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…the past eight months in our new brand and how we have reached $200,000 in sales. Actually, a little bit over that and I’ve invited Chris Shaffer back on, so we can kind of go through the roller coaster ride that we’ve been on. Chris, what’s going on there?
[00:00:37] Chris: Oh man, all kinds of stuff is going on. You and I were just talking about everything that’s happening in the new brand. I’m a little tired this morning. We had a little bit of late night last night, but I am fired up and ready to dive into this if you are.
[00:00:49] Scott: I am so ready because it’s exciting to kind of go through and look and see what’s happened since we started, and I think for people that are just starting, you always kind of think yourself, what does it look like, like going through this process like what can I expect? And the answer is it depends. Right, Chris?
[00:01:11] Chris: Everything.
[00:01:12] Scott: Everything.
[00:01:12] Chris: You can expect everything.
[00:01:14] Scott: Yeah.
[00:01:14] Chris: And nothing and then more stuff.
[00:01:16] Scott: Yeah. So, I want to give a little bit of a backstory about how we even came across this brand, how we discovered the first product or even how we want to or why we want to be going to this market. Because I think a lot of people say like, “Okay. So, what tool did you use? How did you discover this?” Like a lot of people want to know that. I know that I always kind of ask people. It’s one of my first questions is always like, “Well, how did you figure out what you are going to sell or what did you do to figure out the products that you were going to sell?” So, I want to take people through that process and give them a little bit of a back story. So, let me just kind of start with myself personally I’m always looking for opportunities. It’s just the way I’m built. I know, Chris, you are as well. You and I together sometimes have to be calmed down a little bit.
[00:02:00] Chris: Reined in.
[00:02:01] Scott: Yeah. Because like you said, we can bust through walls but then we have to have people pick up the pieces. So, I’m always on the lookout. My wife is always now and sometimes I tell her like, “Listen, we’re good,” because she’ll come with ideas to me because she knows what we do. So, you may have a spouse, you may have a friend that knows what you’re doing and they’re like, “Hey, have you ever thought about this?” And then you’re like, “Hmm, I haven’t,” and then you start looking into it and you’re like, “Wow, there might be a market here.” Kind of like the Jeep story that I share is like that was my touch list because that day I was looking into jeeps. I was educated on that and I came home and immediately I jump in and start researching jeep accessories and then I stumbled into that market. Now, that doesn’t mean that I’m going to go into that market, but I could.
So, long story short is my wife she actually did come up with this idea of maybe you should go into this market because I’m really interested in this market and I think that ladies and women primarily would be interested in this market but men too. But there is a huge amount of people out there that would be interested in products. Now the keyword there for me is products. So, what I always look at is when I’m looking at a market, I’m not just looking at one product. I’m looking at multiple products. Can this same customer buy more than one thing from the business? I think that’s a key point that I want you guys to understand is that we’re not just looking at one-off products. If immediately right now you think to yourself you have an idea, are there multiple products that can be sold to that person? So, the example of the Jeep. If I was going to go into the Jeep Wrangler market, that would be Jeep Wrangler accessories, I would see that I could sell taillight protectors, the steel ones for off-roading. I could sell a grill for the front, these little inserts. I could sell inserts on the inside that trim out the inside to make it look more customized.
[00:04:03] Scott: I could do a steering wheel cover. I could do an armrest. I could do these little pegs that go outside the door that when you take your doors off, you can put your foot out there which is kind of cool, which I kind of want to get one of them. So, when you’re riding down the street without your doors on, you can kind of put your foot out and have something to kind of lean it up. It’s kind of like a motorcycle. Like there’s all these things. So, boom, boom, boom, boom. I’m going through all these ideas. I’m like, “Yeah. There’s a lot of products that people would be willing to buy,” and it’s like you’re grabbing people from all different directions.
So, that’s really how the idea came about. It was an idea. It was not a tool but immediately whenever I get an idea and, Chris, I know you do the same thing, you immediately start pounding on the keyboard and go into Jungle Scout and then you look at the numbers. And then from there we start doing our history, search as far as in CamelCamelCamel. We start looking to see if the numbers in Jungle Scout or in Amazon are something that are worth looking at. And then we just start going through our little process there. That’s what we do and that’s what we’ve been doing. So, that’s kind of how the whole idea started. And then from there, my wife had a friend who was also interested and so we said, “You know what, let’s just go ahead and partner up on this thing,” and that’s what we did. So, that’s a long story short. That’s how it kind of happened and then we just started. We just dove in and launched our first product. Am I missing anything there, Chris?
[00:05:22] Chris: I don’t think you are. I mean, it’s funny because, Scott, people always want to know like what’s the secret? What’s the tool? And most of our stuff that we’ve launched, even looking back to the first brand that you have, is stuff that was on our touch list. I mean it’s all stuff that we interacted with on a daily basis and a lot of people poo poo that, but especially you and I have talked about this on the podcast in the past. It’s too easy to work, right?
[00:05:46] Scott: Right. Right.
[00:05:47] Chris: What’s the super-secret ninja trick that can find me a product without me doing any effort? And the answer is pick up the stuff you use on a daily basis or walk around Bed, Bath & Beyond and see what kind of sticks out to you and then take a look at the numbers. And that's something especially as you dive into this that happens more and more over time. Like you and I can look at something now and get a pretty good idea of whether or not it's going to sell before we even take it to Jungle Scout. Sometimes we're surprised when we take it to Jungle Scout at how much it's selling or in some cases how little it's selling but we have a pretty good idea of whether or not something might move just by looking at it but that's not like a superpower. That's just something that comes from doing this over and over and over again. And I think the way that this brand came to be is not like this super big secret. It's something that everybody can have and do themselves and I think that's one of the coolest things about it.
[00:06:38] Scott: Yeah. And again, like you said, like the first thing I always do and it’s funny because even my wife or our partner, they’ll come up with like another thing that we can add and then the first thing I do is I look at depth demand. I go through my whole process and I go, “You know what, it’s great and all but no one’s buying it.” It’s cool. It’s a great idea. There might even be something like, “Oh here’s a cool spin that we can do on this,” and I’m like, “There’s nothing there for proof for me right now.” Does that mean that we don’t launch something and just test it? No. At this point now that we’ve established the market, and that’s another key factor here. If you’re starting, you don’t know what market you’re going to go into, that’s like the first challenge. And then from there, you got to start looking at products. Once you establish the market you’re going into then it becomes actually easier because now you’re just started thinking of, what is the next product? What is the next thing that that customer would buy? Or what is something else that the customer would buy that might then lead them to my first product or my second or my third? So, that’s kind of how we think.
Now, so it’s actually easier once you get started and it’s actually hard in a sense because you want to launch all of them or you just want to test them. So, I always look at the numbers. I’m always driven by the data, but I’ve got my partner that also and, Chris, that says, “Let’s just try it. We’ve got the customer base. Let’s just go ahead and let’s order 250 of them and see what happens.” And we’ve done that a couple of different times and it’s worked out. So, we’re able to do that now that we’ve narrowed it down to the market that we’re going after and then the products that we think that they would be interested in but then I always like looking at the numbers. There was a product just the other day that my partner sent to me in a text that said, “Here’s another one I want to do.” I already have our agent looking into this and I’m getting pricing and I looked on Amazon and there’s only like two selling. That’s kind of a good thing. Out of those two selling right now, they’re getting a lot of sales. There’s no one else selling it. So, does that mean that I don’t go into that market because there’s not enough depth? No. It means that I could test it because I already know the market and I already have a customer base. So, that’s a different thing. Now, if I was just starting out and I was launching the first product, I might stay away from that when I might go after one that has more depth and demand in the beginning, so I have a better chance of success in the very beginning. Does that make sense, Chris?
[00:08:56] Chris: It does. And actually, Scott, we just got this question last night from somebody and it was very much along those lines and he said, “I have a product that I really want to launch that’s completely unique. It’s not something that a ton of people are buying on Amazon and I think it would do really well. Should I use that as my first product?” And my answer to that is actually no. Get your feet under you or something you know is going to do that and then if you want to take a risk on something like that then you at least have a base of sales and you’re not spending money out-of-pocket with no return. If you’re using profit from the business to do it, that’s one thing but to go out and just kind of take a wild stab is not something that I would generally recommend doing. That’s why we have the numbers. That’s why we have the process that we have and in some cases, those are going to do really well. And one of the products, Scott, in the new brand that we kind of did that with so there’s a little bit of depth in demand here, not necessarily for the way that we’re thinking about putting a spin on it but there is some depth in demand. And we already had a base of sales from other products. We said, “Let’s give it a try. Let’s order a couple of hundred units and see what happens,” and it turns out that’s one of our better selling products now because of that.
[00:10:00] Scott: Right.
[00:10:01] Chris: But if that had been our first product, it would’ve been a different story potentially. We were able to drive the demand for that starting with our email list and then it got established inside of the Amazon marketplace. And because of that now because of where it ranks, people go, “Oh, that’s cool.” But if we would’ve had to try to market that to this audience inside of Amazon, it would’ve been a much, much different challenge I think.
[00:10:25] Scott: Absolutely. So, here’s what I want to do. I want to take you guys through the months that we’ve been through so far as the time of recording this and I’m going to take you through them. It’s like I said, we’re going to take you through those months. I also want to give you three takeaways, three takeaways that I feel are really, really important especially if you’re starting today. And I get a lot of people say, “Scott, isn’t it harder today than to launch three years ago?” And the answer is kind of. If you wanted to just launch widgets or some just one-off products, it was easy or three years ago. You're right. Now what we want to do is we want to attack it a little bit differently and it's really going back to the way it's been for years when building a business. It's just now we have more resources to do it but there are three main things that we look at whether we're building this brand or even starting a new brand. If I'm starting a new brand, these are the three things that I need to consider when starting a brand or when even partnering with a brand. So, that’s what I’m going to be covering with you.
Now, it’s funny, Chris, because I shared these numbers like – actually I’m looking at the actual number at the time of this recording. It’s $208,663.80. So, that was the revenue brought in. Now, mind you, because some of you may get your eyes wide open when someone shows you that they did $500,000 in that same amount of time but they're selling a product for $40. It's double what we’re selling our products. Our average product is between $19 and $20. So, to do that, you have to do a lot of units. So, to me, that’s pretty awesome because I’ve got a lot more customers. Now that doesn’t mean that on the horizon there’s going to be some $40 or $50 or $60 products. There are but what I want you guys to understand is don’t get so focused on the numbers and look at the margin, look at the amount of units you’re selling. So, just really, really important that you understand that.
[00:12:22] Scott: And actually, I know the big question that people are asking me is, what are your margins? Right now, they’re currently 44% and we’re increasing those or making those better coming up here 2018 because we’re going to be doing a lot more. Instead of air shipping, we’re going to be doing by sea. We’re going to save quite a bit of money there so that will take our margin and maybe push it another 2%, 3%. And then from there, we’re also going to be doing some other things as far as maybe we are going to be doing some external stuff that we’re going to take sales and get those sales for our own channel and maybe just have Amazon fulfill it. So, there are some different things that we’re going to be working on but 44 is still good for starting a business. All right. So, let me kind of take you guys through it. I’m going to run through these numbers really quickly just to kind of show you the ups and downs and show you the growth.
So, April was the first month and I think it was about maybe two weeks, maybe a little less than two weeks that we launched in April. And we launched with our email list and we just let people know that we have a product for sale. That month we did 244 units and that was on one SKU. So, that’s 39, 63, 91 is what we did. May now, we started to get our bearings a little bit here. I think it was, let’s see here, I’m trying to read my notes here, Chris. Oh, 529 units. So, 529 units and that was $8,904.30. Not too bad. We’re going up. Then in June, things started to really tick up. We were at 1,132 units. That’s $22,122.73. This is revenue numbers too by the way. July, got a killer month. 1,873 units, part of that was because we had prime day in there which is pretty good for us. $35,593.87. Pretty awesome. But then in August we only had 872 units, $15,933.24, which you know what happened? Chris, what happened?
[00:14:19] Chris: Prime day killed us. No.
[00:14:21] Scott: I know. We ran out of stock.
[00:14:23] Chris: We ran out of inventory.
[00:14:24] Scott: Right? So, we ran out of stock. We were out of stock for, oh gosh, how long were we out of stock for, Chris?
[00:14:30] Chris: Five weeks.
[00:14:30] Scott: Yeah. Like five weeks on one of our top SKUs at that time. So, you can see how that hurts. If we would’ve had inventory and it gives you that projection in there, Chris, and you kept giving me that number. It was like 20,000, 30,000 that we were technically losing in sales or something like that.
[00:14:47] Chris: Yeah. I think it kind of peaked right around 21 or 22.
[00:14:51] Scott: Yeah.
[00:14:51] Chris: It’s a rolling number. So, without going back and having a screenshot, it’s hard to tell but it was between 20,000 and 22,000 kind of at the top end there and it’s because we ran out of inventory. And, Scott, like the running out of inventory thing is something that a lot of people freak out about because they say, “How am I ever going to get back?” So, the question that would be in my head if I didn’t already know the answer to it would be, “Okay, but what happened once you got inventory back?”
[00:15:14] Scott: Yeah. That’s a great question and that is the power of an email list because we are able to notify our email list and let them know that we are back in stock and then get a bunch of pre-orders which is pretty cool. And, Chris, talk a little bit about the preorders. How does that work? What happens? And do you feel that that helped us by taking some preorders?
[00:15:33] Chris: So, with the preorders and we actually just had this on a new product. Basically, what you can set and I’m going to look for the name of the field kind of on the fly here, Scott, because I don’t remember it off the top of my head and I feel like a terrible human being right now. But there is a field in the backend that you can set, and I think it’s called like Offering Release Date where you say, “Okay. This is the first date that it’s going to be available.” And if we have inventory at that point then we can do it and then there’s Release Date. Release Date is actually the field that you need to fill out. It’s inside of the More Info tab and basically, what that allows you to do is that allows you to sell presales some of your inventory before Amazon actually checks it in fully and has it available for sales. So, as long as you have inventory in reserve at Amazon, you’re actually able to take some sales at that point. And basically, what happens is, yes, you get a BSR and all that kind of stuff right away, but all of those preorders count as a sale on day one when you actually have inventory live or when that release date comes.
So, we had a product release date of today on one of our new products and all of those sales that we got over the last two days seem to count, and I'm going to say seem to count but it's because they're actually released today so they hit the Amazon system today and we've noticed that we get a little bit of a bigger boost in terms of keyword placement and those kinds of things. Now, you can only do that once per product, but if you want to sell it a little bit early and you have an email list and you have those kinds of things, it’s definitely worth taking a look at. And the upside is you can sell two, three, four days before you would be able to sell otherwise on Amazon and that becomes really important if you’re launching multiple products because you can kind of control when they come out even if the inventory is already at Amazon.
So, definitely, something to take a look at especially if you have that email list. It's been something that we've used any time we have a new product coming in because it allows us to notify people before you would show up on Amazon by three or four days in a lot of cases. Because once they have it checked in in that reserve status, they add the Add to Cart button and people can buy it even though it’s technically not in inventory yet.
[00:17:44] Scott: Exactly. And that’s the cool thing I think with allowing people to preorder is you’re kind of getting like that launch, you’re kind of getting that little surge of sales. So, you get a little bit of a bump. So, to keep moving here, so then in like that was August, 872 units, then we started to get inventory back in September and then we had a nice little bump. It was 1,467 units. So, $28,080.60 was September so pretty good. October now we continue to climb. We had 1,588 units sold, $30,877.12 and then November we did really well, 2,613 units, $51,128.27. So, pretty darn good and for December we are on track to do more than that. We’re actually on track right now to do just over 60,000 but we’re probably looking more like 70 or maybe even 75. That’s my goal is to really hit those bigger numbers and we’re going to do some things to really spike those sales with our email list and do some sales and some specials. Even though Black Friday kind of already came and gone and so did Cyber Monday, we are going to be doing that.
So, with that all being said, let me just say this. Some people say, “You guys kind of did really good in the fourth quarter. So, shouldn’t I just wait then until next year?” And the answer is no. If you notice what I just shared with you, we started in April and through that, we’re able to build the foundation to get set up for fourth quarter. And now what we plan on doing is launching more products and then getting ourselves ready for first quarter and second quarter like we’re just continually building a business. Yes, you are going to have ups and downs and some of them are peaks that are like little bonuses for your business. That’s fine. Don’t bank on them but just know that you will have these spikes and you will have these dips.
[00:19:46] Scott: Now, hopefully, you won’t have a dip because you ran out of inventory. Maybe the dip is just because e-commerce sales are down in July let’s just say, which for us they were pretty darn good. So, again, just think about this as a journey. You’re going on this journey, you’re building a business and take the ups and downs but just always be looking at ways that you can broaden the product line that you have and that’s what I’m going to get into here as far as the takeaway. So that is the numbers. That is the numbers. So, you could see, the roller coaster ride. We started. We added a little up and we got, man, we had a big dip and then all of a sudden, we started climbing back up that hill again and I think right now in December we’re going to be at the top still. I know I think we might have a little bit of a dip after the first year. Don’t know yet. We’re not there yet. But we’ll let you know how that works. But inventory looks like we’re going to have enough to take us through fourth quarter. Hopefully, fingers crossed but if not, then we’ll run out.
[00:20:40] Chris: It’s a good problem to have.
[00:20:41] Scott: It really is. So, anyway, that is the breakdown of the numbers. So, I wanted to share that with you. So, let’s dig into the three takeaways so this way here you guys can kind of wrap your head around of what we look at when you’re starting your business or even in this business and what we continue to do here to build out this brand. So, number one, like I said at the beginning, it’s important to investigate the market. So, if you are thinking about selling a product, the first thing that I want you to ask yourself is, is there Facebook groups, are there communities, are there YouTube channels, are there whatever, Instagram? Did I ever say Instagram? Pinterest like are there communities, are there groups, are there places where people are talking, not just your product, but your market? So, I use the fishing example. If I was going into the fishing market or I thought, “You know what, I would love to sell tackle boxes,” well then, I would say, “Well wait a minute here. Who is this for?” It’s for fishermen. What kind of fisherman? Bass fisherman. Okay, let me go see if there is there are Bass fisherman communities. Well, there are. Cool. Hunting. Are there hunting communities? There's a ton of them. Okay. Cool. So, I’m looking at the product, but the market more than I am just that product.
So, I want to make sure that if I have a product, I can start to let people know about it inside of a group and it could potentially start to grow by people talking about it, kind of like word-of-mouth. So, communities, Facebook groups, Facebook fan pages, all of that stuff I look at that stuff to make sure before we go into a market. Now that I’ve already established that in this new brand, we know that so that part is already done. That part is already done. And the one thing that you need to definitely make sure and this is a great question to ask yourself, if you are struggling to find multiple products, it’s probably not a good brand to build. You want to be able to almost like rattle off like three, four, or five products right off the bat and then from there, they're going to start to kind of show themselves to you as you start to get yourself invested into these groups and communities and stuff like that. But you should be able to rattle off three, four, five products. What're your thoughts on that Chris?
[00:22:49] Chris: I think that is kind of critical at least in terms of the cohesive brand model, Scott.
[00:22:56] Scott: Yeah.
[00:22:57] Chris: It’s a question that we get all the time it’s like, okay, you guys are talking about building a brand. Is that the only way to go? The answer is no. You can have an open brand and then if you’re just trying to get your feet under you, that’s fine. But if you’re really in this for the long term, the thing that I would be looking for is that cohesive brand where you can rattle off those four or five or six products. That doesn’t mean, and you certainly should not be launching four or five or six products back to back to back, but there have to be some of those logical extensions. You have to be able to see that there are other things that people are interested in that are in that same market.
And, Scott, if you look at the fishing example or the Jeep accessories thing, they’re going to have the Life’s Better Topless sticker for the back of their Jeep and they’re going to have the little headlight guards and all of those kinds of things. There are six or eight products, and I know nothing about Jeeps, that I would think just knowing the little bit about that market from what I’ve seen people driving around in their Jeeps that they have on their Jeeps or in their Jeeps that you could rattle off for that market. And that doesn’t mean necessarily that all of those are going to be good products for you, but it means that there’s depth not just in terms of sales for a product but depth in terms of that market. And that makes the marketing of the thing significantly easier, right?
[00:24:07] Scott: Right.
[00:24:08] Chris: It’s something that we’ve talked about over and over and over again especially in this new brand. Because there's a community there, it makes our job so much easier. All we have to do is go, “Hey, here's this cool thing,” and they go, “Let me buy it.” And you're like, “Okay. I mean, if you want to.” It takes the sales side of it and you're just presenting people with cool stuff and if you can do that, it makes your job so much easier.
[00:24:31] Scott: Totally. Yeah. Again, guys, to kind of keep this clean, investigate the market. Again, if you are building a brand, if you are doing the open brand model, like Dom talks a lot about, he has other brands that are just focused on like a market but he has an open brand and we work in that brand with him and it’s kind of like you’re experimenting with different markets inside this brand. That’s what an open brand allows you to do. Now if all of the sudden you see in one of those markets that you have in your open brand, you see it starting to take off or you start to discover something, kind of like retail arbitrage, you’re able to really expose yourself to all of these different markets and categories, that’s fine but in the end, you do want to try to build yourself a brand, in my opinion. And here’s another thing to think about. I just actually did an interview for our Private Label Classroom. I did an expert interview with Joe Valley and we were talking all about building a business to potentially sell in the future. Chris, want to hear something pretty crazy?
[00:25:32] Chris: I do. I love crazy.
[00:25:34] Scott: You do? Don’t you? Well, I was talking to Joe and I said, “What’s it look like for like if you wanted to sell a business and cash out at $1 million? What do I need to get my business at as far as numbers?” And basically, it’s generally a 3.5 depending on your assets and what you have in that business, 3 to 3.5 return. So, if you get a business to $300,000 net after expenses, you’re basically going to be able to sell that business for $1 million. That sounds not that hard.
[00:26:08] Chris: So, I mean, just for reference on that, Scott, what did you say the number was? $208,571 in change?
[00:26:15] Scott: Yeah. Well, that’s top line so you got to tip it off.
[00:26:18] Chris: No, no, no, but that’s what I’m saying and so, I’m just going to do some math on the fly here. Is that number accurate? So, 208,571 is that what we’re saying?
[00:26:27] Scott: 208,653.
[00:26:29] Chris: 663. Okay. My numbers are old by $6. Okay. So, you said we have a 44% margin, right?
[00:26:40] Scott: Yeah.
[00:26:41] Chris: So, that’s $91,811.72 in net.
[00:26:47] Scott: Yep.
[00:26:48] Chris: So, basically, we would have to 1.5 times that.
[00:26:53] Scott: Yeah.
[00:26:54] Chris: Now keep in mind, we’re only eight months into this.
[00:26:58] Scott: Well, and that’s the other thing to add. The other thing that you need to do is you need to have that business he said about 18 to 24 months. He likes 24 months. So, you need to build that business. We need to show growth and other opportunities that you could be bringing, and you can even push that to a 4X. So, you can increase that by your different assets if you have outside sales coming in even if it’s a small portion showing that you have diversification more than one SKU but on the low side of things we’re talking $1 million on a 300,000 net per year business.
[00:27:28] Chris: Right. And if we take our let’s say September number, what was that September number?
[00:27:34] Scott: That was 28,000.
[00:27:36] Chris: So, that’s Q3 so that’s not an inflated number. So, 20 times 12 that be $336,000 a year. If we assume we did that flat all year because even with August, starting over the last few months it’s like 17 but once we get our feet under us, 28 is probably a reasonable assumption and it’s probably low if we did that. That’d be 336 times 44%. So, you’re at 147,000 run rate right now.
[00:28:08] Scott: Yes. So, let’s just call it 150. If you did 150 and you would let’s just say you three times that, you’re still like a half-a-million-dollar business that you could sell it for.
[00:28:18] Chris: Right now.
[00:28:19] Scott: Right now.
[00:28:19] Chris: Eight months in. Right.
[00:28:21] Scott: Yeah, if you consistently stayed on that track.
[00:28:23] Chris: Exactly.
[00:28:24] Scott: Yeah. So, again, I just thought that was interesting. I know we’re all off topic here but it’s important to note that when you’re building a brand, you’re also building something that you could potentially sell. And the crazy thing is, is some people would say like, “Who would buy a business for a million dollars?” He was telling me that a million dollars actually is a low number for selling businesses like this. I mean, he's seeing people show because a lot of times when you do this, you have to actually show the funds. They're showing $1 million, $5 million and no problem. Like there are buyers out there. There's more than enough buyers out there that want to buy businesses that are profitable and that have a run rate but they also have history and they have assets and all that stuff. So, it kind of was eye-opening to me a little bit. I knew it was happening, but I didn’t know it was at that scale. There is a huge opportunity to exit a business if you want to. So again, I mean, we’re talking small number.
[00:29:19] Chris: One more note on that, Scott, before we kind of move on. The reason there are buyers out there that are willing to pay $10 million, $15 million, let’s just say it’s a 3X multiple on that 5 million that you just threw out which again, guys, like these are numbers kind of incomprehensible to a lot of people but when you think about the math, it’s not that difficult to get there in terms of sales in Amazon. We’re halfway there or more than halfway there in eight months with one brand to that million-dollar exit that we talked about. But the reason that there are people willing to spend that money especially on e-commerce stuff and I had this conversation with Joe and he said, “You’re exactly right,” is I can look an e-commerce business and again my background is in e-commerce consultant so I have a little bit of a leg up there but if I had $30 million lying around, I could look, Scott, at this business, at this new brand and say, “Okay, well, you are single channel dependent.” If I just simply built a website for this brand and use that email list that you have to market to that website, we could add another $200,000 a year to revenue without doing anything else. I’d be getting extra hundred thousand dollars back in profit by doing nothing but building a website or by doing nothing but using your email list better than you are using it currently. So, there are little things in your business that you might not be the master of. You might be great at launching products, but you might struggle a little bit with the outside marketing side. Somebody that has those chops can come in, buy that business from you, and they can still turn it around to make a profit on it and that’s why people are willing to spend that money because you’ve done all the foundational work. I can come in, make a few changes and make a bigger return back on my money than I would be able to if I put in a stock market or something else.
[00:30:55] Scott: Absolutely. Yeah. There’s a whole market out there for people buying businesses. So, anyway, that’s why like when you’re doing this, you want to set things up correctly, but you also want to try to build out a product line and then also a brand that supports the products and customer acquisition like all of those things. But again, we’re getting a little bit ahead of ourselves, but this is what we’re looking at. This is what I look at. This is why I’m so excited about the new brand is because it covers all of these. So, anyway, to stay on track here, I want you guys to get these takeaways. Number one, investigate the market and see if there are groups and communities out there that are talking or that are using or raving fans inside of that market. So that’s number one, so are there buyers? Okay. Are there multiple products that we can think of? That’s another thing to ask yourself. Now number two, this is another takeaway is email list and social channels. Can we build our own email list and our social channels in this market? So, again, going back to the first thing, if I'm seeing that there are already Facebook groups out there in communities that just means that I have to go out there and find a way to get people to come over to my group or my community and build that.
So again, that’s why the first thing is really important because then that kind of spins itself into the second takeaway is building the email list and social channels. I believe because we built an email list in that asset, it has built the brand faster and I know it’s eight months, so you call that faster or some people would say it’s not that fast. To me, we’ve done it pretty quickly and built an email list of over 16,000 now that we can send a message to whether it's going over to one of our Facebook posts and talking about it and then hopefully getting it shared and other people would be exposed to it or if it's directly selling something. So, that's what the email list and the social channels do for a brand and I call this feeding the beast. And the beast is Amazon. What do we want to feed Amazon? What does Amazon like? Sales.
[00:32:57] Scott: All of the stuff that we’re doing is pretty much based off of sales so when we get ranking it’s because of sales. Yes, we optimize our listing and everything, but sales are what really drives everything. How do we get reviews? We get sales. So, we need to get sales. That’s what we need to do and that’s what the email list allows us to do and the social channels, and then it helps us get that organic ranking that we all want. So, that’s number two, email list, social channels but again, we’re figuring that out and the first take away here is really by investigating the market beforehand before we even go into that market. So, Chris, anything you want to talk about there before we move on to the third takeaway and the final takeaway?
[00:33:39] Chris: Yeah. And I want to kind of clarify a few things for people. I mean, the beast that is Amazon looks for a couple of things. The first thing they’re looking for is do people care like is there traffic? Then if there’s traffic and, Scott, you have a listing and I have a listing. Who has more sales? And by having that list, by feeding the beast, we’re able to get both of those things immediately which lets us rank those products faster. And, again, we say faster, I mean, how long did it take us to get on to page 1 for the first product that we launched?
[00:34:07] Scott: Yeah. It wasn’t that long at all. I mean, probably a week-and-a-half?
[00:34:11] Chris: Yeah. I was going to say 7 to 10 days. In a highly competitive market at that point with that product, it was kind of crazy. We didn’t expect that but because of the number of sales that we drove and because we had that traffic and we had all those other indicators, we’re able to do that. Now we launched the product yesterday. We didn’t send an email. All we did was put up a Facebook post. That product is already ranking. That product had a great BSR already because we had a whole bunch of people on that list that we had said, “Hey, this thing is coming,” and they said, “I’m going to wait for that and get that.” It’s that iPhone line that you heard us talk about in the past. Everybody is standing outside, waiting for the new iPhone and on launch date they all go and get one. That’s exactly what we’re looking for with those lists and it helps you get established very, very quickly.
[00:34:57] Scott: Yeah. And I think to know is also as you’re doing this, as you’re getting sales consistently on a variety of products and stuff, you’re also building up your feedback on your account. You’re seasoning your account which we talked about. You’re aging in a sense your Amazon account which then when you launched a new product, I believe Amazon gives a little extra love as long as your feedback is good, and you have good standings within Amazon. It’s why it’s important to keep your nose clean and do things above board. And especially, if you ever want to sell, you want to definitely make sure that you don’t do anything black hat or gray hat. You want to do things totally white hat.
So, all right. Let’s move on. So, the third thing and the final takeaway here that I’m going to share with you that we are doing and what I think that if you're looking into starting a brand is adding multiple SKUs, multiple products. Now, this could be variations, and this can be just various products. Probably both. But we do look at not all products have to have a variation. If it can, it’s even better. But multiple products across the brand. And here’s the mindset, if I can launch 10 products that are all related in a sense that one buyer could potentially be interested in that, I’ve got a much greater chance to hit 100 sales a day than if I just launched one product. I may also find out of those 10 products that only six of them are ones that I want to keep and there’s four of them that I’m going to liquidate. So, you have to understand it’s a little bit of a numbers game and I’ve heard this time and time again. The brands that are doing really well are the ones that are spreading their products out and they’re going wide, not necessarily deep. So, to me, I want to go out there and give my customer an opportunity to buy more than one, but I also want to be able to bring in people that might be searching for something different at the current time.
[00:36:56] Scott: So, to me, it’s all about adding multiple products. Right now, we are going to be in for 2018 looking at doing at least one new product per month so that’s going to be 12 new products in 2018. Now we may get a little crazy and do two in one month but that’s what we’re trying to do. Now my good friend Mike Jackness talks about maybe doing one a week. He’s going a little aggressive there. He’s got a full team that’s going to help him with that. So, for you, it would be how can I get five products to market? Like that would be my goal. How can I get five products to market? So, this way here, I can test it a lot quicker and I can go ahead and see the winners and keep them and cut the losers or maybe even just find one that maybe only does five sales a day but it’s still bringing up your average sales per day. So, that’s a big one.
And again, if you have a product that you can do variations and I don’t mean do a variation just because you’re going to pick up one extra sale a day. It’s got to mean something. For us, we have one SKU that has four variations on it right now and there's two of them that take a bulk of the orders but there are two other ones that probably get, I don’t know, some days six, some days eight additional, so that adds to it. So, why not do that? And the margins are the same. So why not do it? And actually, we’re in the process of doing another four variations off of that variation. So, you can just keep going if your product allows for it. Not all products will do it. Not all of our products have multiple variations. But if you can, it’s a great way to kind of spread out the amount of products that you have available. So, Chris, you want to mention or talk about anything there on that part?
[00:38:39] Chris: So, there are two things there. First, Scott, let me dive back into the variations conversation. Variations do a couple things for you. One, they're a very low-risk way of diversification. Now to me, that would be deep, not wide. But there is a place for depth there, right, because we’re expanding on the same product. But it’s important to understand that especially with something like a size variation or a color variation that you’re going to continue to pick up an additional portion of the market that’s there that didn’t say wants your red one or didn’t want the three-pack. They wanted the blue one or the one pack. And by offering that, you can bring more customers into the ecosystem and that’s something that we talk about. There is out of the 100 people in the market, 3% of them or three of them are willing to buy any given product at any point in time because it’s something that’s at the top of their mind. And that’s really what you’re capturing on Amazon.
And so, as you start to go wider, and you launch let’s say 12 products next year, we’re going to pick up 3% here and 3% here and 3% here and 3% here, and all of a sudden, we’re at 20% which I don’t think you could get to by picking up 3%. 24%. If we launch eight products we’re not talking to potentially 24% of the market and if we launch 16 products, then we’re talking to 48% of the market. At any given point, all of those things are going to continue to sell as you start to branch out and get wider in that market because you’re talking to different people who are different points in their journey with the product. And if you look at the fishing example, not everybody needs a tackle box upfront. But as they start to buy more lines and more lures and all those kinds of things, that’s when they’re ready for a tackle box. They might just want one bobber to go with their fishing rod in the beginning. That’s fine. If we sell them that bobber that’s great. Then when they’re ready for a tackle box, if we have a tackle box for them to buy, they’re going to come back to us and look at our stuff first and that’s really what you’re going for. The other thing that I wanted to touch on there, Scott, with like let’s say we launched those 12 products next year, are all of those going to be our top sellers?
[00:40:39] Scott: No.
[00:40:39] Chris: Probably not. And that’s not to say that they’re not going to set us up and have a great base of sales, but I would say maybe six, seven or even eighth of those might only end up selling eight or nine a day versus 20 or 30. Is that a problem? No, because they’re still selling eight or nine a day and that’s great but in anything, you have to remember that the Pareto principle, that 80/20 rule roughly applies. 20% of anything that you do will get you 80% of the results. The same thing applies in e-commerce. It applies in retail. It applies in anything where there are physical products involved.
Generally, there’s a going to be a handful of those SKUs that account for the majority of the results but if you can have a consistently growing percentage or consistently growing number that makes up that 20%, that’s great. If we can launch even two or three more products, Scott, that are doing 20 to 30 units a day on average, that means we now have six or seven products that are selling 20 or 30 units a day on average and let’s just do that with six. That’s 180 units a day, somewhere between 120 and 180 units a day. I know our goal for the fourth quarter is to average about 100. So, by this time next year, we could potentially be averaging 180 units a day just from the top six sellers that doesn’t account for the other 8 products, 10 products, 12 products that are selling five, six, seven units a day.
So, by consistently doing that, make consistently going out and putting ourselves out there for the market and doing it in an intelligent way looking and launching products that have depth demand and potential, we’re going to be able to massively grow that topline number by not doing really anything differently than we already are which is doing more of what works. And, guys, in business you hear me say this all the time when it comes to PPC, but it applies in business. To grow your business, you do more of what works and less of what doesn’t. It’s not a secret. It’s really basic.
[00:42:36] Scott: Let the numbers tell you.
[00:42:37] Chris: Right. Let the data be your guide and by consistently doing the things that you know work, you’re going to have some things that are runaway successes, you’re going to have some things that are mediocres, and you’re going to have some things that are bunts, and all three of those are great because they all get runners on base and they all put us in position to win.
[00:42:53] Scott: Yeah. Absolutely. All right. Cool. So, let’s wrap this up by talking a little bit about future and growth and I’m going to give you guys our plans right now for the next 12 months, 12 to 18 months. Number one, we want to grow this to a seven-figure brand and I think we’re on track to definitely do that. We have really just some consistent actions that we’re going to be doing and you just heard the keyword there, consistent action. We’re going to be doing things every single week that’s going to be focused on growth for the business, not just maintenance. I’m a big believer in just focusing on things that grow the business as much as maintaining the business. It’s a really, really important thing to think about. So, number one, we’re going to continue to build our email list and social channels. We know the power of this. We’ve seen what’s done. Imagine if we double that. Imagine if we double it. How much more leverage, how much more power will we have if we can do that? A ton.
Number two, continue to roll out new products. I just mentioned we’re going to try to do one a month. We definitely have a list that we can just start pulling from right now. We’re constantly adding to that list. So, you may create a list and then you may move those things around depending on the time that you’re ready to launch, what one might make the most sense. But it’s nice to just keep having a bank of the products that you’re going to do and just continue to get ideas and keep throwing them into the bucket and then see which ones you want to roll out next. And always be getting quotes back for different products and samples and stuff. Like that stuff should always be happening as you’re doing this and keep kind of planning ahead, two or three steps ahead. So that’s number two, continue to roll out products.
Three, build a converting sales funnel and we’re testing free plus shipping offers. This is where we can take an offer and maybe drive Facebook ads to it, give people an opportunity to get something for free. All you have to do is cover shipping and then on the backend of that is where would then sell either additional products or more of what they just bought. Again, stay tuned for that. We’re going to be giving some play-by-plays of that.
[00:44:53] Scott: We’ll let you know what works, what doesn’t work, and all that stuff. So, I’m sure there’s going to be some stuff that doesn’t work and we’re going to figure that stuff out. Just like Chris said, figure out the stuff that works and figure out the stuff that doesn’t work. Do more what works. So, that’s what we’re going to be doing. And then the other thing is number four here is test deal sites for external sales and this was another tip I picked up from Joe Valley yesterday actually when I was interviewing him. And, Chris, I didn’t even mention this to you, but he said even if he sees a lot of other businesses doing this, even if you go out and do like Groupon type sites, Zulily, I think that’s how like you call that one, and there’s another one that he had mentioned. Like, those sites want your offers and, yes, you’re not driving sales to Amazon. So, you’re not going to get the Amazon juice but you’re getting sales so if you discount your product 25% or 30% and you sell 200 of them, guess what, you made money and you now can show if you ever decide to sell your business that you’ve done these deals on these deal sites, you have four of five of them that you do in rotation and it’s bringing in another set of income, another revenue stream that you can show is not dependent on Amazon. Which I thought that was a really cool one. And he said there’s a lot of big brands that he works with that are doing this as another revenue stream. Totally worth doing.
Again, it comes down to inventory. Do you have enough inventory to manage it? Right now, we’re trying to keep up with Amazon but that might be something we plan for. Maybe we do certain inventory buys for these deal sites. It’s something to talk about. Something that we’re going to have to talk about, Chris. But I think that’s another great way to show external sales that you don’t even have to build a sales funnel. You just have to find these deal sites and there’s a handful of them and we’ll link everything up in the show notes. Chris, is there anything I missed on the future and growth that you wanted to mention before we wrap up?
[00:46:41] Chris: I think just to kind of recap, Scott, the future of this is, yes, we’re going to continue to launch products on Amazon and Amazon is going to serve kind of as that foundation but the intent with this business is to not be dependent on Amazon. Not just if you want to sell it down the road but because we know that crazy things can happen, right? They could stop us from doing anything that they want if they wanted to. Not to say that they’re going to, but Amazon is absolutely in our opinion, Scott, the place to launch. But over the long-term, if we want to continue to grow this business, we need to have some ownership over to customers, we need to have a little bit more control of our own destiny and doing some of those things like building sales funnels, building our own e-commerce sites for these products so that people can buy directly from us and you will get a small percentage of people who will do that just by having a site. Maybe a handful of people a month will come through and do that but we’re also going to be driving traffic and doing some of those kinds of things, the stuff that “real businesses” do to grow that side of things.
And that’s something I think that’s extremely exciting with this brand because Amazon is going to still and will for a long period of time dominate the sales numbers in that business. But if we only add it and again, let’s go back to the Pareto principle, Amazon is the 20% of the work that brings in 80% of the results. But if we were able to grow this, Scott, by 20% if that’s all we were able to grow it, if we turned around and then wanted to sell it, it’s 60% growth. Like we’re improving that number by 3X. And so, anything that we can do to continue to grow that, not only serves as a foundation for a stronger business but it increases the overall value and increases the profit for us at the end of the day because we’re bringing in more top line revenue which means as long as we’re doing better than breaking even, we’re bringing in more bottom line revenue and more profit and we can reinvest that however we see fit or we can put that on our own pocket and have a little bit of a nicer Christmas next year.
[00:48:39] Scott: Yeah. Absolutely. The other thing I want to mention here before we do wrap-up is again we’re building like these little assets. I think you can kind of see what we’re doing here. We’re building these little assets that can either drive sales or even just spread word-of-mouth. It’s kind of like the good old-fashioned word-of-mouth marketing. Chris, we have a website that we started from almost day one and all we did was started to kind of post content that we thought that our audience would be interested in and we’ve been doing that pretty regularly. I would say at least one a week, sometimes two. What’s our traffic look like on our website right now since we’ve started eight months ago?
[00:49:21] Chris: It’s funny that you bring that up because I was about to pull that number up anyway. So, let me, I’m jumping into Google Analytics and I can tell you.
[00:49:26] Scott: Yeah. And again, I mean, this is something that we did as like, well, if we’re building this thing, we should probably have a website and we should probably have a place to call home and we are going to be publishing content so let’s just go ahead and create this blog/website and we can have our products on there and then we can do brand registry when we’re doing that and then we can point right now, because maybe we don’t have a shopping cart set up, we can point those links over to Amazon and get some Amazon sales possibly from our blog and then just continually grow this thing organically. And this again, we have done nothing to gain links. We’ve done nothing to really, I mean, we’ve optimized a little bit SEO, but we could do a lot better job there too which we’re going to be working on 2018 but with just kind of winging it and just doing an okay job, what are our number as far as traffic numbers, Chris?
[00:50:19] Chris: Quite honestly, we’re doing the bare minimum. I mean, the content it’s good quality content and that’s the thing that we have going for us. But you’re right, Scott, we’re not doing any like internet market stuff to rank this. So, 30-day run rate, 36,832 unique visits to that site.
[00:50:39] Scott: 36,000.
[00:50:41] Chris: 18,000 of those so about 50% are from organic search. So, without doing SEO, without doing any of that kind of stuff, 18,000 unique people saw that site last month. 12,000 came from social and 5,000 came from our email list.
[00:50:55] Scott: There you go.
[00:50:57] Chris: So, 18,000 people found us. I guarantee you, not all of those people are on our email list right now. I guarantee you, not all of those people have our products right now. So, it gives us an additional opportunity to be in front of those people. And, Scott, I brought this up earlier like 3% of the people in any given market at any point are ready to buy. They’re ready to buy whatever product. So, out of that 36,000 people, it’s a couple of thousand. That means the other that’s just call it 33,000, the other 33,000 people in that site aren’t ready to buy. But guess what, we’re in front of them. So, when they are, they’re going to remember us and that’s the “branding” and it’s the intangibles, if you will, of doing that. But because we’ve brought them into our ecosystem now when they are ready to buy our products, they already kind of know what they’re looking for. They know what is possible in their tackle box, what a cool tackle box should have and so they’re more likely to buy ours and it’s a much easier sell for us to make at that point, too.
[00:51:58] Scott: Yeah. Love it. Cool. Yeah. I’m excited. I mean, even just us talking through this here on the podcast you and I almost like we’re having our own conversation. I’m so excited for this brand. More excited than I have been for anything that I’ve worked on the past two-and-a-half, three years as far as e-commerce. This is like really exciting stuff. Our numbers are really good and not even just numbers financially but our numbers as far as like web traffic and social traffic and social engagement and all of that stuff really, really excited for what the future looks like for us. And again, we’ll give you guys the play-by-play. There’s going to be ups, there’s going to be downs but you got to do it in order to see your result and that’s what I really want to stress here. This is something that was an idea that happened eight months ago, just an idea. We had a conversation, me and my wife, and then talked to a friend of hers, partnered up and here we are. So, that’s literally how it happened.
So, a lot of people say like, “Well, how do you stumble on this stuff?” Well, you got to get out there and you got to make yourself available. You got the keep your eyes and ears open. Like I always say, you never know if there’s going to be someone that you could partner with or even someone that just gives you the idea of a market or product line that you could sell. So, just keep your eyes and ears open. So, just to do my little recap here on the takeaways, investigate the market, really important, look for Facebook groups, communities, those types of things too, build an email list and social channels and then from there add multiple products and multiple variations, and that is to me the answer of building a brand and that’s again just three takeaways. There’s a lot more that goes into it but those are the three main ones that I see when building a brand or when even looking to start a brand.
[00:53:37] Scott: So, to wrap this up, depending on when you are listening to this, this will air on the 13th of December but if you’re listening to this in July, it’s still all relevant stuff right now. But what I want for everyone that is listening here live, we have our last workshop that we just did. The replay is going to end today so that’s the 13th of December. The last replay or the last workshop for 2017 that we did on the sixth will be coming down. So, if you’re interested in attending that, go over to TheAmazingSeller.com/workshop. Now, if you go to that page and the replay has ended, we’ll have a waitlist there and we will notify you when we do our next live workshop which will be sometime in early January 2018. So, if you are listening to this on that date, definitely go check it out before it comes down. Again, that replay is off our five-phase or five-step roadmap for taking you through this entire process, the exact process that we’ve used to build this brand and we give you some downloads and some checklist and stuff like that there as well. So, this way here, it makes it easier for you to go through this. Definitely, go check out that resource.
The other thing that I would mention is if you guys are at all interested in joining our Private Label Classroom, today would be the last day for that as well. We are closing registration for that or enrollment for that until early 2018 as well. So, definitely go check that out. If you’re interested, you just need to see what the class is about and what we teach and how it’s structured, go there, get on the waitlist if it’s not open right now and we’ll notify you when it opens up again. So, Chris, I think that’s going to wrap it up the show notes. I should give those. TheAmazingSeller.com/450, all the show notes. We’ll have a breakdown of everything there for you so definitely you want to go check those out. Chris, you want to wrap this thing up with me?
[00:55:25] Chris: Let’s do it.
[00:55:25] Scott: All right. You know what I’m going to ask you to do, right?
[00:55:28] Chris: I have a pretty good idea. I’ve done it once or twice.
[00:55:31] Scott: All right. Here we go.
[00:55:32] Chris: I don’t know. You might throw me a curveball. I don’t know.
[00:55:34] Scott: Yeah. I do tend to do that but I’m not going to do that today. I think you’ve been a good guy this whole week so we’re going to take it easy on you.
[00:55:41] Chris: I’ve been good this week.
[00:55:43] Scott: You’ve been a good boy.
[00:55:43] Chris: That’s a first actually. Yeah.
[00:55:47] Scott: You know, all of the stuff that you do in the new brand and everything that you do in TAS, I’ll take it easy on you today, alright?
[00:55:53] Chris: Just this once.
[00:55:54] Scott: Just this once, we’ll let it slide. All right, guys. We’re going to get out of here, so you guys can get on with your day but just remember, as always, 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, say it with excitement today because we’re heading into 2018 and I am pumped. Chris, are you ready in the count of three?
[00:56:16] Chris: I am ready.
[00:56:16] Scott: One, two, three. Take action.
[00:56:19] Chris: Take action.
[00:56:21] Scott: Have an awesome, amazing day, guys, and I’ll see you right back here on the next episode.
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