things are going to be hard for them etcetera, etcetera, they are always lacking and it’s mostly an attitude thing. It’s always a mindset thing.

Steve: So I’m just curious then, so if you are giving these courses in person that kind of limits the number of people that you can teach in a given time, right?

Jordan: Correct.

Steve: Okay, so how, so how many people have enrolled in your course and how often do you give it every year?

Jordan: We have it every single week.

Steve: Every single week, okay.

Jordan: Every single week and we are sold out three to four months in advance.

Steve: Wow, okay so how large is the class?

Jordan: Seven guys is the cap.

Steve: Okay, oh okay, wow it’s a really almost like private instructions and all?

Jordan: It has to be. We have to tailor the coaching to the students because everybody is got– Basically what we teach at The Art of Charm is that your beliefs influence your actions, which influence your results and you can’t just change your actions and try to get different results, because the mindsets are always what guides our actions. So we have to dig in to everybody’s physic pretty deep. We have therapists on staff there is a reason why we do all the things the way we do them and so yeah. You couldn’t have more than seven or eight guys because it will just become a complete mess. And not only do we have seven or eight guys, but we have five plus instructors for those seven or eight guys.

Steve: Okay.

Jordan: So it’s pretty much individualized instruction, and there is no other way to do it effectively.

Steve: Okay and so if I understand correctly your podcast is kind of like your legion where you then talk about this class and then people go on to your website and sign up, is that correct?

Jordan: They can’t sign up online actually. We don’t allow that because like I don’t want ex-murderers or weirders in my programs, because it only takes one guy to screw it up for everyone else. So I don’t, I don’t even allow that. And people there is all these folks that are in my entrepreneurs group and stuff like that and they are like, “You need to automate it.” And I’m like, “No.” That’s exactly what we don’t want to do, because when you automate it you get the dregs. And you get the gems as well as the dregs but the problem is the gems don’t want to be in the same class as the dregs. And so it’s exclusive and we keep it that way. Not to mention I actually, we do some work with some Governmental organizations and they purposely require certain types of people either on outcome or be reported and without getting too specific, basically I think they just want to make sure that Chinese spies don’t take our classes.

Steve: Chinese spies, yeah okay right.

Jordan: I specifically chose that.

Steve: I know you did. So how do you screen these people out?

Jordan: Well, since I read people for a living, I essentially do phone calls with them that are an hour, hour and a half long. And I judge their, gauge their responses, goals, what they want to get out of the program, make sure it’s a good fit for them and also that they are going to be a good fit for us. Because at this point you know ask me six years ago, I probably would have just been stroke that somebody wanted a program, but now we are looking at waiting lists and things like that, that are so long that I can afford to be selective with everybody that comes in.

It’s not like, “Oh you are not cool, you can’t join our program or oh men you are going to be a lot of work, you can’t join.” I mean we have everybody from college students to military Special Forces but I just want to make sure there are here for the right reason. Somebody who says, “You know I’m a computer coder. I don’t have a lot of people around me all day. I would love to be able to find a great girl, settle down and get married.” Or Special Forces guy that says, “Listen there is lives depending on my ability to lead etcetera.” Those are great reasons but even a college student that says, “I don’t know it seems like fun.” Totally legit reason. A guy who says, “Women are only after money and I want to learn how to beat them at their own game.” Not welcome here, you know.

Steve: Got it, okay. This kind of reminds me of the movie hitch actually a little.

Jordan: You know its funny my business partner’s friend wrote that movie, it’s largely about what we do.

Steve: Okay, so given that the podcast is one of the legions for your business, can you just take us back to the very beginning and how you actually got your first clients through your podcast and how it all worked from the very beginning?

Jordan: Yeah, it’s a really interesting question because it was demand driven business from the beginning. We never went onto the show and went, “We are offering this now for money.” It was like guys were saying things like well you know, “I really like what you have on offer.” And we said, “Oh there is other people out there that can teach you these skills.” And it’s like, some of these clients were like, “We’ve hired all of them, we don’t like them, I want to learn from you, I relate to you.” And I thought okay fine. You know, so we offered a pretty good deal in the beginning and you know we just thought all right if you want talk to us then we can make it happen. And we will answer all your questions, and we will figure out you know how to translate our personal curriculum, and the things that we are doing into a format that you can copy even though we can’t see you. And that worked really well, we had a lot of clients who really loved it.

And then we had some guy say, “Hey, I just want meet and see you in person.” And we said, “Well we are in Michigan right now we are in Francisco and before that we were in Manhattan but we started off in Michigan when we were in glad school. And they said, “That’s okay, I will fly to Michigan, I don’t care.” And we thought, “Wow, okay, well I guess we will see you in Michigan.” So we would meet people for a day and we would say, “All right, you know it’s going to be 800 bucks or wherever.” And they go, “Okay, fine.” And they would give us a 1000 and then they would say, “What are you guys doing tomorrow?” And we would say, “Okay, we can do it again tomorrow.”

And then eventually when I moved to New York to work on Wall Street, I was still doing phone coaching but we had so many live coaching clients at that point, that I had to hire coaches to deal with the demand. And from there, we literally had people saying, “I want, I will sleep on your couch for a week and give you 5000 bucks, I just want to see it in person.” And so that’s what we did for the next you know several years. Just work on a really amazing science based curriculum and hire the best experts that we could find and then have them co-create and train the out of town clients. So now we have world class program but back then we were amazed that people wanted what we had to offer but it was demand driven. They wanted what we were selling, what we weren’t selling.

Steve: So did you do anything special with your podcast or it just grew organically?

Jordan: In the beginning essentially it grew organically. We didn’t know anything. This is 2006. There were about 800 podcasts in the iTunes store. They were not that many at all. We listed ourselves, there was you know browser, there was no cover art, nothing like that, you didn’t have anything like that in your podcast really. So we put it up there and we kept producing regularly and that set us aside from 90 percent of the other people who were uploading one or two and then quitting. And we kept going, we kept going, we kept going and we found that word of mouth had spread.

We printed out some business cards and any time people would ask us, “What are you guys doing, I always see you out with different people, how come you never wait in line or how come you never pay for drinks or how come you are at this party and you are 20 years younger than everybody else?” You know, “What’s the deal?” We would hand them the card and they would start listening and tell their friends about it. And eventually we started getting things like featured in iTunes and we started getting a lot of word of mouth and the show really took off. And then when I moved to New York we landed a guest spot on series XM satellite radio and the station manager came down. He had just randomly been air checking the show that we were on and he said, “You guys are, definitely you guys need your own show.” And so he gave us a trial period and we knocked it down the pack and we ended up with the show during the evening drive on Fridays on series XM for three and a half years.

Steve: That’s awesome so did you have a website or anything or was it just podcast in the beginning?

Jordan: We had a chrome word, I don’t even know if it was a word press or it was probably blogger actually back then. And in fact I’m almost sure it was blogger.com. And it just, every time we had a new show we would say like, “Episode number 003, Jordan and AJ talk about body language.” I mean that was just the script that we got back then and that was kind of how we worked it. People were finding that and they were laughing and we of course you know like every other amateur back then, we were like chucking our cover out from askmen.com and stuff about because there were the only ones who had a high quality photos of anything and nobody wanted to invest any money in it because I think our budget was 90 bucks or something like that.

Steve: To start that was great.

Jordan: And the show just kept growing kept growing. And I don’t know where people were finding us back then because we weren’t smart enough to do market research really and the show kept growing. And I largely ignored it for a really long time, and I didn’t even try to consciously work on any aspect of the podcast, it just sort of seemed to be automatically operating. But once I started to focus on growing that and we started to focus on growing our client based that’s when everything really took off because we realized that we had accidentally built a marketing juggle not in the form of a value giving show that we’ve being running for years.

Steve: So let’s talk about that. What were some of the things that you did?

Jordan: Well, we have been creating the show every week for years and years. And you don’t really have to do that for that long. People found us out after the first few episodes and they were like this is amazing, I can’t believe this is free. What we were doing was giving away things that other people in our industry had essentially decided that, that should cost money. So I think marketer’s now call it pushing the free line or some crap like that.

Steve: Yeah, premium or wherever.

Jordan: Yes premium, and what that meant to us was wait a minute why should somebody give you 40 bucks for an E-book where you give advice that doesn’t cost you, didn’t cost you anything theoretically to get. And so we started giving away all of our information for free and that’s why we still do that. We give away a ton of information for free but I think intelligent people realize that’s its not, “Oh I have all this information, I don’t need to go to the workshop now.” People know that if they are not implementing information that they get and they realize that if it’s a complex skill set, they need to go and get the program because the training is where the money is, that’s where the juice is. I don’t mean the money is in like the profit; I mean that’s where the juice is. If I can’t do public speaking, I’m reading books on public speaking but I can’t give a speech, all those books are a huge waste of time or maybe they weren’t a waste time, I’ve great technical knowledge and academic knowledge about how that works but I can’t actually perform the skill.

And any really complex skill requires coaching period I don’t care what it is, and anybody is good at anything knows that. I don’t think Tiger Woods is like, “I don’t need no stinking coach.” You know he’s got three or four different coaches for different things and that doesn’t include his fitness and yoga and all that other stuff that he’s got to do to stay in shape. Any athlete, any professional, any sealable executive they have coaches left and right. And so it’s really our egos are the only things keeping us from that. So we thought, “Hey listen if our clients are really these guys who are really understanding what they want and they are willing to go for it, that’s a great client base to have because having a bunch of smart driven people, getting into your stuff is the optimal place.” That’s really where you want to be.

Steve: You know that’s actually very interesting. So I actually run a training course on the side for E-commerce. And what I found was that when I started publishing some of the core materials on the class on my blog, I ended up getting more customers who were willing to sign up and actually have access to me personally. So it sounds like the same effect that happened with your podcast as well in your business.

Jordan: Yeah, absolutely. I mean what it’s done by accident is branded us as; well I guess I’m the face of the company really and that’s fun. I love it, I love The Art of Charm and I love what we do. So I love it but it was definitely strange at first because it was like, “No wait we are not experts, we are just doing this.” And what we found is that our clients were like, “Listen the other guys that say they are experts are internet marketers that live in their parents basement. So the fact that you are actually out trying stuff and doing stuff and teaching people is actually pretty amazing.” And so they wanted to learn from people who actually are experienced and that was crucial in my understanding because I didn’t think, “I’m going to brand myself as an expert.”

Steve: Yeah, I was going to say something. Based on what you are telling me, it sounds like you kind of just grew your podcast organically based on the power of your content alone.

Jordan: Yes and I know that, that’s not the best. A lot of people are like, “Where, I hate this guy, I was looking for shortcuts.” And here is the thing, there are shortcuts go lower for people who don’t want to build something great. And I don’t really know what to say to those people, sure go look for shortcuts and follow in line with everybody else who doesn’t really do much, I mean.

Steve: Okay, yeah that’s really good advice. I mean ultimately the tricks will kind of maybe get you in the door, but then you ultimately have to put out the good stuff to kind of maintain that level of your audience.

Jordan: Yeah and I mean, don’t get me wrong there are tons of internet marketers that are all tricks and they making a lot of money but at the end of the day you can really deliver value in both ways, so you don’t need to only rely on tricks. You might as well develop something real that you offer people, rather than relying on the numbers game of seeing how many stupid people you can fool into buying your crap.

Steve: Absolutely, that’s great advice. So you know Jordan I’m actually really curious about what you teach and I was actually hoping that you would be able to give us some sort of quick lesson about some of the material that you actually coach in your course.

Jordan: Yeah, I mean most of what we do unfortunately for the podcast format, a lot of communication and I mean like 90 plus percent is non-verbal. So it’s really difficult to coach somebody that you have no previous relationship with in podcast format. But what we can talk about, I mean there is a million different things. I mean for example if you are looking at the fact that most communication is non-verbal then you know you need great body language to make a good first impression.

And so one of the quick tips that anybody in podcast learned, I hate that word, can pick up is that, is that you need to create a great first impression. And most people think their first impression is when they decide to make it. For example I use a dating analogy here. What we are looking at, a bunch of guys go out and they are like, “We are going to meet girls.” So they get up and they haul themselves off to the bar or whatever and they are thinking all right we are going to have a couple of drinks, we are going to chill, we are going to pretend to watch the basketball game and you know hung out and talk and then you know once that kicks in we are going to start talking to the girls. So guys go in there, they are sharking around in circles looking for where the cute girls are, they go and fix their hair, they grab a couple of shots, they grab a couple of drinks. They pretend to watch the basketball game; they sit in the corner staring at the girls. And then one of them goes, “All right, I’m doing it man, I’m going to go up and do this.” And so he walks up there in his broad voice. He walks up there and he’s like, “Hey what are you guys drinking?” And the girls are like, “No thanks.” And he goes, “Whatever, girls only want guys who have money, it’s because I don’t have a Rolex, that’s why they rejected me or whatever.” Meanwhile that has nothing to do with it.

The reason is because his first impression wasn’t, “Hey ladies what are you drinking?” His first impression was soaking around, walking around the bar, looking for the girls, pretending to watch the basketball game, building up courage, liquid courage at that. And the girls notice this, they are not dumb. They see this; women are about 20 times better than men at looking at non verbal communication. And so their first impression was when he became the blink on their radar which was probably right when he walked in the door. And since he blew that for 20 minutes waiting for the scotch to kick in, his first impression was made so long ago. By the time he had you know scraped together the gone ends to go up and say, “Hey what are you guys up to?” They were like, “Yeah, yeah, yeah we got it, you’re partially drunk and now you are ready to chat, see you later.” And…

Steve: So it’s all about body language. It’s basically what you are telling me?

Jordan: It’s all about non verbal communication which is not just body language. It’s vocal tonality, eye contact, the way you sit down and walk and talk. How committed you are and how strong you show and there is a lot of different things and that’s not physical strength, that’s like charisma, personal magnetism. How other people relate to you. I mean these are all crucial factors that people use to create a subconscious first impression of you. And the reason that’s important is because if you don’t have that in place, it doesn’t matter what you say. That’s why when guys are like, “I still don’t know what to say, what should I do to start the conversation?” It doesn’t matter.

In fact we’ve actually tested this, years ago. Me, and AJ would walk up to people and we would challenge each other. What’s the dumbest thing we can possibly say and it was like, “I like salad.” And we literally started conversations like that with the girls that we ended up dating because I remember walking up to one girl and saying, “I like salad.” And she goes that’s nice wierdo and then we started talking and laughing because it was clearly so random, but it didn’t matter at all. And so you can have un-conversely the most brilliant thing or like, “Hey blah, blah, blah” convenient really cool, clever sounding thing and the girls not going, “Wow that took a lot of effort and it was really creative.” She is thinking whatever you read that on the internet, like this is so stupid why am I even here? And so it really has nothing to do with it, because you don’t demonstrate any of the qualities that she finds desirable through things that you say. She is looking for confidence, charisma, signs of leadership, the ability to provide and protect, personal magnetism, the way you make her feel. None of that has to do with this stuff that you say in the first two minutes of a conversation, none of it, zero percent.

Steve: So let’s change the context a little bit. Let’s say I wanted to approach someone really famous in the world of business, and I wanted to get business advice from that person. How would you go about approaching someone like that? Let’s say I was trying to approach Bill Gates for example.

Jordan: Sure and I mean the metaphorical approach here is what we are going for. Because obviously even if you found yourself at a party with Bill Gates, walking up there and be like, “Hey Bill, I want some business advice.” It’s pretty much like the worst thing you could possibly say to somebody in that position because you are just, basically you are like the [hormones??] guy is like, “ Hey men, hey you got a dollar.” That’s all you are doing when you bringing that guy to party. And that actually goes for talking with women; it goes for talking with anybody in a higher value position wherever you might put them in a higher value position.

For example if you had a party and you wanted business advice from Bill Gates, you are putting him in that position as higher value because of where he is, but if you are mount biking and he’s falling and looking really tentative in your bad ass mountain biker, guess who’s in the higher value position? Right, it all has to do with situational context.

So what’s you would want to do in that case is and this is how I network with people at different levels as well. I will, one first of all you got to find out what the value add is for them. And the best way to do that is to network with people that know them already. And so you might have to work up the chain. You might have to contact somebody in your network that knows somebody in their network, that knows somebody closer to that person and their network. And you need to find out how you can give value because people are wasting those people’s time all day. And I know this for a fact because they are wasting my time all day. So if they are wasting my time all day, then they are definitely wasting more Cuban and Bill Gates time all day or trying to.

Steve: Interesting.

Jordan: And at that point where you are a billionaire or whatever or even a millionaire for that matter your biggest defense that you have, you are not trying to keep your money, you’re not trying to keep your– the only thing you are trying to protect is your time because that’s the only thing you can’t purchase more of at that point. And so what you do to protect your time, you hire a secretary who has an assistant, who has a secretary who has an assistant to make sure that nobody gets to you that isn’t supposed to. Not one second of your time should be wasted by spam email, phone calls. I mean there is just no chance in hell that, that should happen. And so you’ve got to protect your time like crazy and so the way that you do that, the way that you get through that is not by saying, “Wait, I’ve got an offer you can’t refuse and it’s going to make you double your revenue overnight.” Because they’ve heard it all before and there’s nothing you are actually going to do that can provides that. So you’re only going to establish a relationship with them on a bunch of BS.

So the way that you would have to do that, you have to work up the chain. You have to network and you have to put that into play. But mostly the way that you do that in the beginning is you have to find somebody to use Bill Gates technology. You have to find somebody that knows somebody that knows somebody, and is close to those degrees as you can that needs value from something that you can provide. And you provide that and then later on you might get them to provide return value in the form of hooking you up with somebody who might be able to get you closer to them. The idea of walking up to somebody like that, and asking for business advice even if you did have the opportunity, what’s he going to do. I mean he has no choice but to say no.

Steve: Or give you some very vague answer and then just kind of walk off.

Jordan: Sure, because you are essentially asking Bill Gates for consulting. Like how, why would you, why would he do that?

Steve: Absolutely, you know actually one thing I do when I approach. So I didn’t actually think about it until now after talking to you. One thing I do is– I don’t even, if I wanted business advice, I don’t even talk about business at all in the beginning. I try to kind of establish a rapport about other things whether it will be family, kids is actually something really easy to talk about. Every parent has stories about their kids, and then once you establish a rapport then kind of steer the conversation very casually over to business.

Jordan: Yeah I mean I hate to brush about all that but that’s probably work really well on people that are Bill Gates or even higher level. But I really don’t know because whenever, for example if I meet a mixer and somebody is like, “Hey Jordan, how have you been doing, what’s going on men?” And we are having small talk, I’m literally sitting there going, “When are you are going to ask me for want you want.” Sometimes I don’t even interrupt them, or I’ll even interrupt them. Bear in mind, I read people for a living so I know if you are just making small talk because you are going to break something at down later and I just go, “Hey cut the chase, what can I do for you.” I don’t say it like that but I will give you a more AOC branded charming way of saying, “Hey I’ve got to run, so what can I do for you?” Something like that because I know that what’s coming is, “So I know you got the show and I was wondering if you could advertize my supplement pill on it or wherever.” It happens every single day everywhere that I go. Anything that has to do with business and that’s why I don’t go to networking events that are not exclusive anymore. I used to, I can’t do it anymore.

The other thing honestly that will, that will blow up on your face is if you feel like, “Hey kids rapport blah, blah, blah and then he goes, “So I have a question for you,” What they are doing even if they didn’t see it coming is they are going, “Okay so you are just talking to me about that other stuff, because you wanted something from me, go it.”

Steve: Right.

Jordan: So you are not giving any value and that’s a great way to ensure that those people just avoid you next time.

Steve: Yeah, actually so this actually completely applies to everything related to the internet, right. So I run a blog and people approach me and if they burst that question right away, then I tend to get turned off by that. One thing I do and you can tell me if this is the right way, the wrong way. I establish a relationship early on and then I wait like three to six months and then I just kind of check in from time to time. And then it might be a year before I ask to see if you want to do something together or work together.

Jordan: It’s great and the reason, I do want better, give them value from time to time instead of just checking in because yes it might seem like, “Hey you know this guy hasn’t asked me for anything and I’ve known him for a while, so we have that sort of time invested in so I sort of trust him not to be a total freak because I sort of known him on the periphery but imagine if it were that plus, “Well men Jordan has sent me articles and he’s introduced me to people for like the last 12 months and now all he wants to do is do a cross promotion interview?” Sure, I mean why would I not do that. If anything I owe him one.

And here is the catch. A lot of people are going, “Tick, tick, tick, you are only helping people because you want something in return.” Not true, I help everybody and the thing is I don’t necessarily ever need anything in return. For most people who are asking me for help even small things like, “Hey I’ve got a question about this; can you point me to some resources?” I will point them up to somebody in my company whose job it is to point them to those resources. Because I don’t have time to personally help everyone but I won’t ignore someone just because I can’t, just because they can’t do anything for me but I will always give value. And that’s the reason when I do need something I can post it on freaking Facebook, and I have 100 responses in my inbox.

And I just did this recently. So perfect example I could not find a good graphic designer. So I just kept going through them. All these people were so freaky or they had no talent. And so I posted on facebook, “Hey guys anybody got a graphic designer?” Within 20 minutes I had 18 graphic designers in my inbox and it wasn’t the designers. They weren’t pitching themselves, it was people saying, “I’ve used this guy before, he’s excellent, his rates are great. Or this person did this project see here, link here, tell me what you think, if you are interested I will make the introduction for you.” I had 18 of those and so I reached out to everybody who showed me quality work and I found a graphic designer in two hours that I had hired already. And that wasn’t because people are like, “Oh I really like your podcast.” Some of it was but most of it was because somebody had, of those people I can probably go tick, tick, tick down the list and find somebody who would slept on my couch, you know borrowed 10 bucks when they needed it, asked me for a podcast that helped save their relationship or helped them get out of a bad one. Somebody who I had helped get a job. Somebody who I had helped get rid of somebody that they didn’t end and that sounds like a mafia thing.

Get rid of somebody in their company that they didn’t want and they didn’t know how to do it tactfully. Somebody who needed a legal, a little bit of a legal advice and these are, you know this is the value that you give in and each and every day and you don’t expect anything in return because one day you will, and when you do, that will already be there. You dig your well before you are thirsty.

Steve: That is a very good analogy. So I’m just trying to put all these together in the context of running a business now. Let’s say I wanted to start a business selling something. How important is the social aspect versus the actual nuts and bolts and behind the scene stuff? And what I’m trying to ask here and trying to formulate the question properly. How much, how important is it to dedicate to just networking versus the core foundations for your business if you are just starting out?

Jordan: I would say there are equally there because what a lot of people would do, again dig your well before you’re thirsty, right. So what people do is they go, “Well you know, I’m not in a place where I can/ need a network right now.” And I go again dig your well before you are thirsty. Because what happens with those people is they go, “Well you know I still don’t have an App, so I don’t need a network to promote it. Or you know I still don’t have a product so I don’t need to start talking with people about it.” So what happens is when the– when it’s time to start promoting their new venture, they are in a place where they need that return on that networking because they are going, “oh, oh we are sitting here with this product and we need to get people, we need to get the word out fast.” And so there are you know meetings here, meetings there and all they are doing is asking for value from people that they probably haven’t hung out with or given any of the value to previously. And so they’ll have to hire somebody called growth hacker or whatever. It’s best where somebody has a network and when you hire a PR firm, you are getting a 22 year old girl who has access to a database started by a guy who has great people skills. You are not buying anything other than press release writing, which your monkey can do. And so you are buying, people buy networks all the time. I promise it’s never as effective as the one you can make yourself, ever.

Steve: So what advice would you give on how to establish a network, if you’re just starting from the very beginning?

Jordan: If you are starting from the very beginning what you need to do, is go back to what we had discussed previously which is always give value first. If you haven’t even the faintest idea of what you might need later on, you need to start giving value to people that can either introduce you to people that can help you or people that can help you directly. So if you have an App and you are on Silicon Valley, you need to start going to– Don’t go to meets up with other start up people, maybe once in a while but usually that’s just a bunch of value lichens there anyway. Go to a place where, get to the highest level of networking that you can. And you might have to call in a favor.

For example, I will tell you what. There is a guy who came to The Art of Charm and I always use him as an example so he’s had to prey again pretty big by now, but he’s phenomenal. He’s 20 years old, others still think, he’s 20 years old and he patented a medical device, okay. So he’s a smart kid but he came to us because he knew he would need the people’s skills later on. So what he’s done, is he came to the boot camp and he’s really be killing it and he goes. I can’t, I honestly not a day goes by where I don’t get, I should say prior a week goes by where I don’t get an email from him that says, “Hey Jordan this guy would be a good fit for your show or have you read this book, I will save you the trouble, here is the summary that I wrote after I read it.” And he does this all of the time. So when I’m looking for new guests, he’s already made intro to three different people who he thinks are fit based on him listening to the show for years. That’s value that I can’t buy. And its value that I can’t get anywhere else and I didn’t have to ask for it.

So when he says something like, “Hey I was wondering if I can get XYZ.” I can’t be like, “Sorry bro.” I can’t, I literally can’t even do it, I have to say yes. There is no other choice because he’s given me so much value that I have to reciprocate it as best as I can. So I’m literally trying to find ways to almost like pay this kid back. And I have tons; I’m actually taking him with me to North Korea. He wanted to go on a trip. So there is tons of people that do that for us here at the Art of Charm and it’s one of the reasons our business has grown.

Now when he needs an introduction to somebody that I have in my network, it’s as good as done. I don’t even care if it’s Damon John or Mike Cuban I have to make that intro, because one he’s not going to let me down and make me look bad but he’s certainly done enough to deserve it. And there are other people who probably patented medical devices at age 20 that live in their you know some basement somewhere, and there are going to have a really tough time because they don’t have the skills and again people buy you. They buy you. There might be somebody who has patented that exact same, medical device and they are just waiting for someone to realize they are genius, and they are not going to get the job oh my boy. They are not; it’s not going to be possible.

Steve: Wow, so how did you guys hook up? He took your class then?

Jordan: He cold emailed me. He did take my class but before that, he cold emailed me, and he was like. Instead of going, “Hey I really need XY and Z”, which is like every email that I get every hour of every day. He went, “Here’s a great guest for your show, I’ve being listening for a long time, also here is another great guest, here is the link to the guys website, here is his email, do you want me to write an introduction? If so just reply with a yes and I will send the following two paragraph introduction that he had pasted below.” So I replied with a, “Yes.” And 10 minutes or an hour or whatever it was later, I had an email from him ccing me, introducing me to the other guy saying, “I’m a fun of both of you guys and I think you will be a great fit for Jordan show dot, dot dot, here he is, he’s already said that he’s interested.” He saved me time, he saved me effort and he knows exactly what I’m looking for. I, you can’t buy that. It’s virtually impossible. I’d have to train an assistant for years to do that for me.

Steve: It sounds like he didn’t even need your course. This is what it sounds like.

Jordan: I think he learned that from our show. We teach that at the Art of Charm all the time.

Steve: I see, okay. And it’s kind of also implies that he also kind of had his own little network as well, because of the fact that he was able to introduce you to people.

Jordan: Not at all. Here is how that works. So and this is the key. And this is where most people go wrong. They go, “well I don’t have any money, I don’t have anything to offer, I don’t have any way to give value.” It’s not true. There is other times where he’ll come to me and he’ll say, “Hey do you have anybody that knows this and this and this because I want to meet this person and I know he’s looking for this.” And I will say, “Sure I can introduce person A, who is looking for these three things to this other guy in my network who has this.” But rather than me making the introduction, I’ll say actually, I will introduce you to him first and he will give that person value. So basically I’m introducing Victor this is this guy’s name to person A. And person A is looking for these things. Victor will email him over me. I will make that intro and then he will make that intro to person C. So now both of those people are like, “Yeah this guy Victor hooked us up men, really appreciated you introducing me to him.” Doesn’t cost me anything. Sure I could have gotten an ego bound for hooking those two people on my network but, one it wasn’t my idea and two, I don’t need that. I don’t need that social currency I already have it. So I basically gave it to him but he printed it. Does that make sense?

Steve: It does. Actually I’m just realizing now because Noah Kagan actually introduced us together. And he’s actually introduced me to a lot of other podcast guests who I’ve since interviewed and now I really feel like I owe the guy. Dumb I do yeah.

Jordan: And I will tell you a secret. The reason he introduced us is because I was like, “Hey I saw you were on this show, I would like to get on more shows because that’s how my podcast grows, can you make the intro?” And he did. Now I owe him, and you owe him.

Steve: Well played Noah, well played.

Jordan: Exactly, but that happens all the time. And so maybe I don’t have any value. Say I don’t have any value to offer you and I don’t have any value to offer Noah Kagan, which hopefully is not true. But I know that you guys randomly don’t know each other, and that you actually need something that one of the other– each of the others has. By virtual of me making that connection, I just printed social currency because both of you guys now are like, “Oh Jordan is the man.” And then I’m like, “Hey can I have XYZ and a dollar 50 for a beco?” You are like, “Yeah sure.” Because I made that valuable connection. So you don’t need to have a network to create a network and you certainly don’t need a value other than, you don’t need monetary value or some sort of intrinsic expertise. Once you brought that Rolodex, that is value in and of itself and you can keep using it by weaving connections in it together. And you know a lot of people are afraid to do that, they are like, “I don’t want to hook up Steve and Noah because then they are going to hung out without me.” That’s a scare city mindset. What you need is an abundance mindset, which is the more people on my network that know each other, the more important I actually become.

Steve: So then you act like the hub?

Jordan: You are the hub of the network. Even if they are doing things without you, they are not like, “You know if I introduced you to Noah and you guys are off doing something, you are not going to be, when I come to you guys and I’m like, hey you guys both have really cool business, I kind of really need help from that business, you are not going to be like, screw you that introduction was a year ago, we don’t owe you anything.” You are going to be like, “Oh yeah he kind of was in the beginning of this thing and one of the reasons that it started.”

The principle of reciprocity is there. It’s just Robert Cialdini writes about in his book ‘Influence”, “Psychology of Influence” and sure, sometime, in some ways, sometimes people are just going to screw you over, but guess what those people they do it once and then you don’t help them again. And they are gone and you learn a cheap lesson and also it didn’t really cost you anything. Like what if I introduced you to Noah and Noah is like,” Whatever Jordan, you are a duck, I don’t want to hang up with you.” You know that’s fine. I didn’t really lose anything by introducing you guys, right. May be I got rejected and I feel bad about myself for a while, but it’s not really big deal.

Steve: Oh there is a little bit of credibility in there. Like let’s say I introduce Noah to someone who is kind of a loser, right. Then he might discount my future referrals.

Jordan: Exactly, you put your relationship thread on the line and that’s why you don’t make introductions to people that you don’t really know or you don’t really like. In fact you can also– you never want to make an introduction to somebody that’s going to blow that for you. On the other hand I’ve gotten introductions from people that have not worked out and have been totally flaky. And that person feels bad but here is the thing, “it’s okay, I would rather have 10 intros and have one of them not work out than no intros and have all of them work out. What’s a 100 percent of zero, right?

Steve: Yeah, no I hear you.

Jordan: So people really won’t fault you for that. Like I could introduce you to Noah and then he like steals your TV and I’m like, “Holy crap, I did not see that coming.” You are not going to be like, “Jordan, you did that on purpose.” You are going to be like, “Wow, we both really got, sobered by that guy.” And it’s not like every intro I make for you, to you is going to be that bad. Noah Kagan is a special case, right?

Steve: Exactly.

Jordan: Yeah so like it really doesn’t matter if that happens. That’s kind like of a scare city mindset as well like “Oh what if this happens.” Shit happens dude, you know what and it’s not that big of a deal when it does but yeah you definitely want try to avoid that if possible, but I would say error on the side of making the intro anyway. And you can always follow up with somebody. You know, if I’m going to do it again, if I introduce you to Noah, I can also write you or Noah and be like, “By the way for just FYI he seems really cool, but we’ve never met in real life, so you know don’t let him sleep on your couch.” You know whatever and that’s fine. You know and I would hope that the introduction would say something along those lines anyway, because the more authentic those are the better in my opinion.

Steve: Awesome Jordan. You know we’ve been talking for about 50 minutes now. I’ve actually gotten a whole lot out of this podcast, so I thank you for that. I just thought I end this interview by asking you how people can find you online and you know hopefully where people can learn more about your relationship advice. I think it’s very valuable especially in business. And you know some of the things you talked about, I didn’t even realize, was actually going on. And you know like the fact that I now kind of feel like I owe Noah for these introductions and that sort of things. So I think everything you’ve spoken today is just great, and it’s really nice that you pointed everything out in a very concise manner that I now can actually recognize and actually act upon.

Jordan: It’s all about seeing the matrix’s men. Now that you see it you can focus on things that are working. You can see subconscious processes in yourself and other people. And that of course closely mirrors what we teach at The Art of Charm as well.

Steve: Nice, okay so where can people find you?

Jordan: I would say you know what typically people go to my website but I would say, Listen, you are listening to a podcast, go back to iTunes or station or wherever you are listening to this and search for The Art Of Charm and subscribe and write a really nice review for me if you would, optional but you know go ahead subscribe it’s all free. There is 260 episodes or so in there and go through that stuff and then if you really love what we are doing then you can buy something from me, before that don’t bother.

Steve: All right, well thanks a lot for your time Jordan. I really appreciate it.

Jordan: My pleasure men.

Steve: All right men, take care.

Jordan: Take care.

Steve: I’m going to be honest with you. Before this interview, I actually had no idea who Jordan was, but he came highly recommended from Noah Kagan. And honestly I wasn’t sure what to expect, but after talking to him on this podcast I now have a deep respect for what he does because it’s true doing business and making money online, it’s all about the relationships. And it’s important to work on your social skills in order to succeed. For more information about this episode, please check out the show notes at mywifequitherjob.com/episode14 and while you are there, be sure to sign up for my free six day mini course where I will teach you how my wife and I made over 100k in profit in our first year of business with our online store. Go to www.mywifequitherjob.com for more information. 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!

013: How My Student Sandy Donovan Created An Online Store Selling Personalized Kimono Robes

sandy Donovan

Today I’m happy to have one of the students in my Create A Profitable Online Store course on the podcast today. Sandy runs GetUnrobed.com which specializes in selling bridesmaid robes online.

Now this interview is unique in that it provides a very realistic, in the trenches account of someone who just started their online store. Sandy started less than a year ago and today, her shop is now on the front page of search and making consistent sales.

But her path was not smooth. In this podcast, she’ll tell us about all of her struggles and triumphs during her journey.

What You’ll Learn

  • How Sandy found her niche for her online store
  • Why Sandy switched shopping carts to Shopify early on
  • How Sandy sourced her products for sale
  • How Sandy gets customers to her store.
  • What worked for her and what did not
  • The hardest part about starting an online business
  • How much did she spend to start her business.

Other Resources

Transcript

Steve: You’re listening to the mywifequitherjob podcast episode number 13. A few weeks ago, I sent out a poll to my blog asking who they wanted to hear from the most on my podcast. And surprisingly, they didn’t want to hear from famous people. They simply want to hear from real people, who just started their businesses and basically people in the trenches. Now, since I run a course at e-commerce at www.profitableonlinestore.com I just happen to know many in the trenches. So today, I have a student of my Create A Profitable Online Store course with us on the podcast. Now, first things first, this isn’t gonna be one of those raw-raw type of episodes, it’s not going to be a, oh! I signed up for Steve’s class and after following the step by step tutorials, I managed to make tons of money. Quiet the contrary. It’s rarely smooth for any business owner and it would be a lie to say otherwise. So, in this interview, I give a very realistic, in the trenches account of a student who just started their online store. Now, if you are interested in learning how to start your own business, go to www.mywifequitherjob.com and sign up for my free six-day mini course on how to start an online store. Also, I’m giving away free one on one consults on a monthly basis. For more info on that, go to mywifequitherjob.com/contest. Now, onto the show.

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

Steve: Welcome to the mywifequitherjob podcast. Today, I’m really happy to have Sandy Donovan on the show and Sandy is actually a student in my Create A Profitable Online Store course. Now, last week when I sent out a poll to my readers, an overwhelming number of people responded that they wanted to hear from real people who just started out with their shops, people in the trenches, people starting from the very beginning. So, I decided to bring on different students of mine to the podcast. Now, incidentally if you want to learn more about my course, go to www.profitableonlinestore.com. Anyways, I’m gonna have different students on the show who kind of took different paths towards starting their own online stores.

Now, some students chose to go the free open source route, and if you don’t know what I’m talking about sign up for my free mini course at mywifequitherjob.com. I also have students who chose to go with a fully hosted chopping cart and I’ll also hopefully convince a few students to come on who are just absolutely killing it! Now, in a private poll I conducted with my students last week, there were at least two students doing over six figures per year, both of whom have been doing five figures per month consistently for the past several months.

Now, my goal with these set of podcasts is to give all the would-be shop owners some different perspectives on the whole process of starting an online store. Okay now, let’s talk about Sandy. Sandy is one of my favorite students in the class, because things haven’t exactly gone that smoothly for her, yet she has kept at it. Now, she’s currently doing four figures per month with her online store GetUnrobed.com, which sells Kimono robes for bridesmaids. Now, Sandy really is an amazing person and she’s done an incredible job thus far. So, Sandy, welcome to the show and thank you for coming on.

Sandy: Thanks Steve! That was such a great introduction, so thanks for having me; I’m really excited to be on the show today.

Steve: Yeah, really happy to have you. I know for a fact since we’ve interacted quite a bit through the course that, I know you’ve been trying a whole bunch of different things and you’ve had your ups and your downs so, that’s why I thought you’d be an ideal person to bring on the show.

Sandy: Yeah, well, l definitely had the ups and downs so [chuckles]-

Steve: [chuckles] And again you know, just for everyone who’s listening, we’re trying to give a realistic account for someone who’s just started relatively recently. So, Sandy, how did you come up with the niche for your online store?

Sandy: Well, most of it was mathematical, just walking through what you had shown in the course, which just to give a brief overview, is basically taking a look at what people are searching for and comparing that to what is out there in terms of competition. So, it really came down to that in the end, but just a little background on how I came up with it, I – you’d mention to look for something that isn’t being sold in the store. And one day I was with my family and one of my older cousins was turning something– I don’t even remember, 55, 60, something like that, and someone was looking for a happy coat, do you know what that is?

Steve: I do not, what is a happy coat?

Sandy: Okay, so, it is– I don’t know really where the name came from, but in Italian families, it’s basically this really long night gown, it’s kind of a mix between a robe and a nightgown and Idon’t know why they call it a happy coat, I think it comes from another language but the people now kind of tease the older generation because they wear it all the time because it just makes them happy. But, it’s…

Steve: [chuckles]-

Sandy: Something that the older Italian women would wear around the house. So, one of my cousins was searching for that since she couldn’t find it anywhere, so they used to be able to get them everywhere, and so that kind of just put me down the truck of robes. And as I was looking for different robes, I knew I didn’t really wanna sell the happy coat, but I was looking at different robes and what I was seeing was that, a lot of them were either really cheap, so cheaply made, I didn’t like the fabric or they were just really frumpy looking, so they were really big and just not flattering, and so, that kind of led me even further to find out that a lot of women were searching for robes for their bridal party and they were really hard to get. I’ve heard that from lots of different people and it has been confirmed after I opened the store a lot of my customers told me that they can’t find them anywhere in local stores. So, that was kind of the progression but, all along the way, I was checking for key words that were related. So, it all started from that happy coat but then it kind of you know, went a lot further based on the key words that were popular and low competition.

Steve: Okay, so, one mistake that I’ve seen a lot of students make is that they haven’t decided who their target customer base is, you know, when they’re starting on their niche. How did you actually decide to target your robes towards you know, the wedding party in particular?

Sandy: Well, I was definitely one of those people, who made that mistake and didn’thave a target audience right off the back, or at least I thought I did, and it ended up changing. So, if you look at the name of my store, its Get Unrobed, and that basically came from, like I was just saying, looking at the robes that were out there and either cheap or they were a little frumpy and I was looking for something that was a little more sexy and not lingerie like, but closer to that than what was, so I actually didn’t start targeting bridal parties or brides, as who I’m targeting you know, for the bridal parties, but I didn’t actually start targeting them until I made my first few sales, and my first few sales were all brides, and that was kind of when I decided, okay, this would be a much better option because, when people are buying for their bridal party you know they are buying– my average sale is about five, it’s four point something almost around five robes.

Steve: Nice!

Sandy: Per sale. Yeah, so that’s a lot better than the one robe [chuckles], that I would have been selling per sale if I just went the traditional like, hairspray gift or hairspray yourself or something like that. So, I didn’t decide right away and I wish I did because, if I had put more thought and done a little bit more research, then I probably would have come up with a different domain name and I also would have branded a little bit differently right off the back.

Steve: But I noticed that you know, I just went on your site actually just before this interview, I noticed that all the verbiage on your site is now geared towards weddings and the bridal party.

Sandy: Yeah.

Steve: And has that had a good effect on your conversion rate over all, once you started doing that?

Sandy: Yeah, I mean that, there’s been a lot that has I think, affected my conversion rates since the beginning. I’ve made a lot of changes, so, I definitely have noticed though that my customers over time have gone from you know, bridal party, bridal party, bridal party, individual, now to mostly just bridal parties.

Steve: Okay.

Sandy: So, I don’t really– I guess I can’t say that it has definitely affected my conversion rate overall, but it has definitely affected my number of items per sale.

Steve: Okay, okay sure, that makes a lot of sense. So, you know, a lot of the people just kind of want to hear about the process and first of all, you wouldn’t describe yourself as a technical person, would you? Like a programmer, developer type?

Sandy: Absolutely not! No.

Steve: Okay, so, given that as your background, can you kind of discuss some of the most difficult parts that you had about getting started with your online store?

Sandy: Yeah, so, when I first got started I actually went with open cart because, I thought that it wouldn’t be too difficult to kind of put a store together which– I don’t know why I did that. And you know, after someone made this analogy after I was talking to them about what I had decided to do. They said, you don’t know anything about building a website. If you were going to open a retail shop down the street, you wouldn’t go out and buy some bricks and try to put it together yourself, you know, why are you doing this? So, that’s basically, I started that way, started with open cart I was trying to do it all myself and I’m kind of glad I did it only because I did learn a lot, and now I’m able to take what I learned as far as very simple code and apply that to where I am now which is Shopify, which is fully hosted.

And so, the most difficult part about that, I guess, since I’ve moved to Shopify – which I was only on open cart for two months. But since I moved to Shopify, I guess the most difficult part is, you do so need to code a little bit to get things exactly the way you want, and it is tough for me sometimes. But, what I’m learning is to let go of that, and to just get somebody who knows what they’re doing to do it right off the back because, I’ve learned that I’ve wasted more time and more money making a change that has affected other things such as, okay, now– I don’t know, now the track out process is not working quite right, or it looks a little funny, and my conversion rate plummeted and I have no idea why, you know, because it’s on some browser that I didn’t check, all these different things that can happen. So, definitely I’m letting go of that and letting other people do that for me and that’s been a huge help. So, yeah, most difficult part, just even those little changes just to make things exactly the way you want.

Steve: So, just to give a little background story with the listeners. As part of my course, I always urge everyone to actually just consider the open source route because, that’s the only way that you’ll have complete control over your online store. You have everything and no one could ever raise prices on you or put you out of business. But for some people, it makes sense to just go the fully hosted route because everything is just done for you. Ultimately, you’re there to sell your products and not have to deal with website stuff at all. But you know, there’s obviously pros and cons with both, and as Sandy pointed out, she did try the open source route and I commend her for doing that, but it just wasn’t for her so she moved over to Shopify, and some of her skills that she picked up while going the open source route, kind of translated over as well. Okay Sandy, so let’s talk about the next part of getting started with your store, how did you find the vendors?

Sandy: I found the vendors– well; I have two vendors that I started working with right in the beginning. I have a few more now, but right from the beginning I found one through Ali Baba or I think actually through Ali Express, because I wasn’t quite ready to order enough to go on Ali Baba. But Ali Express let me order just like a few hundred at a time, so, that was perfect. So, I did that and what I did was just contact a whole bunch of them and ask for samples. I didn’t have to pay for the samples and I ended up not liking a majority of them actually, but then once I did find what I liked, it was nice because it’s been a really smooth relationship with that vendor ever since.

So, definitely if anyone is listening, that was something that scared me a lot. I didn’t know how to do that, I mean, you showed us in the course but going into that, I had no idea how to contact people, I was afraid to contact people in another country because I didn’t really know if, you know, what would I do if they didn’t send the product? Or how would I talk to them? I just had a lot of questions but, it actually was pretty easy so, that was one. The other one, I decided to go with a US based company, someone who manufactured in the US. So, that was my second vendor, and I really just went with those two because I felt like they had enough diversity in their products to get started.

Steve: So, can you just talk about some of your experiences with the overseas vendors? What were some of the difficulties that you had in communication if there were any?

Sandy: You know, I really didn’t have any. The ones that I didn’t go with, I didn’t go with because I didn’t like the product but, I really didn’t have any trouble with just reaching out to them, communicating with them. Actually, the person that I deal with now, he’s my only over seas vendor and basically because, he can pretty much do whatever I ask. And then he could do whatever specifications, material. I mean, he’s very flexible with that and the cost is low and he doesn’t even take long, it takes about two weeks to get products to me.

Steve: Oh! That’s really fast actually.

Sandy: It’s really fast, I was really surprised. He ships DHL and it comes almost right away unless I have something that he doesn’t normally make, that I need made special or something. But it really doesn’t take that much longer. So, yeah, I didn’t have any problems and he’s very friendly, he’s easy to talk to, he’s English is, you know, fine so, [chuckles]-

Steve: [chuckles]-

Sandy: Yeah, so it works out.

Steve: So, did you have any difficulties or struggles at all? I mean, did you have any mental hurdles in the whole sourcing process?

Sandy: Yeah, well like I said, I was just afraid but, once I kind of got the samples, and I got over that fear. And I think what it was too, the person who I work with overseas– his name is Ray Ray actually, and I don’t think that’s his real name.

Steve: [chuckles]-

Sandy: But that’s what he goes by, and once I started talking to him about what I wanted, I just felt comfortable with him and like I said, I hadn’t had a problem since.

Steve: Okay.

Sandy: So, maybe I just got lucky, but yeah, my biggest problem was myself, was just the fear of you know, mis-communicating, losing my money. I think common fears that everyone has, but just none of them panned out. And like I said, I’m probably just lucky that I found someone right away.

Steve: Yeah, that’s really good because you know, with our vendors at least, there was some back and forth, where– I mean I talk about this on the blog, but we had good product initially when they were sending us samples, but then when we placed the bulk order, he kind of mixed some bad ones in with the good ones so to speak. And we had some quality control issues earlier on, which we then actually just resolved once we met up with the guy face to face in China. So, have you spoken with any of your vendors you know, verbally at all or?

Sandy: No.

Steve: No, it’s all been e-mail right?

Sandy: Yeah, well, for the overseas ones, yeah.

Steve: Okay. And so, what made you decide to also get a domestic vendor?

Sandy: Well, that was something that I wanted to offer in the beginning. I just felt like it was important to offer something that was made in the USA. As time has gone on, I am re-thinking that because my prices are higher for those products, they have to be because it costs a lot more to get those than it does to get from overseas. And even though the product is outstanding, it’s awesome, I love it, they’re awesome robes, but I just really don’t sell a lot of those robes. So, I thought that it would be a good seller, I thought people would prefer to get something from the US, but I think when it just comes down to it, price is a factor and I don’t know, they just don’t go for it. So, it was important to me but, yeah, now I’m not viewing it as important and I feel bad saying that, but if no one’s buying it it’s like a…

Steve: Yeah, yeah. I mean, if it was selling well, obviously you’d still continue to carry them right?

Sandy: Yeah.

Steve: I mean, you know a quick question for you though, in terms of– I’m just curious this for myself, the vendors in the US, are they actually making them in the U.S, or are they actually sourcing them from somewhere else?

Sandy: Yeah, who I use in San Francisco actually manufactures in California.

Steve: Okay, okay.

Sandy: Yeah.

Steve: Okay cool! Let’s talk about your first sale, how did you get your first sale?

Sandy: [chuckles] I have no idea. I…

Steve: [chuckles]-

Sandy: I was actually getting really upset because I was on you know, open cart still, and I just didn’t like the way my website looked but at the same time, I was spending all day, everyday, like hours and hours a day trying to fix it, and it just kept on getting worse, it wasn’t getting better.

Steve: [chuckles]-

Sandy: Yeah, it was awful and I was getting really upset and I was like, okay, maybe I need to hire someone, maybe, but that’s really expensive and I didn’t know what to do. And then I just got this e-mail that just said someone has ordered a robe and I was so excited then. So, that really made my day and it was just – that one was actually just, yeah; I don’t think that one was a bridal one actually; I think my first one was just a regular robe. But I was really excited and it kind of gave me the motivation to at least keep going and try some different things.

Steve: Yeah, I remember back then you weren’t targeting anyone I don’t think and then your website when I had critiqued it, wasn’t looking so hot if I [chuckles]-

Sandy: [chuckles]-

Steve: You don’t mind me saying. But you still managed to get your first sale, and were you doing any sort of advertising or anything to drive traffic to your site at that point? Or was it just a random sale?

Sandy: I, oh okay, I see what you are saying. Yeah, I was doing a little bit of advertising but I actually wasn’t doing it. I didn’t actually think any sales were going to come from it. I was really trying to test like, where are they going? How long are they staying on the site? Like, I was more doing it for information. Of course I was hoping for those sales, right, you know, but I was kind of just playing around with it I guess you can say, I mean, I only threw like– I don’t remember, 50 or 100 dollars, no more than a 100 dollars at iGoogle adds so, it wasn’t like I was running some major marketing campaign, you know.

Steve: So, how did you end up resolving all of your site design issues actually? I forgot to ask.

Sandy: I just went to Shopify, [chuckles]-

Steve: Okay.

Sandy: Yeah, because I, you know, I did hire someone, I actually hired I think two people. One person was making progress but then he was kind of, I couldn’t do exactly what I wanted. I went to someone else and I wasn’t happy with what he was doing, it was getting too expensive and I wasn’t getting the results. And one day, I just went to Shopify and I just said, forget it, this isn’t going to, it’s never going to make me any money because I’m spending way too much time and money on it and I just needed to…

Steve: Okay.

Sandy: Re-think that.

Steve: And so, once you went on Shopify, you just chose a theme and did you have to customize it– you started to customize it yourself, so how did you get around that hurdle?

Sandy: Well, that’s been an ongoing process so yeah, I did select a theme and I liked it and then I started getting feedback from people– you were one of them.

Steve: [chuckles]-

Sandy: And they all kind of said the same thing about it so obviously you know, right, there was something wrong with it. So, a lot of the changes I could make just in the back end so, if anyone– I’m sure there are people listening who don’t actually have a store so, the difference really– and this is something I was really confused about in the beginning. The difference between open cart and Shopify was, Shopify just has more back end stuff and that’s I think really all comes down to. Like open cart still had back end stuff and I could still make some changes there, but Shopify, it aims to let you change everything back there but there are still some things that you need to change in the code.

So, I was able to get someone to work on Shopify, on the store to make some changes but, you know, it was actually a lot cheaper to have someone work on the Shopify design because it was really close to how I wanted it to be. So, the changes were small and I continue to make changes. I mean, every month basically I take a look at what’s going on and try to make some change. I have crazy eight now which has been really helpful. Yeah, so, I’m trying not to make too many changes, I’m trying not to go crazy with it because I don’t want to make a major change and then totally mess it up. So, it is– I do keep tweaking it and yeah, I have someone now who can do that and it’s really not that expensive and it doesn’t take him too long to make the changes that I want now.

Steve: Okay.

Sandy: So, it’s not too bad.

Steve: Just so for the people who are listening, the reason it’s easier for someone to work on Shopify is because, at that point the person is mainly just dealing with the aesthetic portions of the site. The nuts and bolts of the shopping cart are pretty much obstructed away because Shopify handles all that, whereas in Open cart– open cart is a lot more flexible, the way you get more things as you buy plugins and you can kind of build your store that way but ultimately, you know, you need to be the one to go in and adjust some of the code and, it is separated out nicely, but for someone who is not technical, it will tend to be a little more difficult.

Sandy: Yeah, yeah.

Steve: Okay, so, all right, so, what has worked for you in terms of just marketing your site?

Sandy: What has actually been really effective with paid advertisement, paid marketing, has been Facebook ads.

Steve: Okay.

Sandy: And, I don’t know why Facebook ads just seem to work a lot better for me than Google adworks.

Steve: Well you can target brides or people who are engaged right? For one thing-

Sandy: Yeah, right. So on Google I am targeting the key words, but on Facebook right, I’m targeting the people. So, I actually thought that it would be reverse because I thought well, if I’m targeting just brides but then not necessarily searching for bridesmaid robes, you know, it’s like a cold call as opposed to a warm call if someone is searching for bridesmaid robes and my add pops up. So, I expected the opposite, but I don’t know, that’s not what happened and I think though, one of the reasons is just, Facebook ads is just cheaper too. So I pay a lot less for people to see the ad and you know, for them to click on it so, I can go through a few more clicks before I get the sale and it still works out and it don’t pay as much per sale you know.

Steve: So, how do you have your ad set up? What’s the landing page for your ad?

Sandy: It depends, what ads. I do have a few different ones but, mostly the one that converts the best goes from Facebook to the bridesmaid robe site so, it’s just…

Steve: Okay.

Sandy: GetUnrobed.com/ – I think it’s /collection/bridesmaid robes. So, they go to the collections page.

Steve: Interesting, okay. Yeah, so my experience with Facebook has been different from yours. When I was setting up Facebook ads to just point directly to products, it actually was not doing that well. But what I found was if I pointed it to a sign up page, got them into my e-mail list and then market it to them through my list, it worked out a lot better so, I’m kind of taking a more indirect route than you are. But, it sounds like what you are doing is working and that’s awesome.

Sandy: Yeah, you know, I considered actually doing– I haven’t tried it yet, to go to my e-mail list and I actually have something all set up for that to happen. I have a download for thank you cards for the bridal party, and I thought that would be a nice little lead in, and then, you know there is kind of book cards like a little pdf, and they’re cute, and I thought that would be a nice lead in. And I have people sign up for that and then I do have an auto responder that does market to them but, I haven’t paid any traffic to go there yet. So, you know, maybe I’ll try that and because I had intended to and then, I don’t know, I guess I just kind of thought, that was right, too indirect for paid marketing, so I think…

Steve: Yeah, it’s kind of counter intuitive, but it’s jus a matter of calculating the return on investment for that particular list that you’re driving to, like you separate it out obviously and you just get an idea of how much money you’re making there versus the amount you’re paying for the Facebook ad. So, yeah, it takes a little bit and you know, again, it’s just all about experimentation to see what works.

Sandy: Yeah. I’m going to try it, thanks.

Steve: So, let’s talk about your e-mail actually. So, have you marketed to your e-mail list at all, or?

Sandy: You know, I, okay, I do but I’m probably not doing as good as I should. So, here’s kind of what I have going on right now. I do have people signing up to get those thank you cards and a few other things. So within my blog posts I have little opt in– little lead magnets, so I have a wedding prep checklist, I have the thank you cards, and then I have a five percent discount so, they can sign up and then they go to their list or whatever. Then, I do have an auto responder sequence that will send out, depending on what list it is. So it will briefly send out a follow up to kind of see if they either like their thank you cards or checklist whatever, and they do get an offer at the end of that follow up which is, it’s actually not even two weeks long, and I think for all of the list, it’s no more than four e-mails depending on what list you’re on. And so, I’m really not doing a whole lot and my reason for not– and I know this is probably not going to sound like the right answer but…

Steve: There’s no right or wrong answer Sandy [chuckles]-

Sandy: Well-

Steve: Remember, this is the real trenches, this is the way it is. We’re trying to give a realistic account here so-

Sandy: Yeah, well, okay. So, when I look at Google analytics, it tells you how long until the average customer buys and it’s only one day for me like, it’s usually a second or third visit on the same day. So, generally when people come, they decide pretty much right away, and the only real sales that I’ve been getting from my e-mail list come from the five percent -or not five – I forget how much I’m giving off right now, may ten percent.

Steve: [chuckles]-

Sandy: I change it around all the time but the percentage off that you’re getting, enter names I do for shipping or whatever for signing up, and that’s really been the only thing that has been getting them to convert, but it’s still the same day.

Steve: Okay.

Sandy: Which makes me think that, you know, they were going to buy anyway and then they saw they could get some money off and they signed up and you know, did it. So, I’ve tried doing little e-mail campaigns here and there, but I don’t think I’ve been consistent enough to actually see any benefit.

Steve: Okay. So, I can share some of my own experiences since we are kind of both in the wedding industry here. We do get a lot of – most of our customers are just like yours, because they’re shopping for weddings and for stuff like gifts, like for our handkerchiefs is for gifts right? A lot of times that’s last minute, so people are pretty much ready to buy. It’s not like you’re buying your wedding dress or setting your venue which is way in advance.

But one thing that we have attracted with our e-mail list are you know, wedding planners, event planners and we’ve also gotten people who just like our products; who aren’t brides, who aren’t you know, anything to do with weddings, and those guys are the people who tend to buy a lot. Every time we blast an e-mail we get a bunch of these people. Actually we attract crafters also so, you know, even though you might be targeting wedding people, you might be surprised at some of the other types of customers you might have on your list.

Sandy: Yeah. That’s a good idea for the event planners, so, I am going to look into maybe setting up a list of targets there, thanks.

Steve: Yeah, so, yeah, wedding planners you know, they often have to say shop for everything and they just present it back to their clients. So, you know, I wouldn’t be surprised if one of them would say, hey, I bet this kimono robes would be awesome as a bridesmaid gift, do you want to get a sample or take a look so-

Sandy: Yeah! Definitely, I’m going to do that.

Steve: I know for a fact– and this is just based on the survey that I did last week. There is a lot of people on the sidelines and these people are– deep down they’re ready to start their online stores but they kind of want to know how hard it was before you started making money. So, what I’m trying to ask is – I’m going to go through all the common risk factors that are going on through people’s minds and I think you know, we could just blast through this. How much money did you spend to start your business?

Sandy: After everything, I spent a little under 5000 dollars but remember that that included, [sigh] I want to say like, 600 robes so, and then plus some of the website design and things like that and oh! And a photo shoot.

Steve: Oh! Okay.

Sandy: And, there was a lot of stuff so, I definitely could have reduced that. I’d say I should have reduced that by at least by half because, if I knew what I was doing [chuckles] and I didn’t go through all that website trouble and also if I, well, I messed up somewhere else that I spent too much money – and I’m trying to think right now. Oh! Because the first photo shoot I did I kind of, I switched probably through to say, okay, here’s what I’m selling and then when I started to realize that I was getting more of those, the bridal parties, I switched products, I added a lot more products and had to do that shoot all over again. So and that actually was pretty expensive because I wasn’t able to do it myself. They just weren’t not coming out right and I think photos are a big part of– just because of who I’m targeting and what it is.

Steve: Right.

Sandy: So, I did spend a lot of money on that but, you could definitely do it a lot cheaper.

Steve: So if you were to do it all over again, how little do you think you could start the exact same store again?

Sandy: I would have run with drop shipping first until I tested all the products, so-

Steve: Okay.

Sandy: I would have cut that out. The photos I think would have been the only thing I would have kept honestly, and I would have went with Shopify which is– I could have that whole theme thing theme and everything exactly the way I wanted for less than 300 dollars I’m sure, even having someone do the tweaks.

Steve: Okay.

Sandy: And so, yeah, less than a 1000, definitely less than a 1000 if I re-did it.

Steve: Okay, and you know, how much of a struggle was it to find your actual niche?

Sandy: I did spend a lot of time on that. I actually ended up kind of going down a rabbit hole for over a month on another product that I was going to do and then it just didn’t pen out so – how much time did it take? Was that your question? I want to say like a month.

Steve: Yeah, not time necessarily, but how difficult was it? I mean, I guess so two months?

Sandy: Yeah, probably about that.

Steve: Okay. And a lot of it probably was just kind of getting used to the tools and that sought of thing too, I would imagine right? At least, that’s the feedback I get back from the students from time to time.

Sandy: Yeah, you know, I didn’t mind the tools. I got Market Samurai right away, and that was pretty easy to use. I’m just; I’m not good at the creative side of things, that’s not my thing. So, it was tough for me to even think of things and then if they didn’t work, to like move away from them, that was tough for me.

Steve: Okay. And in terms of marketing, what avenues do you use for marketing now? And has it been a real struggle to actually get traffic to your site?

Sandy: It’s not a struggle to get traffic to my sight, well, at least some traffic. I get – depending on the time of year and I haven’t been open a full year yet so I don’t even know this for sure, but so far we’re getting traffic. I get, around 100 clicks a day just organically which, I think is okay. So, I don’t run ads all the time. I kind of go– I found on Facebook actually that, if I run it for two weeks and then two weeks off, giving that break, I don’t know why, but seems to work. So, my ads mostly run on Facebook. I don’t spend more than 300 dollars a month on Facebook ads. Sometimes I also run Google ads when I feel like sales are you know, kind of hot and there’s been a lot of searches and like, those things are trending. Then I also run Google ads and I won’t spend more than 500 a month on Google ads but usually you don’t even spend that much.

Steve: Okay. I have the answer for you on the Facebook ads by the way. People tend to get blind to your ads so, the people who do Facebook ads effectively they tend to change out their ads quite frequently because of that blindness factor.

Sandy: Yeah.

Steve: I think what you are saying is normal, yeah. Cool, so, you know, surprisingly we’ve already been talking for a like 35 minutes and I didn’t want to take up too much of your time, but I do want to have your opinion. Like I said before there’s a lot of people on the sidelines and you know, what sort of advise would you give the people who are thinking about starting an online store?

Sandy: I would definitely– if it’s something that you really do want to do, I would definitely give it a try. I would say, for the risk, I mean, it’s worth it. I was working full time, I actually had two jobs and I’m also a single mom. So, I had a lot going on when I started, it’s not like I just was able to sit down and really work on this you know.

Steve: Yeah, I remember.

Sandy: So, yeah, it was a lot going on and that’s okay because I kind of feel like my goal was a little bit more long term. So, I was okay with that, but I would say try it if you want to try it. I would though– if I was doing it again, I would have definitely been a little more okay with letting go with some things in the beginning. And I also would have found a lot more people who had done it before that could have helped me find those resources. So, now that I have been doing it a while you know, I have people that I can go to, to do like a website tweak or to you know, a photographer that is going to do a good job and not rip me off and you know, I have all those things, but when I first started, I didn’t have anybody that could help me with that. I mean, even yeah I was in your course but I mean, you couldn’t have helped me find a photographer in Las Vegas, you know what I mean?

Steve: Right.

Sandy: It’s just like, you have to find people I think, to help you with that and that would have been really helpful and would have helped me save a ton of money, if I had the right vendors and the right team members in place right from the beginning.

Steve: Yeah, that’s a hard thing to actually overcome, but the good news is, if you were ever to start a different venture, you have all of that stuff at your disposal now, so it shouldn’t be a problem if you were to start another store.

Sandy: That is true, for sure.

Steve: Let’s see, there’s one other thing I want to ask you. I’m drawing a blanket; I didn’t actually make notes on this, but [chuckles]. So, Sandy, for all the people who are out there who actually might want to contact you and have questions for you, is there a place where they can get a hold of you, or contact you?

Sandy: All right, well, so you can find me, if you go to GetUnrobed.com, that’s the store. I definitely check that out especially if you have a wedding coming up, if you want to get in touch with me and just about that info@getunrobed.com but, also you if want to hear more from me, I also have this other side business going on right now called, clearly influential. So, that is where I talk all things communication. It covers marketing, branding, it covers public speaking– if you are basically if you are in the online world, that would definitely be a good place to get more information. So, ClearlyInfluential.com or GetUnrobed.com, that’s where you can find me.

Steve: Okay, I remember the question I was going to ask you now.

Sandy: Okay.

Steve: Okay, so you have two kids.

Sandy: One, one kid.

Steve: One kid, sorry one kid. You’re a single mom, how the heck do you find the time to do this and your side project? You know, describe me your productivity flow.

Sandy: Okay, well, I’m kind of lucky in a few aspects so, even though, yeah, when I started I had two jobs – I don’t anymore. When I started though, I did for the first six months or something so, I was a little lucky because one of my jobs was as a communication instructor/ professor, and then the second job was tutoring students that would come in and I was actually able to do a lot of things online while I was sitting at the tutoring desk which is really nice, I also though now…

Steve: Those poor kids.

Sandy: I know, [chuckles]-

Steve: They should have been to [chuckles]-

Sandy: Yeah, [chuckles]-

Steve: Sorry, go on.

Sandy: No, it’s okay. You know, well, we had down time you know but now though, what I’ve been doing– I do have a VA now and she’s great. She started about a month and a half ago and basically what I did was just document everything I did for you know what I did on a regular basis and turned that stuff over to her. So, I don’t work on Get Unrobed every single day but, I know that she’s working on Get Unrobed every single day. So, she’s doing at least social media posts and she’s also contacting bloggers that– she’s contacting other places too to try to get interviews and guest posts and things like that, just to build links. So, she’s doing that every single day so I know that there is promotion going on and that it you know, I’m slowly continuing to build links, climb up ranks, build my social media following and things like that. So, that’s what’s going on now, so, if I don’t have the time which some days I don’t, at least I know that, that’s taken care of.

Steve: Okay. And one thing that I just want to talk about to the listeners is that, Sandy has a really good attitude here. She’s looking at this in the long term, she’s doing everything little by little which kind of just builds up over time and will eventually make her business successful and that’s actually one of the reasons why I brought her on. She’s got a really good mindset and the right attitude so to a point where I know that her store is going to be huge someday.

Sandy: Oh! Thanks Steve!

Steve: And with that, I think our time is done. Thanks a lot for coming on the show Sandy.

Sandy: Thank you.

Steve: All right, take care.

Sandy: Bye!

Steve: As you could tell from that interview, there’s often a lot of trial and error involved in launching a successful business. Now, Sandy has what it takes because she’s always willing to try new things and quite frankly, she’s just a problem solver. Now, I can’t tell you how bad her first shop looked when I first critiqued it and she since improved it dramatically to the point where it is now generating regular sales. Go to mywifequitherjob.com/episode13 for the show notes for this episode and be sure to sign up for my free newsletter while you’re there, where I’ll give you a brief introduction on you know, how to start your own e-commerce store. Thanks for listening!

Thanks for listening to the mywifequitherjob 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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012: Billy Murphy On How To Start A Poker Training Course And Multiple Ecommerce Stores

billy murphy

Today, I have my good friend Billy Murphy on the show. Billy runs the popular blog ForeverJobless.com which I highly recommend that you check out and he runs an excellent podcast there as well.

Billy is well known for the many businesses that he’s launched over years. He started an online poker training site in his early years, owned as many as 13 ecommerce stores and now has his own mini incubator for small businesses.

Billy’s a smart guy and there’s lots to learn from this interview. Enjoy!

What You’ll Learn

  • How to start a poker membership site
  • How to create buzz for your business
  • How Billy got national coverage for his online poker site
  • How Billy tapped into existing communities to gain his early customers.
  • The right criteria to use when buying an ecommerce store
  • How to market an ecommerce store
  • How Billy got traffic to his stores early on
  • The multiples involved when buying an ecommerce business

Billy Recommends

Billy’s Sites

Transcript

You are listening to the My Wife Quitter Job podcast episode number 12. On this podcast I interview successful bootstrapped entrepreneurs, and have them reveal the secrets of their success.

Also as part of running this podcast, I’m constantly running contests and giveaways. Every single month you will have the chance to win a 30 minute one on one private consultation with me.

For more information go to mywifequitherjob.com/contest, and while you are on my site be sure to sign up for my free newsletter, where I will teach you the exact steps that my wife and I took to make over $100,000 in profits, in the first year of running our business with our online store. 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: So today I have a very special guest, and his name is Billy Murphy. Billy and I met at the World Domination Summit in Portland, Oregon. But actually that wasn’t the first time that we started chatting, before that I think he actually just randomly contacted me and emailed me on the blog and asked me to Skype chat essentially.

And usually when that happens, I actually don’t normally just randomly chat with strangers, but I noticed immediately that there was kind of something different about Billy. And so after stalking him online for little bit, and just kind of figure out what he is up to and that sort of thing. You know I stumbled upon an interview that he did for eventual millionaire, which is run by Jimmy Tardy, and you know I found out that he’s a pretty accomplished entrepreneur. And I said, ‘You know, what the heck’, let’s just have a quick Skype chat.

And ever since that first chat, I’ve learned that you know Billy is just an amazing person, and an amazing entrepreneur, and I was very lucky to have been able to connect with him. So, just a very brief introduction, of all the entrepreneurs that I know, Billy seems to be living the life. He has many profitable businesses, and he spends a lot of time travelling, going to conferences, and meeting other like-minded entrepreneurs. And so today we’ll get a chance to hear his story first-hand about how he started all of his various businesses, and what he is up to in the present day. So Billy welcome to the show, and thanks for coming on.

Billy: Definitely, thanks a lot for having me, awesome intro.

Steve: Yes, so you know for all those people who don’t know about you and your background, do want to just give a quick background story of what you’ve been up to, and just kind of give a brief overview about all of your businesses. I know you have a whole bunch, so…

Billy: Sure, I guess the quick background would be necessarily is a professional poker player, did that for about four years, and then you know noticed a need in the poker space for trainings. So basically started a poker training company which we taught people through video based membership site, how to play profitable poker.

And from there, I guess in 2011, I started buying and studying e-commerce stores, and ended up with maybe 15 or 20 of them. They were all very, very small, but the combination of them was a pretty cool business. And then I guess in the last six months or so, I’ve started investing and advising in kind of small niche businesses, and then I obviously talk about a lot of this stuff on ’Forever Jobless.’

Steve: So ’Forever Jobless’ is your blog, right?

Billy: Yes.

Steve: Okay, yeah so I kind of wanted to focus a little bit about kind of what started all of this for you and so I understand that ‘The Blue Fire poker’ site was your first money maker, is that accurate?

Billy: Yes, that was the first real business, I guess before poker I had done a ‘sports card company’, but it was more kind of less business and more just kind of a hustling side venture, I guess.

Steve: Okay, so it wasn’t like scale wall, and so ‘Blue Fire Poker’ was your first scale wall business that…

Billy: Yeah, it could have been scale wall but I didn’t know how to do it back then, I was like seventeen or something like that.

Steve: Oh wow, so you started really early, that’s pretty cool. So how did you come up with the idea for ‘Blue Fire Poker’ initially?

Billy: I was a player for years, I played full time for four years, but before that, I had been playing for years in college. And there was a lot of sites already doing what we were doing, but we felt that there were lower I guess higher quantity and lower quality than we thought the market needed. And so basically we started in January 2009, and just did very few videos, but very high quality videos and then focused exclusively on one specific game to start with which was ‘Cash Games’.

Steve: So were you recording these videos yourself or did you get other people to them?

Billy: No, yeah, it was all done by other people, and still up to this day I mean we have– I think right now we have a good dozen people doing the videos for us.

Steve: Okay, so are these big name people that you’ve been making videos with?

Billy: They were in the past, I guess you know some of them were pretty big names. Today, it depends, I mean online poker rides are big names.

Steve: Okay online poker I see, I see so this isn’t like World Series of poker, this is more focused on the online poker audience?

Billy: Yeah, 100% online.

Steve: Oh okay, okay I get that. So you know what were some of your motivations for starting your business? Was it to make a lot of money? Was it to live the lifestyle that you wanted to? Can you just give us an idea what, kind of what was going through your head when you first decided to start ‘Blue Fire Poker’?

Billy: Sure, yeah I mean as a poker player it was a good lifestyle, but it was still a job, and so my goal for starting a business was– you know I had the capital from poker built up then, you know I had a nice runway, so I could try and start a business. And you know if it didn’t work you know just go back to poker, but I really wanted something that could run without me having to work to make money. And you know something that could be automated and scaled up, so obviously as a poker player or in any job, it is a lot tougher to scale your job. I mean you really can only scale up by the hours you work, for the most part, or making a slightly higher hourly rate, but with a business you can scale up and leverage it in a lot of different ways. So that was the goal.

Steve: So everything is on the web, is that correct?

Billy: Yes, 100%.

Steve: So, you know what sort of experience did you have before hand in terms of designing websites and that sort of thing? And how did you, you know if you weren’t tech savvy, how did you overcome that?

Billy: So I didn’t have any experience to design or to develop, I still don’t. So any of the design and development stuff I have always outsourced. That project in particular was very, very difficult. I think we hired an Indian development company for like $16,000 to do the site, and it was a nightmare. I mean it was something that was supposed to take about maybe three months, and it ended up taking nine. They were just– You know I don’t know if you’ve worked with a lot of developers. It was just one of those situations where you get stuck with someone that you wish you hadn’t gotten stuck with.

They kind of, communication was really difficult because if you tell them you need one thing, you know they’ll give you word for word what you asked for, but it is completely different than if you communicated that on the same level. So if you say, “Hey, I need a button on this page to do this”, they’d give you a page with a huge, huge button over all of this page. So it was one of those things where it was just completely– the whole project was a nightmare, but finally it got done, about nine months later.

Steve: Interesting, so these people were in India, and so did you go on a website to find them, or how did you find them again?

Billy: Yeah, I used E-lets.com.

Steve: E-lets, okay. So if you were to do it all over again, how would you have proceeded differently in terms of the website design?

Billy: I would either have well– so I don’t know if you know Stu McLaren. So he runs ‘WishListMember’, and I probably would have gone with something like that, that’s more of an out of the box solution. At the time I didn’t even know there were things like that out there. Maybe it was not out there at the time, I’m not sure, and this was about five or six years ago.

I probably would have gone with something out of the box to make it a lot easier to start up. If not I probably would have gone in the US or Canada, or somebody that speaks the same language, because it was just so difficult to communicate, even when we thought they knew exactly what we were asking, lots of time they would give us something completely different back and so I think that added a lot to the times.

Steve: You know that’s actually very interesting because you read around and outsourcing to other countries was kind of all the rage. And what you don’t really hear about is yu know all the difficulties in dealing with time zones, cultural impacts, and that sort of thing. So it is really interesting to hear your experience and the fact that you would actually go within the US for your next project.

Billy: Yeah, I mean it’s one of those things that in theory, it sounds great right, I mean a lot of these the overseas companies charge a third or a fourth of what you pay in the US, but at the same time it’s just so much more hassle and frustration. For me at least, personally I would stay for the most part in the US and Canada now.

Steve: And Just for the benefit of the readers, Billy mentioned a plugin called ‘Wish List Member’. And it’s actually a plugin for WordPress, and WordPress is a very popular content management system, and in conjunction with WordPress and Wish List Member, you can easily create a membership site out of the box for a very small amount of money.

So, how did you get some of your early customers, a lot of times people launch– I know when I launched my store, it launched to no customers. So how did you guys get people in the door, in the beginning.

Billy: So the poker community is relatively small, when I say small I more mean, there’s only a number of forums and blogs, and new sites, and things like that. So it is a pretty rabid community. So when we launched, we got a lot of traction in the forums earlier on, from people who wanted to see our press videos. And then probably– I don’t know if it was a month in or two months in, we were able to get featured on’Fox News’. And so we did that by– we challenged Obama to a game of poker, and the reason was, so there was legislation in the news at the time where they wanted to try and you know ban poker. And one of the big arguments was, whether poker was a game of skill or a game of luck.

And so you know I made the challenge and offered a million dollars if he could beat one of our pros. And so ‘Fox news’ picked it up, they aired it, and obviously we didn’t get a lot of traction from or a lot of business from ‘Fox News’ itself, but what happened was that created a huge buzz in online. Poker was new because we’d just launched, and then we had just this little training site that a lot of people hadnt heard of yet, and we were on national news. And so it helped kind of jump start us in the poker media.

Steve: So walk me through that a little bit. So how does ‘Fox News’ find you? Where did you publish this information or this contest?

Billy: So I can’t remember, I think we put it on our home page, where we started putting it out there and I think I would literally stay up and email any and every media contact I could find. You know I didn’t really have a good research at the time to do– I had hired a PR guy to kind of help, and he had some contacts and so I would send him. This was like, I think this was like our second or third idea that I tried, other ones just flopped. Like I had an idea at the time– this was 2009, so you know the economy was horrible at the time, you know lots of people were losing their jobs and all that. And one other promotion that I thought was going to do really well, that if people like scanned us over or faxed us over or whatever or that their debit sheets from getting fired, we were going to train them to become professional poker players.

So that, things like that almost got picked up and then they just never did, and this one just happened to hit. So it was a lot of like trial and error, I think this was probably like our third one that we tried to get picked up.

Steve: So it is a lot of leg work that you guys did earlier on, right?

Billy: Yeah, it took a lot of time to try and get it on national news, yeah.

Steve: Yeah, so you know walk me through your interactions on the forums actually. So we actually did a lot of forum marketing with our online store early on. And I actually ended up getting banned multiple times from like, the wedding forums and that sort of thing, because I was a little too promotional. So I was just wondering if you could talk about your approach in regards to forum marketing.

Billy: So I think early on, I don’t think we made any initial post, but we had friends that mentioned our launch, and then it enabled us to have an opportunity that you know if somebody asked a question or made a comment like we keep that and go in, and answer questions and whatever. So we actually didn’t start the promotion, but you know we just launched and kind of put it out there to right people, and said– you know we asked other people like, “Hey, would you mention this.” And other people mentioned it, and once they mentioned it, it kind of took a life of its own, then everybody started buzzing about it. Then we would hop in and chat about it, and I think the moderators or the owners at one of the forums did that. We had you know threads going on– actually wanted us to do a sponsorship or something like that, to be able to talk in the threads because there was so much buzz about it that we were geting. They wanted to be, I think, paid for, compensated for the promotion that we were getting in there.

Steve: Wow! That’s really cool. So it was all free publicity in the beginning.

Billy: Yes, 100% free.

Steve: So that implies that you already had kind of contacts within this community, and this is probably from the fact that you used to play online poker, is that…

Billy: Yeah, I had been in the community for, in total, probably you know eight years or so at that point, so it was– you know becausse I started playing in college, and then started playing professionaly a little bit after college. So we knew a lot of guys in the community, so not only me, but other guys making videos for us, all knew guys in the community.

Steve: Okay, that’s cool. So you got a pretty big bump-up during your launch, and then ever since then how have you been promoting it? Do you use pay-per-click services? Do you do Facebook Ads, or anything along those lines?

Billy: No, we actually a lot of this is still word of mouth or referral. For poker stuff we actually can’t do Adwords, so they won’t let you do any advertizing on Google. I think you can on Facebook, we haven’t tried any I know. You know I’ve talked to some other guys who have, but for the most part word of mouth, referral, we do some promotions, and we have a huge email list at this point.

We do some promotions through our email list sometimes. We have some affiliates, but affiliates make up a very, very tiny part of our business. There is just not a lot of people with poker related sites that will promote training sites, because a lot of times the larger affiliate sites are people who kind of have their own deals, like poker rooms and things like that, who have their own training.

Steve: So is Google search a factor at all?

Billy: Yeah, we definitely get some from search. I don’t know the exact percentage, but I’m sure, I mean, we’ve had blogs and forums and all that for over five years now. So we get a decent amount of search result, but it’s not– we don’t make a big focus on SEO. There’s not a lot terms you know people would search like, ‘how to play professional poker’ and things like that. It’s more of a– the people would know about us and would sign up for us, and more within the poker communities.

Steve: I see so it sounds like you are most valuable marketing channel, at least, is your huge list and then all the various content that you have on your site that’s for free, which in turn kind of influences people to want to sign up for the full blown course. Is that right?

Billy: Yeah, exactly. We have so we’ve got over a thousand videos on the site, and each video has like got two minute free trials. So, if you want to sign up, you can actually watch the video, and then it will stop at the two minute mark in the video, and a screen will pop up and ask you if you want to see the rest of it you just have to sign up.

Steve: That’s very clever, so you give them a little teaser, a little appetizer.

Billy: Yap, exactly.

Steve: So you know how long did it take before your business started gaining traction, and you started actually making profits with this business?

Billy: Right away, within 24 hours we were profitable.

Steve: Wow! That is amazing, and this is just straight from all the buzz that was generated from your ‘Fox News’ promotion and your forums.

Billy: Yeah, well at that point, I mean, a day in we hadn’t gotten on ‘Fox’ yet, but it was mainly just forums, blogs, news sites, and obviously we kind of take the golden news sites and try to get them to talk about it. But a lot of them that were just – again because the poker community is so small we’d pick it up from the forums. A lot of the poker news sites go to the forums for their news.

So they would pick it up and talk about it, and so it was one of those things where we brought a lot of money right away, and keep in mind it is not just for that day, it’s a lot of people signing up for one month memberships, or six months memberships. So you know I guess in theory we were profitable after one day, but we still had to earn the money over the memberships.

Steve: Oh yeah, absolutely, absolutely. So you know once you obviously spent a whole bunch of time getting the site up, and then getting all the initial content up. But once everything was up and running, can you kind of describe what the day to day was like, once everything was actually launched?

Billy: Most of the day to day for me was just more of marketing. I mean I was trying to talk to more news sites, talk to other poker sites, even our competitors. We’d try to join the joint ventures, or cross promotion, with you know trying to keep people active on other forums, they would find our site, trying to get videos in from pros, looking for more pros once we decided to expand, keeping the blogs and forums active, all that kind of things. So it was a lot of mostly marketing on my part, trying to expand it.

Steve: Okay and at what point– so how much time do you actually spend on the site today?

Billy: Today not a lot because I have someone kind of running, you know they handle all our support, video uploads and the pros make the videos. So I don’t really spend much time on a day to day basis these days.

Steve: And how long did it take you to get to that point where you could actually be really be hands off with your business?

Billy: It’s hard to say. You know we started over five years ago, and I think, at least the first year or two, I was doing a heavy marketing push. We had a support person in there to handle the emails and stuff, but for the most part most of my job was to make sure that we got more customers, and kind of the business strategy and things like that. So I would say this, at least for the last several years it hasn’t taken much time on a day to day basis, outside of obviously the marketing stuff.

Steve: And how many people does it take to run this operation.

Billy: So in terms of employees really just one.

Steve: That’s amazing.

Billy: Yeah, but we obviously have pros, probably like a dozen right now, maybe even more, making videos for us, but they make like two videos a month. And so it’s just you know whenever they are scheduled to make a video, they get their video in and then we have a support person who– he knows the emails and just making sure that the pros get their videos in and things like that.

Steve: Okay cool. Yeah, so that’s really interesting how you started that whole membership site with poker. I would like to kind of switch gears at this point, and kind of talk about some of your experiences in terms of e-commerce. So e-commerce is my main thing, so it is just interesting to hear some of your experiences with your stores. So do you want to just give a brief overview about some of your most successful stores that you’ve owned?

Billy: Sure, I guess I started I guess we’ll start with the first one I bought, was the organic baby furniture store, and it was our flipper. It was making, I think was like 900 or 1000 bucks a month and I ended buying it for like $4000 which [cross talking] [00:20:43] at the time.

Steve: That’s amazing.

Billy: Yeah, that was– even now I still don’t understand how I got it so cheap, but I think if I had to buy it now for like $6000, and so you know I was just learning, I had friends in e-commerce so I knew a little bit from them. But I would ask them, why is this so cheap, it doesn’t make sense, and they didn’t know why it was so cheap. And so I called the seller, found out she had to sell really quick, she wanted to buy something else, and we negotiated down to $4000.

And so everybody in the comments was trying to figure out what was wrong, there must be something wrong if she was listing so low. And so as soon as she bumped to buy down on to $4000, I just instantly bought it, and ended up getting a great deal. I just wired over the money right away, and it made its money back right away, I mean it was just you know it took four months or so, but made its money back. And so that was kind of the first store that I bought.

The second one, that was actually kind of started about the same time, but it was started from scratch. I had a French pastry store, and this was probably ended up being probably one of my better stores. This one I started just doing SEO, I would just buy links, buy link packages, hire someone to do SEO and basically slowly started making sales. I mean, a couple of months in, I get sporadic sales a couple of times a week. Slowly picked up and then probably six months to a year in, that was one of my best businesses. I mean we had months where we were making a few thousand dollars which isn’t a lot but I was playing more of the quantity game starting a lot of the stores.

So I ended up selling that store last year in a small package, I think there was maybe like three stores in that package, and started it like a couple of hundred dollars and we sold it for $68,000 last year. And so that was you know it was– that was probably the best– definitely the best in terms of I didn’t take much money to start and ended up selling for a pretty good amount of money but obviously I had flops as well. I mean I bought– you know I remember buying a store for $15,000 and literally like a week or two later, one of the big Google updates came and just lost all our traffic.

Steve: Oh, man!

Billy: So I mean there is the downside of it too that hurt. You know you buy that for $15,000 and then you are making 200 bucks a month, and you don’t know what happened. So that was definitely a wakeup call that, “Hey, it isn’t that easy to just buy a bunch of stuff and basically print money, which is what we thought we were going to do for a while.

But we scaled up pretty quick. I mean I bought and started fifteen to twenty, over like eight or nine month period. We went from like I think the first month we did like three K in revenue to yu know forty to forty-five K in revenue, probably eight or nine months later. But we were doing all drop ship and so the margins were pretty tight. So you know even if you’re doing forty to forty-five K in revenue, it’s like maybe you have a margin of like ten to twelve K something like that so it was… If I could go back in time, I would have definitely done what you did and basically you know giving product you’ve made yourself, make your own brand, get bigger margins, because we basically had a 100% rely on SEO, whereas we couldn’t make sales because we couldn’t buy media with you know we can’t buy Adwords with the small margins of drop ship.

Steve: That’s actually an interesting point. So from what you just said your margins were on the order of 20% – 25%, is that accurate?

Billy: Yeah, for the most part, I mean it would vary, but you know some stores like actually the French pastry one. Part of the reason we did pretty well was we had slightly bigger margins, so I think we were in the forties for that one, and so we actually could buy some advertising for that. And so all the other ones though we tried and you know we got to like break-evenish, and I’m sure if we’d spent a lot of time we could have gotten profitable, it was the type of thing that you are squeaking out an extra 5% margin after paying Adwords and stuff, it didn’t really interest us because we were in tiny niches.

Steve: Were there comparison shopping engines, and like Google matching center, I think they were around back then, did you guys give those a try or anything?

Billy: Yeah, we tried them we never got a ton of sales, I think we got a handful of sales, but we never got a lot of them from our products

Steve: Okay, so the macaroon site was just purely SEO, and then what about the organic furniture store, was that SEO as well?

Billy: Yap, 100% SEO.

Steve: Okay, amazing. So if you were to do it all over again, given that Google has made all these changes in the past two years, how would you do things differently in terms of customer acquisition and that sort of thing, based on what you’ve experienced in the past?

Billy: So if I was starting today I would definitely take more time and more money upfront to create a product. And not necessarily even create a product, I mean there are ways around it where you cannot be seen white label someone else’s product and just kind of stick a brand on there. But I would definitely do whatever it took to get the margins, you know at least 50%, obviously if you go overseas a lot of times you can get anywhere from 50% to 70%. Some people get even higher, but I would definitely spend the time and money to do that, and then I will spend all other time trying to acquire traffic, and then obviously through media buys, through Adwords, through Facebook advertising, all of that.

I mean there is a lot of untapped media channels, and I am not an expert on it because I have never done it, but I have talked to a lot of people who have. And a lot of people are killing it on buying advertising on sites that earn on Google because everyone knows about Google Adwords.
So everyone buying media is kind of you know they are reaching the point where it’s– I don’t want to say it’s efficient, because obviously people are making profit, But it’s as efficient as you could get because most of the people are trying to advertise there. So there are a lot of channels, like I know people who’ve done really well on Facebook and other forms of advertising that people are just getting used to buying a lot of advertising on, that I would probably spend a lot of time just figuring out where you can make a profit and just scale those media or buys up.

Steve: Interesting, you know what I like about your experience is that you’ve actually chosen to buy all of your stores, whereas I have always had the philosophy to just kind of building my own from scratch and just kind of very gradually building something up. Can you just kind of walk me through, what was on your mind on whether you should buy and how you made the decision to buy versus just start something from scratch?

Billy: Sure, part of that reason was that I was trying to– I had a bunch of money I wasn’t doing anything with, and part of it was two I wanted this to be a passive business. And so I didn’t want to actually do a lot of the scaling up and running the stores and all that stuff. So actually from, almost from day one I had someone who was handling customer service, handling orders, and a lot of dealing with the suppliers and all that.

And so basically, I figured if I bought more and more sites I’d give them more jobs to handle where if I had them started from scratch we couldn’t do a lot at one time. We could slowly start with one store and basically I would be paying them but not having an income from the site yet, because they wouldn’t be making the money yet.

So I almost treated it like in some sense less like a business and more kind like a fund, where I know I can buy a store, I just kind of place into a collection of other stores and it would keep running smoothly. So that was the idea, so obviously it was less of a hail out start-up, really big business and more like, “Hey, there is a bunch of stores you can buy at low multiples”.

Because most of the stuff, obviously we didn’t get as many good deals like the baby store, but there was plenty of deals where we got where we bought for one year income. So if we get to buy a store for $10,000 and makes 1000 bucks a month, and you just kind of plug it in and your goal is to have it obviously at least make a thousand bucks a month. You can make your money back in a year on those so that was the idea.

Steve: Just a side question about just buying sites in general, so what are some of the things you look for outside of just the regular stuff like revenue and profit. Do you actually look at how they acquire their customers? Can you just kind of walk me through some of the things that you look for in a good buy?

Billy: Sure, so I looked at yeah well you know I want to take it back– I look at their analytics, site go, through the analytics I get access, I do want to look at their back end of the store to make sure the owners came through. I do want to look at– obviously if it is a bigger store you try and get bank statements to make sure that you know everything’s legit and not just showing thick orders or anything like that.

But in terms of what you look for, you want it to be– I mean whether it’s on an uptrend or a down trend, you want to figure out why that is. Did something happen in the industry, you know why is it? Is the whole industry turning up or down or just their business? If it is their business, what did they do to create it, is that sustainable? So in other words, if they had some PR campaign and their traffic’s by choosing out of first sales, is it just going to drop off in a month?

And so you know where they may make it seem like, “Hey, look our business is growing.” And if you took a look and just really ask the right questions where, it is a huge traffic spike last year that caused a bigger income boost, and now they are selling based on that multiple, including that income in that multiple, so you want to make sure that you are not buying something that’s going to be obviously at a lower multiple, unless you put a ton more work in. So those type of things where, did they get a Google hit, did they– and I’m sure, you know I’m not really an SEO expert, so if there was anything related to SEO stuff in there, I would probably ask someone else to check it out for me and so…

Steve: So just curious, what are some of the common multiples for e-commerce stores, at least in terms of what you’ve experienced?

Billy: And this is really broad, but so at least for me it was– when sites are very small, let’s say $20,000 or less, lots of times they sell for very low multiples, like for the most part I’d say ten months to eighteen months. Obviously some sell higher, some sell lower, but for the most part that was the range. Then you look at, if sites are…

Steve: Is this self-revenue or profit?

Billy: Profit.

Steve: Profit, okay.

Billy: And then the bigger sites– it’s been a while since I looked at it, but I know the bigger, let’s say 50,000 plus you know 50,000 to 150,000 stores are selling more on the lines of like eighteen months to three years income. Three years is obviously on the higher end, but then even the higher and the higher you get, which seems like if you did the opposite, the higher you get will be low multiples. But it seems like the higher you get there are just more buyers, more people with money that can actually pay higher multiples. This is what it seems.

Steve: And it probably kind of makes sense, their sales and traffic are probably more stable I would guess, once you are larger as well.

Billy: Yeah.

Steve: So that’s actually a good lead into kind of your newest project which is from what you were telling me, like a little micro incubator for businesses.

Billy: Yeah, so I just started doing this probably about five or six months ago. I made the first deal with a couple of guys who wanted to start a design company. So basically the gist of what I am doing is, there is a lot of I guess younger entrepreneurs for the most part that have a good idea or have a current business that’s doing pretty well and they need either funding, and to advice to kind of help get it to the next level.

And so what I’m doing is basically finding businesses that I think have the potential to be really successful. And you know I don’t get involved in the operations very much unless they need help. But for the most part they run the business, they do all the operations, and then I fund them, give the money to scale the business, and then kind of help them to strategize, help them make connections that will help them grow, and just help give them a bigger network and any others. There’s two of them that I’m doing right now, looking in a couple of other ones, but there is just, there is a design company right now and an e-commerce store that I’m doing.

Steve: Cool that’s pretty exciting stuff. So by operating this way you kind of get a large variety of businesses that you get exposure to, and so I think that is pretty cool. And this is all funded from the money that you’ve been earning just kind of from ‘Blue Fire Poker’ possibly, is that kind of accurate.

Billy: Yeah, I mean from playing poker, and Blue Fire and e-commerce stuff, yeah, just had money to invest.

Steve: Cool, so given all of your experiences, what advice would give to some of the newer entrepreneur, some of the people who actually are just starting out or want to start a business?

Billy: I guess the biggest piece of advice that I always tell people is, “Listen to those you aspire to be like, and ignore everyone else.” It’s just one of those things that there is a lot of people, I guess, giving a business advice that are true in business and it is a lot easier, you know, someone who wants to start e-commerce stores obviously if they followed you, they’d probably end up doing pretty well.

But then there is a lot of people that you know a lot of new entrepreneurs don’t know who to follow and so they end up listening from advice from like a hundred people at the same time. And so it tends to be pretty difficult to know which direction to go. I would say, a lot of people don’t need a lot of capital to start. A lot of people think I’ve got to stay in a job or just do whatever it takes to make a lot of money, and then I can start my first business.

I think capital helps, but I think just having knowledge helps a lot more. So if they’re getting a mentorship or just actually trying to execute the business and learning from mistakes and then asking for advice once you hit those mistakes. I think that helps a lot more than just kind of waiting on the side for a long time to start a business.

Steve: So you mentioned a whole bunch of different sources there, so I imagine you read a lot of books, is there a particular book that kind of influenced you one way or the other?

Billy: I’m trying to think. There is a lot of good books, I read a lot of books, obviously most people read this one, so it is probably not a great recommendation, but obviously ‘The 4-Hour Workweek’ is a good book for a lot of people, but it is more very, very, very passive. And the one thing people get confused over ‘The 4-Hour Workweek’ is, you know they think you start with the ’Four 4-Hour Workweek’, which is a lot of people get into trouble doing that, a lot of times it takes up you know 40-hour work weeks or 80-hour work weeks to basically create a 4-hour work week. But I think that book is a good idea of the lifestyle you can have.

There are other books you know my buddy MJ wrote ’The Millionaire Fastlane’, I think that’s a really good book for people who want to learn how to make large amounts of money and hear what it takes to do so. There is a book called, ’How to Get Rich’ by Felix Dennis, and it’s really good. This guy is a, I think he is a billionaire, and just wrote a book on you know I know that the title sounds kind of scamy, ‘How to Get Rich’ but it’s actually a really, really good book, from a guy who is really rich. I like that book a lot, it’s just kind of he just gives a really broad and honest look at about what it took, and kind of what it’s like. Yeah, this is a couple off the top of my head.

Steve: So, you also mentioned finding a mentor, how do you go about finding a mentor?

Billy: For me, I guess I haven’t had mentors other than just reading a lot from people who’ve written books that are on forums. But for me, I didn’t know where to go at the time, so we just kind of stalk people on forums. And so if there was someone who seemed like they knew what they were doing, I would literally read every single post. So, I mean if someone wrote 2000 posts on a forum, I would read 2000 posts that they wrote. And then I would go to that person and I would say, “Hey, you know you wrote a post like two years ago, and you said this. Why would you do it that way instead of this way?” And I would ask like you know pretty in-depth questions so they knew that I wasn’t just wasting their time and kind of I wasn’t asking them like, “Hey, how do I get rich” type of questions, it was more very specific things and they could tell I’d done my homework, and so, a lot of those people would write me back. They’d give me really good answers.

Steve: And then you would ask to talk with them on Skype.

Billy: Yeah exactly.

Steve: I see a pattern here.

Billy: Exactly, and actually MJ was one of those guys. He used to post back, and this was a long time ago, probably a decade ago, but back on the rich dad forums. And so I would just read all of his posts, and there were probably five or six guys there and I read all of their posts. And then now these days I’m friends with them. We got to know each other through like meet-ups and going to the same conferences and things like where you know back in the day I would just– I didn’t know anything yet, and I would just ask a lot of questions.

Steve: Cool, yeah that’s really good to know. I think being really ingratiated within some sort of entrepreneurship community would greatly help out anyone who is interested in starting a business. Yeah, so I thought I’d just wraps up, we’ve been talking for quite a while. I just want to thank you Billy, do you want to just go ahead and talk about some of the sites and where people can find you online?

Billy: Yeah, definitely. My blog is ForeverJobless.com. I post a couple of times a month. I try and post a couple of times a month on Forever Jobless. I am actually launching a podcast, probably by the time this airs it might be up. I don’t know what it is going to be called, probably something forever jobless. So those are the main two places they can find me on.

Steve: Cool, sounds good. Hey thanks a lot Billy.

Billy: Awesome, thanks Steve.

Steve: All right, take care.

Here is what I like about Billy, the guy knows a ton of people, and he is an excellent networker. And every single time that I chat with him, I learn something new, and he has a ton of great insights and ideas, and in fact the idea of running a podcast contest was his idea, not mine. I just merely took it to improve the overall rankings for my podcast.

For more information about this episode, go to mywifequitherjob.com/episode12, and while you are on the site, be sure to sign up for my free newsletter, where I’ll teach you the exact steps that my wife and I took to make over a hundred K in profit in our first year of business with our online store. 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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011: Mandy Rose On How To Start A 6 Figure Subscription Box Service For Moms

Happy Mommy Box

Today I’m happy to have my good friend Mandy Rose on the show. Now Mandy runs the popular mommy blog House Of Rose which is an incredibly engaging blog about her life as a mom of 3 kids.

One day, Mandy along with her friend Natalie, decided to create a subscription box service for moms. And within a matter of months, their subscription box service Happy Mommy Box exploded into a six figure business.

Her story is pretty incredible and you have to hear it to believe it. If you are interested in starting your own subscription box service, you must check out this interview. The best part is that both Mandy and Natalie achieved their success without spending a lot of money on marketing.

What You’ll Learn

  • How Mandy and Natalie came up with with the idea for Happy Mommy Box
  • How to come up with products for your subscription box
  • How to source goods for a subscription box
  • The economics behind a subscription box service
  • How they handle product fulfillment
  • How they created a community among moms to help them promote their box
  • How Mandy has differentiated their boxes from the competition
  • How they got their first sale
  • How they used Instagram to promote their boxes
  • How to build up an Instagram account
  • How they decide what to include in their boxes
  • Mandy’s best advice on how to start a blog or business

Other Resources

Transcript

You are listening to the ‘My Wife Quit Her Job’ podcast episode number 11. But before we begin I just want to announce that the winners of my podcast contest have already been chosen. But since the contest went so well, I’ve decided to make it an ongoing giveaway, so every single month you will have the chance to win a 30 minute one on one private consultation with me. For more information go to www.mywifequitherjob.com/contest. And while you are on the site be sure to sign up for my free newsletter, where I will teach you the exact steps that my wife and I took to make over a $100,000 in the first year of business with our e-commerce store. 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 am thrilled to have a good friend of mine on the show Mandy Rose, but I have to be straight up honest with you. I kind of have this love hate relationship with her. So, on one hand Mandy is super cool, fun to hang out with and she has incredibly entertaining quotes, but on the other hand this woman cost me a lot of money every year.

Now, Mandy blogs at houseofroseblog.com, and she often puts out incredibly detailed and visual articles about how she re-decorates her house. Now, my wife is actually an avid reader of her blog, and every time one of these posts comes out my wife goes out and buys something. So, one time Mandy posted a room model, and my wife dropped five figures on new furniture, then Mandy posted a kitchen project which could potentially cost me six figures in kitchen re-model cost this year.

And then there is the threats, so, one night we are hanging out at think-on, it’s like 8 p.m., really early, and she was like yawning like crazy. So I started making fun of her big time, because who gets tired at 8 p.m. during conference time. But instead of fighting back, here is how it went down.

So, after bursting on her repeatedly for being lame here is what she said, she said, “You do realize Steve that I have another basement re-model post in the queue, right?” and I was like, “Wh-wh-what did you say?”“And so I would suggest that you stop talking now, otherwise I’ll hit post from my phone right now.” And I said, “Yes mum”, and I shut up right away.

Anyways, the reason I brought Mandy on today was not to talk about her blog, but to talk about her subscription box service, ‘Happy Mommy Box’. Now, her subscription box business has grown extremely fast to the point where she can’t even keep up with demand, and so I invited her to talk about her box today, so welcome to the show Mandy, how are you doing?

Mandy: I am doing great, thanks for that intro, I don’t know if that was a complement or…

Steve: I don’t know what it was, I was just speaking from my mind, and you know…

Mandy: It’s a good thing you have a six figure online business.

Steve: Yeah, otherwise I would be hurting. This kitchen re-model is getting a little bit out of control, but…

Mandy: I take no credit.

Steve: It doesn’t help that your house looks beautiful, so…

Mandy: Hey, I have good budget friendly ideas.

Steve: Yes, you told me how much you actually spent on your kitchen re-model. I was like there is no way that would actually happen in Silicon Valley where prices are like four or five X higher, but…

Mandy: Yeah, see that’s the problem, you just need to move to the mid west.

Steve: Yes, yes, I would love to do that someday. Well, we are not here to talk about my spending and how you cause me to spend money. We are here to talk about ‘Happy Mommy Box’, so why don’t you just give us a quick highlight review about what you are offering and what you are selling.

Mandy: Yes, so ‘Happy Mommy Box’ was actually something that my business partner Natalie, it was all her idea. Basically it is a subscription service for mums, kind of like a batch box or searchers lane or there are so many out there right now, but they have them for every niche. And when we were looking into it, they really didn’t really have anything for mums, and so we are like, “Near”, you know like, we love– both of us have blogs that are geared towards mothers, and motherhood, and we were like, ‘What can we do to encourage other mums’, because really when you come down to it, it’s about the community and you know, lifting each other up.

And so, it was really her idea, but it is a care package service that we do monthly and we send like a surprise box of goodies to mums all over, and it’s about three to four products in the box, and one product is always for the children and the rest of the products are just for the mum, and it is just the way to encourage and inspire mums. Especially whenever you are, you know, you’ve got a new born or you’ve got young kids, just kind of like a happy melody. We call it, ‘Encouraged, Inspired Motherhood at Your Doorstep’.

Steve: So, walk me through, what’s in one of these boxes, for example, last month what did some of these mums get?

Mandy: So, we always have a print in the box, something that you could post on your refrigerator, on a bolten board. Last month there was a bigger print, so, something that you could frame and hang in the gallery wall, don’t tell your wife that.

Steve: Yeah, I have seen your gallery walls by the way, you should see it, I am going to take a picture of my wall downstairs after this and…

Mandy: If they have stuff on it, I don’t even think you mean you need to know.

Steve: It’s a bunch of blank picture frames with just the stack photos, our family photos aren’t even in them yet, but there all already posted on the wall, anyways.

Mandy: Hey! I’ve had that– I have kept that up for like a year, I had a stock for doing that, Phil would be like, “Who is this?” and I’m like oh I just have them.

Steve: Yeah, we’ve had those up for like three or four months now, but anyways.

Mandy: Anyway, so there is always a print, and then, so we always– we include that every month, we have a magazine that we do, and it is just a ‘Happy Mommy Box’ magazine. In that we feature other happy mums, other happy mums that we want to share with our community. We always have a recipe, we have, or just good idea that you can do with your kids, play aids, fun things, you know, to do with your children.

Then there is usually a necklace or some piece of jewelry, earrings, necklace. There is always a kid item, so like, you know, we had this, like, little crown holders or play doll or maybe it’s a kid’s snack, or like a makeup item. They are always just things, you know, things that women like.

Steve: I can’t relate but yeah, it sounds good. So in this magazine then you don’t happen to talk about home re-decorating or anything in there, right?

Mandy: Oh man, you know what, I think last time we did-

Steve: Ah, okay we are definitely not subscribing, that’s going to do damage.

Mandy: Usually it’s not about that though, usually it’s, I think last month it was the Easter issues, so we did, you know, some fun, DIY race projects in there, but most of the time it’s more things that are related to motherhood, not decor.

Steve: Okay, so there is jewelry and sounds like there is something for the kid to play with? Toys to keep him occupied, are they crafted.

Mandy: Yeah, like a book, a play doll, we always like to include something for the kids, because obviously this box is geared for the mums, so we wanted it to be mommy focused, but we always say, you know, when the kids are happy mum is happy. So we want them to feel included, and so, right now we aren’t able to kind of break it down to like sending age rims, like if you have, this box is really for zero to seven-year-olds.

Steve: Okay.

Mandy: Most of our mums have kids that are under the age of seven right now. In the future we will love to kind of be able to, you know, specify if your kid is between this age and this age, we just right now we don’t have that capability. So most of the items are for children under the age of seven, but it’s just a little something happy for the kids too so that they feel included.

Steve: So, do the parents know what they are getting in the box ahead of time, or is it just a complete surprise.

Mandy: No, it really is just a complete surprise.

Steve: Okay, so in that way, actually it makes it even more attractive, right? Because it’s like getting random gifts in the mail.

Mandy: Yeah, it is, it’s really just a surprise box, and you have no idea what’s coming in it, and so you kind of really have to be one of those people that like surprises, you know. If you don’t like surprises this box won’t be for you, but a lot of our mums love that aspect about it, that it is just a surprise box that’s coming to their door.

Steve: So, just for the benefit of our listeners, what has the demand been like for your box so far?

Mandy: You know, it’s been really crazy, we never thought it would be. There would be such a demand, and we knew that we had a lot of readers that wanted something like this, but we never knew how many. And so, currently like we started out just, we want to keep it small and we started by just doing– I think our first month we just did a hundred boxes. And between me and Natalie, my business partner, I’m kind of like the helper and she’s very much the big idea ‘wow’ person, and so she was ready to just blast it out with, you know, “Let’s start with 500”, and I was like, “My gosh, we can’t do that, we don’t even know what we are doing”.

So, we kind of brought it down and said, ‘let’s scale it down and just do a small start and see how it goes, and learn about what we are doing. We just did a hundred at the beginning. We started in, I think our first box was in November of last year.

Steve: Okay.

Mandy: We started sales in October, our first box went out in November, and then every month we’ve just been adding more, because we had no idea, like we started a wait list. So after we did those hundred boxes that sold out for like less than an hour, we started a wait list, because we were like, “Oh my gosh, okay, so people like this idea, we’ve got to find a way to get more boxes.”

And so, every month we’ve added and added and so right now we are doing 500 boxes. We have 500 subscribers every month, and we are trying to add to that even more, but we have over 3500 people on our wait list.

Steve: That is crazy, that is awesome.

Mandy: Yeah, it’s been great.

Steve: So, how much do these boxes go for?

Mandy: They are $29 plus free shipping.

Steve: Okay, and approximately, how much do you spend in shipping, on shipping one of these boxes?Just curious.

Mandy: Let’s see shipping, I don’t have my breakdown, but it’4s between six and seven dollars, a shipping.

Steve: Okay, so that makes sense. Wow, so did you have like a whole factory putting out these 500 boxes, or how does fulfillment work.

Mandy: Yeah, if you call it a factory, like, it was the basement of Natalie’s house, yeah, we’ve got a factory. That’s the part that was still working through. We obviously have different roles in the business, and Natalie lives in Shirley and I live in Illinois. So she’s in working on her end, that’s her part.

So she boxes everything, and ships everything, and I will tell you what, I went to Shirlety in April to help box the April boxes, and holy cow, it’s a lot of work. That was the first time that I had been involved in doing the shipping. But we don’t currently have, we don’t have anybody that we hire, we do it all ourselves.

We do have a great community of women who– Natalie lived in Pennsylvania, when she lived there she had like six other bloggers that were just willing to help, they wanted to come and box it up, and it was almost kind of like a fun girl’s night. And then now that she is in Shirley we have– there is just more bloggers that keep coming out of the woodwork and they are like, “We’d love to come help box your boxes.”

So, right now we’ve been really lucky that we’ve just had girls and women and mothers that are willing to help us, while we are kind of doing it on our own. Eventually we would like to have, you know, some type of a warehouse or-

Steve: You know, I think you guys are doing things completely the right way, like for example, when we started our online store initially, we shipped everything out of our bedroom and we put all of our goods in the garage and you just gradually scale up to the point where you are ready to start hiring people. And I think you guys are doing the right thing.

Mandy: Yeah, I think so too, she just recently, when she moved to Shirley, the place that they bought has like three levels, and so we are using the whole bottom level just for all of our boxes and so that helped. We have kind of a little bit of a space now, but we are still really just doing everything on our own at this point.

Steve: So, let’s talk about these bloggers that are helping you out. So, I know for a fact that they have some sort of incentive as well to help you out and so, can you just talk about how you’ve created this community of people that are willing to help you promote ‘Happy Mommy Box’.

Mandy: Well, ‘Happy Mommy Box’ is something that I think is very different from other box services, because it’s really focused on the community aspect of mums, and so Natalie and I both – like I said – had blogs that, and had readers from our blogs that are all mothers. One of the things that mums and women love is to connect with other mums and women.

And so we’ve really focused our marketing efforts on that rather than on our box and what’s inside it. It’s more like this community of women, they are like, “Oh we are all in this together, and we are getting a surprise box and we feel encouraged and inspired’, and you know, and sharing it on social media.

I think, you know, when you look at other boxes, and you look at searchers lane or whatever, ‘Brickyard Buffalo’ or ‘Batch Box’. I think about those boxes, and to me those boxes are all about the products, because, I don’t have any idea who runs those boxes, I don’t know the people behind who started those companies.

And so that’s how ‘Happy Mommy Box’ is different a little bit, because Natalie and I feel like, up until this point most of our subscribers are people that are buying our boxes because they either read our blog or they know us through our blog, and they love, you know, that we are mums and that we are kind of just putting it all out there and how we are doing it, our struggles. And so I feel like we are different from other boxes in that aspect.

Steve: So this is what I like about your business. You guys put yourselves out there, and your personality really shines through your blog and even all of your social media posts as well. So just knowing how you write and what your personality is like makes me want to buy your products even more. And that’s actually something that some of the other boxes don’t have.

Mandy: Yeah, and we feel like that too, so, we kind of want to capitalize on that, you know, we want to take a different approach and we want it to be about the stories that we can share with each other, you know. Not just about the products that you are going to get in the box.

Steve: Yeah, that’s a very good strategy; I don’t see very many other box services doing that actually. So in that you guys have a unique advantage.

Mandy: Yeah I think so too, thanks.

Steve: So let’s talk about the very beginning because, I know how it’s really scary to actually launch a new business. So when you guys first launched ‘Happy Mommy Box’, you know, how did you kind of get some of your early customers and generate buzz for your product.

Mandy: Well I will tell you this, when Natalie first approached me about doing the subscription box, I was like, I looked at Jeff and I was like, “Absolutely not!” I’d have no time, how would I ever do this, I don’t know what I’m doing; I wouldn’t even begin to know how to do something like this.

And the more I thought about it and the more that I prayed about it, I thought, ‘Man, all these people,” – you know, Jeff and I have a podcast and we interview people online, you know, successful online entrepreneurs, and I was falling into that, you know, the fear of failing. And I was like, “Man, all these advice that I give to other people about going for it and stepping out, and taking risks’, and I was like, I just pretty much contradicted myself, and he looked at me and he was like, you know, I really think that you just need to think about, ‘is this something that would pay out for you, is it something that you want to do?

And if it is, you don’t necessarily know how, you don’t have to know how to do it, you know, you can learn as you go. And so it was– I finally just ended up just saying, “You know what, I think wanna try it” and I knew that was going to mean for me putting back some of the stuff that I was currently doing. So, I was working for Jeff a lot on his blog, so he has a finance blog and I was doing a lot of work for him, I was doing a lot of work on ‘House of Rose’ which is my personal blog, and we have a blog together. I was doing all the groundwork, I was editing videos and podcasts, and I knew that it was gonna mean I was gonna not be able to do some of that stuff.

Steve: I hear Jeff is a lousy boss also. Anyway sorry, go on.

Mandy: Yeah really, you know, that man – just kidding, he is a pretty good guy. But yes so he actually hired help, he hired a virtual assistant to take over some of the stuff that I was doing, and I just kind of put my whole heart into, you know, trying to figure this out. And Natalie and I, neither one of us had any idea how to run a subscription service. So it was very scary.

Steve: So how did you get your first box sale?

Mandy: Well so we started by marketing on Instagram, so-

Steve: Instagram.

Mandy: Her and I both had a pretty decent following, I don’t remember at the time, I mean, it wasn’t huge by any means. I think maybe I had like 4000 Instagram followers, and she probably had like 5000. So not like something dramatic and huge, I mean, a good amount, and we just thought, Instagram to us is just a happy place of, you know, pictures and mums, and you know, just being happy.

And so we started with Instagram. We just kind of put it out there that we were going to start this ‘Happy Mommy Box’ thing and we created a buzz about it at the beginning because, we pretty much told everybody like it is the secret thing. Like sign up for our newsletter if you want more information, and so we kind of created a buzz about it on Instagram, and that was at the very beginning. And then…

Steve: So can we walk, can we go into more depth on that, so how do you– what does it mean to put it out there on Instagram, so did you have a strategy or how did it work exactly.

Mandy: So we just would post kind of, I’m trying to think in the beginning what we actually posted.

Steve: You know maybe we can just link up your Instagram account, all that stuff should still be there, right?

Mandy: Yeah it’s all on there from the very beginning, but we just put out there that we were gonna be doing a ‘Happy Mommy Box’. And it was going to be something that was going to be there to encourage and inspire mums and we were like, you know, if you are a mum and you wanna be encouraged and inspired sign up for our newsletter and you will get to be the first person to know what this is all about.

And so we posted really just stuff about that. And I think in the beginning it was really just pictures of Natalie and her kids, and me and my kids, just kind of how we shared on a personal Instagram, it’s really how we started it. And so It’s changed a little now, but that’s how it was at the beginning, and we just shared about our own lives and our own stories. And so yeah, we had people that were like, amazingly, people that were like signing up left and right for our newsletter. Yeah, so we started it just on Instagram.

Steve: Did you do any marketing on your blog, because you have a pretty big large audience there as well.

Mandy: That’s the funny thing, I can’t even remember when I first posted about it on ‘House of Rose’, but I do remember Jeff telling me like, “You haven’t even talked about this on your blog” and I was like, “You know what, you are right I haven’t”. It was almost like when we started it on our Instagrams, because you know, we promoted it on our personal Instagrams as well, that is how we got people to go to our ‘Happy Mommy Box’ Instagram and follow that.

I didn’t promote it much at the beginning on my personal blog; I think it might have been like a few weeks then, before I even posted anything about it on my personal blog. But I did post about it on my personal Instagram.

Steve: So why Instagram and not your blog versus Pinterest versus Facebook and that sort of thing? Just curious.

Mandy: That’s a good question. I think at the beginning it was just trial, it was one of these things that we were like, “Well, let’s try it on Instagram” and it worked.

Steve: That’s the understatement of the century, go on.

Mandy: So we just kind of stuck with it, I mean, we have a Facebook page for ‘Happy Mommy Box’, and it’s funny because it’s not near as engaging or we don’t have nearly as many followers. It’s just, I don’t know for some reason Instagram was just where it was up for that kind of community of women.

Steve: So how do you build up an Instagram account, just curious, so how did you build up to 5000 followers?

Mandy: I try to think about that and I’m like, ‘how did we get there?’

Steve: How long did it take you to get there?

Mandy: To get to 5000? Let’s see, I don’t know where we are at now, I’d have to look, but I mean it probably took us– let’s see, maybe like four months or so.

Steve: Okay so, four months to build that many followers, so you must have been doing something.

Mandy: Yeah well, one thing that we started doing is we started promoting other mums. So we would share some pictures, we would find other mums that were, who had pictures of them and their children doing fun things or just cuddling or whatever it was. And we would share those pictures on our Instagram and then we would tag them.

And so you know, it was just a way to get other people involved and for people to see like this wasn’t just about us and us being mums. This was about you, and you being a mum, and her and her being a mum and everybody who was a mum felt like, ‘Oh yeah that’s me’, you know, ‘I can relate to that’. And so we just really started sharing other people.

Steve: So, how did you tap into like, the ‘Mommy blogger network’ after that?

Mandy: Well, I think we are lucky in a sense that Natalie and I both had it in there already. I mean, and I wouldn’t say that either one of our blogs are huge by any means. I feel like we do have a good amount of followers and both of us have been blogging for you know at least five years, I think.

And so, we did have readers that are mums, and so that helped because we kind of already had that connection with mums. And so those few mums that saw what we are doing and felt inspired by it, you know, they shared it. So it was really just about word of mouth for us.

Steve: Wow, okay that’s amazing. Did you guys do anything else outside of Instagram and your blog?

Mandy: No, no, we watched a–Jeff and I were watching Shark Tank– this is a few months ago, and there was a subscription service that came on there, I can’t even remember the name of the box. It was like two women who were like, graduated from Harvard and they were on Shark Tank and they were like, “We have 200 subscribers”, and they were like all pumped about it, and they were talking about how much money they’ve spent on marketing. I can’t remember the exact number, but Jeff was like, “Wow babe, can you believe that, like you guys haven’t really spent a dime on marketing.”

And I was like, You know what, we haven’t, we really haven’t had to in the sense that, you know, just with our blog readership, the only thing that we have done is that at the beginning, every month we have given away a box. And because our boxes sell out so fast, everybody is like, “Oh, I want a free box” because you know, some people can’t get in as a subscriber because they are sold out. So I think just creating that buzz it’s helped us. But that’s– giving away a free box is really the only way we’ve spent any money on marketing, and even that is very little.

Steve: So I can tell you from a third party, why your stuff is selling, it largely is because of your personalities. You guys really put yourselves out there on your blogs, and you guys come across as real people, real mums. You don’t pretend to be like a super mum or anything like that, you talk about your trials, you talk about the good times, and you talk about the bad times. And that is just very endearing from someone who follows you. So there is your answer Mandy.

Mandy: All right, I like that. Actually that’s a huge complement, because when I think about other people that inspire me, and I was thinking about this actually before our interview. I was thinking, I am never inspired so much by like celebrities or these big people. I’m always inspired by people who are like down to earth people that I can relate to. You know, that are transparent and putting it all out there. So that’s a huge complement, so I appreciate that.

Steve: Yap, so let’s talk a little bit about the economics a little bit, so how do you get– first of all, how do you get products for your box?

Mandy: So, I’m kind of the brand person I guess you could say, and at the beginning Natalie and I had some relationships with brands that we had just worked with through our blogs. So we just did some brand outreach, and we basically said, you know, we kind of built up on Instagram a little bit first, then we are like, you know, we have the community of mothers, and we are going to be putting up this box. And, I don’t know, people were just like, brands were just all about it, we had ‘Ikea’ in our first box.

Steve: Really.

Mandy: Yeah, Natalie already had a relationship with ‘Ikea’, but they just saw value in what we were doing and they wanted to be a part of it. So at the beginning, most of everything that we put in the box was donated in exchange for a promotion of the brand.

And now that we are building up our capital and we have a little bit of money, now we are being a lot pickier about what we include in our box, and we’re also– we can pay wholesale prices for some things now. But I will tell you this, we have never paid over two dollars per item for anything that’s been in our box, ever. And most of the stuff still is being donated.

Steve: I would imagine there is huge incentives for companies to actually pay you to have their items in your box, right?

Mandy: Yeah, at first it was a little bit harder because we didn’t have any experience and we couldn’t show them how much value it would create for them. And so it’s hard to be, “Hey you know, can you donate this product”, but for some reason, I don’t know, people saw something in it and they were still doing it. Now it is a little bit easier because we have brands that have worked with us that are willing to, say, you know, I saw a huge increase, like we had a brand in one of our boxes a few months ago, that was like,“I had a 30% increase in sales that month from being in your box”. And just from the buzz that was on Instagram about it. So we do have–

Steve: That is crazy, 30%?

Mandy: Yeah, it was a necklace stuff that we included and yeah, so it is good to hear that. And that helps us get other brands and good products in our box.

Steve: So clearly your reach goes further than just the 500 boxes that you are selling a month.

Mandy: Yeah, I think so, I mean…

Steve: Okay, so that means that people are talking about these products and you are generating these buzz, and you have this huge waiting list and it just kind of feeds upon itself.

Mandy: Yeah, I think the buzz is key. One of the things that we feel like has helped us is that every month it does sell out. So it is always like this. It’s kind like when Pinterest started and you couldn’t get into Pinterest, you were on the wait list, and you are like, “Men, I really want in because I can’t get in” it’s like that. Looks like a logical thing. So I think a lot of people with our box are like that. They are like, you know like, “Oh, it’s going sell out, and I need to get in right now.” You know?

Steve: Yeah I know that’s great, that’s like the apple model right there. So let’s say I’m a brand and I want to get into your box, you know, what is your criteria.

Mandy: Really the stuff that we include in our boxes is just things that Natalie and I would both love as mothers. So we have tons of people now. At the beginning, you know, it was more brand outreach. So we were reaching out to brands, and now it is more about weeding out the brands that reach out to us, because we just have tons of brands every month. They are like, “how can I get in the box”.

And you know, that’s kind of the hard part, that’s– my part is weeding out those products that don’t really fit. So we are very picky now about what we include, but our criteria is mostly just, ‘is this something that as a mum I would love, I would wear or I would use’. And really I feel like we are the perfect people to know that because we are mums, and so a lot of the stuff in the boxes is stuff that Natalie and I just love.

Steve: So if there was something that you love, you actually go ahead and contact the manufacturer and get wholesale pricing, so how does that work? So obviously not all the brands that come to you are going to be providing products that you actually like, right?

Mandy: Oh right yeah, we have– actually this just happened last week. I was working with a brand and some of the stuff that they had online I was like, “this looks cute and I think this would be a good fit for our box.” But we always usually make brands send us a sample immediately before we would ever commit, because we want to have the product in our hands and we want to hold it and feel it and see, is this something, you know, does it look like the picture? Because you know how that can be online.

Steve: Yeah.

Mandy: And so we just had this happen last week where, you know, I was like, ‘Yeah this is great’ and then when they sent us the product and the sample was like much poor quality and I was like, ‘This is not what I thought it was.” You know, we had to go back and be like, you know, ‘I am really sorry, but it doesn’t really fit with what we are trying to do right now, and thank you so much.” And that’s the hard part because I like to say ‘yes’ to everything.

Steve: Right, right.

Mandy: But I finally had to learn how to say ‘No’.

Steve: So what is your– how many products are you getting pitched now from month to month?

Mandy: I would say probably each month now, we probably get fifteen to twenty brands that would contact us, yeah.

Steve: And they are competing for like three or four items in the box, right?

Mandy: Yeah, and the way that we have it set up now is, when we work with a brand we basically tell them, ‘You know you are going to be in the June box, or you are the July box, and we need your product by such and such day. And so we kind of curate the boxes based on the brand that we are working with, but the way that we would really love it to work – and this is going to be in the future hopefully – we want to be able to have a warehouse of products.

You know, we want to say if a brand wants to work with us, we want to say, “You know what, sure send us the products you will be in a box in the next three to four months. And we want to be able to curate the boxes with products that we can kind of pick from our wholesale or from our warehouse. But we are not to that point yet, and so right now it’s working.

Steve: Well, you have extra room in your house; I saw some of those bedrooms that were looking quite nice.

Mandy: I don’t know about that.

Steve: So okay, I still have a bunch of questions here. So let’s say you want to start out creating your own subscription box, so where would someone start?

Mandy: Where would someone start, by researching what other people are doing.

Steve: Like say I want to start a ‘man’ box, let’s say hypothetically speaking, well…

Mandy: A ‘Happy Daddy Box’,

Steve: A ‘Happy Daddy Box’.

Mandy: Don’t you do that now, Jeff Rosen is going to do that.

Steve: Oh really.

Mandy: No I am just kidding. We have talked about doing something for the men like on ‘Father’s day’ we might do a ‘Father’s day’ box, that’s in the works, but I’m just kidding, you can start a ‘Happy Daddy Box’ all day long.

Steve: I have no interest, but let’s say I want to start one or something from complete scratch, what would be your advice on where to begin?

Mandy: Well for me it was easier because I had Natalie and so we were able to kind of figure things out together. So I think if you are on your own it’s a little harder, you just have to research. You know, what we did at the beginning was, I know we even reached out to you, because you have an online store and we were just asking questions and kind of connecting with people that were already doing it. So we didn’t necessarily talk to anybody that was doing a subscription box, but we did reach out to people that were selling things online, and just got advice from people that were already doing it. Because I feel like, you know…

Steve: So what were some of these pieces of advice that you got that were helpful?

Mandy: Well, one of them was start out small. It’s helped me be like, “Okay Natalie, you know, we don’t need to go big so start out very small,” just do like a barter test, you know. Because you don’t want to put everything into it, you don’t even know how it is going to go, you don’t even know if you are going to like it, you know.

This is something that when we started, it’s like, ‘are we going to really want to do this every month? Is this something that is going be fun for us? Is it going to be encouraging for other people? So starting out small, I know, we had that advice from– it might have been you or I can’t remember, but we…

Steve: That’s something that I would probably say, yeah.

Mandy: Yeah, I know you gave us lots of good advice, but I’m trying to really remember the advice at the time. It’s such a blur because we literally knew nothing. I know we had– we were lucky in the fact that we had Natalie who knew a little bit of HTML so she was able to set up our site for us. But when we started out we were on burb.com which I had never even heard of, so we had a lot of issues with that.

So, at the beginning it was really all just about trial and error, we had months where we sealed the boxes, and ‘Oh my gosh,’ like we did it the wrong way and there was no way to fix it. So we had to back in and tell all the subscribers that had subscribed you know like, “Oops, you know, we messed up and we really need you to like– we’re going to cancel, we really need you to subscribe here”. And the thing about that is like, ‘that’s okay’ if you only have a hundred people. But if you would start out with five hundred people, you are going to take a lot of people off.

But we made it very clear to our audience like, “Hey, this is something that we’re just trying, and thank you for being patient with us as we learn”. We really had a good response in just the fact that being transparent about it, you know, not acting like we knew what we were doing. We were kind of like, “Hey, you know this is something that we have a passion for but we are not perfect”. And yeah, I just think that people can probably relate to that a little bit.

Steve: So, are there any website– what are you guys using now for your website, are there any packages that kind of handle the subscription model for boxes.

Mandy: Yeah, currently we are on WordPress now thank goodness. So we’ve moved to WordPress, but we are using Woo Commerce and PayPal. So I don’t think that’s probably the best option, but it’s working for us now. We are having– we’re getting to that point where we are having a problem figuring out tracking. You know, tracking our retention rate and that kind of stuff. We are still trying to figure that out and but…

Steve: But right now you have this huge waiting list anyways, right?

Mandy: Yeah.

Steve: So it’s probably not much of a factor right now, I would imagine.

Mandy: Yeah, that’s kind of how we feel about it, it’s like retention isn’t a huge issue to us because we can’t even reach the people that are like willing to buy.

Steve: Just curious though, what is your strategy for people to continue to get this ‘Happy Mommy Boxes’, so what is your retention strategy.

Mandy: Really, our goal from the beginning has just been, no matter what that just kill them with kindness. So we’ve had people who have unsubscribed or who have been disappointed with something that came in the box, and both Natalie and I decided that no matter what it is, whether they are disappointed or they are unsubscribing for whatever reason, we’ve just really been nice about it.

So we’ve never been like, we’ve had people that are like, “Oh you know, I didn’t really like this” you know blah blah blah, we are like, “Oh my gosh, we are so sorry we would happily give you a refund. And every single time that we’ve done that or said that, they have said, “Oh my gosh, no way, I so appreciate you offering me a refund and that’s really great”.

I think the key is just engaging with them and not making them feel left out, because I know sometimes when I order products or subscribe to things online, have you ever had a personal response from the owner of the store, and has it ever been like, “What can I do to make it better?” you know.

So we’ve done that and then another thing that we do is every month we give people an incentive to share their products on social media and on Instagram. So we send out happy– we call them happy mail days. And so we ask people to tag, like hash tag ‘Happy Mommy Box’ things. So then people are sharing what was their favorite product in the box. And we would pick usually three of those people from the hash tag and we’ll send them like star box gift card or a target gift card, or you know, just some kind of encouragement in the mail on top of the box.

Here is another little thing that I think is important, this is something that Natalie did in one of the first boxes, I think it was the second month. She had somebody who had commented on her Instagram it was like, “Couldn’t wait to get a box”, and she had mentioned like, “the only thing better about this box is that it included diet coke”, you know, kind of just joking around, and Natalie sent her that box and included a diet coke.

Steve: Ah nice.

Mandy: You know when she got that, she shared that all over Instagram. And just doing little things like that has really helped us keep the people that we have.

Steve: That is great advice and in fact that’s actually how we run customer service with our online store too. If there is anyone who is disappointed with anything we just give them a refund and often times, you know depending on the situation we just let them keep the product as well, then you don’t have to bother sending it back.

Mandy: Yeah, yap.

Steve: And just a word of mouth that that generates is just worth it in itself. So speaking of customer service, how do you guys handle customer service?

Mandy: I am customer service, I am everything right now, so yeah, I usually– well, we both tag team on the e-mails and the customer service part of it, but yeah I mean, we are kind of, I think that helps though because people feel like, they get to talk to us, the two people who are running the company, you know. And I think that goes a long way. So I just– customer service to me, is all about making sure people get a response.

Steve: So do you guys have a phone number or is it just e-mail?

Mandy: We don’t, we just have e-mail and so right now that’s been working for us. Eventually we would like to have obviously a number that they could call, but right now…

Steve: I’ll be sure to post your cell phone number in the show notes here.

Mandy: Yeah, go ahead and do that, I would really appreciate. If you could tell them to call me in the middle of the night that will be great too.

Steve: Well, you will be up anyway; I have seen how late your kids stay up.

Mandy: I’m actually sleepy now, well, just one of the reasons that I probably feel so pumped about this business. Don’t do that!

Steve: Okay, so let’s see, I’m trying to run through in my head all the things that we’ve covered. So okay, customer service, okay. So let’s say I am starting my box, how do I get brands to recognize me and send me their stuff?

Mandy: You’re starting a box, how do you get brands to recognize you and send you their stuff, well-

Steve: Or does it even matter, in the beginning?

Mandy: I mean, I guess it depends. For us it helps that we had our blogs and so we could– we didn’t have to just say, “Hey, we just started this website called happymommybox.com, you know, here we are”. We could say, “Hey, I’m Mandy from ‘House of Rose’ and I’m Natalie the busy burgee mama. And we’ve been blogging for five years and we have this passion to help mums and encourage mums”, and so for us it was a little easier, I will say that. I think we had an unfair advantage in the sense that we could send people to our blogs so that they could see the success that we had and the community that we had there.

And I think that they knew from that that, “Oh they have a community here, women that are following them and are supporting them, and are engaging with them, that can only carry over into the ‘happy mommy box’ and so, I think it is a little bit, you have to do little bit more ground work in the beginning. If you don’t have that, it’s harder to get brands to work with you.

Steve: Would you even just go out and just buy some stuff and throw together a box, just to see if it is going to sell even if you didn’t really make a profit in the beginning, I don’t know. Just curious.

Mandy: Yeah no, I absolutely think that’s a great idea, I think that if you don’t have that recognition already and you are having a hard time getting brands to work with you, I think absolutely, you know. I mean, you can always get brands to do wholesale you know if you tell them that you are doing a subscription box service and you want to see their wholesale prices and that you are going to buy a hundred products. Most brands are going to be willing to work with you on that. And so you don’t even have to spend a whole lot of money.

I would say too, one of the things that we did at the beginning as we worked with– so in our box we have like two to three main brands and then we always have a small business brand, like an Etsy shop or we always like to feature other mums in our community who are trying to do online business, and who make Etsy stuff, you know. And so I think that’s a great place to start too is look on Etsy at other women who are running Etsy shops, because those mums are really wanting to get their products in the hands of people, and they have a small, small audience, and so they are willing to work with you.

Steve: Okay, that’s really good advice, I not that I am going to be starting ‘Happy Men Box’ or whatever.

Mandy: Well, don’t worry because there is not a lot of men on Etsy, so you would have a profit.

Steve: What do I even put in the box, like razors, yeah turkey, razors, you know, actually I don’t even have to shave that often, I wouldn’t include a razor, I guess. I don’t know.

Mandy: Actually, you know, you can’t do that because there is dollar shave club, right?

Steve: That’s true.

Mandy: Jeff does that.

Steve: Oh does he.

Mandy: He does yeah.

Steve: Well okay, thanks Mandy we’ve already been talking about forty minutes, and I have learned a whole lot about your box business, so, you are very humble, I just want to say that. And deep inside of you, I see this marketing genius and I’m just wondering are there any books that you’ve read or, what’s your background that has allowed you to be such an effective marketer.

Mandy: I don’t know, sometimes I feel like I’m not. You know, I really do because I went to school for business, but I was more into management information systems, and I don’t really have– I am not–I don’t have a back ground in marketing and I wasn’t a marketer. And it’s really just been trial and error and I think the biggest thing for me is just– and a lot of people have a problem with this, but being transparent online and being who you are, and just putting yourself out there. It’s very hard for people to do, and that’s really been my only strategy, all I can do is stay, you know, here I am love me or hate me.

And I’m sure some people hate me, but hopefully more people love me. It is the same when it comes to anything in my life, like home decor. I am not, I don’t have any background in interior design, but it’s just something that I love to do as hobby, and so I get e-mails all the time from people that are like, “Oh my gosh, can you– I will send you a picture of my house, and can you tell me how to decorate this”, and I feel like, ‘I’m so not qualified for that, like I don’t know, I just try stuff and it works, you know, or sometimes it doesn’t work.

And I think that’s important for people to remember too is, I’ve done a lot of things that haven’t worked, and that’s okay. I think you have to do that. I think you have to get past the fear of failing, you know. I was just at the marathon this weekend, I was with one of my best friends, I remember her, I had somebody come up to me at the marathon and was like, “Oh my gosh you are ‘House of Rose’ can I take my picture with you”. And she just felt like, that is so cool, like, I wish I had something that I could like do online that was a like a niche. But her comment to me was, ‘I would have to quit my job to do something like that, and then, you know, I’d have to invest into it, and then I will have to be like, you know…

Steve: That’s a cup out right there.

Mandy: Right, that’s the mentality of so many people is that you know they are afraid to cross that line and to go for it and I think you kind of just have to get past that fear of, you know, this might not work or, you have to take risks to make things happen, and you have to do the work.

Steve: Send that woman my way, actually because you know, I still work full time and I have got three businesses and two kids. I mean you have three kids but yeah, send that woman my way, what a cup out.

Mandy: Exactly that’s– and I was thinking in my head like, “No, you have to work two full time jobs at the beginning, that’s how it works. You know I didn’t do this overnight, and I didn’t, you know, I don’t not work hard, you know, I’m constantly on my lap top, and I’m constantly working and it takes work.

Steve: I hear you. All right Mandy, so where can people find you if they want contact you, for home decorating advice or whatever. I will not be giving this e-mail to my wife.

Mandy: Hey, she already knows that so…

Steve: I know.

Mandy: Yeah, you could find me at houseofroseblog.com. I am at house of Rose on pretty much every form of social media that you can find. If you are interested on getting on our wait list for happy mommy box, we are just happymommybox.com and happymommybox on social media.

Steve: Awesome, well, thanks a lot for your time Mandy.

Mandy: Yeah, I appreciate it thank you so much for having me.

Steve: All right take care.

Mandy: Bye.

Steve: Here is what I like about Mandy, she really is a genuine person, and she really just wears her hat on her sleeve, and as a result she exudes passion for everything that she does. Now, I know that I asked her about tips and tricks with her business in the interview, but the reality is she was just being herself.

For more information about this episode go to mywifequitherjob.com/episode11. And while you are on the site be sure to sign up for my free newsletter where I will teach you the exact steps that my wife and I took to make over $100,000 in our first year of business with our e-commerce store. 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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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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010: Farnoosh Torabi On How To Establish Your Own Personal Brand And Become Recession Proof

Farnoosh Torabi

Farnoosh Torabi has established herself as one of the prominent personal finance gurus out there. You’ve probably seen her on tv on popular shows like the Today Show, MSNBC, CNN, Larry King Live, Dr. Oz, The View etc…

Farnoosh is also an accomplished author with many bestselling books under her name.

In fact, she is releasing a book today and I’m happy to be giving away 3 copies of her brand new book “When She Makes More: 10 Rules for Breadwinning Women”.

All you have to do is sign up for my podcast contest and you’ll automatically be entered.

To learn more about Farnoosh, you can find more info at Farnoosh.tv.

Note: Farnoosh and MyWifeQuitHerJob.com are not affiliated in any way. I used my own money to buy the books for the giveaway. Enjoy the interview!

What You’ll Learn

  • How Farnoosh laid the ground work for her own personal brand before she got laid off.
  • How to land a book deal
  • What publishers care about when making a decision to publish your book
  • How to get on television on the Today Show
  • The most important aspect of getting a book deal
  • An inside look at a book publisher
  • The one thing Farnoosh did to land her first book deal.
  • How Farnoosh gets support for her books despite not having a gigantic audience

Books By Farnoosh

Transcript

Steve: You are listening to the mywifequitherjob.com podcast episode number 10. Now before we begin I just want you to know that my podcast give away is ending this week, so make sure you sign up soon. Now, I’m giving away a free lifetime membership to my create a profitable online store course as well as free consulting. Now, my course is the most comprehensive course out there on ecommerce that teaches you how to make money with online stores and unlike other courses I give live lectures and I’m constantly adding new content to the class. For more information about the giveaway go to www.mywifequitherjob.com/podcast-launch. And while you are there be sure to sign up for my free newsletter, where I’ll teach you how I managed to made over a 100k in a single year with my own online store. 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 is your host Steve Chou.

Steve: Welcome to the mywifequitherjob podcast. Today I have a different type of interview for you all. Unlike the other people that I’ve had on the show this particular guest does not own her business in the traditional sense. Instead she owns something much, much more valuable. Unlike a regular business which can go out of business at anytime Farnoosh Torabi of Farnoosh.TV has developed something far more valuable, her own personal brand. And in a way that’s what I have been trying to do with my blog and my podcast but Farnoosh has taken this to a whole another level. Now, Farnoosh Torabi is a personal finance expert, author, speaker and coach.

She’s a frequent financial contributor to Yahoo. She’s been on the Today Show, ABC; she’s written many books includingher latest book which is ‘When She Makes More: 10 Rules for Breadwinning Women’, which we will talk about a little bit later. She’s also written ‘Psych yourself Rich: Get the Mindset and Discipline You Need to rebuild your Financial Life’ and ‘You’re So Money’. Now I’ve even seen her on TV with Jim Cramer of nerd money which pretty cool also. She has hosted her own web series which turn into the number one personal finance series online. She’s been on Remake America, TLC, she’s been on CBS, MSNBC, CNN, Fox, I mean could go on and that could actually probably take the entire interview and I actually want to talk to her today. So, you know, word on the street is that Farnoosh owns what is called the Noosh Empire, so welcome to show Farnoosh glad to have you here.

Farnoosh: Thank you so much Steve that is such an awesome introduction. The Noosh Empire I’m going to take that, I’m going to borrow that for sure.

Steve: You don’t have borrow it. It is already out there.

Farnoosh: I own it. Okay.

Steve: Yes for all those who do not know who you are, can you give us a quick background story, because you have a very interesting back story.

Farnoosh: Well, thanks I hope it’s interesting to your listeners, I mean, I started out, I went to college, I went to graduate school. I studied finance in college, and then I went and studied journalism in graduate school and I combined the two fields to then pursue personal finance, reporting and writing and all of that. Though I found quickly and this was I think my lucky break earlier on, is that I realized that if you want to be a journalist, if you want to be a communicator you don’t have to pigeon hole yourself, you don’t have to be just a writer or just a radio host or just a broadcaster you can do it all. And to implement a sense of entrepreneurship in your career, that is something I learned very early on in my career.

Steve: So let us take it back to the very beginning, particularly I’m interested in hearing you know how this all started. I’m interested in hearing about how you got laid off and that story, but how you got started with a need to establish your own personal brand.

Farnoosh: Sure, so I was working at TheStreet.com and for several years I was helping them with their online strategy, with their video strategy we were having a great time. But you know 2009 rolled around and of course everything was crashing, the sky was falling, the economy was on life support and what we found was people were just losing their jobs left and right. Companies were reducing, reducing, reducing and so, I was also part of that reduction. I lost my job in 2009 and I have to say though it came at a really important time in my career. Up until that point I had been you know working sort of this full time job at The Street but I was also, I published a book, I was freelance writing elsewhere, I was doing TV and I started to see you know that there were a lot of opportunities out there and that there were other people who were completely freelance doing those things. And you know well, I wanted kind of the best of both worlds.

I wanted the 401k that the job would give me, a full time job but I also wanted to experiment and dip my toes in other adventures and I had been doing that pretty well up until that point, and then you got point laid off. And now the question for me became, do I go back to find another full time job to provide me those securities that I thought were really important like 401k and health care, constant pay cheque, or do I just sort of incorporate myself and try to build the momentum that I had build in these other side projects that I had been doing.

And you know 2009 the job market was pretty slum and it wasn’t like I had all these choices. So I just decided and fortunately at that point too, I had some savings, right. That’s really important if you’re ever considering taking a leap into a risky business, or going on your own, venturing out on your own. Having the financial cushion was a peace of mind, and it also allowed me to explore things that I probably wouldn’t have, and to take time to really find my groove again and it wasn’t this knee jerk reaction that I had to find a paying job again right away. So, I thank myself I guess for that. I mean who can ever anticipate getting laid off? But fortunately I had some savings, so I dint have to feel pressure to just take whatever came my way.

Steve: So, it sounds like you had already kind of laid the ground work even before you got laid off. It sounded like you had your book before that happened is that correct?

Farnoosh: Yes, I had my book it came out in 2008 got laid off in 2009, and I guess I just, you know I was doing all these things because I was passionate about them as so many of us do we do these side gigs as sort of passion place. But truly if we want to be strategic about it, it could end up being our next kind of endeavor. Our next full time entrepreneurial endeavor if we really wanted them to be and I think for me what was holding me back was, I was comfortable frankly you know working full time gig. Getting that constant pay cheque and doubling in sort of extra curriculars like the book and what not.

And also I was a little scared frankly of what if I truly leave my job voluntarily and do this other stuff full time, and you know what would that look like, and would I be able to feed myself, and fortunately the decision was made for me getting laid off. I have written about this experience and looking back, obviously at the time you don’t feel this way but looking back was certainly all right this is a decision that I had no control over I couldn’t beg for my job back. Even if they you know really felt bad for me, but it worked out.

Steve: Yeah, so let’s take a step back and let’s talk about that first book, so had you been on TV at the time too before your book?

Farnoosh: Well, I had been on TV as a reporter. So, you know after I graduated from grad school I worked in Money Magazine where I did a little bit of TV as a correspondent for money. But then I went to work for a broadcasting station in New York where I became a producer, and then I ventured on camera reporter talking about money and business. So I was comfortable in front of a camera as a deliverer of information, but certainly to now be an author and be asked to come on TV to give advice was a whole other ball game and I definitely had to get media trained for that to speak in a way that you know with money it can be pretty obstruct and when you are on television your goal is to make it as simple and hopefully as visual as possible so that was the training for me that I had to take on that I wasn’t necessarily trained in before. Even though I was comfortable on TV the presentation had to be a little altered and I think I just went for it you know. I kind of threw myself in to the deep end and learn how swim my way up to the top. And it was, if you look at my very first TV head, I mean I’m embarrassed to even look at these days, it is just…

Steve: We will be sure to post that.

Farnoosh: Okay, great. I’m sure you can find it on YouTube. It was like my very first interview. I was on the Today Show, I am– we are talking about my book and I think Meredith Viera was interviewing me and I think I called her old. And it was just, I mean everything that I– it was like my worst nightmare come true. But actually I finished the interview and when it was over my producer said “good job we will have you back” and I was like “really? Were you there, did you just watch what happened?” I think in our heads things go a little bit more horribly than they actually do on camera. The key I found was just to continue smiling and hopefully that would defuse any of the like awkward energy that I was sending out from my conversation. But I don’t know, someone was looking out for me that day and it didn’t totally destroy my future career in television, but it definitely felt like a horrible experience in my head.

Steve: Sure, so I’m sure at least one of the questions I have in my mind is that, you know how do you actually find someone who is going to publish her first book and how do you actually get that opportunity to be on TV in the first place?

Farnoosh: Okay, really good questions. I’d say writing a book, now you can self publish and back then when I wrote my first book it was not something that was considered easy to do or successful to write your own book and who was going to publish it, you really needed like a traditional publisher in order to get the street credit that you wanted to get the interview. So I think that, you know these days publishers wanted to care about a couple of things. They care about, they care about obviously that you have a really, really enticing, compelling, interesting story to share whether it’s fiction or nonfiction, but also they want to know why you as the author? Why should you be the person who tells the story and especially with nonfiction obviously, you know what makes you the expert, what makes you the guru, what makes you, someone who is going then to be able to bring this story to market and sell it, right.

So it is not like just you know, Farnoosh has a really cool perspective on money, it’s that oh she also has relationships with people in the media or she has a blog and it gets x many millions of hits a year. Or she has this podcast that gets lots of downloads. They want to make sure that you are marketable. And that you can help them market the book because, and this is again going the traditional book publishing route because publishing houses are overwhelmed, understaffed. They really rely more and more these days on their authors to support the marketing and the promotion. So it’s not, I would say it is 50% of your proposal is how you are going to sell this book successfully, you know.

If you give speeches, if you go to conferences, if you have relationships with co-operations that might get bulk book buys, if you’ve got a huge online audience that’s conditioned by your goods, that is all important to mention because that’s ultimately what’s going to give you a good advance and really get you the book deal. And that’s so unfortunately I think what separates some other authors from getting published and others not, there are a lot of great authors out there with great stories. But if no one knows who you are, and you are kind of hiding in a hole, it’s very hard to just rely on word of mouth, these days to get a book sold. You really need to get out there and make efforts well in advance of the book coming out to get people aware and excited about your book.

Steve: So let’s talk about your first book then, so had you already had an established audience for yourself?

Farnoosh: Somewhat, I think, you know, certainly when I was pitching the book, the publishers were excited about the fact that I worked in the media that was a plus, they considered a plus. I think they were hoping that my savvy in the industry would get me you know would the book in the right hands. I knew producers, I knew writers, and when I sold the book ultimately I had just moved over to The Street.com, where Jim Cramer had generously offered to write the foreword to help endorse it so that was a huge, huge help.

I don’t think I could have gotten the book published in the manner that I did if it wasn’t for his vote of confidence and he really wrote letters to the publishers and they were like you know, we’ll help her market this in and I mean credit yeah Jim was really super instrumental in helping me launch my career, in a lot of ways and with that book. And the book later took on like a life of its own and it has since you know helped me with other things, but I owe him big time. So that was for me and that was something that my agent recommended, he said “you know you’ve started this company, have you met Jim Cramer yet?” I said “no I just started like two weeks ago, I know my editors, and you know Jim is the founder, but he is a busy guy I have not run in to him in the office”.

So I actually made the request through my editor in chief to see if Jim would read the proposal and tell me what he thinks and he if he would be willing to do something, maybe a foreword or a chapter. And he took time you know I was like oh gosh he hated it, it was taking weeks before I heard back and I remember it was around thanks giving, I got a– my editor was like he read it, he loved it, he said he will do whatever you want him to do for the book.

Steve: Wow that was awesome.

Farnoosh: I was like what, so that was the lesson, right, like ask the scary questions. I was scared to death to as Jim Cramer to help me. I hadn’t even met him you know. So it was like, I felt like it was really premature for me to do that, but you know I took a bold chance and I was prepared for no and I got another world, so it was such a…

Steve: That’s actually a great lesson, you got to ask the question otherwise you may never know whether you are going to get results or not.

Farnoosh:Yeah absolutely, taking the fear it’s just you know it can hold you back but sometimes I always say like the fear of the unknown is worse than just the fear of failing. You know like I’d rather just fail and have an answer than to never try and feel like I just you know I’m just stuck.

Steve: You know in a way this is just like me starting my podcast. I’ve asked actually asked a few bigger names and I have gotten denied, and you know I plan on asking them again once the podcast gets a little big larger. So let’s talk about TV, how did you get your first TV segment on the Today Show?

Farnoosh: Well that was thanks to the publisher, you know I just spent all this time talking how my publishers really depend on their writers, but I will say that even though they booked that for me, what ultimately got me their attention at the Today Show because you know Today Show gets a ton of book requests, author requests, interview requests. Every day they get like sacks and sacks and sacks of books. Well when I was 20 years old 21 years old I had an internship at Money Magazine and as part of that job I worked in conjunction with the Today Show because Money and Today had kind of editorial partnership.

So I was in constant communication with this one producer of Today Show and helping her with our content and our guests that were coming over to talk about Money and I remember we would talk– I mean I would work all nights sometimes for these assignments and she remembered me and we had met. And so fast forward you know seven years and my book lands on her desk, this producer of The Today Show. And she recognized my name, and she recognized me and called me and said “did you write this book I can’t believe it, it’s been so long you have come so far. I can’t believe it”. Now, so that was definitely helpful because had I been a really a crappy intern when I was back at Money, she would remember me as this like unreliable, you know silly person who you know, oh she wrote a book but I don’t have good memory of her so you know so well good luck to her.

But she actually, you know was excited to hear that I’d written this book, and had good memories of working with me. So that helped move the needle but it wasn’t a guarantee, I wasn’t going to get on the show just because she liked me. You know she needed to prove to her bosses that I was ready for TV. So she asked me for any kind of tape that I had that I could produce that showed me on camera looking comfortable and relaxed and articulating. So I just scrambled and put together whatever I could you know from my days as a reporter.

The one CNN hit that I did when I was 22 at Money Magazine and sent that to her, and I got the call that they wanted me on the date that, that book launches. I think I just– I think I fell back in my chair when I got that email because on the one hand I was so excited, I mean you really like you know there’re moments in your life you feel like this is my break.

Steve: Yeah.

Farnoosh: But you are also scared to death. And I had all these feelings at the same time.

Steve: So, there are some good lessons to be taken from what you just said. So one thing is you know should always do your best and never burn any bridges because you never know when someone you meet might be able to you know help you later on in life.

Farnoosh: Absolutely. I can speak from that; I can speak to that in so many ways, but that was probably the biggest example you know when you are, especially young kids today when they are out there working, internships, or in college you know there is so much more life ahead of you but the relationships that you establish, or even just people you interact with casually sometimes can be the people that will help you go from point A to point B in the future, and you should be prepared to do that for others as well.

Steve: Yeah, you know I know that I’m going to do my best to help you promote your book after this. No strings attached or anything you know after chatting with you a little bit I already like you and I very much respect you, and so I’m going to do whatever I can to help you out.

Farnoosh: Oh my gosh. Thank you so much and of course I want to help you out too. So let me know how I can ever return this huge favor.

Steve: So we have these listeners out there, you know a lot of them are just starting out, and so if you have any pieces of advice for people who want to follow your same path. You know what advice would you give them?

Farnoosh: Well, if you are interested in writing a book and I don’t know if up your audience wants to primarily do financial books or other books. I would say and I was just giving this advice to another hopefully future author, we had coffee the other day, she was struggling over her book proposal. My advice would be to obviously you know every book has it’s facts and it is important to make the book educational, or service driven if it is in the nonfiction world, but at the same time again it is about your voice right, why you? Why are you bringing this book to attention and why are you best the person to share this story.

And so, going to a pretty vulnerable place sometimes it is important to unearth some of the stories that in your life really influenced you that might relate to this topic that you are writing about. Readers really appreciate authors that are transparent, that are open, that show vulnerability, because people, I find out that, that is not something that you will often hear because people think like well you are the author you should be the expert, you should just be the authority and you know, not show that that you have weaknesses like. I totally disagree, I mean even with my new book you know I am helping women with their partners in the event that she makes more, and I’m in this situation and I’ll be first to say it has not been easy for me.

And you know I’ve gotten mixed advice in the process of people saying you know may be you shouldn’t like say that you have this insecurity because you know if you are supposed to tell people what to do, you are supposed to be the strong one and I disagree with that. I think you know certainly, we all have insecurities and I think I’m not a complete mess; I am not coming to market with this book like completely distraught. I have moved on, but it’s just that I think sharing that you are human, sharing that you have a connection with that audience is so important. So don’t lose that perspective and really cultivate that if you can in your book writing process.

Steve: That’s good advice, yeah. So for people just starting out from what I’ve gathered from what you said so far, it almost sounds like you need a following first before you even consider writing a book, is that accurate or?

Farnoosh: Yeah, but it doesn’t have to be huge following. You might have just a 1000 people on your blog and I know that sounds even– I just started the whole online process of getting people to join newsletters and stuff. So, I’m completely damp founded when people say like they have like 500,000 subscribers. It’s like I’ll never get there, I just have my you know, I’m starting at a much smaller number but, I think it is quality not quantity right. You could have half a million people coming to your site but how many of them are really engaged. So, but if you’ve got a really good core audience that you know is commenting and replying. You can tell by their engagement that they are really quality followers and readers, that goes a long way and that is something you want to present your book proposal.

If you’ve got a really active twitter handle, if you are on face book, if you are giving speeches, it doesn’t– you don’t have to be a traditional correspondent to get a book deal, you know that’s not what we are talking about. We are just saying that you have a loyal and dedicated audience and that you are engaged with that audience, then that could hopefully get you the attention of publishers. But even if not, you want to go the publishing route, you could to go the self publishing route. I don’t know a whole lot about that, but certainly people are doing it successfully. I just actually spoke to a woman who in her spare time she writes romance novels, really short romance novels, but did you know romance novels are one of the hottest book categories. I mean like no pun intended but like these books go really well.

Steve: You don’t have to tell me that, my wife reads them all the time.

Farnoosh: Really?

Steve: And then I keep telling her, “Look the romance is right next to you, why do you need to read these books.”

Farnoosh: Right? Like I know, I don’t know, I was totally schooled in this. And she’s like yeah so, I write; I’ve written a couple of books, I sell them for like 299 on Amazon and you know she makes a few thousand bucks. Every time she writes these books and they sell really well. And it is a complete side project, it takes her like you know a few months to put them together, she loves to write, it’s like her passion. So, I say you know that is another way to be a successful author. And she could be because she’s identified a niche market that people are always wanting to read you know the next great book and she prices it really low, and it comes easy to her, it’s not like she has to hire people to do this. And you know to the return is quite good for her. And who knows what it will all turn in to, may be like somebody will read her book and will be like I should turn this in to a movie.

Steve: Yeah, that’s how it happens right?

Farnoosh: Right.

Steve: So you mentioned that, you said your online presence is really small and which I find hard to believe, but who are the people actually buying your books in bulk right now?

Farnoosh: People who are reading the reviews right now that are going on as we speak you know between now and May 1st when the book comes out. There is already a tonnage of articles out there– not a tone some articles out there. But I’ve also been contacting people who have bigger online audiences than I do and saying “hey I’ve got this book coming out, how can we partner up, let’s get on the phone, and I’d like to help your business, you know if you will be willing to review my book or” what I’ve done is I created a promotional kit. I mean I’m going to do actually, I think probably when I go to Thinkon this Fall, I might actually give everyone the play by play of this latest book launch, because I have learned so much about the importance of online marketing, and for me in a while I work online I don’t have this like huge newsletter database.

It’s just not something that I have focused on but it is the new kind of direction for me. But, there are people who have been online for 10 years and they’ve got so many polarizing and really loyal fans. So, I find these people and through hopefully introduction or referral introduce them to the book, give them all the goods, give them the book, I give them you know images, I give them potential blog posts already written, I give them copies for newsletters and emails that they might want to sent out. I give them badges and all these stuff and so they kind of I arm them with everything. But then still I say you know, if there is anything else that I can provide you that would be a better fit for your audience maybe it’s a podcast interview, maybe it’s a Skype interview, or it’s I interview you and you give that to your audience.

Steve: I have to say you have handled this book launch very thoroughly and in a very organized fashion, I was very impressed by that.

Farnoosh: Thank you.

Steve: So let’s talk about your latest book now. It’s called ‘When She Makes More’ and it is a guide book targeting women that earn more in their relationships than their husbands. Now, technically the business that my wife and I started together you know makes more than I do, perhaps this is a plus to her but personally when I was younger, I often dreamed of meeting that sugar mama like yourself Farnoosh.

Farnoosh: Well, thanks.

Steve: So what’s the back story behind the book?

Farnoosh: The back story is that we know women are outstanding in the workforce, we know that women are making more in their relationships. I think we have seen the headlines by now. There have been some great books actually written about this trend, but as somebody who is living this reality, and as someone who works in the financial space, who see other relationships, struggle with money and particularly with this kind of new normal dynamic of she making more. I felt like we were not having the conversation of really how to make these relationships thrive. Certainly there are couples out there that do it effortlessly. We need to laugh, I know that was not easy to come.

Steve: That was very effortless.

Farnoosh: Yeah. When you look at the statistics Steve, you know. If you look at the divorce rates, if you look at the infidelity risks women who make more have a 50% higher chance of experiencing divorce, a higher chance of infidelity in their relationship. If she’s single and does well financially, she is less likely to get married. And she does more house work when she’s married and makes more. I mean there is all this, all these difficulties, all these complexities that are specific to women who are bread winners.

Steve: I would imagine that your target audience, a lot of them must be female entrepreneurs, right?

Farnoosh: Many are certainly, and I find that actually with female entrepreneurs who are running their households financially at some point the conversation in that relationship does turn to, may be my husband should join me in my business because it is the only we shall see each other.

Steve: Right, okay.

Farnoosh: And it’s one way to for them to kind of you know, it doesn’t work for everybody, but then I have interviewed a lot of female business owners who whether business has really taken off and in order for them to really maintain a relationship of intimacy but also like to have their schedule sync up is to have him kind of participate in the business somehow.

Steve: So here is an interesting fact and I’ve never revealed this to anyone thus far, but I run this class where I teach people how to start their own businesses and I usually wouldn’t announce this publically, but there has actually been a couple of divorces among the students, and I don’t know if it has anything to do with the business itself, but I would imagine that running a business since I run a business with my wife, we’ve actually had many fights. We never fight, but we have had fights over the business because we run it together. You know it’s just interesting that there is this other dynamic that you are talking about in your book can lead to a lot of conflict in a marriage as well, so? .

Farnoosh: It can I mean money, oh look I would like you to read the book and I don’t want to like you know bore your listeners ears to death with this.

Steve: Cool, I will definitely pick up the book when it comes out.

Farnoosh: Yeah.

Steve: So we’ve talked about a lot of different things, you know I usually like to let my interviews just kind of wander and go on different directions, but I think we’ve picked up a lot of good lessons today. From one thing, I think the most important lesson that I’ve learnt is that, while you are working you should be in the same process kind of establishing your own brand. And in my opinion for you Farnoosh, you’ve established such a large brand at this point that you are essentially recession proof. Let’s say you decide to go back in the work force, it doesn’t matter if anything, if you get laid off or whatever because you will be able to find other opportunities because of the name that you have established for yourself.

Farnoosh: Well thanks, I mean and I think that’s the goal for everybody right is to how to make yourself recession proof. No job is a guarantee, but if you have skills and other revenue generating projects from the side to fall back on, you are far more, you are going to be far more financially stable, far more confident too in yourself, in your abilities to get back out there and find something great. And so I encourage everybody to do that you know whether even if you are just selling craps on Etsy, you know not even think junks, I know that’s not an easy thing to do but you know something that is of minimal time but do it, you know because first Etsy could be a really fun outlet for you, but who knows what it could turn into.

Steve: So, just curious and you don’t necessarily have to answer this question, you are not working for anyone else at the moment is that correct?

Farnoosh: Oh well, I have clients; I mean I have I work with– I write for Money Magazine, I write for other online publications. For 3 years I was working with Yahoo doing videos as you mentioned in your intro, so I, you know I am in self, I am self incorporated, I do have these partnerships right, with other entities to bring financial advice to them and to their audiences.

Steve: Okay.

Farnoosh: So that’s how I run my business. I am sort of this, I guess financial media production company.

Steve: Okay.

Farnoosh: And whether your company needs a webinar, or a speech, or a video, or an article, I can provide that.

Steve: Okay. Great so if there is anyone out there who wants to get in contact with you, how can they find you?

Farnoosh: They can go to my website which is farnoosh.TV and you can learn about what I do, all the different work that I do with partnerships, and if you want to contact me directly email Farnoosh@farnoosh.tv. The new book is called ‘When She Makes More: 10 Rules for Bread Winning Women’. That site is when she makesmore.com and so we’re running a really fun promotion between now and the launch day on May 1st where if you order the book, pre-order the book, you will earn bunch of freebies and there are some really bonus prizes that we are giving out, a limited number but you could win. You know gift pads to taskscribeit, and Evernote and you could come to the Today Show with me, so there’s lots of fun stuff. So I encourage people to explore that site and see if they are interested to buy a book, and hopefully if you have any question about it, I just gave how you can reach me so hoping to hear from people.

Steve: Yeah, I will go ahead and link up actually all of your books and the show notes but I’ll particularly highlight that promotion that you’re doing for your latest book.

Farnoosh: Thank you, thank you so much.

Steve: So thanks a lot for taking the time to be on the podcast. It was a pleasure.

Farnoosh: I had so much fun Steve, thank you and hoping, wishing you continued success with your podcast you know it’s been extremely popular and hopefully greater things to come for you as well.

Steve: All right thanks a lot Farnoosh.

Farnoosh: Thanks Steve.

Steve: Isn’t Farnoosh cool? Now she’s established herself as an authority within a niche and as a result she gets television appearances on the Today Show very regularly. And she had the fore sight to pursue her passion and go launch a book before she got laid off, so she had a foundation to go out on her own. Now I’ve no doubt that her brand new book will do well. And speaking of which, I am going to be giving away three copies of her book to three lucky listeners who signed up for my podcast contest. So, not only do you get a chance to win a lifetime membership to my course and free consulting, but you could also win her book as well. For more information go to mywifequitherjob.com/podcast-launch. Thanks for listening.

Thanks for listening to the mywifequitherjob 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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