E160: Under the Hood with David Wilson Part 3 – Taking a Plateauing Business to the Next LevelJuly 5, 2018 in Ecom-Crew-Podcast
This one definitely made my day.
It is really rewarding to be able to help someone grow and improve their ecommerce business. And in this episode, I got to experience just that!
I recently caught up with David Wilson to see how his ecommerce business is doing. If you guys can recall, David was struggling with a plateauing business when we talked to him last year. In parts 1 and 2 of this Under the Hood series, we discussed a couple of strategies that could help his online enterprise get out of that slump.
It’s been six months and, I’m happy to report that his situation has definitely improved. From steady revenue of $10k month after month, David’s ecommerce business is now inching closer to that $20k goal.
Here are the things that helped bring about this upward turn.
1.Improving Amazon listings
- More product images to his listings that have better quality
- Lifestyle photos to highlight the product’s versatility and usefulness
- Diagrams to highlight noteworthy features like a specially designed buckle (David sells a wide variety of belts)
2. Remove barriers to purchasing
- David added a size chart to help customers make an easier decision when buying his product.
3. International expansion
- David sold a few of his products in the UK and Canada. He also ventured out to other EU countries like Germany, France and Italy. Today, at least 10% of his total revenue is generated by international sales.
4. Diversifying the product line
- David has added some new products to his catalog and promoted them via Amazon’s Early Reviewer Program, products all have 4-star ratings
We also had a good discussion about what David can do to continue on this trajectory. Here’s what we covered.
- A cohesive product line is always better than lumping unrelated products that sell well individually
- Kickstarter and Indiegogo are great platforms for launching new niche products
- Profit vs growth: It’s a personal choice. But making a decision on which direction to take should be based upon hard facts.
Other Resources Mentioned:
Thanks for listening to this episode! If you have any questions or comments, feel free to leave them below. Happy selling!
Full Audio Transcript
Mike: This is Mike, and welcome to episode number 160 of the EcomCrew Podcast, 160th edition of this show. So great to have you guys with us today. And today is a special treat, maybe more so for me than you guys. This is something that’s pretty cool. We started doing these Under the Hood segments something like six to 12 months ago; I forgot exactly what it was. But this is the first follow up with someone that came on Under the Hood in the early days, David Wilson.
Six months later, I don’t want to give anything away, but things have been going well for him. It was nice enough to come back on the show and tell us kind of what tips and tricks we gave him have been helping the most, and which things he hasn’t done yet and what his business has done over the last several months. So, I want to thank David again for coming back and doing this. It’s exciting to see what’s happened with his business. But without giving too much away, let’s hop right into the introduction here and on with the show.
Mike: Hey, David. Welcome back to the EcomCrew Podcast, man.
David: Thanks, Mike. Yeah, excited to be here.
Mike: You are in a small group of people there. There hasn’t been many people that have been on multiple EcomCrew podcasts, we’ve only done 150 something episodes as of recording this. So, it doesn’t happen often that we get somebody back on. But you were on originally; it actually wasn’t that long ago in the timeline of when the podcast went live. But you were on episode 145 and 146 as a Under the Hood guest.
But we recorded that back in December of 2017 because I try to record those well in advance just to have stuff kind of like in our catalog for when I’m traveling or whatever it might be so we have them ready to go so that the timeline from when we recorded to when it went live was pretty far apart. But now putting things in perspective here, we recorded in December of 2017. We’re doing a follow up conversation in June of 2018, not sure when this episode will go live.
But just so people know kind of the timeline we’re talking about here. So it was about six months ago. And if you were to summarize back six months ago when you came on, what would you say the three to five big things that you brought up that you were struggling within your business world then?
David: I think the main things that I was struggling with was scaling the business. I had kind of gotten up to around 10,000 a month in sales. And I was sort of plateauing with a couple of thousand on my website, and less than 1,000 on eBay, and then the remainder on Amazon. And I was just having a hard time. I mean, I think I maybe got up to maybe 12,000 a month or two, but it might drop back down into the nines. And so, I was really having a hard time expanding beyond that.
I think that some of the other things, I think that I was not really getting cost effective advertising from some of the paid search I was doing. The results could vary; sometimes the CPA or the cost per sale would be a little bit too high. So, I was hesitant to invest more money in that. Some other challenges I had was just trying to decide sort of like what next, do I want to go into like micro influencers, that I want to try to do some kind of like offline advertising, or I don’t know, just really just kind of straining my brain to figure out what was the best approach and the best use of my time and my dollars.
And the other thing is that at the time I was consulting and I’m actually now just kind of wrapping that up. But it was — I was doing consulting two days a week, and then working on my business three days a week. So that was another big thing. My goal was really to try to at least double my sales. So then at that point I could discontinue doing the consulting and devote myself full time to it, and then I could really try to focus on ramping up the business.
Mike: Very cool. And so, kind of reading between the lines here now since you are wrapping up the consulting thing, I guess you did that. You must be around 20,000 a month now or getting close to it.
David: Yeah. So, I think naturally December was a better month. So that got me up over 12 and closer to 13,000. And I thought maybe there’d be some drop off in January because it’s not the holidays anymore. But January is a longer month and it tends to be a little more activity online, just from some of my past digital marketing. And so that I actually did better than December and I was up to over 14,000. So that was exciting. And I did fall back a little bit in February. I mean, there’s only 28 days in the month. And it’s kind of a little bit past the New Year. So that wasn’t too much. But I only fell down into the 13s.
And then like, in March, I got all the way up into 17, almost 18,000. So that was really exciting. So like, wow, I’m actually pretty close, was over 25% growth over the previous month, month over month. And then I managed to maintain that in April, and actually outdid it by $30.
David: But still, hey, once you hit…
Mike: A record is a record man.
David: You want to stay there and go higher; you don’t want to start creeping back in the wrong direction. And then in May I think with the assistance of an email campaign, I really hadn’t done any email campaigns to my list and with some — and we can get into all the reasons why throughout the call, but I got to within $200 of my goal. So, I mean, even though I didn’t quite hit 20,000, I think that’s still maybe less than half a day’s worth of sales.
Mike: Yeah, I mean, $19,800 man, you’re right there.
David: Yeah, absolutely.
Mike: Very cool. So, from the things that we talked about on the call, what do you think helped the most? I mean, what advice did you take, or was it something I helped you with or was it just other things that serendipitously helped you it during that process?
David: So there were some things I was able to implement, and then some things I wasn’t, but since your question was what helped the most, I’ll focus on that. I would say your advice with regards to improving my Amazon listings, just saying that really like there was the — if you think of the 80/20 rule, 20% of the things you do are going to drive 80% of the results. I think that that’s the place where my time was going to be best invested. And so, I improved the images, I improved the quality.
Whereas before, I think I had maybe three or four images at the most, now I’ve got around five or six images. I have some better images. One of my belts sort of changed a little bit from one generation to the next. So, I now have a new sort of the primary photo. I also, I liked your idea with sort of having the diagrams where you really kind of spell out the benefits in greater detail. So, I have a diagram where I sort of talk about the buckle, and what are sort of the particular features about the buckle, because it is a buckle that we designed ourselves to make it better than just the other generic buckles out there. And there are some little features and aspects to it, that our unique selling points.
We also had another one that talked about sort of the strap and the sewing, how we use like a better stitch that’s more durable, and just kind of points out certain things like the strap keeper on the belt, and some other things that maybe some competitors don’t have, just more differentiation. And then we also added a few lifestyle photos. And that’s a little bit more recent. I think I did the photography with a friend who’s a photographer down here in the San Diego area. And it took a little while for me to get around to getting those, doing kind of the final editing, adding them to the correct sizes and everything and adding those all to Amazon.
But now I have for the more the men’s belts, at least a couple of lifestyle photos for that for men. And then for the ones that are kind of unisex, I’ve got some lifestyle photos of women and then others with men in there as well. So I think that that was one of the largest things. There were a couple of other things also that were helpful.
Mike: Cool. Well, it’s good to hear that that definitely helped. I mean, I think that this comes up, I mean, it’s got to be like in the top five things that like I recommend on the Under the Hood segments. And I think that some people probably quietly like roll their eyes at this because it just seems like come on, man. Like you’re telling me that if I put all this extra effort into the photography, that that’s going to be the thing that is the magic pill for my listing? It doesn’t really add up like if you think about it like on the surface if you haven’t been through it before.
And for me like it was something that we just kind of took for granted ourselves for a very long time. But I’m also a data guy. And we had heard about this about two years ago now at a Global Sources Summit event. One of the guys was talking about photography and I was like, you know what, those look really good. I’m going to try that on one listing. And then the results were phenomenal. And now it’s really been helping catapult our business to the next level. So, it’s cool to hear that you actually were able to get that done and it did make a big difference.
David: Yeah, thanks. I definitely think it does. One other thing I added was a size chart, which before I kind of had like an answer to that question saying if you click that little blue link next to where you select the size that says size chart, we basically made our sizes to match the Amazon default size chart. But people just think if you create doubt in their mind, and they don’t know what to order then, they may just go order from somebody else, or choose not to order right at that moment, seems to just kind of take away as many barriers to them purchasing right now as possible.
So that I think, also has helped more recently. I’ve had some really good days this last week where I’m thinking, I don’t know, at first I was like, wow, I don’t know if I’m going to make it to 20,000 this month or not. And then now I’m thinking I could maybe get there and then some. So, we’ll have to see.
Mike: Very cool. So what are some other things that you think attributed? I mean you’ve grown 100% since we talked which is not a small amount. It’s awesome to hear about the success you’ve had. I mean what other things besides the Amazon listings do you think have helped you either directly or indirectly?
David: Yeah, so I mean, I think that the international expansion has definitely helped. It kind of started slow. I only sent my two kind of best sellers over there, and the ones that are most unique. But they’re in six different sizes each and three different colors, and one and two different colors and the other. So, there’s a few skews, but the UK adds about 500 to 1,000. Also, you’re getting the money in British pounds, you got to factor in a bunch of other things like that and that sort of thing. But you add that into your price and you figure out if that scheme works for you.
I don’t know, it’s a little complicated, but at least with the UK, you don’t need to translate your descriptions and bullets and all that. But actually, Germany, which started off really slow for me really picked up. I don’t really know what it is about Germany, but it’s a big economy, quite a large population. And I get about 1,000 or more in sales there a month. And again, that’s in the Euro. So that translates out to a little bit more money.
I really don’t get much out of France, Italy and Spain, but we’re there and since I’m just shipping to one warehouse in the UK, it really doesn’t cost me anything other than just doing the translations and stuff to be there. So I get a few sales from those, but when you add it all up, it adds up to another couple of thousand dollars, so that’s another kind of 10% to your, I guess top line revenue. So that’s definitely been one factor and…
Mike: What about Amazon Canada, you didn’t mention Canada, have you done that or just over in Europe?
David: You know what; I am in Canada as well. I didn’t have that on there because I was, yeah I don’t know why I don’t have it. But yes, I am in Canada. I would say Canada for me is about like the UK. I get about 500 to less than 1,000 there as well. So, it’s another $500 and it’s a little bit of a pain to ship the inventory up there, and you have to take some different steps with signing up to be an importer to Canada and all that sort of thing. But once you kind of get that ironed out, it’s not that much of a hassle.
Mike: Right okay cool. And I apologize I cut you off, you were about to mention something else.
David: Yeah I think, so I also I kind of expanded my product line and I mentioned I have some different types of belts in different materials, strapped with and colors and some of those back when we first talked really hadn’t gotten a whole lot of traction. But I do that what is the Amazon review program where you pay $60 for new products?
Mike: The early reviewer program.
David: The early review, I pretty much do that for every product that’s just getting launched just because you need those first few reviews. And sometimes it still takes a while to get some of the reviews. I’m sure there are other more nefarious ways but I do it pretty much by the book. And once they eventually do kind of start getting some good reviews and people are saying some really positive things, I mean right now knock on wood, I don’t have a single product that’s below a four and a half, I mean at least as far as when you round up to four and a half. I think I have like a 4.3.
But having all your products at like 4.5 or above I think, and some of that even took going back and contacting people and trying to really provide good customer service and maybe asking a bad review to reconsider after they received a replacement or what have you, just really making sure that you’ve got good reviews for all of them. So that’s one critical thing.
And then I’ve also got a couple other white label products. I mean they’re not massive sales, but I’ve got a few of them that contribute and I’ve got another product that’s just totally out of left field that I basically invented. It’s a baby product and that product also sells a certain amount. So, just kind of I guess diversifying my product line and having a few other things that are contributing to my total revenue.
Mike: Very cool, excellent man. Well, it’s awesome to hear how things have been progressing and going in the right direction. It’s like you’re the first one to follow up with us from these Under the Hood console. It definitely makes me feel like it’s worth the effort that we put into it to see the success that people have been having. And it’s definitely really cool.
And I also was just thinking like since we have you here, maybe give you opportunity if there’s anything else you wanted to ask, any other advice now that you’re at 20,000, it presents another set of problems or challenges for your business? I’m sure you got a new goal. Let’s talk about that for a sec. What is it, to double again, is it to go to 40,000 or is the next milestone 30,000, what are you trying to get to next?
David: Yeah it’s been, I guess I would say it’s been cool and pleasant that when I’ve set myself these goals, I had a goal of 10,000 and I reached that pretty quickly. And then like I said, it kind of plateaued there. But then I had sort of a little in between goal of 15,000 and got there within a couple months. Then I had another goal of 20,000 and got there I guess a little quicker than I thought. But I’m sure you know how it is. It’s like when you’re selling 10 a day, you think, wow, that’s pretty great, I’d love to keep that up.
And then you start, it’s almost like you get a little more greedy and you get more used to it. You get 20 a day, for a little while you’re like okay, well now I’ve now become accustomed to this new bar, and then you just kind of want to [inaudible 00:18:38] your 30 day. And I mean you’re talking I’m sure with yours it’s you’re talking 100, 200, 300, but it’s all relative. You sort of I don’t know, I guess you want to continue, at least at my level you definitely want to continue growing and growing and growing otherwise you’re never going to get big enough for it to be a substantial enough business.
Yeah I mean I’m looking at a couple of things. I’m thinking about maybe you’d mentioned FameBit, and I kind of went back over my notes a little while ago after I talked with Abby about maybe doing the follow up call. And that kind of jogged my memory of FameBit, so I was thinking about maybe doing some of the influencer marketing. Some other stuff I was thinking about doing is maybe paying someone like I’ve been talking to a copter, what’s the — one of the main sweepstakes and giveaway…
Mike: Rafflecopter probably you’re talking about?
David: Yeah, I think it was under Rafflecopter, no it’s Wishpond actually that contacted me about maybe having them run some contests for me to grow my list. So, that’s another thing that’s sort of on the horizon that I’m thinking about doing. One of the things that I didn’t get to do was redo my website. That was because I had some issues with trade trademark issues.
And it’s almost like the trademark; people are just trying to find ways to deny your trademarks. They’re not very, I don’t know, their mindset is very much find out any way possible to not allow you to get the trademark. And it’s going to be very critical soon, I’m going to get all those emails from Amazon saying like the old Brand Registry is ending, and you need to have your registered trademarks for the new Brand Registry.
And so that’s a little bit of a concern. See, I mean, there’s a number of different things that I’m focused on in terms of — yeah, I mean, my overwhelming thing that I’m always wondering about is just how much to be putting the pedal to the metal, how much to be worrying about profitability, whether I should just be thinking about trying to scale the business enough to where I can get big enough to where people will give me the time of day, or whether I should just be kind of doing like I’ve been doing, taking a very bootstrap mentality, always trying to pay the least for things and trying to stay as profitable as possible.
Mike: Yeah, I mean, that’s a tough one to answer. I often struggle with this internally myself. I think that it requires — if I was to kind of put my therapist hat on here, which I think I’m probably need to go to therapy myself, so it might be hypocritical, I don’t know. But if I was put my therapy hat on it’s like, I think the number one thing is to sit down and ask yourself what you legitimately want to get out of this business.
And when you’re thinking about that — and not only out of this business, but out of your life, right? I mean, like where you want out of your life, what your age is, like if you’re married or not, if you got kids, if you want to be traveling, if you want to be working a four hour workweek, or if you don’t mind working eight hours, like all these different things that go into that. And then also, like what you want to get out of the business itself. And be honest with yourself, because I think what ends up happening is like very easily society has set this like one like, I don’t know, like not goal, but like vision for what success means, right?
So if you’re making more money, you’re deemed to be more successful. Which reality is, is that isn’t really what makes you probably happiest like for sure. And so it all comes down to what you want. I mean, like some people feel like they need to have 10 houses and a boat and a yacht, or they’re on plane or whatever it might be. And some people I know that are living on very meager amounts of money can be comparatively are way the heck happier. So and you’re around other entrepreneurs, and you’re coming on a call like this, and it’s just like you’re constantly like have this instinctive thing.
I think that’s an entrepreneurial thing to constantly grow and do more. And just like it’s that whole concept of losing feels worse than winning feels good. Which is why when you hit these new highs, the day that you hit it, it’s like this huge hit of dopamine and it feels really good but like, the next month when you do the same thing, it feels awful. And if you were, God forbid, go backwards in one month it’s just like, oh my God like — but if you looked at it from the perspective of a year ago, if I was doing $18,000 a month, I would have been really happy. But like now that you did 20,000, if you did 18,000 in June, you would find that as a failure. So, it’s very easy to get yourself in this trap.
David: Yeah, that is true. I mean, I was just thinking about this the other day. I mean, it’s a little bit I play a little poker here and there, and it’s like winning is great and you have the money in your hand, and it’s kind of gravy, but man, it just kills you when you lose. You think about what you could have done with the money, that you second guessed all the decisions you made. I think it’s kind of a little bit like almost like with the reviews. I mean, you can get five reviews in a row where somebody just says, man, this is the best thing ever, and they will just I give all sorts of praise to your product, and it feels good momentarily.
And then you’re just kind of, okay, well, there’s nothing to do about that other than be like feel good for a moment. But man when you go to check to see if you’ve got any negative reviews, I have to like literally stop, still myself, and just be prepared of course because I know what you’re going to get. And it could just be somebody that just trashes your product out of the blue, and you know that’s going to be sitting there on your product page on Amazon, and you can do something with different ways to mitigate it, depending on your review program on your website. But on Amazon you don’t really have many options.
So, that I think is another one of those things kind of like what you were saying where I don’t belabor the point, but you get good reviews, and it does boost you up. But it’s not as bad as when you get that terrible review that just sort of sends a shiver of dread down your spine.
Mike: Yeah, yeah, no doubt about it. I mean, I’ve had to get to a point where I do my best not to read the reviews because I take it so personally when someone leaves a negative review and it legitimately like ruins my day. And especially when it’s something that’s so factually like off point. It’s like someone left, I just, I happen to notice it to the other day. We got a review on one of our ice packs that said like, doesn’t get cold. I’m like what do you — you put in the freezer, it’s freaking ice. Like I said it’s one temperature, like what the hell you talking about? Like, I mean, it’s just, you want to like reach through the screen and strangle them. But there’s nothing you can do.
And the objective thing to do is to — and which our team does is they’re removed enough from it that they can do it without getting biased and passionate is they just reach out to me, I’m so sorry that you had a negative experience. We’d like to either send you another one. Or maybe you tell them like you need to leave it in the freezer a little bit longer, and try to just be as polite as possible and try to defuse the situation. But for me, I want to reach out and ask them if they’re an idiot. I take it so personally, right?
David: Yeah, I think it’s funny when they get really like they’ll complain a lot about the price. I thought the price was listed right on the listing, if you thought it was too expensive, why did you buy it?
Mike: I didn’t put a gun to your head to make you buy it, like you made a free will decision to buy that product.
David: Exactly. I guess one of the other things that I would think of in terms of, is the greatest strategy to really just continue to refine and optimize, and improve the listings for existing products, or do you think that the key to continually expanding is the expansion of your line? And one of the things I was thinking about when you’re talking about it earlier is I think different people get into this type of business in different ways.
I originally had a product idea, created the product, thought about a brand, but hey, it would be cool if I could create a whole brand kind of a lifestyle brand around this product and this brand name. And then I decided, okay, well, Amazon would be a great channel to sell it on.
But nowadays, because the whole selling on Amazon is so popular, a lot of people get on Amazon, and they’re just sort of willy-nilly picking products based on all of these different sort of softwares that give them different criteria to choose which one might be most profitable. And the products may or may not be in the same product category, but they’re just trying to find a whole bunch of different products and different ways and sell those.
My current thought process has been to try to kind of grow in related products, so that my brand has some sort of cohesion and sense behind it. But I also feel like if I’m just kind of stagnating and not adding a lot of products, it’s going to be difficult to continue to grow my sales.
Mike: Yeah I mean, I’m pretty adamant about having products that work well together. So definitely not taking that I’ll just sell whatever random crap I can come up with strategy. I don’t think that really works. And I think that that’s going to get harder and harder moving forward. I think that your best position to sell a brown version of the belt or white — well people don’t really wear white belt but black. There’s different other like one’s a fabric, one’s a leather, whatever, different belts, but then there’s also other accessories that are in men or women’s fashion that typically it’s like kind of like that accessory thing.
So it could be like tie clips, or stars or whatever. I don’t know, like other things that I think I would get into that stuff well before getting into something that that doesn’t make sense there. Because like I mean, the reality is, is the most expensive sale you’ll ever get is the first sale from a customer. Selling them something else the second time is always going to be cheaper. That’s why Klaviyo is so powerful, and Facebook ads to existing customers, and things like that.
So those are the things that I would be thinking about, like how does this customer play into my long term plan of what other things can I potentially sell them. And then think about them being an asset. When you launch a new product, that you can email them and say, this product is now available on Amazon, and you have a built in 10, 100, 1,000 customers, whatever it is based on the size of your list where you don’t have to play any of these black hat gimmicks. You can just email your list and say, products available on Amazon now, no coupon, go buy it, and good luck. And that’s how we do it with ColorIt because we have that built in and it’s incredibly powerful.
David: Yeah, yeah, absolutely, I think that makes sense. I mean, one last thing I was thinking about is I was kind of thinking about, I’ve got actually a new product that’s it is related. I actually got a couple of different products. But one in particular, I was thinking about maybe trying to take a different tack and maybe trying to have it produced in the USA. And I was thinking about maybe doing a product launch using either Kickstarter or Indiegogo. And I’ve never used either when but I’ve listened to a couple of podcasts that have talked about them.
I mean, I don’t know if you have any experience or insight or would lean towards one Kickstarter, Indiegogo or the other. But I mean, I know that there’s some other companies out there that are in a similar space as mine. And it just seems like they have so much more momentum because they got started on a platform like that. And there’s also this kind of like this built in fan base. I don’t know, do you have any thoughts on trying something like that for a product launch instead of just doing the standard putting it up on Amazon and doing some kind of paid sponsorship?
Mike: Yeah, I mean, Kickstarter and Indiegogo are both can be really great platforms. I know a few people that basically sell through there almost exclusively, or at least when they launch a product it’s almost exclusively always through that. But they’re also almost always in like a very narrow niche of things. Like for instance, something like a board game does like really well on Kickstarter, where like you have like this new board game, and it’s something new and innovative. It does really well. Something like a backpack as a for instance, like that I’ve seen those do really well where there’s seven figures. But it’s like this new and innovative backpack.
So the point is that — and I think that you might be there with your with your belts, because they are different. But I’ve also seen similar products before, like I know you have a few, I don’t want to talk about your secret sauce on the podcast. So, you definitely have some unique components. But is it unique and like, wow, and like, holy crap, I have to have this, is different enough to like really work on Kickstarter. And that’s something you have to kind of ask yourself is do you feel like that’s actually true or not?
Because that’s what does well on Kickstarter where just everyone is like I got to have that because like why the hell do I have a belt that has a hole and then I have to put the middle tip through the hole and like buckle the belt in the old fashioned way. Like there’s obviously a much better way to do that. But it’s already been done before. And sometimes because I’ve seen those types of belts, but yours is also a difference. So is it different enough to kind of compete with all that that’s done well on Kickstarter?
David: Yeah, yeah, that’s true. Yeah, I mean, I don’t know. I think so, my new one’s got a couple of new wrinkles to it that I think are going to be kind of interesting. Are they major game changers? I don’t know, I guess that kind of remains to be seen. I think that also if I tried manufacturing this one in the US. That would be an additional kind of added benefit. A lot of people really like to rally around products made in the US.
Yeah, I’m going to do more research on which one would be better to use? And also, like at what limit do you set in terms of your goal, and all that. I would say, probably not my strongest point is trying to rally all of these people to come support my product and all that is going to be another whole aspect to Kickstarter that maybe is going to benefit maybe the millenials and such out there, as opposed to some of those a little older, and then the Gen X age category.
Mike: Yeah, makes sense.
David: Yeah, I mean, did you have any other questions with regards to what we’ve been doing or where we’re going?
Mike: Yeah, I’m going to go back to just answer one of the other things you mentioned earlier. I didn’t get the chance to fully kind of go through my thoughts. But you were asking like what’s the direction as far as should I go for growth or profit, and all those other things, and I was kind of alluding to, it’s obviously a personal choice. I’ll speak to at least what we’ve done so you can at least kind of get your head around how we’ve approached it. Our approach has been like hyper growth. I’ve been through multiple businesses in my past as an entrepreneur.
One thing you’ll find over the years is that not every business idea that you have is going to be a smashing success. You’ll do certain things here and there that are just complete flops, and other things will take off like a rocket ship. And I don’t know, I think it’s just probably inherent in my personality like when I see something that’s working, like I go from like the tinkering mode to just completely all in.
And that’s the stage that we’re at here. I mean, I saw the same thing with online poker when we were doing that with affiliate marketing and SEO in the past when we were doing that, there’s lots of other things that I did that just like I wasted $5,000 here, $3,000 there, $10,000 here just tinkering around and it just didn’t work.
But the Amazon business and just e-commerce in general has done well. And if I thought that this was a type of business that was going to be around for 100 years, then I would be taking a much more managed approach to this and thinking very, very long term. But I do think that there’s a short term land grab, that’s like happening here where Amazon continues to grow, the competition continues to grow. And it’s like having a number one ranked listing on Amazon is like basically, like owning real estate. And like once you’re there, it’s hard to get booted off that mountain in a lot of ways.
I mean, I see some products that we launched a couple of years ago that have become like hyper competitive on Amazon. And we ranked number one or two for those products. And even though we’re more expensive, or other ones come across that might even be better or trying to knock us off or whatever, we seem to kind of stick there. So for me, there’s like a big sense of urgency to build this to be as big as it can be as quickly as it can be. But at the same time, like we’re not living off of this business.
So, we have a different ability to be able to do that because we have other businesses in the past that we started where we’re living off that income right now and we’ve been just putting all the money back into this business. But even with all that said, like next year we’ve agreed internally here that we will grow slower. We are going to instead of targeting 100% growth next year, we’re going to target 50% and try to make things a little bit more sane. Because I think that once we get to eight figures, which is kind of like where I want to be, I feel like we can take the pedal off the metal a little bit.
And we’ve also started to hit a lot of the ultimate efficiencies. There’s a lot of efficiencies to be gained in the e-commerce business with volume, being able to bring in a full 40 foot container over is a good example of that. When you’re shipping air shipment because it’s so small, it’s really expensive. You graduate to doing LTL. It’s cheaper, but not nearly as cheap as shipping a full 20 foot container, which is not nearly as cheap as shipping a full 40 foot container. But shipping two 40 foot containers, there’s no gain. So like at that point, it’s like diminishing returns.
So, I feel like we’re hitting a lot of those like economies of scale that like get us to the right point. And I’m like really excited for like the next year to look where that leads to as far as profitability. And that that’s kind of where my head is at, and what our philosophy has been, and why we’re trying to grow so quickly. But you might have a different outlook. So, I think that it just kind of gives you a window into my head of our growth pattern, and why we’re doing that. But again, I’m very respectful that everyone has a different goal in life. And that’s just kind of our goal.
David: Yeah, I mean, I think I could go a few different ways. I mean right now it’s still mostly a one man show, and I can see getting to large enough revenue that I could live quite handsomely just as still as kind of a one man show or with maybe just outsourcing a lot of stuff to other people. So certainly my goal, I mean my thought was maybe to get to kind of like a small, almost like family business, lifestyle business.
I have a friend too whose family owned a business and they employ a number of different people, have a warehouse and it’s been going, it’s been on the family for decades. But the problem of that is I’m a little bit concerned, kind of like you said, this might be sort of a short term land grab. And I think Amazon is kind of — what is the word, disintermediating retail and e-commerce and who knows.
I mean, a lot of these former ways of getting products and sort of having them manufactured overseas and being the person in between the consumer, I see sometimes how cheap certain things are in say like Costco and I go, man, how can anybody make money selling something for that much when it has that much detail and the stitching and the zippers and then this and then that. And it’s just, it’s crazy and it’s a little bit scary sometimes. So, it’s kind of a balanced approach. I can see a few different kind of outcomes, but I kind of see what you’re saying or like if you’re going to make hay, you want to make hay now because the future is uncertain.
Mike: Yeah, I mean, I definitely feel that way. I don’t think that this is going to be the same five years from now like by any stretch of the imagination. I hope to still be doing this or this is still a viable business, but I think it’s going to be very different. And I think that the bigger you can be when these changes start to happen like the better position you’re going to be in. I mean, so that’s why we’ve been kind of taken that approach, but again it just it depends on your risk tolerance and your outlook of what you’re looking to do there.
David: Yeah, yeah absolutely.
Mike: Cool, well again man congrats on the success. I’m glad you’re able to double since we talked last. Hopefully we can do this again in six months from now, you’ll be telling me you are at 40K. I love you and the follow up success story. It’s one of those things where I’ll be happy the rest of the day. This definitely puts a big smile on my face.
David: Yeah, thanks so much. I really appreciate all the tips that you gave me the first time around and talking through all of it today. It’s been a good time. And yeah, I’m also hoping to get there. I don’t know about 40 K, but I’ll definitely have to come up with a new aggressive goal to hit and something that I can really be proud of if I manage to achieve it.
Mike: Yeah, definitely. Cool, man. All right take it easy and let us know if you got anything else in the future, we’ll talk to you again.
David: It sounds good. Thanks Mike.
Mike: No problem.
And that’s a wrap folks. That is the 160th edition of the EcomCrew Podcast in the books. You can go to EcomCrew.com/160 to get to the show notes for this episode. Let us know what you think. Leave David a comment, congratulate him on his business, which is kicking butt and taking names. And I like to think we had at least a small part in that.
I got to tell you guys, the thing that has been so rewarding about EcomCrew is stuff like this, seeing people that don’t compete with me in any way, shape, or form be able to like just go out there and kick butt and take names with the advice we’ve been giving. It’s a pretty cool feeling.
And again, I want to thank David for coming on the show and telling us what’s been going on with him. If you want to be on your very own Under the Hood episode, go to EcomCrew.com/UndertheHood. One last reminder, the webinar, July 18th 11am Pacific, 2pm Eastern time at EcomCrew.com/webinar. And besides that guys, have a great day. Happy selling and we’ll talk to you soon.
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.