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…was on Shark Tank. Now, if you guys had been listening for any amount of time, you probably heard every now and then me talk about Shark Tank and how I love watching the show. It’s entertainment. I understand that. It’s not all what you see on camera and not all the deals work that they signed with and all that stuff. I understand that stuff. But I love the concept and I also love listening to multi-millionaire, billionaire-type people and the way that they think. I love listening to why they don’t do a deal. I like to hear why they do a deal because it gives me the mindset or what they’re looking at as far as taking a business and scaling it or if it’s too small or what they see that they should do to make it work, like I love listening to that stuff and I learn a ton through that.
And it also kind of reconfirms maybe what I already kind of know but I’m like, “Okay. So, if they’re doing it and I’m thinking I should do it, it’s probably a good idea.” Now here’s the thing and we’re not going to be talking this entire episode about Shark Tank, but I did get a guest that was on Shark Tank and of course, I have to hear about the entire story so that’s what I do. But then we also talk about, and his name, by the way, is Andy Humphrey. I should’ve probably said that but I’m so excited I forgot to tell you his name. I met Andy at one of our live events. He was at our TAS Breakthrough Live in North Carolina. We had one just outside of Charlotte not that long ago. We did a list building and really how to launch your product using a list and how to go out there and get influencers and all that stuff and since then, he’s done really well. But what he is launching now or what he’s already launched in the past like eight months had nothing to do with Shark Tank.
[00:02:04] Scott: And you’re going to see through his journey that it’s kind of led him to where he is today and he started multiple businesses all the way back in 1995 when he got his first start and you’re going to listen to exactly what he was selling so you’re going to want to stay tuned for that, and then how that kind of brought him into the next product, and then how the next business venture got on his radar, and like all of that stuff is through that story, all the way back from ‘95. And just to let you know, he didn’t get a deal on Shark Tank, didn’t get a deal. Walked away. And how do you recover from that? Do you feel like you’re a failure? Do you feel like you’re not going to be able to sell your product? Like, there are things that probably go through your brain. Well, we’re going to hear about that. All right. So, we’re going to hear about all of that but we’re also going to hear about his entire journey from being an e-commerce seller in the very beginning in 1995 all the way until now and how things have changed and what things are really good that have changed and all of that stuff.
So, I’m not going to take up any more time of explaining. I’m going to let him explain it because it’s an amazing interview and you’re going to learn a ton and I think it’s just fascinating. But before we do, let me just remind you that the show notes can be found at TheAmazingSeller.com/461 and you can get all the show notes, the transcripts there. And if you guys are at all interested in attending one of our live events which we are going to be doing probably a couple in 2018, definitely head over to TheAmazingSeller.com/live and you’ll get any information there that we have posted. You might even get some highlights from some of our last ones but when we do announce those live events, they usually sell out pretty quickly because they are small and intimate, and we will be doing more. So, definitely go get on that early bird list. All right. So, I’m going to stop talking so you guys can listen to this amazing interview that I do with my good friend, Andy Humphrey. Enjoy.
[00:04:04] Scott: Well, hey, Andy. What’s up, man? How you doing?
[00:04:07] Andy: Hey, Scott. Doing great. Thanks so much for having me today.
[00:04:09] Scott: No, man. I’m pumped to have you on. It’s been a long time coming that you and I met in North Carolina at, well, no actually I take that back. We met at Seller Summit. You were there and then you had told me there that you were going to be attending the event in North Carolina. Is that true?
[00:04:24] Andy: Yeah. So, we met up for some coffee the night before in North Carolina and I had a great conversation and we’re taking action.
[00:04:34] Scott: Yeah. No, it was awesome and when I had that conversation with you in the little coffee shop at that TAS meetup, we were kind of talking and I’m kind of starting to unpack some things there and you’re like, “Wow. Yeah. Okay. I guess you got a point there. Maybe I should be doing that.” And we’ll talk a little bit about that stuff, but you’ve got a lot of stuff going on and you’ve been doing this for quite a long time and what I want to really do here is I want to kind of unpack your story, so people can see the journey because I think a lot of people just hear about the successes.
They don’t hear about the journey leading up to the success that you might have had three or four or five or however many failures along the way and I don’t look at them as failures. I look at them as just bumps in the road and like you had said, I think it was here or maybe in person where it’s kind of like you have a choice. You can either at that point say, “I got to go left, or I got to go right,” but you got to make a choice and for you, it’s kind of like you picked left or right and you go with it and see what happens and then you make another decision down the line. So, cool. So, take us back in time a little bit. How did you even get introduced to e-commerce and then what I want to do is I want to jump into a little bit, we won’t spend too much time on the Shark Tank experience. So, take it off.
[00:05:43] Andy: Right. Yeah. Absolutely. Just kind of hit on your turn left, turn right, I sort of consider those decisions sort of thresholds, right? You learn something, and you cross a new threshold. And so, to me, it’s all about new opportunities to learn new skills and cross new thresholds, and when you cross a threshold, it opens up your eyes to a whole other horizon that you didn’t see before.
So, just take you back to 2005 and working my day job and there’s only so much money that you can make in your day job even if it’s uncapped. It becomes, hey, this isn’t worth my time to go make an extra $1,500 or $500. And so, I started buying some domains. I always read magazines like Inc and Entrepreneur and things like that and started buying some domains, learning about the Internet and one thing led to another and I started selling Christmas lights on the Internet, bought a really fun domain.
[00:06:44] Scott: Okay. That was back in 2005?
[00:06:47] Andy: 2005, yeah. Started selling Christmas lights. I found some unique lights that weren’t sold in your typical box stores or hardware stores. And so, they had a unique selling proposition and did pretty well, but at that point, I started to learn more about getting the average price up and margin and competition, pay-per-click. And the Christmas lights, the manufacturer of the Christmas lights invented some Christmas storage products. And so, I took a right turn and decided not to continue selling Christmas lights because the market was getting saturated and they were everywhere. LEDs were coming out and it was a pretty saturated market, and got into selling Christmas products, Christmas tree bags, wreath bags, ornament bags, light storage bags and the opportunity was much better because the average ticket price was higher. There were some downsides to it. It’s a very seasonal business and so it hits hard and then it’s over, right?
[00:07:56] Scott: Yeah. Now let me ask you this quick, Andy. Where did you get the sourcing for this? Were you just drop shipping? Were you wholesaling? Were you private labeling back then? What were you doing with those products? How did you get those spots?
[00:08:08] Andy: Yeah. The Christmas lights I was working for a wholesale irrigation distributor that was selling Christmas lights to contractors and so what I would do is I would sell Christmas lights online and I wake up in the morning and, hey, here are some orders. I’d go into work, buy the lights and then ship them, stop at Staples on the way home and ship them out.
[00:08:33] Scott: Wow. Okay.
[00:08:33] Andy: And then it was always sort of like money in hand first, get the money, buy the lights, ship them out and repeat.
[00:08:40] Scott: Okay. So, you didn’t even need to have the inventory necessarily because the company had the inventory and you would just place your order by ordering them and buying them and fulfilling them. I mean, you just make a margin on that.
[00:08:48] Andy: Yes, exactly.
[00:08:49] Scott: Okay.
[00:08:50] Andy: And it worked similarly with the Christmas tree bags. The very first year when the manufacturer released them they said, “Hey, Andy, why don’t you try selling this Christmas tree bag?” And sure enough, I could sell it and I built a business around it and bought a domain name around it and started to build a brand around it. And year two was when I had to start buying inventory.
[00:09:13] Scott: Ah ok.
[00:09:14] Andy: So, therein lies another threshold, right, because the manufacturer says, “Hey, Andy, it’s February. We need you to put your order in for next December.”
[00:09:22] Scott: Oh gosh. Okay. And then you’re sitting at home for a while.
[00:09:27] Andy: Right. And I’m going, “Okay. I’ve never written anybody a $50,000 check before,” which seemed like a lot of money back then.
[00:09:35] Scott: Yeah. Oh my gosh.
[00:09:37] Andy: I could have a check then but commit to it.
[00:09:38] Scott: Yeah. You’re committing to the order.
[00:09:41] Andy: Correct.
[00:09:41] Scott: Yeah. Now let me ask you this too because I know some people are asking or asking themselves and I’m curious like what were you doing for traffic? Were you just basically doing like Google AdWords or banner ads? What were you doing?
[00:09:54] Andy: I would click on AdWords and it was very profitable, right, so back in 2005 let’s say $100 order I could spend $5 in PPC so the cost per acquisition was 5%. It was very low.
[00:10:10] Scott: I got you. Okay.
[00:10:13] Andy: Yeah. And so, I basically became a PPC expert because that drove all the traffic. It was much quicker and much easier to build fantastic PPC campaigns with targeted landing pages, call to actions and sell through pay-per-click.
[00:10:30] Scott: Okay. So, that’s how you’re getting all your traffic and you weren’t even really doing SCR. Well, you kind of doing it but if that came, it came kind of thing?
[00:10:36] Andy: Kind of but I wasn’t really, I wasn’t patient enough. I want to be the quick sale.
[00:10:43] Scott: Don’t we all?
[00:10:42] Andy: And writing isn’t my skill set so I’m much more of a branding visual. And so, I could make the PPC work for me really well.
[00:10:52] Scott: Got you. Okay. Again, let’s kind of timeout for a second. So, you’re looking at traffic here. I got to get some traffic. I’m going to go to Google because that’s where everybody is going. I’m going to start targeting keywords that people are searching for that would lead them to a sale and I’m just going to learn that. I’m going to become a master at that because that’s where the traffic is and when you did that, you became an expert in a sense on that for your product and for your market, but you immersed yourself in that. And again, that’s kind of what I talk with people a lot about as far as like just in time learning like you just focus on building that. You had everything else kind of dialed in. You just had to fulfill the orders and stuff, but you just focused on how do I get to the customer. Correct?
[00:11:27] Andy: Yeah. Exactly. And I sort of felt like there were firms out there and there still are that focus on PPC for a fee and I always felt like why would you charge someone a monthly fee for PPC when you can go sell products yourself and make more money? There’s more money in the physical product sale than there is in charging someone a fee to do it and if you charge someone a fee to do it, you’re just taking their margin away.
[00:11:52] Scott: That’s true. Yeah. That’s a good point. Okay. Cool. So, you get the fork in the road or not even the fork, the turn left or right. You’re like, “Okay, where do I go?” You go into this storage kind of cases or whatever for the tree or for the lights and all that stuff. But now you have to start buying inventory. What was that like?
[00:12:15] Andy: Yeah. That was nervous. When you got to take a loan out to buy inventory, you look at your business with a magnifying glass so every day I’m looking at the sales, I’m forecasting, I’m seeing how quickly can I pay this loan back? Am I going to be able to pay this loan back? And watching it like a hawk.
[00:12:39] Scott: How did that first season go after you’ve made that order and stuff like how was it? Because you’re basically waiting for the season to kick off. When does the season really start to kick off for like Christmas lights and bags and stuff?
[00:12:50] Andy: Yeah. It starts to kick off right after Thanksgiving and there’s a lot of competition in that space now but back ten years ago what was really interesting is let’s say the competition was the box stores or the brick-and-mortar. Well, after Christmas so let’s say it’s January 15, what brick-and-mortar store is going to have Christmas items, right? So, a storage bag for Christmas item, that’s Christmas. That’s not spring. So, you go into a brick-and-mortar store in the middle of January and you’re bound to see a lawnmower, right? And so, there’s a lag on when the person needs the bag and when it’s available. And so, the box stores, the brick-and-mortars don’t have any Christmas items after Christmas. They do now but they didn’t then. That’s right. So, they went on the internet. So, there’s this huge spike and of course, now there are most of the brick-and-mortars have central warehouses and they have e-commerce as part of the business model but ten years ago they didn’t.
[00:13:58] Scott: Right. Now that makes sense. All right. Cool. So, all right, that’s your like start into the e-commerce world. You got your taste. You got your feet wet. Where does that lead you?
[00:14:09] Andy: Right. So, that led me sort of back into the lawn and garden space which is where I was working and went to a trade show, went to I think it was the National Lawn and Garden show and looking for products. So, I went to the show looking for products and came across push lawn mowers and one thing led to another and I guess they were a manufacturer, maybe more of a distributor, or both depending on which mower it was, and they were willing to drop ship and I went right back to my sort of branding self and acquired the domain EcoMowers.com of course, right, because a push mower was obviously very environmentally friendly.
[00:15:03] Scott: Sure.
[00:15:03] Andy: Most environmentally-friendly mower you can have, and I really thought that the Eco brand was going to be a great opportunity and felt like I could use the push lawn mower as the vehicle to secure some trademarks and build some intellectual property around eco lawn mowers. And lawnmowers being more harmful for the environment than cars, I felt like, gosh, this is going to be a major manufacturer that wants to put the eco label on their lawnmower. Well, John Deere and Toro will probably want to have the eco such and such of lawnmower to try to capture the corner of the market. So, I launched EcoMowers.com and found a drop shipper and started to really sell a lot of push lawn mowers through EcoMowers.com.
[00:15:55] Scott: Wow. Okay. So, did you repeat kind of what you did with the other products that you were doing before? You just did it in that space?
[00:16:04] Andy: Yeah. Exactly.
[00:16:04] Scott: Okay. So, you kind of learned from that.
[00:16:06] Andy: It was a rinse and repeat.
[00:16:07] Scott: Got you. I love that because it’s, again, leading people through that story. It’s like you did this, you learned a ton through that, and you just took that same mindset and just brought it over and kind of plugged it into another market, another product, another idea, even another forecast because you’re thinking now like possibly trademark, possibly licensing like that type of stuff which is cool.
[00:16:27] Andy: Yeah. And that did pretty well. I would say it did really well for a short period of time and then this would be right before Amazon started to take off. And so, what’s interesting about Amazon is that it used to be let’s say 2006, 2007 and 2008 outside of Google PPC, my number one traffic source was comparison shopping on Amazon. So, placing an ad on Amazon that drove the traffic to my website. And then I think around 2010 they terminated that. Amazon wants all the traffic to stay on their site but back in the day, that was my number one source. So, if it wasn’t on Amazon, they’d seen my product listing ad and we had shoot them over our website and get the sale.
[00:17:19] Scott: Got you. Yeah. Okay. That makes sense. I mean, they’re there looking for something but it’s not necessarily there, but they see yours and they go over and then you make the sale there. Obviously, Amazon is like, “No, no, no, we’re going to sell everything.” So, we’re not going to let you do that.
[00:17:32] Andy: Yeah. And that it was probably like 8% to 10% cost per conversion, so it was still a profitable sales channel.
[00:17:40] Scott: Okay. So, you dabble in the drop shipping space and stuff. When does Shark Tank come into the mix here? Lead me into that story because I kind of want to touch on that, go through that a little bit because I’m curious because I am a fan of Shark Tank show. I know it’s a show but I just like watching and kind of going through that process because my mindset, I like thinking business. But take me through like when does that even become something you’re considering in your mind like why are you even thinking about Shark Tank?
[00:18:10] Andy: Yeah. I think, well, I think I was just sitting at home watching the show. I think I was watching season 1 and enjoying myself. It’s entertaining, liking the show and I thought, “Gosh, I wonder how you get on this show?” And if I remember right, I believe I just did a Google search and came across an email address and it wasn’t a joe@sharktank. It was just somebody’s yahoo email address.
[00:18:38] Scott: Really?
[00:18:39] Andy: Yeah.
[00:18:39] Scott: That’s funny. Okay.
[00:18:41] Andy: It might have been like SharkTankCasting@yahoo or something like that. I don’t recall.
[00:18:45] Scott: Yeah. But it’s not a paid domain. It’s a free Gmail or Yahoo account or whatever.
[00:18:51] Andy: Exactly. I think I just wrote up a little story about the EcoMower story and set it off and actually just sort of forgot about it. That was the thing of it. I sent this email and basically forgot I had sent the email and I think six months later I got a phone call and I was traveling. I was out East, and I got a phone number. I looked at the caller ID and it was California and it was 10:00 at night. I’m thinking, “Ugh, telemarketer.” I let it go to voicemail.
[00:19:24] Scott: Right. Who calls me at 10:00 at night?
[00:19:27] Andy: Right. I don’t think I even checked the voicemail that night. I think I woke up in the morning, listened to the voicemail, and it’s some girl that says they got my email and they liked to talk to me about casting for the show.
[00:19:41] Scott: Oh wow.
[00:19:43] Andy: And I just about my jaw hit the floor.
[00:19:46] Scott: Yeah. I bet.
[00:19:49] Andy: I think that was probably early September-ish and I believe they did the taping in late October or somewhere in that timeframe.
[00:20:01] Scott: Wow. That’s pretty quick.
[00:20:01] Andy: So, it was pretty much like a sprint from there all the way through the show. Interviews, working with, I guess, the casting, not casting director, casting crew. They sort of want to take you to these different thresholds inside of Shark Tank. Okay. Well, you’re going to be interviewed with such and such and if that goes well, you’ll move to the next level.
[00:20:26] Scott: Okay. So, it’s a process. You’re not just getting one email and it’s like, “All right. Yeah. We’re going to book you.” You go through the interview process.
[00:20:32] Andy: Right. And I don’t know if they set up 500 interviews or 1,000 interviews and then they weed out the contestants along the way I would assume.
[00:20:40] Scott: Yeah.
[00:20:42] Andy: And let’s say that the show taping was a Monday, Tuesday. I don’t recall exactly but it was something like that. I don’t know that they told me that I was coming out there until like Thursday. They sort of say like, “Hey, if we choose you, can you be available these dates?” All right. They keep you on the edge of your seats and they talk to you about what do you want your set to be like. And of course, for me, they said, “Hey, can you cut some grass on the show?” Well, I’m an entrepreneur. I can do anything. Yes, I’ll cut grass on the show. So, there was a lot of homework that I had to do and legwork on finding a sod company and figuring out how I was going to get sod to the show and of course they want to have a backup plan and they want to do a pre-show edit and, yeah, it was a trip definitely.
[00:21:36] Scott: So, like for all of that stuff, you have to pretty much get all that stuff to the set or to the show or do you tell them what you need?
[00:21:41] Andy: Yeah. It was all on me so essentially each contestant is on their own and it’s very fair in that way. So, what I found interesting is we all got to the hotel. We met with the coordinator and she handed out money to every contestant, the same amount. I don’t recall. Let’s just say it was $500 for expenses. And if I wanted to have my set be different than someone else’s, that was all on me to pay for and coordinate.
[00:22:09] Scott: Oh, wow. Okay.
[00:22:11] Andy: So, I rented. I actually went out a few days ahead of time, rented a pickup truck, built a wood rack in the back of this pickup truck so I could have two layers of sod that weren’t stacked on top of each other and sort of figured all this out ahead of time but that was all on me.
[00:22:27] Scott: Oh my gosh. Wow. That’s crazy. All right. So, and you got to be out of your mind right now at this point. You’re like, “Oh my gosh, all this stuff is going on and I want to make sure it’s right. I want to make sure it doesn’t go off without a hitch and all this stuff.” You’re probably in an unfamiliar area which just seems crazy. All right. So, at that point, you’re going to do the show. Now you get ready. You haven’t met any of the sharks at this point though, right?
[00:22:56] Andy: No. You don’t meet any of the sharks ever except for the time in front of them. So, you work with, I don’t know the title. Let’s just say it’s a casting agent and it might be different today. Each casting agent maybe had five contestants or ten, some number of contestants and we had regular calls with a casting agent so let’s say for two weeks or three weeks leading up to the show, I would do a call let’s say twice a week and run through the pitch. They would provide the feedback, coaching before the show, and then going into the show, the casting agents that’s how they know what you’re going to say on television ahead of time essentially. It’s somewhat predictable. It’s a formula and they got to make great television. So, yeah, so that’s sort of what happens leading up to it.
[00:24:00] Scott: Yeah. I don’t know. It’s funny because you see it on TV and you think it’s seamless and the guys or people got on the show and stuff and it’s pretty seamless but it’s kind of choreographed in a sense where like you said, I know that like it’s a show. I mean, I like Gold Rush too and I know that’s kind of like they pick the best stuff but also, they have what they want to get. They want to leave you at the end of the seat when the truck’s about ready to tip into the thing but it really doesn’t tip in because that’s commercial break. They want you to come back. But it’s just interesting to kind of go behind the scenes a little bit. So, at this point, and again, I want to get to the meat of why I wanted you on but I just find this interesting. So, at this point, you get on there or you’re getting ready. They open the doors. You’re going out there. Do you hear the music that we hear on TV? Is it the Shark Tank music?
[00:24:53] Andy: Gosh, you know, I don’t think there was any music. No. I believe there was silence. All I could hear was my heart beating.
[00:24:59] Scott: Yeah. I was going to say the doors open and you’re thinking, I mean me personally, people would say like, “Oh no, Scott, you’re great. You’re on podcast. You do videos, all that stuff.” I would be afraid I’d mess something up as far as like the routine that I have rehearsed. Because everything seems to be like in the presentation they have like certain things that they say that lead back to the product but then also they want to make it funny and catchy and all that. I would feel like I would mess that up.
[00:25:28] Andy: Right. And it’s likely that a lot of the funny and catchy comes from editing. So, there’s a lot of good editing that happens to make television magic. At least when I was there, there was sort of two sets, so we sort of taped what would look like somebody sort of getting ready to open the doors sort of like the pregame, looking nervous, and then there’s another set where the sharks are, and that door opens and the first thing I saw was this giant camera on wheels staring at my face.
[00:26:08] Scott: Oh gosh.
[00:26:09] Andy: And you just sort of walk down the hallway. And so, when you watch it on television, you see somebody walked on the hallway, well, there’s a camera right there on wheels rolling in front of them. So, that was a little bit nerve-wracking and you walk in and there’s your little, whatever it was, X or piece of tape on the floor and you stand right there and then you just repeat the pitch that you’ve been working on with the casting agent for the last couple of weeks.
[00:26:33] Scott: Okay. All right. Cool. And then you start to get some feedback from them and we don’t have to go on to all the ins and outs but pretty much they didn’t care for your pitch or for the product. Is this correct?
[00:26:45] Andy: Right. It was a no deal.
[00:26:48] Scott: It was a no deal. Now, who were the sharks for you?
[00:26:51] Andy: Let’s see. It was Damon, Jeff Foxworthy.
[00:26:58] Scott: Was Mr. Wonderful there?
[00:26:59] Andy: Mr. Wonderful, yep.
[00:27:01] Scott: And then was Barbara or was it Laurie?
[00:27:05] Andy: Barbara.
[00:27:07] Scott: Okay. Interesting. Okay. So, you didn’t have Mr. Cuban there.
[00:27:12] Andy: Right. Yes. It was season 2 so they were still doing some guest sharks. Sort of leading up to the show, they sort of put you, but everybody has their own little casting room so a white room with a couch and then there’s a little snack room. And so, all of the contestants are sort of holed up camp in their little rooms and it was really fun to see behind the scenes. Essentially, Shark Tank’s in this giant warehouse in Hollywood or not Hollywood but Studio City and then they set up a set in this giant warehouse. It was really fun to see behind the scenes. Then you make your pitch. You go back to your casting room and then I don’t know if I can talk about it, I guess. Then they brought in like a psychiatrist just to make sure that contestants are okay.
[00:28:07] Scott: Oh yeah. That makes sense.
[00:28:08] Andy: You know what happened and it kind of does make sense. Do they have questions, concerns?
[00:28:12] Scott: Well, especially if you didn’t get a deal.
[00:28:13] Andy: Right.
[00:28:15] Scott: You know what I mean? You only get a psychiatrist if you didn’t get a deal.
[00:28:19] Andy: Yeah. Yeah. But there’s no hanging out and shaking hands with the sharks and socializing and then you basically get on the bus going to the airport and you’re out of there.
[00:28:28] Scott: Wow. Okay. Well, that’s interesting, man. I appreciate you sharing that. But now you didn’t get a deal and what are you thinking at this point? Like, you just did all this work and everything. Now, the one thing is, and you can see sometimes people they don’t even care if they get a deal because they just want the exposure and you can hear sometimes the sharks calling out on that. What was your thoughts in your head at that point like what happens next?
[00:28:54] Andy: Right. And I’ll touch on exposure a little bit. So, because I was coming from an e-commerce background, I knew the numbers. I knew what a lot of visitors was or should be and I was actually surprised and of course this was back in 2011, there was only maybe, so the show aired on a Friday so through that weekend I think there were 15,000 visitors. So, not a lot. You’re going, “Okay. At PPC I could buy this traffic for X amount.”
[00:29:25] Scott: Right. Yeah. You would think 100,000.
[00:29:28] Andy: Totally. Right. Totally.
[00:29:30] Scott: Right. Okay.
[00:29:32] Andy: And it could be that my product, the consumer didn’t identify as much. It’s an expensive item. It maybe wasn’t as identifiable so maybe there wasn’t as much traffic but that was my biggest surprise was the traffic was much lower than I would’ve thought.
[00:29:47] Scott: Okay. Yeah. And it’s funny because sometimes I’ll just go search a product. Even if I’m watching like a repeat or something and I haven’t watched one before, I’ll just go and kind of look and see where the product is now whether they worked with him or whether they didn’t and kind of see if the website’s changed. So, sometimes I’ll kind of do that but not necessarily to buy the product I guess but kind of curious to see what the brand’s doing now or whatever.
[00:30:10] Andy: Right.
[00:30:11] Scott: So, anyway, all right, man. That was a great story. So, at this point, though, like you get to know what do you do with that company and kind of let’s move on and kind of get into your Amazon now, your current business that you’re building and all that stuff.
[00:30:25] Andy: Yeah. So, I was on the show in 2011 is when it aired, and I had just started another e-commerce business, the SprinklerSupplyStore.com. And so, I was about one year into that business and that business was really starting to take off. The one thing that I learned from all of the e-commerce businesses leading up to that point was they were all one-product sales. So, I would capture these customers inexpensively, make a margin on the product and that was it. Then I find another customer and another customer and another customer. And because the cost of acquisition was so low, that model was working well but as the advertising cost went up, I did not have an opportunity to resell products to those customers. And so, as I started Sprinkler Supply Store, that was the model that I was trying to go after was the repeat business. I want to sell more things and I want to have this customer for life and really try to target that lifetime customer value.
[00:31:28] Scott: And that company though, was that targeting like businesses?
[00:31:33] Andy: Yeah. Both. Mr. and Mrs. Smith, as well as businesses, as well as city, municipalities. Really, it’s the wholesale or the professional lawn sprinkler market.
[00:31:43] Scott: Because I’m kind of thinking in my own head. I’m like someone that’s doing like underground sprinkler system or whatever. You’re buying parts all the time as a contractor or as a business that’s having contractors do the work. So, I’m thinking like is that your repeat customer or is it also like me that I got a sprinkler head that went bad and I got to go get a new one and I may need something in the future. Or are there other products that aren’t just for the system, I guess?
[00:32:09] Andy: Yeah. You kind of hit it. It’s both. The professional underground sprinkler contract is going to have a much larger ticket and probably a bigger discount and the homeowner might buy one to ten sprinklers once or twice a year. So, it’s both. The professional contractor has relationships in the trade which are great and there’s a lot of contractors that are either smaller or they live a long distance from a supplier, so the internet makes sense for them.
[00:32:37] Scott: Okay.
[00:32:38] Andy: Or they don’t have a relationship with the supplier. So, it kind of works side-by-side in the trade so we don’t really target the big contract as it has the relationships. It’s sort of the Tier 2 and Tier 3.
[00:32:50] Scott: Got you. So, again, you evolved this whole thing. You got into another business. Now you started thinking, “Well, I want to get more than just the one sale. I want them to be able to come back. Maybe even target businesses.” I think if you can figure out a way to target a business, I think that that’s always an advantage because they’re always going to be buying whether it’s supplies or just office supply or whatever it is for the business or just different things, accessories. I mean, I think about like even like notepads like if someone you’re going to go Staples maybe but if you find that you’re going to buy notepads over and over again, you’re going to keep reordering from that same company. It’s kind of like a recurring model in a sense so I like that.
[00:33:25] Andy: Yeah. And then so kind of leading into Amazon. We started selling sprinkler parts on Amazon I want to say around maybe 2013, 2014 and sort of really learn the ins and outs of Amazon. And at this point, we’re still selling what I call other people’s products. It’s not really retail arb because we have drop shippers and suppliers and we do stock some of our own but it’s other people’s products. And so, because of that, we don’t have the margin and the listings on Amazon. There’s 10, 20 people on these listings. So, it’s very competitive and I’m seeing what’s going on in the marketplace and I’m seeing the consumer products channel kind of change from selling name brand items to private label.
[00:34:22] Scott: Is that kind of where you got your idea where I might want to start this?
[00:34:26] Andy: Yeah. Exactly. I have this e-commerce background. I just need to tap the private-label market and combine those two. And so, going into 2017, that was sort of the mission for this year is learn as much as we can about the private-label side of the business and hence coming to North Carolina and learning from you sort of been a game changer. So, we’re going to likely take what we learn from the private label, our private label study, and then apply it to Sprinkler Supply Store.
[00:35:07] Scott: Yeah. No, I love it. And that’s what you and I were talking about because you had a brand-new product and a brand-new market kind of but it’s kind of like you and I were talking and I’m like we got to tap into the sprinklers side of things. You got a lot of customers there. You’re like, “Oh yeah. I probably should.” And I’m like, I don’t know, you threw out like a crazy number like 100,000 past customers and I’m like, “Damn, like we got to tap into that,” and then that got your wheels turning again. You’re like, “Oh yeah. Maybe I kind of went over that and maybe I should go back to that and address it,” because I think there’s a huge opportunity there and you got customers. Now we could retarget them and all that fun stuff.
But, yeah, North Carolina was cool because you were kind of like at that beginning stage where you had the product picked. You kind of went with something you thought was going to be different in the market. It wasn’t going to be something that everyone else was going to have. It was going to be a little bit harder to manufacture so you kind of took all those skills that you would had and kind of brought it in a new brand, in a new product. And I think what you really were doing there was figuring out how we were going to launch it and get some sales, really feed Amazon what they want which is sales. How has that been since we met in North Carolina?
[00:36:17] Andy: So, it’s been fantastic, and I’ll set the stage just a little bit. So, the product that we’re running with and it’s going great is not something we discovered on Jungle Scout. So, we do have some of those and they’re working and it’s going well, but we had somebody call in to one of our other stores and talked to Christine, one of my customer service reps, and said, “Gosh, if you guys could make such and such a product for this market, it would sell like crazy.” So, and we thought, “Gosh, we don’t know anything about this market. What’s to learn about it?” And so, we did some research and found out that there were large Facebook communities and that the item that we should make was missing in the market. It was a void.
So, as we look through the Facebook communities and learn about this market, we found a hole. And so, when we went to launch on Amazon, this was not a category that already existed. So, we weren’t going in and there was no product research we could do. We could guess based on some similar items. And so, I couldn’t use Jungle Scout to look and say, “Hey, if we can spend some PPC and get on page 1, we’re going to sell 350 units a month.” There wasn’t any data like that. And so, what we needed to figure out was how to get this item to sell when there’s nothing like it on Amazon.
[00:37:51] Scott: Yeah. Well, and I think for you, you were looking at the market size. You were looking at kind of accessory kind of related. I just did a video yesterday like on a Dyson so if you have a Dyson vacuum, I bought one for my father for Christmas, well, there are attachments and there are other things for that that you can sell or other products that you can sell to other vacuums. You know what I mean? But there was maybe nothing in there, maybe there’s something for that vacuum that doesn’t exist right now that I could come up with and that’s kind of what you’re talking about like starting from there.
[00:38:21] Andy: Exactly.
[00:38:23] Scott: But the one thing that you had was you had some feedback from some of your past customers said, “If you made something for this, I think it would do really well.” But still, that’s a hunch. It’s not like proven. But you knew that the market was definitely buying, and I think that’s a big thing. You weren’t inventing a new product for a new market that didn’t exist. The market existed. There are raving fans let’s say. There are people consuming content. It really checked all the boxes. It’s just you had a product that was going to be different that no one was offering yet and being first to market I think is key.
[00:39:00] Andy: Right. So, it’s an accessory. It’d be kind of like your jeep analogy.
[00:39:05] Scott: Yes. Yes.
[00:39:05] Andy: There’s this community of jeep lovers but there’s this one accessory that doesn’t exist in the market but if it did, we think we can sell X amount because there’s a fan base.
[00:39:15] Scott: Yeah. And so, let me ask you this. So, again, I mean, you’ve got a little bit probably more than others as far as like a risk. You’re willing to take a little bit more of a risk because you’ve been in the game awhile. You’re okay with it. You understand it. What do you go in with the mindset that you’re going to test and knowing that it may not work? I mean, you’re still thinking, “I think it’s going to,” but there’s no proof it’s going to.
[00:39:42] Andy: Right. So, there’s risk on inventory. There’s risk on can we sell this at the price we think we can sell it?
[00:39:48] Scott: Ah, yes.
[00:39:49] Andy: Right? But if we’re the only one in that space, I think we can. My general principle is you can always lower the price but it’s very hard to raise the price, right? So, if you’re going to go into a market, start at the top of the market and build a quality brand with perceived value by being a little bit higher priced and then you can introduce items that have less features and they’re cheaper and you can lower that price. So, that was one of the risk factors. Okay. Well, we’ll go into at a higher price and if we were to drop it by 50%, can we still make money and liquidate? The rest is inventory if it’s a bunk item.
[00:40:26] Scott: That’s great. Yeah. People are going to be asking like what is the price range? Like what are the top market?
[00:40:31] Andy: Yeah. So, the average, we got a couple of different variations and so the average price is about $40.
[00:40:38] Scott: Okay. Is that what you were going in at that you want to be able to get for?
[00:40:40] Andy: Yeah. Yep.
[00:40:41] Scott: Okay. Cool. All right. How has the market responded?
[00:40:46] Andy: So, we probably have one. So, I’m a big fan of keep raising the price until you get pushed back and that’s how you measure the prices. It’s okay to have a certain percentage of people complain that it’s too high of a price. That’s fine, right, because the other 95% are okay with it. So, we’re probably at that 5 and 100, maybe even less. We probably just don’t capture the sales from the people that don’t want to pay that. They want the $20 version. Very few people complain about the price, so I think we’re right in our sweet spot.
[00:41:17] Scott: Okay. Cool. So, now let’s talk about this. What was the launch plan? What did you do to get buzz? What did you do to get some sales come into the door? Because we know that’s what Amazon wants, right?
[00:41:28] Andy: Right. So, the launch plan was to build an email list. We kind of follow The Amazing Seller launch strategy and so we did a giveaway, so we used Giveaway Boost, built a WordPress site, added Giveaway Boost, and looked for influencers and people that we could put this banner or advertisement either for free or paid for the giveaway. That worked well. I think maybe we generated a list of 5,000 emails let’s say and we’d find people that would do it for free and then we’d find people that would say, “Yeah. Let me send you my media packet.” Usually, people start out at about $5,000 for ad placement.
[00:42:15] Scott: Okay. All right. We’re not going to go to them but okay.
[00:42:19] Andy: Right.
[00:42:20] Scott: Yeah. Yeah. Yeah. Okay.
[00:42:21] Andy: Yeah. And I want to say that that was a little harder than we thought. When we were in North Carolina, you did a great job of sort of explaining the process for how to find these people, how to go into Instagram, run a search, find somebody that is in that space, contact them and just make a list. So, basically, we made a list. We found all these different influencers of people talking about similar items and contacted as many as we could. Some are very open, and we built relationships with them, some we never heard from, and we built this great launch list.
And when the item was released, we had great sales initially because people were sort of waiting for it also, so we sort of did this trickle slow release. Let me tell you about this item. Here’s what it is. Here’s what it’s going to do. Here’s a video so we kind of had these people waiting to buy it. And fortunately, or unfortunately, we missed Prime Day. We didn’t have our inventory. We missed it by about a week. So, within the states, it was stateside, it didn’t quite make it to Amazon’s warehouse in time.
[00:43:28] Scott: How many units did you start with, Andy?
[00:43:30] Andy: We started with 1,000 units in two different variations.
[00:43:34] Scott: Okay. So, basically 500 of each.
[00:43:37] Andy: Yeah. It was probably 75/25. One was going to be a better seller than the other.
[00:43:43] Scott: Got you. Okay. So, you go ahead. You get going. You optimize your list. You do all that stuff that we talk about and you start getting some sales. What happens after you kind of get through the honeymoon stage? You know what I mean? Like, when things are coming in, the sales were coming in, what happens after that?
[00:44:00] Andy: Right. So, there’s probably two things. One is I was keeping an eye on inventory because I knew that, okay, once this thing starts to sell, I’m going to need to reorder. And so, I missed that by about three weeks. So, we sold out of our number one and had to wait about three weeks for the next shipment to come in. So, we missed that but then what we did is we said, “Guys, we really need to sort of build a name for ourselves in this niche.” And so, we got active on these Facebook communities and we started doing Facebook Lives. So, we now do a regular weekly Facebook Live where we not only talk about our products because that’s not the point. Sometimes we have it sitting there but we talk about other things in that space, helpful tips, and we do a weekly live that generates great content and it also provides value to our fan base.
[00:44:57] Scott: Yeah. No, that’s huge. Again, it’s hard for some people to understand that you’re not just driving after the sale but you’re building community in a sense but also just goodwill and people will naturally come back and want to either consume more of your content or maybe purchase when the time comes.
[00:45:15] Andy: Right. Yeah. And it’s likely consume more content, so it probably is going to be they’ll consume 10 or more pieces of content and value for every time they make a purchase and that’s great. And I think you got to know your product and you got to like your product and you going to like the niche that it’s in. And we’re fortunate enough here that one of our team members in her personal time is in this niche so she knows this niche and that really helps because then she can speak from the heart instead of from a script.
[00:45:48] Scott: Yeah. That’s huge. Again, I talked to people a lot of times. I’m like look around you at people you’re dealing with and that you’re conversing with and that you’re like you, you had someone that was part of your team or whatever like there’s people that are doing something or that would love to do something because they’re passionate about something or they enjoy that thing like whether it’s the guy building the car on the weekend in his garage and you filming some of that like it’s just going out there and figuring out that piece if you weren’t the one that’s going to be the face.
[00:46:19] Andy: Yeah. I would say that especially as you start, right? So, if you’re going to start a business, it should be in the niche that you know and that you love and that you’re an expert in. If you’re going to buy a business, it doesn’t really matter as much because the business already has legs and it’s off the ground and it has the nuts and bolts and pieces and parts. But I think probably a lot of listeners here are thinking about starting an Amazon private-label business and I think it would really help if they liked to their product. They don’t need to marry it. They don’t want to get attached to it because you might need to let it go if it’s not a winner, but you should like the niche.
[00:46:51] Scott: Yeah. No, I agree 100%. So, okay, you missed Prime Day but so what? You moved on. So, let’s just kind of fast-forward. So, after that kind of happens, I’m sure you’re running some pay-per-click and you’re getting sales and stuff through that and probably even some organic stuff at this point. So, leading into fourth quarter, how was that? Because I know that you’re probably trying to predict. You don’t have a season under your belt yet.
[00:47:19] Andy: Right. So, we sort of doubled down on our next shipment or next order, ordered twice as many. When it first came in, what we did, and we got a huge spike for this, the strategy really worked well, we reached out to the community, one of the communities. So, some of the Facebook communities don’t like advertising which makes a lot of sense and some do, and some have rules about it. So, anyway, we played fair in one of the communities and offered a discount coupon. Actually, I think we offered a discount coupon to an influencer and then they rolled out the opportunity.
[00:47:59] Scott: Got you. Okay.
[00:48:02] Andy: And that one discount alone I think brought us over 100 sales or almost 200 sales in a day, just a giant spike and…
[00:48:16] Scott: What kind of discount was that, Andy?
[00:48:17] Andy: It was a 50%.
[00:48:18] Scott: Okay. So, pretty aggressive.
[00:48:21] Andy: Pretty aggressive. Now what we did is because we knew we were going to get a lot of sales and, anyway, right or wrong, I raised the price on Amazon then offered a discount. So, it wasn’t quite as much of a loss. We try to break even. So, basically, hey, we’re going to get all these eyeballs. Let’s just add a little bit to the price. So, we offer this 50% and people care more about the 50% than they do about the end dollar sometimes.
[00:48:43] Scott: Right. Yeah. What kind of discount they got.
[00:48:46] Andy: Right. And we’re sitting at, I think, in this category, we were right around 17, 18 in our rank and it brought us up to number three. So, what that also did this it really showed me what the volume needs to look like to get to number three. So, if we’re at number three, here’s how many units we’re going to be selling.
[00:49:05] Scott: Yeah. How many actual units is it going to take?
[00:49:06] Andy: How many actual units it takes to get to number three and for our item because it’s the most expensive item in this accessories category, it’s not sustainable because some of these items are like $8. And so, these other accessories that are going to stay in the top 10, we’ll probably hover somewhere between 10 and 20 but I know what the volume looks like to be sitting in that top three.
[00:49:29] Scott: Yeah. And that’s great data because if you want to just have a spike then you just got to stay to yourself, “Let me bump my list.” Let me get some eyeballs for maybe even something that’s coming up. Maybe it’s another big day coming up or maybe the traffic is going to be increasing because Amazon is doing some Prime Day in another month or whatever. Like you could kind of gear up for that a little bit and get you kind of rooted which I think is good.
[00:49:51] Andy: Yeah. And I think some of these other accessories we’re going to sell also. So, some of our items are going to be unique and a higher value and innovative and others are going to be more “me too” items. And so, it’s nice to know what the volume looks like for those “me too” items.
[00:50:06] Scott: Yeah. No, that’s great. Awesome, man. So, alright. So, at this point, I mean, we’re recording this in fourth quarter. Things are rolling along. How does inventory look for you? Are you placing the next order like where are you in that process?
[00:50:19] Andy: Yeah. It’s selling a little bit. I can’t say it’s selling faster than you would like because I’ll take more sales and ran out of inventory before I’ll take slow sales, but we’ll probably have another whole. We do have inventory that’s been ordered, and I ordered it to try to get it ahead, to ship ahead of the Chinese holiday since factories shut down from anywhere from two to four weeks. So, that’s the plan. Our next shipment will be leaving port before that holiday. I may have to airfreight some of the items, but I think we’ll make it through fourth quarter and then at some point in January, towards end of January we will sell out.
[00:51:01] Scott: Awesome, man. That’s awesome. Yeah. I’m so happy for you, man, because when we first talked, it was kind of like that. It was like, “Oh, I think this is going to do well. You don’t know until you do it,” and here you are, you did it, and it worked. Doesn’t mean that the next product is going to do as well the next one, but you know that because you’ve had other businesses and you understand that it’s part of the process. It’s like you’re learning through this process and I think now you’ve got this under your belt. You’ve got one product that you’ve done it with. Now, are you going to be taking some of this again and kind of applying it to the other businesses that you have?
[00:51:34] Andy: Yeah. So, this particular private label brand is going to expand so there’s probably somewhere around 10 accessory items that we’re going to make to fill out the brand and then we’ll take it offline, I shouldn’t say offline, off Amazon onto our own store and generate emails and all that really build out this brand outside of Amazon. And then we’re going to take the sort of this private label study and see what we can do to apply it into the Lawn and Landscape Industry.
[00:52:07] Scott: Yeah. Love it. Love it. And I love it how you say the private label study. Well, you know what, I mean you’re right. You understand that this is like an education as well like you’re going through this and you’re figuring out what works, what doesn’t work, and you know that you might launch 10 accessory products and five of them aren’t going to work. You’re okay with that. Like you just cut them and work on the five that are, and I think that’s key. And then you also have that vision of going outside because you’ve experienced that outside. You know that there’s traffic. You know not everyone is going to buy on Amazon although there’s a lot of them are, but I think also building even like a little mini funnel with like two, three, four products, even with a free plus shipping offer is a whole another animal that you can then throw money at that at the front end and see what comes on in the back end. So, there’s so much that you can do, and you understand it and it’s just awesome to kind of hear how you talk about it like a study like you’re going to school for this. And in a sense, you are and when people understand that, they don’t look at it like, “Well, I got to put a dollar and then get a dollar out tomorrow.” You’re learning through that process that will eventually get that dollar back.
[00:53:11] Andy: Absolutely. Yeah. And you look past and if I look back over the 10 to 15-year e-commerce landscape at the beginning, it was a search, click, buy. That was the funnel. Search, click, buy, search, click, buy, right? Well, now the funnel could be 20 clicks long. It’s so diverse and different that the only way to understand it today is to learn it, right, to actually take the time to go to workshops like yours and actually learn the process and experiment and be okay with losing money. Everybody has a different threshold of the amount that they’re willing to lose but you got to be willing to lose money because that’s your education.
[00:53:49] Scott: Yeah. No, that’s great advice. All right, man. Let’s wrap this up. Is there anything that you would like to share with anyone listening as far as like, I mean, any other last-minute tips, bits of advice? You’ve got the floor, man.
[00:54:05] Andy: Yeah. I would say that just get started. Think about the amount of money that you’re willing to lose. You have more control over the money that you lose versus just shelling it out at the casino but there’s a very good likelihood that you will lose it. But make sure that if you do lose it, you’re learning so that you can take another step. And so, the path from point A to point B is a right turn, a left turn, another left turn, a right turn, and every week or month or quarter there are going to be left and right turns and you have to just be willing to keep on taking turns along the way until you get there. And really frankly, you never get there so it’s all about the process.
[00:54:49] Scott: It’s about the process and to me, it’s about like the climb to get there, right? It’s like we can always say like once I get that thing done, I’ll be happy, and I can relax. How many times have you said that? Like, gosh, I’ve said that in my own house. I’m like, “Once we get that project done, I’m good, I’m done. I don’t need to do anything else.” Then all of a sudden, three months go by and I’m starting to think about another project. It’s like one of those things. You’re never going to be really happy unless you are growing and that’s what Tony Robbins has always said and I’m a big fan and I agree with that. If you’re not growing, you’re dying, and I believe that.
When you’re in this, like you and I, our DNA is to build something. And it’s like to see what happens. When you do this what happens? When you plug this in, what happens? And I just was having this conversation with a friend of mine and I kind of related it to football like you run a play and it doesn’t work, you don’t just stop. You run another play. And then you try to figure out what to do next. And that’s all what we’re really doing here. You don’t know until you put that thing in the game or you insert that play in the game and then you get to decide like what do we do?
[00:55:52] Andy: Absolutely. And that’s a great way to say it. I would say get in the game. So, by taking to action, that’s another way to say it, just get in the game. If you order something from China, you are in the game. As soon as you take one step, you’re in the game, so get in the game.
[00:56:06] Scott: Yeah. Love it. All right, Andy. I’m going to let you go. You got a ton of things going on. I know you do, man.
[00:56:09] Andy: Thanks, Scott. Appreciate it.
[00:56:10] Scott: All right, man. Well, talk to you later. Keep me posted. We’ll probably have you to have you come back on, do another update.
[00:56:14] Andy: Okay. Will do.
[00:56:15] Scott: All right, Andy. Thanks, man.
[00:56:16] Andy: Thanks, man. Bye.
[00:56:19] Scott: All right. So, that was amazing. I love that Andy is so transparent and he shared everything with us, everything including the Shark Tank experience, what led up to that, everything after that, and all of his plans really moving forward, and just his thoughts and his mindset. And I think you guys can take a lot away from that. There’s no secret sauce here other than you need to go out there and focus and take action and you also have to be willing to pivot. And what we mean by that is if you see something else that might lend itself to your current business or even if it means getting rid of a product in a business or even that business in itself then it may be time to move on and you have to be aware of that and you have to be willing to do that, not marry the product or the business.
All right. So, just a lot of great takeaways. Probably want to go back and listen to that one again. Definitely going to want to go to the show notes and the transcripts because everything will be outlined there for you at TheAmazingSeller.com/461. And then again, I met Andy at one of our live events so if you want to attend one of our live events and meet great people like Andy then definitely head over to TheAmazingSeller.com/live and we can notify you when we are going to be doing our next live event and meet people like Andy and everyone else that that attends. I mean, it’s just an amazing experience. If you ever get the opportunity to do it, I would say do it. There’s a lot of great people there and people that are doing stuff that are actually taking action and Andy is a perfect example of that.
All right, guys. So, that’s it. That’s going to wrap up this episode. 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, take action. Have an awesome amazing day and I’ll see you right back here on the next episode.
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