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…a coaching call recap that myself and Chris Shaffer just got done with and the question was asked at Seller Summit. We were sitting at lunch with one of our TAS listeners and also one of our students and he said, “I think I might have picked and launched the wrong product. Now what?”
He really had a great mindset because he said to himself, “At least I’ve launched and at least I’ve gotten some momentum here but the sales just aren’t what I thought they would be maybe I’m doing something wrong.” We said, “Let's jump on a call when you get and I get back, and we all get back and get situated let's jump on a call and dig through what you have going and see whether it’s something we can improve or if it’s something we can say maybe we need to pivot and move on.”
That’s exactly what we did here on this call so I just wanted to let you guys know before we jump into this call actually Chris and I had a little bit of some glitches in our Skype connection so you might hear a couple of pops here and there but I think you guys will be cool with it. I just want to let you guys know that I am aware of it and I think you guys will still get a ton of value from this. I’m going to turn it over to the conversation that I had with myself and Chris Shaffer and oh by the way the show notes to the episode can be found at theamazingseller.com/375.
Alright guy so enjoy this recap call that I did with my good friend Mr. Chris Shaffer.
[00:01:33] Scott: Chris, are you ready to rock and roll?
[00:01:34] Chris: I am ready to rock and roll, let’s do this thing man.
[00:01:39] Scott: You ready to do this thing? Right now the time that I am recording this which is early in the morning, you are just a little bit earlier than I am
[00:01:47] Chris: Just a little.
[00:01:49] Scott: Just about an hour but normally right now I am not recording this early so again I’m recovering from this chest cough, I’ve got some coffee I’ve already had some nice tea and everything. I’m hoping I’m going to get through this without coughing Chris I think that’s my biggest fear right now.
[00:02:04] Chris: I think we’ll be okay, you’ve got a mute button.
[00:02:06] Scott: Oh that’s true I do, I do. We are not doing this technically live, are we? Yes we are, we are actually live we are just not live if that makes sense. But Chris what I wanted to do is maybe just give people the backstory really quickly on how we met Reese and get people caught up. You and I were at Seller Summit which was an amazing event, Steve Chou’s event and we met a lot of great people, a lot of great people and we sat down had lunch with Reese and Reese said, “Hey guys I just want to let you know I’m a fan of the podcast and I’m also inside of the PLC classroom.” And we were like, “Awesome, how are things going?” He goes, “It’s actually going really well. I mean we are selling consistently but I don’t really think this is the product or at least I’m not sure if it is because I may have jumped the gun but I’m okay with that. I did that on purpose because I just wanted to get started. I didn’t want to sit there and think about it too much I just wanted to jump in and learn the process.”
I don’t know about you Chris but that to me showed that he was just ready to get in there and learn and he had a great mindset. What did you take away from that little conversation we had with him at lunch?
[00:03:11] Chris: That little lunch pow wow in the sunshine in Florida.
[00:03:15] Scott: Oh my gosh it was amazing.
[00:03:16] Chris: Oh man I’m standing here staring at a very cloudy sky here in Southern Texas and just thinking about how nice it was being in Florida and only half listening to what you are saying because I’m distracted by how nice it was.
[00:03:32] Scott: It was.
[00:03:34] Chris: No I’m just kidding. Reese is a good dude and I think that’s absolutely the mindset that you should have. It’s the fail quickly mindset. If you are going to do it and you are not sure if you picked the right products you still go all in and see what happens and that’s the mindset that he and his wife have had which is, “We think we can make this work but we are not sure if it doesn’t oh well it’s going to be a learning experience.”
Quite honestly it sounds like from our conversation with him that even if it isn’t a product that they are not going to continue with long term at least it’s not a costly misstep. They are going to come out around, breakeven from the sound of it. That’s always good to start with. I think they have absolutely the right mindset for this kind of venture and I’m curious to see what your thoughts are in sum total from that call as well.
[00:04:19] Scott: Yeah well again I want to get people caught up as far as we sat down, we had lunch with him and he’s telling us all about what he’s doing and everything. You and I are like, “If you want I mean we can jump on a Skype call. We don’t do this with everyone but we are sitting here at a table, we met you in person and stuff let's go ahead and jump on a call and we can walk through exactly where you are at.” He was at this turning point really, he was like, “Do I continue to go with this product that’s not really selling awesomely” Is that a word awesomely?
[00:04:49] Chris: Awesomely? It is now.
[00:04:52] Scott: It is now. He just was stuck. The other thing he did is right away he is like, “I think I made a mistake because I had too many variations.” That was another big one that he’s like, “I think I made a mistake on that but I’m okay with it because I learned a ton through this process.” I said, “Let’s just jump on Skype once we get back get situated let’s find a time that we can get together and go through your business.” Of course he’s going to reveal his product to us and all that stuff and he did and it was really good to go through everything that he’s done so far. I think he’s done amazing just getting started, getting through that process but again us being able to look at it from a different perspective and then give him some insights and that’s what I’m going to do here.
I want to just recap that call for everyone and guide people through what we seen and then what the advice was and for him to actually have a lot of these I think aha moments where he is like, “Oh okay I see, don’t do that do this.” I want to bring people through that process and give them some of that advice that we have given them. Maybe we can just dig in to the whole he had like five or six different variations off of this one product. That was the first thing that I seen that I was like, “Oh boy.” To start off to have five six different SKUs, even if they are under one parent, that’s a lot of different products. Technically some might not sell, some might sell. What’s your thoughts on that Chris?
[00:06:19] Chris: That’s a mistake that I see a lot of people make and it’s a conversation that you and I have a few times a week with people. Any time that we jump on a workshop people ask us that question, you get that question I know via email a few times a week and it goes something like this, “My top selling competitors have eight colors. Do I need to sell all eight?” The answer is no, please for the love of all that is holy do not sell all eight in the beginning. Take a look and see which one sell the most and start with those one or two. We even did this recently in a brand that we are in Scott where we said, “There is a hundred different color variations that we could launch. Which are the two that are going to work the best?” And we asked our audience which two they wanted to see and we let them choose.
The same thing works here, you can use Jungle Scout say okay, whether it’s a size variation or color variation or quantity variation which one of these sells the best and then you can decide to launch the best seller or the two best sellers. I would not generally suggest anyone launches a product with five variations especially for their first swing at the plate because you are managing a much more complex system. We had a statistic and I don’t remember if it was at Seller Summit or if it was somewhere else recently but it was like every time you add a SKU… Oh it was at the Click Funnels event. Every time you add a SKU to your business it gets more complex by 12%. Does that make sense?
[00:07:51] Scott: Yeah it does.
[00:07:52] Chris: So if he has five variations and I’m going to give every math teacher in the world a heart attack right now, that’s what 60% more complex?
[00:08:00] Scott: Wow you are doing some great math right now.
[00:08:02] Chris: Right, so I guess technically it will be like 48%.
[00:08:06] Scott: I don’t know, you lost me already.
[00:08:07] Chris: You can’t count the first one but it’s 50% more complex than it would be if you just had that one SKU so there is a whole bunch of other variables. You have to track five listings, you have to worry about running paid ads to five different listings and figuring out which one works. You have to look at the sessions for five different listings and that can be overwhelming. That can also be distracting in the beginning and it turns out that just like everything else in business it seems like his sales are following the Pareto Principle, the 80-20 rule if you will. 20% of your stuff is going to net you 80% of your results so turns out two of his variations were like 85% percent of his sales.
[00:08:47] Scott: Yeah and I think we can say what we are talking about here small, medium, large, extra-large, extra extra large. That’s what we are talking about or it could be five different colors. That’s what we are talking about so when you have those different ones, not everyone is going to need the small, not everyone is going to need the red but once you find out that there’s one or two that people are more or less buying then that’s going to be a better way to go into that space without having to have five different SKUs.
Remember if you have five different SKUs that means if your supplier says you need to have a 300 or 500 minimum per SKU that means you’ve just 5X’ed that and that can be overwhelming and expensive. I think that was a big one and he already knew that when we sat down on the table before we even got on a call. He was like, “I think I might have messed up there. I’m okay with it.” So now that he’s going though and I want to lead people through the first thing that we did.
We looked at that and we said, “Okay yes, that’s probably something…We can fix that. That’s not hard we can just liquidate the other ones and keep the main ones for now and keep fulfilling those but the real question is, is there really any chance for you to succeed with this product? Is there something different about your product? Is there depth and demand for your product and is it too competitive for your product and is it worth continuing?
That’s really the big questions that we had to answer here so our first step in that was looking at the product and immediately when I looked at the product I go, “Yeah too competitive, too easy to copy, it’s probably not going to be worth continuing.” That was my first reaction but he is running paid ads to those pay-per-click and his ACOS is like 55% right now which isn’t that bad and 500,000 impressions which isn’t that bad especially when you are just starting out and being that competitive so really he’s generating all of his sales through pay-per-click.
[00:10:56] Scott: Now the next question is this, can you rank on page one to start to get sales on page one because if he gets to page one he can probably sell that product? But he is not even in the top twenty pages. It’s that competitive and the product only sells between it was like $11 and $20 depending on the color or the size. The first thing we had to look at was the competition and right away I said to myself, “Competition, very, very high and I’m not sure it’s worth even trying to get to page one.”
Does that mean that we give up on that product 100%? Our advice was, “No, you have some momentum, you can keep selling this if you want to if you can do minimums and still fulfill that without having to do thousands of units and then you can slowly start to rank for other long tail keywords and stuff like that and maybe still run that pay-per-click at least if it’s a breakeven and then see if you can still build that out.”
It also could lead people to other products in your brand, that’s if we want to continue out this brand which we’ll talk about because that was another part of this conversation. Chris I just went on a little bit of a rant there about as far as how to figure out that next part but what did you take away when we’d first seen the product and when we first seen what we were up against with what he’s selling?
[00:12:18] Chris: I think my gut takeaways were very similar to yours and the thing I geeked out over is he had a metric boatload of sponsored ads data. He had 500,000 questions and all that stuff and we got to talking and it sounded like we are around breakeven on the product, is it worth continuing to pursue? And to me the answer to that question is not super simple. You have to decide if it’s worth renewing that order or not just on those say the two largest selling colors, the red and the blue and if you can do that then does that make sense rather than getting red, blue, pink, green, fuchsia and black if we just reordered those top SKUs and we can use that to bankroll other products? Is it worth our time?
At breakeven the answer is probably no because we are not creating a bankroll there, we are not pulling out any profit but what it turned out to be was that even without much refinement, his sponsored products were at around the breakeven point. So with some refinement we might be able to make that profitable which is interesting to me. One of the things that I suggested is that he take a look at that and see if there is a way to make it profitable because even though he is not getting a ton of organic traffic to that, if he can cut that ACOS in half then it might be worth doing because you are going to make… I think he said he was making $10 a unit so at a 50% ACOS that means he’s breakeven. If he can drop that to 25% percent he’s making $5 a unit.
So that’s not the ideal $10 that you and I talk about in the ten by ten by one method but its till $5 and this plays back into the question that I got a few times at Seller Summit and we get all the time and it was from our friends Josh and Jess. They said, “Look, we have a product that’s not necessarily on brand with where we want to be long term but it’s selling. Should we keep going with it or should we not renew it?”
[00:14:23] Chris: And that’s the same exact answer that I gave them. I said, “Well if you can use that to create profit and fund your other products then why wouldn’t you reorder it?” If he can find a way to make that profitable then it might be worth reordering in my opinion. That was my initial gut call from what we were talking about because it sounded like he was at breakeven if we can improve that a little bit and use that to bankroll the other stuff it might be worth doing another order on.
[00:14:52] Scott: Yeah okay so we talked about that and then he was really like, “I just don’t know if this is the market, I don’t know if this is going to be a brand.” And I’m like, “Listen, if it’s not telling you that it’s a brand, if you don’t have someone that is going to be pushing a brand I’m talking like a real brand that you have a suite of products then maybe it’s time to go to an open brand, maybe it’s time that this is just your open brand account.” And he’s like, “Well I’ve already branded my account with my name.” Then we basically told him, “That doesn’t matter, you can change your seller’s account your brand name within five minutes. That’s not a problem and then this name that you’ve given this product that could be your sub-brand in the open brand.” Does that make sense Chris?
Being able to take that brand that’s kitchen garlic presses you’ve named it that because you are going to be this kitchen garlic press seller and that’s what you are going to sell. You are going to sell these specialized garlic presses instead now you take that sub-brand or you create that as a sub-brand your main brand is XYZ deals.
[00:16:05] Chris: Yeah, what you are talking about there Scott is the soul buy name.
[00:16:07] Scott: Yeah the soul buy.
[00:16:08] Chris: So you can change that at any point. It’s in your account settings inside of your seller central account and you can change that to be XYZ wholesale and then the brand of the product doesn’t have to change.
[00:16:18] Scott: Exactly so that can stay the same so you have one leg in your brand let’s call it one channel in your brand or in your main brand, your umbrella, your open brand that could be in kitchen stuff and then you can start a brand new one in cabinet accessories for kitchens? So you can totally just start to pick random products and I think that’s what he really wants to do because then he can dabble and not feel as restricted like I have to find something in this space. That’s what we told him like that might be better to do so you have to go back to the drawing board and then start from scratch. It’s funny I asked him I said, “Reese do you have a list of products that you already have a list of that you might want to look into next?” And he really didn’t.
And he actually told us too when he was at Sellers Summit. He said, “I’ve just let this go on its own. I haven’t really pushed it, I haven’t done much maybe got busy,” whatever and then still been doing what it’s been doing so that’s still pretty good but I would have thought that he would have had a list of… I know I have a list of products. I know Dom does, I know you do and there’s just not enough bandwidth to launch all those products. And it doesn’t mean that all those products are going to be ones that you launch because you might go back to them and go, “Oh no now that I look further at it it’s not good.”
We opened his eyes a little bit on how to do that product research going back to basics and he said, “So what do I do, do I go just back to the Jungle Scout web app and start going there?” I’m like, “Listen you’ve got to start over by going back to your touch list. Go back to your touch list or think about things you are passionate about right now. Is there something you would want to build a brand around eventually? Maybe you start there even though you might not call it a brand yet or a big brand you can at least dabble in that brand to see if something sticks and then start to build off of that.”
[00:18:18] Scott: He got thinking he’s like, “Yeah okay.” Then I’m like, “If you are going to use Jungle Scout web app and we actually did a whole thing with him on this we took him through that process using some examples and I said, “Listen, what you have to do though is use the web app to get ideas.” Maybe, do those refinements and stuff and all those filters to bring up products that could fall in that arena of the different criteria but then from there, and this is what people don’t do and he didn’t even do this and a lot of people don’t so it’s not like he is the only one that doesn’t do this.
But you find a product and then that might not be the product you are going to launch because it’s being shown in a web app so you are like, “Everybody sees this thing,” but then you drill into that person’s brand and then you see a suite of products that they are selling or their open brand and then you start to pick through those and start to see if anything can meet that criteria. Does that make sense Chris though all what I just said?
[00:19:13] Chris: It does and going that second layer deep and it’s something I said on the call with Reese was no one does it and the other thing that no one does and everybody poo poo's the touch list but every time we talk to somebody who’s selling extremely successfully it turns out that they are using their touch list and Scott you and I find most of our products by using our touch list.
[00:19:34] Scott: 100% yeah.
[00:19:38] Chris: It’s something that we do all the time. Now I don’t keep a running list of everything I touch at this point because it’s a habit for me. When I touch something I go, “Oh I wonder if this would sell on Amazon. This is a weird thing I wonder.” Then you jump on and you look at Jungle Scout when you get home. That’s how I handle that but starting off with that list is extremely powerful. But the other thing that is and that’s what you were touching on is diving that second layer deep.
It’s clicking on that soul buy name and seeing what else those sellers are selling and it’s something that not a lot of people do because one, they either just don’t know that it exists or two they are digging through their own list of stuff and they just want to look at the top level things. That second layer gives you a lot of insight into one, whether or not you can build a brand off that product. That was something that you and I found, the item that you and I have talked about that I found when I was putting together my guest bedroom.
We did that second layer and found out that there were a lot of complimentary products that would also meet the ten by ten by one criteria and we could build a brand around a completely non sexy, for a lack of a better term ridiculous item and build a brand of five, ten, fifteen even products around that one item. And so diving that second layer deep gives you other ideas but it also validates demand for the market as a whole, for the niche as a whole rather than just for that particular item. Does that make sense?
[00:21:04] Scott: Yeah it makes total sense and the one that I said to him is well, “Listen, sometimes it’s the non-sexy products.” The product that he’s selling is a sexy product and what I mean by that is it’s something that you’d be proud to tell your friends that you sell. It’s like, “Cool look at this, I sell this amazing…”
[00:21:22] Chris: People would get it.
[00:21:23] Scott: Yeah they’d get it and they’d go, “Oh I see,” but if you told people that you sold repair parts for a blender that’s not that sexy. And it’s funny because I showed Reese an example actually I pulled one of the items off of my list of products then I said, “Reese I don’t care I’m going to show you this.” So I showed it to him and I started drilling down into these different products, these different pieces and he was blown away and he’s like, “Wow I would have never known,” and I go, “Yeah I never would have known this number one, if I didn’t have to have one of these in my house one day and then if I didn’t start looking at parts around this item I never would have found that.”
That’s how I found that product. I did not find that product and the things that could be sold around it by using a tool. I did use the tools to go in and refine and dig and I used the shovel once I figured out where to dig but I did not go out there and just let the web app tell me what I should sell. That’s what people are relying on. They are relying on the web app to tell them exactly what to sell. That’s not how I’m using it and I’m not saying that you can’t find a product that way but I’m saying I use it as a way for me to bring an idea to me in a certain market or a category and then I can start to drill down and dig in that area that it made aware of.
Like I said the product that I was going through with him and it was funny I showed him like this whole different methodology on how you would do it that he wasn’t aware of and it’s funny because I’ve said this time and time again and I’ve showed people how I’ve done it but it’s basically again just finding that product, looking at the brand… Don’t even worry about that product right now it might be selling really good but it's competitive and then I would click on the brand that’s selling that and I would look at all their products and sometimes you see that all their products are related to that one products and sometimes you’ll see just a barrage of things that’s their open brand. And then I start drilling into all of those different products inside the open brand.
[00:23:24] Scott: The other thing that I do is once I go into their brand that’s when I run the Jungle Scout extension and I get details on all their products that they selling in that one brand. And that was one thing that he wasn’t doing as well and he was like, “Oh wow I didn’t realize that running that on that page is going to give me just their results,” and that’s exactly what it does.
He took a ton away, I know he is going to get back to the drawing board, I know he’s going to figure this thing out but I just want to go back to anyone else that is at this point just understand that if you are not married to the product, and you shouldn’t marry the product at first because you just don’t know and the thing is if you don’t marry the product it gives the freedom to be able to say, “You know what, I’m going to pivot and I’m going to go ahead and figure out another product or if I’m going to turn this into an open brand versus a main brand.” Does that make sense Chris?
[00:24:17] Chris: It does indeed and that is the key here is don’t get married to your product even if it’s something that you’ve been selling for two years. You have understand that the market is going to change but in most cases if you get out of the woods on that first order it’s something that you can continue to sell. That’s a question that you and I get all the time is that, “When you guys say don’t marry your product but does that mean you are just churning products out left and right?”
No, you are still selling some of the stuff that you first launched and you are selling almost as many of them as you did when you first launched it at this point. It’s just one of those things and if you don’t get married to those it’s going to open your eyes and it’s going to make you a lot more objective in terms of whether or not you want to continue with that or if you want to pursue something like the open brand strategy.
[00:25:03] Scott: Yeah exactly and going back to even like my first product and first so called brand because I thought that that’s what I was going to do is build that thing as a brand, I’ve since backed off of that just because the market. Now I’ve learned more and I’ve seen that its saturated in certain areas and stuff and I also don’t want to expose myself to people finding me and stuff so for other reasons but like you said I was able to look and see what’s happening, adjust and then decide do I want to let that brand be an open brand or do I want to let that brand do what it’s doing and start a new brand? That’s your option.
For Reese my recommendation to him was probably go to an open brand right now and it’s very easy for him to do that because he’s only got the one product and now he can just make that product and he can still launch products in that market just underneath that brand but the main brand, the soul buy brand is going to be XYZ deals or XYZ wholesale and then from there he has the freedom to be able to do that. I think the big thing I want people to understand here is number one, you are going to learn a ton through this process and I think Reese really understood that. I think a lot of people don’t see the value in you take the action, you get results, you react. You learn, you react, you get all of the things that happen when you actually get to see what happens.
It’s like split testing. If you don't do a test you don’t know how it will perform. A perfect example, the product that I first launched the very first product and I would think that it’s not going do well it’s just going to fizzle out. It’s still selling pretty well and I’ve raised the price because I tested it and I found out that I probably should have raised the price a year ago because I’m getting two to three dollars more per unit right now and it’s selling the same. But if I didn’t test that, if I didn’t take action to see what would happen I never would know.
[00:27:02] Scott: I can’t stress that enough guys, you guys hear me say it all the time it’s like you have to actually implement something in order to see a result period. It just doesn’t happen. You can’t lose weight unless you start to exercise and diet. You can’t, you can think about it but you’ve got to actually do something. So Chris, let's wrap this up but I did want to get your thoughts on the overall call that we had with him and then anyone else out there that might be in this situation or in this spot.
[00:27:30] Chris: First of all and I said this earlier I think he’s got absolutely the right mindset to be successful in this business. I don’t think the product he picked was an ideal product by any stretch of the imagination. I think if he does want to continue with it, if he digs through that data that he can make that a profitable product for him to bankroll those other things it’s just a matter of whether or not he wants to do that work versus investing that time and effort and quite frankly money into a new product or launching a few products with the open brand concept. But I think he definitely approached this from the right way. He is using the data to inform his decisions which is exactly what you were getting at there.
We say don’t get married to a product, don’t be emotionally invested and that’s something that’s really hard for a lot of us and I struggle with it too, but I know that the data is going to tell me whether or not something is working. If you are at breakeven after your first order that’s not necessarily a bad thing and you have to do exactly what we did with Reese yesterday and look at whether or not it’s going to be profitable in the future. If I make this change, this change and this change is it going to be profitable and then if yes do I want to invest my time, effort and money into making this product profitable? Does that make sense?
[0:28:47] Scott: That makes total sense and I think this goes right down to what I see in a common thread of people that we met at Sellers Summit and people that I just talk to in general but most of the people that are successful have failed before they were successful. Meaning the product failed or their idea failed but they kept going. There’s many people that we met over that weekend and said, “You know what, I started my first two products were no good, the third one I started to building some momentum and then I launched three more products around that and now I’m doing $500,000 or now I’m doing $1.4 million.” Like that couple that came up to us and said, “I failed so much going up in the beginning but I learned a ton, I learned what not to do, what to do more of and all that stuff.” That’s the people that succeed.
You can’t win if you quit, period. You have to keep going, you have to keep trying if you really want this and again that goes back to your why and all that stuff that’s why mindset is a huge play here in anything. We are talking business her e but if you wanted it’s there for you, you just have to keep pivoting or keep figuring things out as you move through this but you will be smarter I promise you. You will be smarter as you keep going through these different tests. Think of them as experiments when you're doing a product in a sense. Think of it as an experiment, think of it as a test and then from there you can decide what to do next.
You won’t be able to do what we just did with Reese unless you’ve actually done something to get a result so we can actually look at and make that decision. Chris I think that’s it I think that’s going to wrap up this episode. I wanted to keep this short and to the point and give everybody like a quick little recap of like being in a coaching call with us. I think it was really, really good for him to hear our outside perspective and he even said that it’s good to see someone looking at it with a different set of eyes through maybe different glasses in a sense where you are actually able to see a little bit differently and you are not just looking inside so tightly because they are so vested in that product or they are so committed to that product.
[00:30:54] Scott: That’s it, that’s all I got. Guys the show notes can be found at theamazingseller.com/375; transcripts, show notes, any links we mentioned will be there as well and yeah that’s going to wrap it up. So guys we are going to do this with Chris on this time, we are going to do it together, hopefully Chris has got enough energy to do the ending with me so, you ready Chris? Are you ready to do this?
[00:31:17] Chris: Oh I’m ready.
[00:31:18] Scott: Okay let’s do it. alright guys, remember I’m here for you, I believe in you and I am rooting for you but you have to, you have to… Come on say it with me, say it loud, say it proud, come on Chris, one, two, three, “Take Action!” Have an awesome amazing day guys and I’ll see you right back here on the next episode.
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