I figured the best thing to do for my first post is to introduce Grant and I and then talk about our mission for EcomCrew. I know it's a bit boring, but for those of you just discovering our blog I think it will be quite helpful. It is also a good exercise to get our mission statement in writing, so we can print it out and remind ourselves everyday what we're here to accomplish.
Introducing Grant Chen
Grant is a 2002 graduate of University of Washington and has a strong technology background. About 18 months removed from college, Grant got started with affiliate marketing and SEO. Within two years Grant's sites were ranking at the top of the SERPs (Search Engine Results Pages) for some of the most competitive keywords on the planet. It was partially being at the right place at the right time, hard work, and a little bit of luck all spun into one. Grant and I met an industry conference in early 2006 and we quickly became friends. Later that year Grant decided to take a less active role in his business and ended up partnering with a company I was running at the time. This allowed him to become a silent partner and travel the world. Grant seized the opportunity to travel all over South America, Europe, and Asia visiting over 30 countries in a 3 year span. In typical Grant fashion, he didn't just drive a car, or walk around these countries; he took the opportunity to do some amazing adventures such as rock climbing, SCUBA, hiking, and defying death (seriously). By 2011 our business paths crossed again when we started a keyword domain investing company – terran.com. Our goal was to invest in keyword domains and turn them into revenue generating websites. In addition to all this, Grant also owns some B&M stores and just happens to be one of the smartest people I know.
Introducing Michael Jackness
Since I'm a few years older than Grant and didn't goto college, my story is a little more complicated than his. Instead of going to college after high school, I started my own business the day I turned 18. Armed with a box of business cards, a pager (remember those?), and about $100 in the bank I started a company called Discount Computer Consultants. I hustled in every way I could to get home computer clients and later corporate level clients. I did well for myself and learned quite a bit about computers and networks along the way. In 1998 I was offered a full time job as the Director of IT from one of my corporate clients. Even though I was an entrepreneur at heart, the large salary and opportunity to not have to spend half my day stuck in traffic going from client to client was quite appealing. When I started in Corporate Life in 1998, I was about the 28th full time employee of the company. By time I left there were over 200 employees in 5 states. It was an amazing opportunity to learn about business in general; as a member of the Executive Team I had a front-row seat. By mid-late 2003 I started getting bored with Corporate Life and the entrepreneurial itch started roaring back. In very early 2004 I discovered affiliate marketing and launched a website a few weeks later. By the summer of 2004 I put in my one-month notice and the rest is history.
If you recall from above, Grant's path and mine intersected in 2006 at an industry conference where a great personal and business relationship were formed. We've been doing various affiliate marketing, domain investing, eCommerce, and other projects together since then. Our latest project is EcomCrew…
Our eCommerce Experience
By 2012 our domain investing company picked up great names such as WebsiteHosting.com (now sold), GraphicDesign.com, OnlineStorage.com, WordPressThemes.com, OnlineDegree.com, Treadmill.com (now sold), CuttingBoard.com, Coffee.net, GunSafe.com, BiometricSafe.com, and more. Our original plan was to make all of these affiliate marketing sites, sit back, and make easy money as we had in years past. However, on April 24, 2012 our lives changed forever when Google Penguin came along. If you read my personal blog at all, you know that I love talking about a book called Who Moved My Cheese. Well, on April 24, 2012 our cheese got moved in a big way. Instead of sitting around “hemming and hawing” we decided to do something about it! So, starting in the summer of 2012 we scrapped the affiliate model and started working towards a) turning our websites into properties that sold something directly to consumers b) stopped working on the site / parked the site.
Since we own a number of domains, it wasn't until mid-2013 that we embarked on our first eCommerce project. Even though we had a strong tech background, we didn't know the first thing about running an eCommerce store. So, we had to evaluate all the platforms including Magento, Shopify, BigCommerce, and many others. We ended up picking BigCommerce because it seemed like the most robust hosted shopping cart on the market. Fast forward a couple years later I think it's clear we made the right decision, but more on that later. After we picked BigCommerce as a shopping platform, we needed to seek out a consulting company that could help us launch our first store, treadmill.com. So, we went to the BigCommerce Partner Directory and picked out a “Premium Partner” to help us build out treadmill.com. We invested about $15,000 in development and design with them and ended up with a bucket of bolts. It was frustrating to say the least and I could write an entire blog post about nothing but this. Finding good tech resources is never easy and it wasn't our first time going down this road. Since we have tech backgrounds, we just decided to say “screw it” and learned everything we needed to complete the project ourselves. The end result was the necessary experience to build future stores from the ground up.
After we launched Treadmill.com in October 2013, we quickly learned that getting the store launched was the easy part. Sounds silly right? Let me lay out some of the challenges we faced:
We never expected things to be easy running an eCommerce site, but having to deal with multiple personalities and legacy supply issues with manufactures was something we didn't see coming. We were obviously a bit cocky, but we figured with a name like treadmill.com everyone would want us to sell their product. The problem is the speciality fitness equipment industry is stuck in the 1980's and there are a lot of B&M retailers that carry a lot of weight. So much so, they can prevent businesses other than themselves from selling online. So, this limited us from selling 50% of the products on the market, or worse being discontinued by manufactures after being promised their lines. The remaining manufactures who sell to us also sell equipment directly on their on websites, or at large retailers such as Walmart, Target, and Sports Authority. This left a situation where we could never compete on price and the sales we did make were at thin margins.
You might like shopping at Amazon.com, but if you ever launch your on eCommerce site, you will learn to hate them. Not only do they crush margins in every way possible, they also have set unrealistic expectations with customers on shipping speeds and cost. A 250lbs treadmill cannot be shipped with traditional carriers such as UPS or FedEx – enter LTL shipping. With LTL (Less Than Truckload) shipping you are sharing a tractor trailer with others to get product across the country. The bottom line is it's very expensive and not very fast. Customers have it in their mind that products will travel cross the country in 2-3 days (thanks Amazon) and arrive in perfect condition all the time. When we first got started with treadmill.com it was a revolving door of LTL trucking companies until we found 1 or 2 that were worth a crap. Even after trying a dozen companies, our best result was about 2 weeks shipping time with a 3%-5% damage rate.
In the end we found UPS Freight to be the best company to work with, but they are far from perfect.
Great, so we finally got the treadmill to the customer's local area, but we're not done yet. About 40% of our customers order with a service called white glove delivery. Meaning that we will bring the unit into their house and assemble it in any room of their choice. By running a website you need to be able to service customers in all 48 of the Continental United States and this means a logistical nightmare of epic proportions. Even if you can find a national install company, they are always going to have issues. There is no magic pill here and we ran into all sorts of issues from lack of experience to people who showed up late.
After a year of searching we found Urban Express to be the best assembly company, but they don't have people covering all metro areas. When they can do the install they are great!
You wouldn't think that keeping organized is that hard with all the 3rd party apps on the market, but it is. When we first got started running treadmill.com this wasn't something we didn't really take into account. However, since you aren't just “done” when you ship the item there are always a lot of balls in the air. It took some time to find the right 3rd party apps and develop the correct internal processes to this this under control.
We ended up using software called BrightPeal to get everything organized.
When you are selling products that start at $599.99 and go up to literally $10,000, you better be around to answer people's questions when they have them. We found that about 20% – 25% of our sales converted from live chats; having to constantly be tethered to your computer or smart phone to take them is a big time suck. Sure, you can be doing other things in between the times you are chatting, but you can't be out on a hike on or the golf course either.
In the same vein as live chats, you also need to be prepared to take phone calls. Another 20% – 25% of our customers would call in to place their orders, or ask questions before making a big purchase. Even if it was just to make sure you were a “real” company, they wanted to talk to you. The end result was us having to get an office because nothing is more unprofessional than hearing a dog bark in the background when taking a support call.
To Wrap It Up…
Even with all the challenges we faced, we still ended up selling over $1,000,000 in fitness equipment in our first year. As you can tell, a lot of it was baptism by fire, but we gained a wealth of knowledge during this time. This experience allowed us to launch our second store, CuttingBoard.com in mid 2014. CuttingBoard.com has been a big success by any standard. Thankfully it doesn't carry a lot of the logistical challenges treadmill.com brought us. We also used our experience to purchase an existing eCommerce business in January 2015 in IceWraps.com. It's too early to tell if this was a good purchase or not, but we'll be documenting our journey with that site on EcomCrew.com.
Finally, just before writing this post, we ended up selling Treadmill.com on February 1, 2015. We received an offer to purchase the site in late 2014 for an amount we were very happy with. Rather than sell ourselves short, we ended up shopping that number around a bit and ended up selling it to another third party for more than the original offer. We wish the new owner nothing but the best of luck with the site.
Our Mission With EcomCrew.com
The Internet is a wealth of knowledge and a great resource for finding quick answers to your problems. I can't tell you how many searches I did over the past two years trying to find quick answers to my eCommerce questions / problems. There are countless eCommerce related blogs out there, but over 95% of the time I found their posts stop just short of answering my questions. They have wonderful post titles, but ended up being fluff and a waste of my time. I think part of it is because several of the high profile eCommerce blogs have imposters, not eCommerce or business experts running them. They are mostly full of, and market hot air. I think the others know the answers to the questions being sought out, but don't want to reveal any real information or secrets. The last batch of people just write fluff for SEO and affiliate marketing. So, they review something like ShipStation and do the bear minimum to rank and get that coveted affiliate income.
I've been blogging a lot (on and off) personally over the past several years, so I've always had a passion for sharing my thoughts, ideas, life lessons, etc with the world. I'm not worried about sharing real information or secrets because I'm secure within myself; I also know that I have a head start on everyone else. If you want to directly copy my ideas and compete with me, so be it. There are plenty of people who have done that in the past and there will be plenty moving forward (I could write a case study about this). There will always be competition and that keeps me motivated.
So, in the end, the mission of EcomCrew is to write content that is actually valuable to those seeking it out. We will never write a post just to put words on a page. Most of the content will be driven by things that we once searched for ourselves and had to figure out on our own out of frustration. Our posts will range from things to help beginners get started with eCommerce to helpful insights that will help those who have been running stores for years.