E130: Under the Hood with Matt Baack Part 2 – Transitioning from B2B to B2CMarch 22, 2018 in Ecom-Crew-Podcast
During last week’s episode Matt and I talked about the lowest hanging fruit he can take advantage of as he transitions from a mixed B2B and B2C model to completely B2C.
Matt owns Angle 33, selling wine thermals, beer chillers, and other cool housewares made of concrete. The nature of Matt’s products make it quite difficult to optimize areas like PPC ads, but its uniqueness definitely makes it stand out from the hordes of Amazon products in the same category.
In this episode we continue to talk about the low-hanging fruit he can easily pluck in his transition. We talk about how he can use the uniqueness of his products to his advantage and get around the advertising problem.
Specifically, we talk about the following:
- Amazon customization and work-reward ratio
- Email campaigns and getting people into a subscribers list
- Facebook and Instagram ads
- Ways to leverage B2B sales to create more B2C sales
- Social proof
- Discounts and reviews
- Product price point
- Google shopping
- Product photography
- Launching on Amazon with a bang
- Product variations
We’d like to thank Matt again for coming on to the podcast and talking about his business. Don’t forget to check out his cool concrete wine thermals and beer chillers at Angle 33.
If you want to be featured on your own Under the Hood episode, just sign up here.
Thanks for listening! Until next week, happy selling!
Full Audio Transcript
Mike: This is Mike and Welcome to episode number 130 of the EcomCrew Podcast. You can go to EcomCrew.com/130 to get to the show notes for this episode. And for today we are back with part two of our Under the Hood with Matt. I hope you guys enjoy this part two. I always think the second part of these is more interesting than the first.
The first is kind of a get to know you filling out period. The second half hour is always jam packed with tons of actionable advice, and I hope you guys get as much out of this as I did interviewing Matt. Stay tuned for the interview on the other side of this break.
Having something unique there I think is going to be an awesome proposition for you and it’s just the buyers are already there. So from a work aspect to reward ratio for you it just seems like a slam dunk.
Matt: So a lot of our — most of our sales actually on the website come from return customers. You have people buy and most of those are buying to customize. We have [inaudible 00:01:52] they customize for whether it’s for somebody’s wedding or whatever it might be. Does that fit in? I’m just curious does that fit in on Amazon customization wise or is it a platform that they do you allow that kind of thing or is it even worth looking into?
Mike: Yeah it’s absolutely worth looking at. So they have a thing called Amazon custom now where you can do the same thing that I’m seeing on your website here with the customization artwork. And I think it’s important if that is an aspect that’s causing a lot of sales or getting a lot of repeat business that’s another like hit on the photography angle of your website, because you don’t show that at all. Like what are some examples of some of the customized products look like?
I think it’s really important to convey and it makes sense that that you are getting a lot of repeat business for something like this because I can just tell it’s a [inaudible 00:02:41] product and it’s so unique. The only thing that you can work on that might be some low hanging fruit for you is email marketing campaigns. Something like Klaviyo is actually relatively cheap when you have a small list. So you can set some of these like basic e-mail campaigns up for win back sequences, bought this, but haven’t bought that, or they bought something but remind them like around the gift times of the year like get one of these for your friend, customize this for your friend.
I think you could definitely do a lot with things like that. Again just a matter of work to reward kind of ratio. So I mean the number of sales you’ve had, is it worth putting all the effort into the setting all those things up. I actually think it is because I know exactly how to do it step by step. I know for me to set those things up would be you want two days worth of work like a full time day with the work just to set up like the five basic e-mail campaigns that would probably drive like a ton of traffic for you. So I definitely think it would be worth it for you to do it.
Matt: And we do that with Klaviyo and then we do like a fairly decent job of having win back campaigns, cross on and that kind of thing. I think one area that I have found that it’s difficult, I haven’t figured out the best way to attack it is getting people, A, first off getting them to our website. But secondly, how to get them to sign up for our newsletter so that we could gradually move them through the sales process.
Mike: Yeah I mean getting people to sign up for a newsletter for a thing like this is definitely going to be a little bit tougher. There was a pop up that came up when I first came to the site, but I closed it so I forgot what it said now. Typically it’s get a 10% discount or 5% discount whatever to sign up for our newsletter. You could do a few other things with something like this like some design ideas I think would be really cool, like grab Angle 33’s design, ten design ideas for the home or whatever and put together some type of PDF that people that are into this type of stuff would be really interested in. I mean you can sit down and brainstorm some other ideas.
That definitely could work for sure because if you’re already in email marketing mindset which I think is awesome because it’s so important. I mean we’re sitting at 56% revenue right now from email marketing which is a little bit higher than all of us because it is the holidays and e-mail is more effective than even normally is. But we’re typically somewhere between 45 and 50% of our revenue comes from e-mail.
And I’m not surprised that it’s works well for something like this because you have more than one product. You have other products as well besides just the wine holder. There’s a beer holder here, there’s some tile, there’s some planners and stuff. I mean some people like the style I think it does make sense they will go back and buy more. So I think it’s great that you’re already doing the Klaviyo stuff. You said you’re already doing win back campaigns, you said what are some of the other ones you’re doing?
Matt: So we have win back campaign. We have VIP customers, we have the active profile, list of the people that are engaged consistently, they are on a different flow. Certainly have abandoned cart browsing banner. I don’t think there’s any others. And there are — I think we have an eight step – we do have an eight step thank you when people do sign up for the newsletter. There’s an eight step that I believe goes, I want to say goes 120 days just kind of introduction to us.
Mike: Okay. Yeah I mean I think those are all great. And I would probably shorten the introductory sequence, 120 days for emails is like that’s less than one per week. So I think you can probably email them at least once per week or maybe even twice per week and just compress that a little bit to get them used to hearing from you. One of the ones that does really well for us is bought this and hasn’t bought that.
If there’s a correlation to people buying the wine holder to the beer chiller, you might want to do something like that where they bought the wine one and 15 days later they get an email about the beer one, and or synchronizing that up to a Facebook custom audience, and running a Facebook ad for the beer chiller version. That in particular does incredibly well for us; I mean that’s definitely well worth the time. Those bought this but haven’t bought that is literally are our best selling or best performing ads like period without – like it’s nothing even close to that.
So if there’s things that people because they bought one of your products they have an affinity of buying another, I would definitely implement that stuff. That should work really well for you.
Matt: Those you’re talking of, those are kind of the dynamic ads that go out at the same time that a campaign does?
Mike: Yeah, you can do in conjunction for sure. If someone does like to walk through an example what you could do is you set up segments of people who have purchased a wine chiller or a wine ice bucket version or whatever you want to call it. We’ll call it a wine chiller just to keep the name the same. So they buy a wine chiller, you make a segment of those people. And you say like I want to segment people that have bought a wine chiller but have not bought a beer chiller.
So now you have people that did purchase a wine chiller but haven’t purchased the beer chiller in a segment. And then you could sort of flow off of that let’s say 15 or 30 days after they purchase the wine chiller and send them an email about the beer chiller version. But at the same time you can synchronize that segment under the settings for the segment. You can synchronize that to Facebook and make a custom audience. And as long as you have more than I think it’s 20 people, it’s a very small number.
As long as you have at least 20 people in that custom audience, you can then run an ad to those people. So you can either do it literally in conjunction where they get the e-mail and then the ads also going out at the same time, or you could stagger it somehow whatever you want. But typically the ad will run much longer, like I’ll run the ad for 30, 60, 90 even 120 days because it’s just such a high value audience. Some of them we even do it for six months. But the email you’re only going to send once or twice. You have like one or two times to hit them with the email, and if they don’t open it you have a much better chance of getting them on Facebook.
Matt: And you said the ROI for those types of ads on Facebook are very good for you?
Mike: Every one of those bought this but haven’t bought this, all of them are over 20X ROI. Some of them are as high as 30. So the one that performs the best is bought gel pens or pencils but not markers is the one that does the absolute best for us as an example.
Matt: And with the Facebook ads, do you kind of have a way to learn ideas on how to make some front end, getting some money back on the front end but not just getting yourself caught up doing ads that aren’t necessarily getting the return or initially just starting out with them you feel like you kind of have to suck it up a little bit and spend some money to make some money?
Mike: Yeah I mean if you want to start with just the ads are going to be like guaranteed successful, it would be like this bought this but haven’t bought that. It’s like I’m not even sure how you can fail at that anymore, because I have both in our own businesses and other people I have talked to about this, it’s been successful across the board because this is such a slam dunk. Now if you’re advertising to cold traffic, you’re going to have to lose money before you make money. It takes some time to perfect.
The traffic is getting more expensive. So it’s not like it was once upon a time where it’s so ridiculously cheap that you can make money like in spite of yourself. You’ve got to definitely get your audience and your ad perfected. And I don’t really know exactly what I would start first with in terms of who I would advertise to. But I would say people that like wine, maybe like wine, own a home, like wine and maybe have a certain education level, like wine and have a certain income level I think would probably do well.
There’s probably other things that I’m ignorant to like they like wine and they also like a particular designer or something. Or maybe there’s like an artist or you’ll know way better than I do in this case. But I’m sure that you know enough about your customers to understand that maybe they go on vacation a lot, or maybe they like wineries or whatever it is, there’s probably some correlation there that makes a lot of sense.
And once you kind of figure those out it can be pretty lucrative if you have the right the right ad and you’re definitely going to need a video ad for this type of thing. Just doing it in a picture is not going to do it. You would need something that this product is like in the home and you’re showing people just like how cool this thing looks on their counter versus the old ice bucket. And maybe it’s even something as profound as like the old ice buckets on the counter and you like throw a temper tantrum and throw it off the counter and replace it or something so it’s like almost like a humorist aspect to it.
And then you kind of like go from sad to happy or whatever, it’s like these late night infomercial thing type things or whatever. But I could definitely see the right ad appealing to the right audience. It’s just a matter of — the thing that I don’t know is like how big is that audience. It might be one of these things where there isn’t millions of people that fit into that bucket or maybe there are. And that’s what you need to kind of figure out.
But with the margins you are talking about, if you’re truly you’re selling this thing for seven in your cost of it on this thing is like seven plus, then you got to pay for shipping or whatever, I mean those are awesome margins and that affords you the opportunity to be a little bit frivolous in your ad spend which is great. Because if you can be frivolous in your ad spend and pay let’s say $30 for a conversion or $40 for a conversion, it’s hard not to get conversions when you start talking about those kind of numbers. So I think it’s definitely possible for you.
Matt: Yeah and I think the main thing was we have run some ads and we’ve had some success obviously with just general ones. But what I was looking at more is it seems to me like it makes a lot of sense to run or use whatever people that have purchased in the past and run those exact audiences through Facebook.
Mike: Yeah absolutely. Like the bought this haven’t bought that, the win back sequence, that’s another one that we do. And all those types of emails that you’re doing that work well though what I would do, like the way that I would approach that as far as like how you get your head around it, look at the open rates on those e-mails you’re sending out. They’re probably somewhere between like 10 and 35% open rates depending on how good you’re doing getting those e-mails read.
So that’s 65 to 90% that don’t open the email, and those people are on Facebook. And it’s easier to find them and target them on Facebook a lot of times than it is to get them to open an e-mail in today’s day and age where emails are getting harder and harder to get opens and people are spending more and more time on Facebook.
Matt: Yeah, do you have much experience with Instagram ads at all?
Mike: We do. We haven’t had a lot of success with them just because I think that — we were just actually talking about this earlier today it’s a kind of funny you mention it. For ColorIt specifically, it’s an older demographic that’s buying like 45 plus and it’s really our bread and butter is 65 plus, and a lot of those people aren’t on Instagram. We were excited and seeing some early results is with Wild Baby. With our baby brand you got young parents and that type of stuff does really well on there.
So the good news is that it’s easy to test because it’s the same platform as Facebook ads. So the thing that we do and that I would highly recommend that you do as well is whatever ad you run for Instagram, just run them as separate ads. Don’t try to check the box like I want this set to run on Instagram, Facebook, newsfeed, mobile newsfeed.
That’s a mistake because the Instagram ad is a different size, and you also want to be able to check performance separately so that Instagram ads are going to be square. You’ve got some restrictions on video; it can’t be more than 59 seconds, things like that. So whenever we do run Instagram ads, we run them as a separate completely separate campaign.
Matt: Excellent. I have another question for you on ways to leverage our B2B sales to create more B2C.
Mike: Yeah I mean the first thing that comes to mind is throwing an insert in the box for like as a coupon up of a future order. I think that that’s the first thing comes to mind is making sure that your website and other contact information in is on the packaging I think is important, maybe even on the bottom of the product. Again without being able to see the bottom of the product it’s hard to know what’s in there.
But having your name and phone number, your company name and like a phone number, contact info, like where it’s made, made in Montana, Angle 33, made in Montana, whatever it might be just like stamped on the bottom for those people that have thrown away the box or insert card or they’re at someone else’s house so like, man, I really like that and they look at the bottom of it, your info is there. I think all those are the first thing that come to mind as far as like converting people from a B2C to B2B or B2B to B2C angle.
Because I mean basically what you’re looking at is you got someone is at a winery, they’ve had a few things to drink, they see this like in there like little shop, they buy it, take it home, now what. And this way — because they probably not going back to the winery. Most times people at a winery, they’re not right near their house unless you’re lucky enough to be, awesome, there’s a winery right near your house. So you want to be able to convert them down the road. I think those are some good ways to do it.
Matt: Do you have any thoughts on – I have been thinking about putting a way to you share. So when you open the box and on the top there’s foam that’s protecting it, putting a sticker or like you said kind of a coupon in there that tells people how to if they take a picture and share it on Instagram or Facebook that then they will receive a coupon code or anything like that?
Mike: Yeah I absolutely love that idea, yeah I mean I think that we’re lucky with what we do that we get a lot of social proof, a lot of content like that. But yes certainly having that right on the top like take a picture of this thing in your home and get $10 off your next Angle 33 purchase or whatever with instructions just like e-mail supported Angle 33 or social media at Angle 33 whatever email and just send to it and making it easy for people to know what hash tag to tag and how to do that to get a quick coupon I think is a really great idea.
Matt: Because we’ve certainly had troubles. We do send out our product review email once somebody has purchased, and I don’t know if I’m wording it incorrectly or what we’re doing, but we don’t get as many people coming back to write reviews as we’d like.
Mike: Yeah so 10% is about like the best you’re ever going to do in like a home run world, 5% is probably more realistic. So unless you’re below 5%, you’re probably not really doing anything wrong. But if you are below 5%, then I would definitely start looking at — it looks like you’re using Yotpo I thought when I was like on one of the pages there. They’re pretty good at like delivering and getting reviews. So I’m surprised that — I’d be very surprised if you’re below that. And I’m like do you have a sense of like where you fall as a percentage basis, or you would have to look that up?
Matt: I would have to look it up. Yeah so I don’t know. And again I think some of those things we’ve set up in Klaviyo are fairly recent. So we’re gradually doing things as I have time trying to make this work. But I think I need six months or so to actually see what our percentages are.
Mike: Right, yeah that makes sense. I mean I guess with Yotpo, the e-mail comes directly from Yotpo, this isn’t a Klaviyo e-mail, the review request e-mail. So just make sure that those are on and being sent out, and make sure that you’re asking for a follow up, like you do a follow up review request. Like if someone doesn’t leave a review, a second e-mail goes out X number of days later just to increase your chances of that happening.
But if you’re using Yotpo, I mean as much as I think that they’re way overpriced, we’ve switched over to Stamped.io just because they’re significantly cheaper. You get more for less money, that’s always a good spot to be in. But I mean if you’re on a legacy like either free or cheap Yotpo plan, I would just stick with it.
Matt: Yeah they do get a Klaviyo email also that’s dynamic, so it shows the product that they did purchase.
Mike: Okay, that’s definitely good having as many follow up sequences about that being possible is good. And bribing them is good as well. Yotpo has a part of their interface, we used to and still do that with Stamped. If they leave a review they get 10% off their next order.
Matt: And with percentages, where do you sit on — what’s your view on how often people get percent discounts and where do you ideally use those?
Mike: So I mean 2017 like was a big initiative for us to offer way less discounts than we did in 2016. I think we definitely accomplished that as a for instance like in our abandoned cart sequence, we used to immediately hand out a 10% coupon. If they didn’t convert, they would get an email like an hour later, please come back and get 10% off. So we made it just much more difficult to get any type of discount like that.
We reserve them for very specific things. Abandoned cart is definitely one of them, but we wait now until like I think three days later before we give them a discount, and then we do have like a bigger discount even a few days past that, because if they haven’t converted still it’s like okay well, maybe it’s just the price sensitivity thing and we’ll give it a try. So I definitely see there’s ton of money last year. We have the win back sequences, so it’s a 10, 15, then 20% discount on the win back ladder.
And we have is a part of like a lot of our free downloads and things that we do when we like get people on a lead magnet list. Eventuality at some point we’ll offer them a discount. But for the most part we’re trying not to discount. We don’t want money to be the only driver of someone buying, but we also realize that some people are just price sensitive or they’re looking for a deal or they’re just not willing to buy without a coupon whatever it is. And so at some point we give those people an opportunity to buy with that coupon, but we also are focusing on all the people that are willing to buy without a coupon which is a much larger percentage of people than you think.
Matt: In this price point, I’d be curious what your thoughts are on price point of some of our stuff.
Mike: I think it seems fair. I mean like I definitely didn’t have a complete sticker shock when I saw the 70 bucks. I mean it’s definitely more expensive than everything else out there, but it’s also unique and handmade and etcetera. You got to be careful obviously like you are a brand, so it’s not easy to just start moving prices like around arbitrarily. What we do on Amazon where it’s easy to monitor the stuff is use a tool called Splitly. And within that they have a thing called profit peak.
And profit peak like will change the price of the item multiple times per day, move it up and down based on a bunch of different criteria and eventually it’ll spit back out you what your ideal price is. So will tell you like your ideal price is 54.99, whatever it might be, then you can change it to that if you are so inclined. But what we’ve found overall is if we raise the price on things, our sales either go up or stay the same. It’s actually kind of crazy. I mean, obviously raising prices could be a good thing.
I feel like where you’re at is probably pushing the high end of what someone is willing to pay for a wine chiller. So I mean I’m not sure that I would just go change yours to 99.99 tomorrow just because I said that. I do think that at a certain point you’re going to definitely see things kind of fall off of a cliff. There’s definitely been some products that we’ve done that with, we’ve restarted raising the price and the sales just kind of evaporated.
But it’s good to know where that boundary is. I mean would you rather sell five a day it at 99.99 or ten a day at 69.99. I mean, obviously you’d rather sell five if you’re just focusing on profit. And it also depends on your objectives in your own business. I mean sometimes you’re mostly interested in sales and casting a wider net and getting your product in more people’s hands, and you’re willing to do that at less margin. It depends on your goals and business and your own life.
Matt: Well, with having cold sale we have had to — I mean our price is driven by our wholesale price. Obviously we can do certain ads for x and we’re selling to a wholesaler that has to turn around and sell for $15 more than we sell it for.
Mike: Yeah, so I mean do you offer your wholesalers key star pricing than on your retail, than you have on your website at?
Mike: So I think you’re at a good spot because they’re probably selling at your retail price. They’re not going to want to make less than the 50% margin. So I don’t know, I didn’t have — like that’s too expensive like gut reaction when I looked at it. So I actually feel like you’re pretty close to an ideal price. And if you have a wholesale relationship, I would just kind of leave it alone.
Matt: Yeah I was curious on the business I guess part of the leveraging for B2B. Obviously these people see it in a restaurant and we get orders and that is predominately where we’re getting our traffic from is people see at a winery and we have one hundred wineries or some they use them and so that is predominantly where we get our business. But with that being said, I feel like e-commerce has — we can do that same type of volume on e-commerce with possibly less work over the long.
Mike: Yeah. I definitely think that if you look at how many you are selling on wholesale, like your B2C should be at least the same size if not bigger than your B2B just considering your footprint like where you’re at, your distance you know some wineries or whatever, you’re not in like big retail box stores or anything. I definitely think that you have like room to move there. Some of the things that we talked about, the one that I had on my list here, I want to fill out, I guess it’s a good time is Google shopping. I think that’s another opportunity for you. I’m not sure if you’re in that program or not.
Matt: No I don’t do much about them.
Mike: So I mean it’s just basically the equivalent of Amazon’s sponsored product ads. It’s basically the same thing on Google. If someone types in wine chiller bucket on, if I was to go to Google right now, we kind of do one of these exercises on google.com, and I’ll type in wine chiller bucket. What I want to see at the top of the results here, in this case they were showing up on the right hand side for me.
But it says like shop wine chiller buckets on Google and there’s nine results here of different wine chiller buckets and there are ranging from 21.99 is the cheapest, 19.99 is the cheapest. The most expensive one they’re showing here is $229. It’s the ultimate beverage tub or whatever. There’s an electronic one, but I think your product would do well here as well. Sponsored product ads are almost always a winner for us. So I would definitely look into this.
But yeah I think that there’s some again low hanging fruit kind of stuff to get people to your website whether it’s influencer marketing or these types of Google sponsored product ads, some win back campaigns with Facebook or just cold traffic from Facebook. There’s definitely a lot of leeway there. Again with the margins you’re are at, if you’re happy selling this thing at 32.50 or whatever at wholesale, you’re giving up 32.50 of margin, I would look at that as your wiggle room for what you’d be willing to spend to acquire customer at B2C on Facebook ads.
And I eventually I guess that you could do that here because it’s again it’s — if you’re trying to convert traffic at five to ten dollars which is the range that we’re in, because we just have a lower margin product and a lower price point products, it’s a lot more difficult than someone who has the types of margin that you have and that’s a higher price point. If you can spend $35 to acquire a customer through Facebook ads, that’s still very doable in this market.
Matt: And Google shopping is a fairly simple platform to…
Mike: Yeah and that’s definitely another like low hanging fruit thing for you because you’re really paying per click for people that are actually making a search of like wine chiller bucket or whatever your product is going to show up for in Google shopping. And you want to be in front of them and get those eyeballs like when they’re doing that search. And before I entered in any of those programs, I would definitely work on the photography on the website first. That would be my number one objective.
This seems to be a common theme with these Under the Hood segments, just yapping off photography and really conveying what your product is all about to the buyer, whether it’s on your own channel or Amazon or whatever. It’s online and this is the only way that you get to really communicate with your customers.
Matt: And I’m just taking a guess on Amazon. But I’m assuming when you go on to Amazon, you really need to put your best foot forward right off the bat. You don’t want to go in there half ready.
Mike: Exactly. I mean I would listen to our Amazon product launch strategy episode that we did recently. It was like a whole 30 minute type of how to kind of launch a product in Amazon in 2018.
But yeah absolutely you want to try to kind of hit with a bang the best you can, and which is going to basically just making sure you do the right keyword research, the right product research with your competitors, getting a good title tag assembled that kind of conveys all those things, really good photography is definitely really important, making sure that you enter and know brand registry and you can do enhanced brand content, launching PPC, getting in the early reviewer program, and then emailing your list and telling people like we’re now on Amazon, go buy this over there.
Maybe you make a coupon for them to incentivize them to do that, and dripping that out over a couple of week’s period time so you’re not getting a huge spike, but more of a sustained sales volume. And yeah I mean you could with what you have already here because you already have some of Amazon traffic which is incredibly valuable to launch this stuff on Amazon. I think that you could definitely make a dent into this segment.
Matt: And the reviews on Amazon just out of curiosity, I don’t spend much time on Amazon, and that is something would you say people more often do write reviews on Amazon than a website?
Mike: No and in fact it’s getting more and more difficult to get the reviews. It’s like a pretty frustrating part of selling on Amazon. They used to be able to like email your customer a couple of times and ask them for a review. Now it’s kind of gotten pretty strict. You can use a program like Feedback Genius, and we only e-mail them once. Amazon blocks a lot of the reviews we’ve been getting through now because people can opt out or have to opt in I think even to receive communication from third party sellers.
So a lot of the e-mails basically bounce. But you can still get reviews, and if you have a product that people really like, the chances are that they’ll leave a review more than just one of the metal bucket. So I definitely think that you’re in good shape there. I really think that you have a good product here and you can you can make a good dent under the Amazon sales game.
Matt: Sort of making sure, looking over my notes.
Mike: No problem.
Matt: Well actually one other – just kind of maybe off topic a little bit is with any of your companies have you ever dealt with – there is a corporate gift items.
Mike: I haven’t no; it’s not something I have any experience with at all.
Mike: Well yeah thanks. It’s top of my very depth. I mean that kind of covers a lot of one of the things I was curious about.
Mike: Cool. I’m definitely glad it was helpful and it’s open to everybody else, definitely follow up and let’s catch up and in a few months let’s know how you have been able to progress and how much difference it’s made in your business.
Matt: Yeah absolutely. Yeah I’m looking forward to getting stuff on Amazon and always been a little bit curious anyway.
Mike: Yeah I mean it’s one of those like what do you have to lose kind of things. And I would just start with your best selling product. I would just do it with literally one product, just do your best selling product, put all your effort into doing it right instead of just trying to throw everything up there and seeing what sticks, because I do think it is important to launch with a bang like you were mentioning.
So just put a decent amount of effort into the photography and into the listing and making sure that it’s done properly. When you create the listing, put a sales day, a start selling day in the future like let’s say you start doing it today, put that data on January 31st as a for instance so it doesn’t start the clock for you on Amazon until after you’re ready to start selling. You can back that date down later.
And yeah and then just see what happens. I do feel like that’s at least if you looking at the wine chiller product, I didn’t look at all the other ones, but I kind of give you the numbers for the Amazon one. I think that there’s definitely some room there for you.
Matt: As far as that goes, do you feel like — so we have 12 color options, but to be honest we have two, we have the dark kind of the dark grey and the standard concrete grey. Those are hands down by far are our biggest sellers. Is there a point where you can have too many options that can deter people from placing an order?
Mike: I don’t think that it deters them as much as it spreads out your power if you want to call it that on Amazon. So if you have two items, let’s just say it’s a black and a white and they both get an equal number of sales let’s just say you’re doing like 100 a month, you’re doing 50 and 50. Those two variations are only going to show 50 sales each instead of getting one product that has 100. And if you have one product that was doing 100, you’re going to be in a much better spot on Amazon.
So a lot of things that we’ve had that had these color variations, we removed all the variations except for one and just started selling our most popular color only, and if they didn’t like it too bad. In your case I’m not sure that I would go to that extreme, but I would definitely take that as a lesson and don’t put up all 12 colors.
Matt: Maybe even just start with three. I think the biggest thing for most people with colors if they’re buying for a present for someone else, there’s only a few colors they know will match anybody’s décor.
Mike: Yeah, you want those kind of like agnostic colors or whatever that fit on anything. And yeah I think three is actually a really good number as you kind of get into selling on Amazon and get yourself brand registered approved and everything and you can run headline search ads. Having three variations allows you to run those ads which will actually do very well, they convert very well. And so, three is actually a really good number to be at.
Matt: And as far as sizing to you, we have three different sizes. Champagnes are reselling, it’s just big, bulky, and the middle, the penile size actually fits most champagne bottles. I guess kind of the same idea there; we want to just have one size that’s available.
Mike: Yeah I would start with one size, your best selling size. The way that I would set up because what you can do is you can set up one listing. Let’s just say you have three sizes with three colors, that’s nine total options. So there’s different ways you could do that, there’s three ways you could do it or four ways I guess. You could do nine completely separate listings, one for every one of those unique options. You could do one listing for each size like when you click on the wine size, the penile size.
On that size there would be three different color options, or you could do it the other way around like it’s the blue one and the blue one has three different size options. For me the way that I would set up would be I would have the size as the listing and the colors as the variations. And I would make each size its own listing because I think that it’s a different product going out to different keywords. So I mean people that are searching for wine are going to be searching for that in their search, and for people that are looking for champagne are going to be looking for that on their search. And I would want that to be a separate listing for those reasons.
Matt: And what does a separate listing — you said though they can if you had like you said 50 champagne sold, 50 wines. Does that hurt you a little bit then on Amazon versus 101?
Mike: Yeah. You always want to be in a position where you could sell 101, but like in the situation you’re talking about here, I don’t think that like really it cannibalizes you because again people are going to be searching for champagne ice bucket and they’re looking for something to put their champagne bottle in like a big bottle of champagne. And I think that that’s more important to be able to capture those searches.
And if you have them listed separately, like you can even if it’s a situation where both of them, if they do a search for something where both things can’t show up, then you can actually get two different listings to show up in the results. But if you have one listing with like all nine variations on the same listing, you’ll only be able to get one result out of all that. So that’s the reason why I was setting up with the wine size as one listing with three variations of champagne sizes as a different listing with a different variation.
Matt: Yeah do you have any other ideas on low hanging fruit at all on this?
Mike: No I think that covers. I mean I try not to get too — like I think I’ve already given you probably like more than an awful. I’m worried about just like overloading people. I think I get the same thing that a lot of people just — what ends up happening is you listen to podcasts like this and there’s other ones out there and you hear about us doing all these like neat new fangled things or whatever without the context of the fact that we’re a mid seven figure company that’s also being sure to diversify and trying to grow it to 200% per year.
We have different objectives and we’re in a different place. When we were a $50,000 company, we weren’t doing all these things. So you got to just kind of keep that stuff in mind not to get influenced by keeping up with the Joneses or you hear about these awesome techniques. I mean the reason we’ve had to switch between some of these awesome techniques in some cases is that we’ve already exhausted everything we could possibly do with Amazon let’s say as a for instance.
And our Amazon business grows to a point where we’re going to do about 3.5 to four million this year on Amazon. It’s probably close to four actually just the last month has been crazy. So we’re doing about four million on Amazon. To me that’s something I have to diversify. I can’t let my business be 100% Amazon with all four million dollars, because if something happens to that channel I’m completely screwed and out of business.
So at some point, I need to diversify and we do about six million total, it’s just at two thirds Amazon, one third off Amazon. And I’m okay with that kind of balance, but if I had a $50,000 business, there’s no reason to diversify off Amazon at that point. It’s the easiest sales and the highest profit that there is, like why diversify. But when it gets to a point where you start feeling like with your own personal comfort level that like all your eggs are in one basket and you need to start diversifying, then it makes sense.
So the whole point is just to kind of put things in perspective to where you’re at and be comfortable with where you’re at, and what makes sense that’s going to move the needle for you, and like make this like a full time thing or change your lifestyle in a way that is significant and not have you rely only on wholesaling, you can get your B2C business moving. What is that for you? And what’s going to do that without worrying about the Mike Jacknesses of the world that are doing some of these more sophisticated things because we have a whole another reason for doing it, and we also have 15 people here that can help us with that.
Matt: Yeah and I believe that is the hardest part. I do listen to a lot of podcasts, yours, and others and caught up with 400 ideas, and then you find yourself months later you haven’t accomplished one of them.
Mike: Yeah exactly. That’s why I just prefer not to throw more things your way. Just from looking at the thing here, I really do feel that the three big things that we talked about can really do it for you. Just don’t worry about the other interference that you hear out there. At some point it will be relevant to you, like hopefully you’ll get to a point where you have a million dollar business here and then it’s relevant, then it’s like oh God, I need to — like I just did a million dollars this year on Amazon only.
I need to protect myself and like start growing my off Amazon business a little bit just in case like Amazon like there’s the boom hammer down, and I got like all this inventory and stock, and employees because that’s another thing. I mean I have to worry about people as well and it’s not just the money part of it by any stretch of imagination for me. I need to make sure that if Amazon closes our account that we lay off as few people as possible, hopefully zero.
How do I position myself to be in that situation? Whereas if all my business was on Amazon and they shut our account down, like I got to like lay off 15 people and figure out what I’m going to do with the lease that I’ve signed here. And there’s a lot of other things to be thinking about. So that’s the reason, some other reason why we’ve diversified versus when we first got started. I mean when you have a $50,000 business and you’re the only employee, it doesn’t very much matter if something bad happens, right?
Matt: Well thanks a lot for that Mike, I really appreciate it.
Mike: No problem man. Best of luck with everything, definitely catch up with us in the coming year [inaudible 00:40:19] on how things are going and I look forward to hearing back from you.
Matt: Yeah I will certainly be in touch.
Mike: Cool thanks so much.
Matt: Thanks Mike.
Mike: And that’s a wrap. I hope you guys enjoyed this Under the Hood segment with Matt. If you guys want to be on your very own Under the Hood, just go to EcomCrew.com/UndertheHood to sign up to be on a future episode today. It’s a totally free thing that we do to give back to the community.
And in turn it’s one of these rare win-win things where not only does it help you but it helps the entire community by giving people actionable advice and letting them know that they’re not alone in the world of entrepreneurship. So again go to EcomCrew.com/UndertheHood to sign up today. Until the next episode everyone, happy selling, and we’ll talk to you then.
Michael started his first business when he was 18 and is a serial entrepreneur. He got his start in the online world way back in 2004 as an affiliate marketer. From there he grew as an SEO expert and has transitioned into ecommerce, running several sites that bring in a total of 7-figures of revenue each year.