Click Here to Download Transcript <<
…an eight-figure seller and he’s going to share how he started and grew his business and he’s also going to talk about how he’s doing it in today’s world because things have changed since he started. All right. We’re going to hear all of the lessons learned. We’re also going to hear about how his first product failed. I think we all want to hear about that. Well, this guy he’s a pretty cool guy. His name is Bernie Thompson. I met him at Sellers Summit, Steve Chu’s event. We hit it off. It was pretty cool sitting next to an eight-figure seller and being able to pick his brain and that’s exactly what we did. But the cool thing about Bernie is he’s just a laid back really easy-going guy but he knows business and he also knows that with business comes challenges and struggles and he’s not willing to give up and that’s what I think makes us entrepreneurs different.
We’re able to go out there, get started, take massive action which you’re going to hear how he did and how he failed in the beginning and then how he kind of turned that around and how he still fails today and he’s okay with that like it’s part of the process. And I think it’s really cool to be able to dig into a larger business, see how they think, see how they operate but also see that they also can continually improve their business and I think that’s really key here to pay attention to because you would think, “Oh, someone’s at eight figures. They’ve got it all figured out.” No. Bernie’s going to tell you, “No, that’s not the case. We’re always figuring things out.”
So, really excited to share this conversation that I have with Bernie. You’re going to learn a ton. Like I said, pay attention to a lot of the little details that we cover because those are the ones that I really drilled into and some of those are kind of like, well, what makes a product fail in your eyes? What do you do next with that? What do you do for product launches in today’s world?
[00:02:04] Scott: Do you focus on just your e-commerce and not as much on Amazon? Like, all of those things we drill really, really deep into. So, actually before we do jump in, I want to remind you that if you want to download the show notes to this episode, the transcripts, get all the links, everything that we talk about, all the resources, head over to TheAmazingSeller.com/480 and you can grab all of the goodies over there. All right. So, I’m going to stop talking so we can listen to this conversation that I have with an eight-figure seller and a cool guy, Bernie Thompson. Enjoy.
[00:02:36] Scott: Hey, Bernie. What’s up, man? How you doing?
[00:02:38] Bernie: Hey, Scott. Great to be on with you.
[00:02:40] Scott: Yeah. This is fun. This is going to be a lot of fun. You and I met at Steve’s event, Steve Chu, our mutual friend at Sellers Summit last year and it was last year, right? Not the year before. It was last year, right?
[00:02:52] Bernie: It was last year May. Yeah.
[00:02:53] Scott: Yeah. I’m losing track of time. It’s going by so fast. But yeah, we had some good time together there chatting and talking and what I really like about you is you’re a down-to-earth guy, you wouldn’t know it by looking at you that you’re a pretty successful seller. Not saying you’re not successful-looking by the way, Bernie. You’re just a regular guy but you run a pretty successful business. You’ve been doing it for a long time and I mean successful I mean we’re in the eight-figure range. So, when you can sit down at a table and talk to someone that’s doing it in those kind of numbers, you kind of want to pay attention. So, yeah, that's really what I want to do though, Bernie. I want to kind of just get on and kind of introduce you to the TAS audience but then also dig into your backstory but then also how you got to where you are today and maybe even talk about like how the platform has changed and kind of like what you are doing or what you would even do differently starting in today's world of e-commerce. Sound cool?
[00:03:51] Bernie: Yeah. Absolutely. That’s awesome. Sounds great.
[00:03:53] Scott: Yeah. All right. So, why don't you get us started? Why don't you tell us a little bit about Bernie?
[00:03:57] Bernie: Well, you know, we are different as a seller. Kind of what you’re highlighting is true. So, Plugable Technologies is the company that I run that is the eight-figure selling business and it wasn’t started that long ago, 2009, but one thing that’s different about us is it really, we started as an electronics company first and then Amazon actually was a secondary strategy that really was all about kind of letting us focus on the technology and the customers and kind of outsourcing the rest. So, we backed into Amazon. Rather than kind of starting with Amazon first and then figuring out what products to do, we had a product vision and then backed into Amazon. So, yeah, 2009 which was a great time to start a selling business. I mean, it was a greenfield at that point. We looked at eBay and Amazon at the time and with FBA and some of the other things that – FBA had really just kind of gotten off the ground at that point.
We saw that, okay, wow all these pieces are coming together where this vision of getting a pretty complex substantial business off the ground is possible because we can outsource a bunch of aspects of that that we’re no good at like sales and marketing frankly and outsource that to Amazon. But of course, now every single year it’s changed. I mean, the Amazon picture has been so dynamic. I mean, Jeff is successful in his vision kind of making it the most competitive marketplace in the world and that highly competitive aspect means everyone is just constantly thinking. Everyone is constantly innovating on the platform and so certainly we've struggled but yet ultimately been successful at keeping a strategy going or a set of evolving strategies that have meant that we’ve grown every single year that since we’ve been in existence since 2009.
[00:05:55] Scott: Yeah. I love it how you talk about like you came up with like your business in a sense before you started thinking about where you are going to be selling necessarily like you’re just thinking to yourself, like okay, you’re going to create a brand, we’re going to serve a market and we’re going to, I mean, it’s online like there’s different platforms looking at different ones, eBay, Amazon, whatever, my own e-commerce store or whatever but you aren’t thinking right off the bat, “Like how am I going to go over and just win on Amazon? Or how am I going to go over there and win on eBay?” You thought about what you are going to be selling to a specific market and then you kind of plug that into these different platforms that made your job a little bit easier where you could focus more on the company more than the platform itself which I really like that. Let me ask you this though, Bernie, and I know a lot of people would be wondering this. So, where do you get the idea of even the company that you want to start? Let’s start there. Like you’re sitting there one day and you’re like, “You know what, I want to start this company.” Like, where does that come from? I think everyone likes to know like how do you get inspired by that idea that turns into a business?
[00:07:00] Bernie: Yeah. I think it’s always great for people to take the threads of their lives, their interests, their experiences, maybe where they have something to bring to the table and they combine those things into a set of business ideas. It requires patience even when you have a few stars aligning, you also need to add to that a huge amount of persistence and patience but in my case, I’m a technology geek. I started my career working at IBM, on an operating system called OS 2 back in the early 1990s.
[00:07:35] Scott: Nice.
[00:07:36] Bernie: Yeah. So, kind of old style tech geek going back a long time. I worked at Microsoft on Windows, actually managed the USB and Bluetooth teams in Windows at Microsoft. So, the products that Plugable sells are all in that area. We basically have a complete USB product line of over 100 different USB products. We’re on the cutting edge of technology. We’re members of the USB Implementers Forum. We kind of network with all the chip companies so we’re really a technology company first. So, that all comes from my background. That’s what I’m interested in. That’s what I care about and actually the Plugable name was a name that I actually set aside almost 15 years ago where kind of the founding idea of the company is with the march of Moore's law, it’s things are going to keep shrinking and kind of what’s inside your computer is going to matter less and less and what you really are interested in is these things that you connect on the outside.
And that vision actually really has come to full fruition now kind of in the timeframe the Plugable has been around since 2009 because we had USB 3 come out and pretty much anything that was performance-limited, almost anything, USB 3 could do it and now we’re doing all these Thunderbolt 3 products which completely is exactly electrically it actually uses the PCI bus which is the technology inside your computer, the things connect and literally exposes that on the outside. So, Plugable was kind of built on a technology vision that is playing out. And again, that goes to the thing of we’re an electronics company first and then Amazon Seller second, but everybody has something like that. Everybody has a set of background experiences, places they have worked, people they know, things they care about, and I think if you’re going to build a company, a brand that is going to be kind of continue growing and kind of have a long-term vision, it’s got to be built on those things because you do have to have a few advantages that align and it does have to be something that you love to some degree.
[00:09:51] Bernie: How do you get a business to eight-figure? Well, it can’t be just one product. It’s got to be kind of a whole area that you care about. So, if your goal is kind of getting to this size, one of the things that I advise is, you know, just kind of sit down and think about what you care about and what you bring to the table and try to find that area of products, not just one product where all those things align.
[00:10:16] Scott: I love that. I mean, I talk a lot about that as far as like everyone has something that they’ve either been good at in the past or that they’ve enjoyed or that they’ve worked for a company kind of like you where you enjoyed it to a certain degree and you kind of did that stuff on your spare time too. It’s kind of like it was an interest of yours but also it was a job of yours. I mean, everyone I think can tap into something if they dig a little bit deeper rather than just thinking about the next fidget spinner that they can launch to make a buck. If that’s the case then to me, it’s like go out there and just be like kind of like a product flipper, go out there and find something to bargain and flip it and kind of do this little side hustle thing. It’s not a true, true business or a true, true brand like you are and I like that because I think moving forward then it’s like where do you take your business and plug it into a certain marketplace and try to get more exposure in a sense? So, I absolutely love that and I’m so glad that you said that.
And I also like it like you said like multiple products in a certain area. Like, if you’re starting a brand and you can’t think of like three products that you would serve, you’re probably not in the right market or you probably haven’t done enough homework because there should be multiple products that you could serve to that same customer or at least that same area of the market. And I think as you start to grow, you’ll see too that having a bunch of different products is also going to give you diversification where you’re not relying on just one product like you said. Like, USB 2.0 and then there’s 3.0 and then there’s Thunderbolt and all these different things like some of those other ones are probably eventually maybe phasing out more so than the more current ones and vice versa but you have that stuff kind of covered which I really, really like that.
[00:12:09] Scott: Let me ask you this though, so when you first get this idea of doing this, where do you think first that you’re going to enter the market? You had to start with one product like so where do you think that you want to get started and what was that experience like? Because you’re starting from someone that was working in the field, but you didn’t really necessarily create your own products in a sense. So, how do you attack that in 2009?
[00:12:37] Bernie: Yeah. No, it’s interesting because the first product was a failure. So, in 2009 I left the company I was at previously, a company called DisplayLink in August and my goal was to have a product launched within a month. So, obviously, I was not going to do any kind of ground up electrical engineering or anything like that, so I had a particular thing that I want to do. I wanted to take a regular USB laptop docking station and turn it into a thin client where you could connect a bunch of them into a single PC to turn one PC into many and I knew how to do this from a software perspective. I’d actually been playing around with it on kind of prototyping on Linux and so the first implementations were going to be on Linux. So, very niche, very kind of low-level tech, not a huge market but I kind of charge that. I wasn’t sure at first whether Plugable was going to be a broad product company or whether Plugable was going to be a USB thin client company.
And so, I actually succeeded doing what I aimed to do. I got it out in a month and I had a set of instructions for how to get it working on Linux and I’ve had a few people who had gone and done that. And even though it was pretty niche, it was pretty cool. Most people had not seen this that this was even possible that you could plug a bunch of USB docking stations into a PC and turn one PC into many. So, it was kind of talk-worthy. It was publicity-worthy. I gave a talk at a Linux Kernel Conference and Linus Torvalds was there and all this kind of stuff at that time. But as with a lot of products that are innovative, you have the problem of, okay, I got to get the product working but then you have the problem of educating the market that’s something that the market has not realized is possible and that’s where classic marketing comes in and that’s not where personally I bring strength to the table.
[00:14:44] Bernie: So, basically over the next 6 to 12 months, well, basically over the next six months, we’re looking at the sales. We’re looking at the amount of publicity we’re getting and saw that this was failing. We just simply for what we were doing unless we took a radically different approach with marketing, this was too niche, and it was not going to take off. And so, I remember a conversation that spring, so maybe about six months after launching with a good of friend of mine, very smart guy and I said, “Gosh, what should I do? Should I kind of double down, go deep here and really kind of make this thing work or should I go wide and just kind of launch a lot of simpler products and not focus on this USB thin client space?” And my friend's advice was very wise, the advice. He said, “Bernie, really you’re one person using a bunch of kind of contract resources and stuff. You can’t go wide. You need to focus on one thing, do one thing well, and that’s the way you’re going to be successful.”
I just remembered that advice because I struggled with it and then obviously I made the opposite decision. I said, “Okay. To really go deep here, I’m going to have to go deep into areas where I’m not strong. I understand this technology. I understand a lot of little opportunities all over this technology to do a few things better. I’m going to go wide.” And so, we went wide and immediately started getting traction in a few different places, a few different products and Plugable became a company that it became today. So, it could’ve been a USB thin client company and that was the focus and that failed, and so we kind of shifted direction and became a different company.
[00:16:30] Scott: So, let me understand this. So, your friend gave you advice to go deep. You ignored it. You went wide. It’s what your company is today and that was good advice? Well, okay, it was good advice. I guess it could’ve been really good advice if you followed it and it was successful but right now I’d say you going the opposite way was a pretty good idea. And here’s my thought on that too and kind of what you brought up is like when you have to really educate the market and you’re trying to create your own part of the market or a really small part of the market and educate people that aren’t familiar, it will be harder to sell because you’re not just searching for something and seeing it and going that’s what I need and I think, I mean, even going back to like watching shows on TV like Shark Tank or watching The Profit or any of these shows, right? They’re always talking about if you have to do a lot to explain what the product does, it’s going to be a lot harder for the general public to buy it or want it. You have to almost make that need or that want there by showing them that it can do this to make your process easier or whatever. It’s a cool thing. You got to see this thing.
And whenever they say that they're always a little reluctant to do a deal because they don't want to have to spend all the money in all of the time educating. They wanted to be like they see it, they know what it does. Let's buy it. And I think that's kind of what you're saying, what you kind of did. You kind of went after more products that were like we know what they do, people know what they do. They see it. You might make a better version of it but then they know what they want, they're going to get it, they buy it, they're happy and then they might buy three, four other products down the line with you guys. Does that kind of the way we’re looking at it now?
[00:18:09] Bernie: Yeah. Absolutely. That’s right. The last part you were saying there is kind of the key to as you go from six to seven to eight-figure, very large businesses, it’s that brand synergy. It is that in a moddable product line initially, they'll discover us because of one need that they have and one pluggable product that they end up choosing, and then that leads them back to us sometimes through Amazon, sometimes through marketing, list building, funnel management which I often say we’re almost like an anti-marketing company. So, Scott, every time I watch one of your podcast, I’m like, “Oh God, we’re very successful but there were all these things we’re doing so terribly. We got to do better.” So, all of that stuff is relevant and as you build a multiple product brand, you really do start getting brand synergies where these efforts that you just have to be so persistent about, the progress seems so slow at first. It does snowball. It snowballs for a single product and then it snowballs for moddable products across the whole branded line.
[00:19:17] Scott: No, I love that and it’s so true because the way I think about it is like with anything, the more opportunities you have to bring someone in that’s related to that market or that thing, you have a greater chance of widening the net in a sense to where you're going to capture people at different times or different places they are in that journey or what they're searching for that day. So, I really like that. I mean, it's a simple as like I mean like an iPhone case like, I mean, there are thousands of people out there selling those things but there's one brand that I really like and it's not even like – I think it’s a private labeler, but I love the brand and I buy all of their stuff because I just love the product, the quality. I love the way it fits. It’s like my third one I’ve had on three different phones. Now, they also sell the glass shield that goes over it. I buy their brand because it’s quality. So, it’s one of those things like I stick with it if I’m happy with the product and I think you’re doing the same exact thing and we can reach people from different searches when they’re searching for different things.
Like, if I’m searching for a glass protected screen and I see them and I’m like, “Oh, wait a minute. I’m going to buy that. I’m going to try it,” and then I see that they sell cases, I might buy the cases, or maybe they do sell maybe an attachment for it that goes on my exercise bike or whatever then I might buy that. So, it kind of brings me into their space and then if they have multiple products that are naturally going to increase their sales. And like you said, it's going to take time though. It's a slow process and you have to have that patience. I'm glad that you said that because it is so true. People think that you just wake up one day and automatically you're at six, seven and then eight figures. It's a journey and you're constantly I think learning the process and like you said. There are things that you're doing right now that you know you could probably do better, but it takes time, but you also got to figure out what is working right now and then focus on that and your strengths and all that stuff. So, I’m glad that you said that because a lot of people be like, “Oh, eight figures? They’re set. They’re just sitting back and just rocking in their chair and saying, ‘This is a great day.’” No, you’re always thinking about things that you can learn or improve inside your business.
[00:21:24] Bernie: Absolutely. Yeah. I mean every single product is a war that has many, many battles within it and whether the product is successful or a failure, we’re talking about the brand synergy stuff that plays out in all kinds of different ways that you can’t just sit back on like you’re saying. You got to pay attention. Amazon search, if Amazon begins, there are some effects in the A9 search engine where that are kind of associated with your selling account, with your brand's. So, if you develop a strength in a certain area for a certain set of keywords, it does have a statistical halo effect on other similar products that you launched for A9 search. And then on top of that, there’s the human element of it like you were describing the exact effect. If you do a search for a bunch of screen protectors and that brand that you know and you trust is maybe a few positions down in search, but your eyes see it, they come up high enough where you see that product, you’re going to skip by all those other brands that you know nothing about and go for that one that you trust.
And so, their organic position may be positioned five or whatever but because of their brand strength, they’ve got a certain number of customers that are going down to five and choosing that product and that’s actually going to pull them up in organic search. So, again, brand synergy effect. And then there’s all the list that they’ve built. Hopefully, they’ve been doing some marketing where they’ve been gathering emails and Facebook Pixels and Google remarketing on all of those screen protectors they have been selling so that when they launch the next one, they’ll be able to have an audience that they can remarket to either through Facebook and Google ads or through direct email. And so, yes, that’s where a lot of our focus is as we look across our business in all of those different aspects, we are always seeing things that we are doing well in and things where we are just not doing the right things yet.
[00:23:30] Bernie: So, we have a toolset that we developed kind of originally for ourselves and then we offer to other sellers and we just launched a funnel manager where when we do collect the list like one of the great ways that we collect list because we tend to do actually new products that haven’t existed before is we actually have some presale list gathering where, “Hey, you’re interested in this. We’ll let you know when it launches. Give us your email.” Were actually kind of quite successful with that. We’ve had success with Kickstarter in the past which are kind of similar. You end up with a…
[00:24:01] Scott: Yeah. Very similar. Yeah.
[00:24:02] Bernie: An email list out of that. So, we now have software, and this is actually something that Amazon exposes through the MWS API where we can push those list into our software, just upload all of those emails and we tag them and say where they came from and we’ll actually call the APIs to match those to any Amazon orders that came out of those. So, then we end up knowing which of those customers that said they were interested in a presale actually bought it and that’s powerful because now we have what’s really our customer, we brought that customer to Amazon because they came to us first with their kind of signed up for the presale on our landing page and we have now a direct line to that customer because it’s our customer.
[00:24:52] Scott: Yeah. So, are you then doing that kind of like a Kickstarter like you would? Are you kind of like you’re marketing it in a sense to where you’re like, “Okay. This product isn’t here yet but it’s going to be. If you’re interested in being notified when it goes live, let us know,” and do you tell them that there might be a discount or are there something that they’re going to get or the promises that you’re going to get it before everyone else?
[00:25:12] Bernie: Yeah. We do typically do discounts, but we often don’t need to promise that. Yeah, one of the advantages of scale is we’re actually doing products that will get press reviews of the product even prior to launch and then there’s press review. The people reading those articles in an online magazine or whatever will end up coming to look for the product and it’ll say, “Launching in the future.” We try to be careful about promising launch dates because often those are unpredictable but if you’re interested, just sign up here. And, yeah, and so a lot of comes from that.
[00:25:51] Scott: I love that. So, let me ask you this though, so then when you're building that list now a lot of people would say, “Okay. Well, Bernie, you got your own website. You got your own e-commerce. You got all of that stuff. You've got other platforms that you're selling on,” like so now do you take that launch list or even a portion of it and then when you roll out that product, do you drive those sales through Amazon to boost your ranking and all that stuff or do you mix it? Do you do half and sell half on your own? What’s your strategy there?
[00:26:22] Bernie: Yeah. Amazon is just so brilliant in a kind of nefarious kind of way. So, I think we’re all desperate to get diversified away from my Amazon because Amazon is so risky. I mean, Amazon has got this gigantic hammer of suspension that they use whether it’s a small issue or a big issue. It seems like the only tool they have is to suspend sales of that product or suspend that seller. So, they really – they’re a tough platform to sell on. They compete with you. I mean our number one competitor is AmazonBasics. So, we’re competing with a platform we sell on. So, we have every motivation in the world to get diversified away from Amazon and yet to answer your question, we send 100% of that traffic to Amazon. Why? Because we want every single bit of the way Amazon’s designed their system is traffic begets traffic, sales beget sales.
And if we don’t drive that traffic to Amazon, we are giving up a much larger opportunity from kind of spinning up the flywheel on that ASIN, on that product. And so, yeah, we send today 100% of the sales to Amazon. We don’t split it. We don’t keep the sales to ourselves because we know that early in a product lifecycle every sale that we can generate on Amazon is both kind of necessary that the best product in the world at the best price will sit in obscurity on Amazon unless you have a strategy to drive traffic to it. And that each one of those real customers that you sent to Amazon in those early days of a product will pay off multiple times in terms of additional customers that Amazon will bring you through keyword search and just their massive ownership of the buying audience especially here in the US. So, yeah, so we send 100% of it to Amazon.
[00:28:25] Scott: Yeah. And that’s not the first time I’ve heard that. I’ve talked to many Fortune 500 companies that are doing the same exact thing and it’s funny this one guy that I become pretty good friends with now and runs their marketing for their Amazon division now which never existed and now they have that and he’s kind of brought it on and he said, “Let me prove to you that doing it this way will benefit you and will add probably millions to the bottom line,” and that’s what he’s done. And it was hard for them, at management or the main office, for them to understand that we want to drive traffic and pay more per sale that we’re going to pay in fees, but it will be worth it because we will rank organically, and they will reward us for that. And once he started to prove that system and that plan then it was like, “Okay, we get it. Go ahead. Do what you got to do.”
And it’s true, it’s like what we’re doing is we’re trying to give Amazon what they want which is like you said, it’s traffic and sales. Sales ultimately. And from there, obviously, it’s got to be a good product because very soon if it’s not a good product you will be known for that as well and you’ll start to lose your rank, but you want that. You want to get ranked so you can start getting all of that exposure that comes with getting those sales and it’s worth it and a lot of people are like, “Yeah, but wait a minute. I can drive them over to my own website. I could save 15% or 18%.” It’s like, “Wait a minute here. That’s your cost of like your promotion when you’re first launching.” It’s kind of like a grand opening sale is the way I look at it. It’s like you’re going to spend on that grand opening sale. This is what you’re doing to do it.
Let me ask you this. Because there’s been some talk here recently because a lot of people in the day, back in the day, were giving away product for almost free to kind of do this and kind of game the Amazon system. We’ve never been a fan of that. We’ve always done it where the max we’ll ever give off is 50% but we’ve been leaning more towards the 25% to 30% during a launch.
[00:30:26] Scott: But now we're hearing that Amazon is starting to figure that into the algorithm that if there are coupons giving out for a product and they are over a certain threshold of a percentage, they’re not seeing the boost or they’re not seeing a change in the ranking. It’s not being credited towards their rank. Have you heard anything or seen anything of this?
[00:30:51] Bernie: So, we’ve never done those deep discounts. We’re so odd. I mean, we never paid for review services. We’ve never done big discounts. The largest discounts we do are basically 25% and that’s unusual. We normally do 20% or 15%. So, we haven’t experienced it ourselves so I probably just seeing the same things you’ve seen of people reporting that on the forums. Frankly, I’m kind of glad they’re doing it because the deep, deep discounts, the 80% or 90% discounts potentially I could see Amazon really encouraging that and making everyone unprofitable because it’s always the new guys giving away stuff and then they destroy the margins for the whole market.
So, in a way, I’m kind of glad that they maybe are applying some of the same algorithms that they began applying I know a year ago with discounts and reviews where when a discount was over and they would never kind of say the number definitively but somewhere around 40% or 50%, any discount above that and the reviews which previously were marked as verified reviews now no longer have that verified marking. And I could just imagine them tucking in a little bit of search adjustment along with that other disincentive if they felt the other disincentive wasn’t working enough.
So, yeah, and it’s hard with Amazon. I think another reason why we kind of spend a lot of time on tools like our Efficient Era tools is Amazon won’t tell you anything definitively so you’ve got to kind of reverse engineer everything so I think all of us were watching the forums, hearing other people’s experiences but also knowing that those are just anecdotes and they could be deceptive and so we really we got kind of look at the data. But on this heavy discounting thing because we don’t actually do it ourselves, I don’t think we’ve got great data on that.
[00:32:50] Scott: Yeah. Me neither. I’m just hearing from other people but this usually like, “Well, yeah, I went to a group, not even a review group anymore. Let's just call it like a discount group but it was a review group but now they’ve changed it or whatever and I’ve used this group and I’ve given away a hundred my products at 75% off or something like that.” And I’m always like, “Well, I can’t help you there because, number one, I don’t do that and for anyone that is doing it, are the reviews going to stick? I don’t know. Are they even going to be able to be posted? Don’t know because I’ve been kind of told that you can’t even leave a review if you had a product that’s been discounted over 50%, 60% now so I don’t know.” You know what I mean? Like, I don’t know. I don’t really care to be honest with you because that’s not our strategy and that’s not really what I share or what I teach so I would say do exactly what you’re doing as far as build up some type of list that people are aware of your product, they want the product that so obviously you’re going out to that market and then letting them even know kind of like a Kickstarter.
When we do launch, we’re going to give it away at a discount. The discount might be 20% or something like that or you’ll be the first to receive or whatever. And then just throw some sales at Amazon and launch the product, have your listing optimized and it’s pretty basic. Really, it’s not like we’re not like trying to reinvent the wheel here. We’re just doing things that Amazon want anyway and obviously run some pay-per-click and give Amazon what they want. So, anyway, we could talk a whole hour on that.
All right. So, what I want to do though here is I wanted to kind of just talk briefly and then I want to also talk about like you have created some tools to kind of help you run an eight-figure business because I think like you said you started to see some struggles and things that you wanted that you wanted to kind of simplify so you started to build those in yourself. I kind of like that too that a lot of people that are selling tools at least the good ones, they’re usually created for themselves first and I always love that. But let me ask you this question because I know a lot of people probably want to know, if you were starting over today and in the place that we are right now with Amazon the way it is, eBay the way it is, with Walmart the way it is, all the different platforms, what would you do right now starting from scratch like what would be the first thing that you would say or any advice that you would give someone that’s just starting?
[00:35:12] Bernie: Yeah. I mean, well, the first advice is I needed a lot of patience to build this business. It took me five years actually to get cash out of the business and a lot of that has to do with the category, I mean, electronics. It’s a brutal category with huge investments and small margins. But I had a huge advantage starting in 2009 so I think today you both need to be very informed about all of the kind of different little – what you can do today to make your business successful is really a collection of dozens or hundreds of little things that a lot of them are kind of the modern digital equivalents of things that have been marketing, well-understood marketing things for years but you need quite a bit of patience too because it is a market where a lot of the tricks have been purged from the market which is good.
There are still a few kind of whatever you want to call them, bad actors out there and you’re going to have to compete with them which is frustrating when you’re kind of faced with a choice of, okay, well I could use a shortcut to go get those first few reviews, pay somebody via PayPal or whatever which is what some of the black hat sellers are doing but it’s a short time or strategy because almost Amazon is very erratic about their enforcement of things but they are persistent so, over time, they will get you.
[00:36:53] Scott: Yes, they will. Yes, they will. They will win too, by the way, Bernie. They will win.
[00:36:59] Bernie: And they will win. No, that’s right. Actually, playing off that, I mean I think one of the things that we’re constantly doing is kind of letting go of certain product categories. As AmazonBasics comes in and dominates a sub-area within our area, USB, we let that go. We say we’re not going to go head-to-head with AmazonBasics. We’re only going to go at them when we’ve got some sort of game-changing differentiation or whatever.
So, I think there’s a huge amount of opportunity. I think what Amazon has done in terms of enabling small companies, small brands to be able to reach a global market nearly instantaneously, I mean, there are some tax and regulatory things that stand in the way of it that you really got to be prepared to absorb but if you’ve got a great idea for a brand and a great set of product ideas sitting under that, this is an amazing platform to make those ideas reach the world but you do need the core of those good ideas that are not just need to and they’re not just purely opportunistic. I mean, you can be a bit opportunistic. That’s good but not purely opportunistic. And then you need persistence because it’s a crowded world. It’s a noisy world and there are a lot of things to learn here about marketing techniques within the digital world and within specifically the Amazon world that’s going to take you a while. Effectively, all of us are testing all of the time.
[00:38:32] Scott: All the time.
[00:38:33] Bernie: All the time, discovering things that don’t work and things that do work and which fall into which list, the shifting over time. And so, that would be my advice is to go for it if you’ve got those ideas but also be prepared that this isn’t easy.
[00:38:51] Scott: Yeah. Well, I agree on all of that and the one thing that I would say and what I think I heard you say earlier and I just kind of want to highlight it for people, there’s two things and I think we’re seeing this more and more moving into 2018 and beyond. Just with the updated brand registry, it’s now 2.0 and they’re saying that they want you to have a trademark on your brand in order to even get approved. That wasn’t the way it was before and now they’re all so locking down some of the listings, not all of the listings but some can be locked down which is good but it’s also showing me and us that they are starting to focus more on brand and the power of the brand and what they’re going to do for the brand and even give you maybe some extra credit for what you do right and then allowing you to have more reach and all of that stuff.
So, I think building a brand and also having that brand registered and all of that stuff and really focusing on that brand, I think that is the long-term and I think the patience in that, Bernie, is really like you said and you keep saying and I think that’s what it has to be, you have to have that patience. You have to have the vision, you have to have the plan, you have to execute, you have to be willing to pivot, you have to be willing to let go of that one product that’s not really doing what it’s doing a year ago, let that go or just not focus as much on it. And that kind of leads me into the next thing that I pulled away from what you were talking about and that’s products like not just having one or two or three products. It’s having new products. It’s having multiple products that can serve so this way here you’re not depending on just that.
And like, I mean, so would you say that because I heard someone else say this and it made a lot of sense, if you have like a few products that are doing pretty good, would you say in your head if you said, “If I really focused on this product, I can maybe get it too. It’s selling 20 a day. I can maybe get it to 30 but I’m going to have to really test my marketing. I got to really go ahead and maybe test some keywords. I got to do some more pay-per-click,” or would you say just go find another product that could serve another part of the market and roll that out?
[00:41:01] Bernie: Yeah. I think it’s sometimes it could be either answer depending on how compelling that new product is versus the existing product, but I think it is to what you’re describing, the attitude that I took once I made that shift to kind of going wide was I’m almost like a venture capitalist. I have no idea, I’m going to launch 10 products and I believe in every one of those 10 products or I wouldn’t be doing them but I know that the market’s going to tell me a different story and that it actually, in fact, maybe two of those products are going to be home runs and four of those products I'll maybe do a few reorders but they’re never going to really take fire and then a bunch of the others will just flop entirely. I can’t really even to this day, here I am, it’s 2018. I’m nine years into this, when I launch a product and I believe in that product, I to this day cannot predict whether or not that product is going to be a raging success or a complete failure. We just got to take it to market and we got to put our best effort on it.
So, then to answer your kind of second question in there, there are times where there isn’t that next product that is really jumping out at me at that moment that, “God I love that. I really want to bring that to market or that idea,” and so we do kind of focus on our existing set more for that period of time and really optimizing everything and we’re doing that anyway in the background but maybe during that time, we’ll only do that. And then there’s some technology shift where I realize, “Ah, there’s this new type of product that’s possible and we want to be first there and then we’ll kind of let the existing products maybe ride a little bit more and steal a little bit time from that and focus on that new opportunity.” So, I think it is a matter of it could be one or the other and it’s based on kind of this very difficult subjective judgment of where does the opportunity lie? Does it lie in optimizing what they already have or does it lie in the new thing? And you’re going to do both but in that moment which one do you prioritize? And you just got to make choices based on the evidence as you can judge it.
[00:43:14] Scott: Yeah. That’s exactly right and I think like you’re saying because you have like a lot of SKUs, right? So, at that point, you could also say, “Well, okay, let’s pause on the product stuff right now because we already have enough stuff going here. We probably might even be neglecting a couple of products that we haven’t been able to focus on. Let’s go ahead and put some focus on those.” I get that. I agree with that but I’m saying like you have like three products and you’re like, “You know what, I need at least 10 products here,” then I think you should be pushing yourself to launch those new products versus trying to squeeze out a little bit of those two or three that you have.
But like you said, you’re 100% right because you’re looking at a whole slew of SKUs and I see a lot of people that when they get a lot of SKUs then they get a little bit overwhelmed like which one do I focus on? You know what I mean? Like which one can I focus on? And I think you’re right like you got to look at the entire situation but for a lot of people they have one or two or three products and they’re just thinking to themselves, “Man, I got to squeeze out a little bit more.” I’d rather see them try to start thinking about that next one. I mean, honestly, they should have those next three or five already kind of mapped out planned and working on or researching or what they’re going to do, how they’re going to figure it better, making adjustments, whatever but I just think that a lot of people get stuck on, “Let’s just try to squeeze out five more sales and spend all this time when I could just be rolling out another product and probably do better.”
So, that was just my point on that but, yeah, great. Okay. So, brand and products. That’s what we settled down there and then optimizing ones that obviously that could use it. All right. So, to wrap up here, let’s talk about these tools that you created for your business and then why but then also we could talk about how people can learn more about them. So, why don’t you get into that?
[00:44:59] Bernie: Yeah. Starting in by probably about 2010, you realize, “God, in order to scale this business, we’ve got to do a lot of automation and so we started doing it in-house then about a year or two ago, we released it as a toolset called EfficientEra.com and because we did it for ourselves originally, it’s kind of a wide range of tools but they’re really helpful in again there’s all these little things that you got to do well and we do a whole bunch of those little things. So, a big set of the tools that have been around for a while are interesting. They’re all about spinning up the product flywheel and kind of closing all the feedback loops with the customer. If something negative is happening with the customer like a negative review or negative seller feedback, catching that and interacting with the customer to try to mitigate it. On the positive side, if there's evidence of the customer having a good experience, we want to encourage a positive review.
So, there’s a whole kind of complete toolset in there related to that. In fact, I even wrote the book about just a high level of that kind of customer service mindset called Flywheels and Feedback Loops which is on Amazon, self-published, and honestly, I try to make the book really readable and actually the feedback I’ve gotten from lots of people over the last year is they actually really love that book. So, if you’re interested in customer service from an Amazon-specific point of view, that might be a good book to get.
[00:46:26] Scott: Yeah. We’ll definitely link that up for you, Bernie. Yeah. For sure. I mean, I actually had the opportunity when we are at Sellers Summit to go through it and, yeah, you’re absolutely right and I love it that you’re able to kind of focus on that because I think a lot of people don’t realize they’re always thinking themselves like, “How do I get more reviews? How do I get a stronger sellers account?” You do exactly what you’re saying here so I love that. So, yeah, I’ll link that up in the show notes for sure.
[00:46:49] Bernie: Yeah. So, a big chunk of the tools are related to that but interestingly with the email opt-outs and limitations on logging in to Seller Central, Amazon themselves have actually gotten away of some of those things and then also as we’ve been trying to solve the problems that we’ve been talking about in this podcast to kind of leveraging our brands to build the brand, we’ve been focusing a lot more on kind of marketing tools. So, the Efficient Era tools have a funnel manager which is this thing I hinted at earlier where as we’re trying to gather email list to build brand equity through email list that we own, we want to have that be very connected and to know what are those lists resulting in, in terms of orders on Amazon? Amazon has that as part of the API set that you can figure that out.
And so, I described it earlier, you just upload your email list, you tag them, so you know where they came from because you want to know kind of what is that subset audience there and then we match that up to orders so that we could email those customers directly outside of the Amazon marketplace email system. And potentially you described it well, Scott, that email list is basically this thing that you could retarget. You could target it at Amazon or if someday for whatever reason you want to drive that traffic to your own sales funnel, you can target that at your own sales funnel. But we kind of connect that all together so it's almost like an Amazon focused CRM where you know what your customers are doing on Amazon and while they're still your customers.
[00:48:34] Scott: Yeah. I love that.
[00:48:37] Bernie: And then we have ad analysis. So, we have our ad manager that uses again the, well, used to be on MWS and now it’s the other ad API set, pulls all those reports in, does keyword analysis and overall sales analysis, ACOS analysis over time and makes recommendations like big recommendations, bidding up, bidding down on your campaigns. And then we got a lot of things where we’re pulling in all of the Amazon data and letting you query it easily. So, whether it’s reviews, review changes like you get a review, it looks like it’s five-star and then three months later they changed it to one star. We’ll let you know about things like that. And then all the order data and return data, actually return data is one of the things I’ve been really focused on lately. Amazon started initiating a process probably about a year-and-a-half ago where they have what they call [inaudible] suspensions that are return rate triggered where they’ll suspend sales of your ASIN because the return rate popped up high. You’ve had those, Scott?
[00:49:44] Scott: Yep. Seen it. Yep.
[00:49:46] Bernie: Yeah. So, they’re pretty easy to get it relisted. They give you a form to fill out where you got to explain what you’re doing better but we have some products in electronics where the compatibility is complicated, so they keep getting suspended over and over again. That hurt sales a little bit and then after a while, they will actually completely remove the product from FBA if the return rate stays high and we’ve had that happen to some products. So, we’re now and not only that of course, I mean, we’re really motivated about returns but we lose money on them. I mean, if you actually look at the cost structure of a return, it’s brutal. I mean a product with a 10% return rate, chances are you’re losing money on that product. Interestingly, there is no report in Seller Central that will tell you what the return rates are for all your products. So, we added that to the Efficient Era tools. We’ve got an easy query or return rate query which tells you exactly each product and each geography what the return rate is, and you can look at it over time or for certain time periods.
So, we just launched this feature and I’m personally going through this data like crazy for my selling business trying to scrutinize our high return rate products. Basically, I discovered that over 100 products we’re losing money on about seven of them just based on return rate alone. Yeah.
[00:51:05] Scott: You want to dig into those reports.
[00:51:07] Bernie: Yep.
[00:51:08] Scott: You want to dig into those for sure.
[00:51:10] Bernie: And it’s crazy that Amazon cares a lot about return rate, but they don’t make it easy. They just don’t have good reporting off of it. Same thing with promotions. When you do a promotion or a coupon, that data is associated with each order, but Amazon doesn’t provide a great way to see, how many times was my particular promotion used or how many times was this coupon used? So, we’ve got that in Efficient Era. We got a promotion count and a promotions report that will tie together everything and show you how often a coupon is used and which orders resulted from a coupon or promotion and everything searchable. So, yeah.
[00:51:50] Scott: Sounds pretty robust.
[00:51:52] Bernie: It’s a lot of different features. Interestingly, one of the things that we are focused on is trying to turn this into more of a benefits-focused thing. Like, we have a lot of content up on EfficientEra.com in our blog, you kind of see all of our strategies of how we use the tools ourselves to achieve particular advantages. But we were talking earlier about marketing. I think one of our challenges is turning all this great functionality that really helps us be successful as sellers into something that is understandable to other sellers so that they know how to use it. And it’s exactly like the challenge of launching a product that maybe the market doesn’t understand yet. You’ve got to translate it into terms that the market can understand and you got to market it. And to some degree, that’s the challenge we also face with our tools for Amazon Sellers. So, it’s kind of funny. I keep running into this, Scott. My weakness is marketing. I got to work on that.
[00:52:57] Scott: I keep hearing that myself. We’re definitely going to have to sit down for sure because that’s what I enjoy probably the most is the marketing end of things. That’s why you probably know I started a new brand with a partner and it’s doing well. We’re already at six figures, soon to be seven and really excited about it and doing exactly this. We’re building a brand with the hopes off in the next three to five years if we wanted to exit we’d be able to exit if we wanted to but right now we’re not planning on it but we’re setting everything up, so we could. But, yeah, we’re doing everything that we’re talking about. It’s like a brand and we are launching multiple products and we are serving a market and we’re doing a really good job though I think as far as the marketing.
I’ve got a face to the business. It’s not me. It’s my partner but they’re able to really connect with the marketplace as well which is really helpful but then in the background me and our team we’re able to really hunker down on the marketing side of things and that’s when things can get really exciting and we just love testing this stuff. I think I love the climb more than I love reaching the top. You know what I mean? Like I love testing things and see what works and I also like talking to people like you that are doing different things in different markets and seeing how they would relate to a market that I might be in. I just love the process, to be honest with you and marketing is one of them that I definitely love. So, yeah, will definitely be chatting for sure. Are you going to Sellers Summit this year? I didn’t even ask you.
[00:54:33] Bernie: I am. Yeah. I’ll see you there again.
[00:54:35] Scott: Yes, you will. So, again, I’ll give a little shout out here to Steve Chu. If anybody is interested, you can definitely go over to SellersSummit.com. I don’t even know if he has any tickets left to be honest with you. I think the last I checked, he had a handful. So, definitely go there if you’re listening to this and it’s before the event. It’s a great event. It’d be my third time there. It’s always great, people like you, Bernie, and a lot of other great sellers. But, yeah, guys, if you want to check it out, definitely check out the tool. What’s the address again that they would go to?
[00:55:05] Bernie: So, it’s EfficientEra.com and I will do one marketing thing.
[00:55:10] Scott: Okay. Cool.
[00:55:12] Bernie: If you sign up, we have a 30-day free trial but if you email us, firstname.lastname@example.org after you sign up and tell us what your account is and you mentioned Scott Voelker or The Amazing Seller, we’ll double that to 60 days.
[00:55:26] Scott: That’s awesome. Yeah. No, that’s cool. So, guys, I mean, 60 days, give it a shot. Check out the tools. To me, the tools to me are always like if I can find something in a tool that’s going to, number one, make it easier for my business to grow but then also automate some things, and also see some stuff that I necessarily wouldn’t be able to see unless I dug through like all these reports and it’s definitely something that I would be interested in and I am definitely interested in the tool myself so I’ll be playing around with it right along with everyone else. So definitely check it out. Bernie’s a great guy. Bernie, I want to thank you again for coming on and again like I said to you at Sellers Summit last year, it’s just a pleasure chatting and being able to rub elbows with someone that’s been in the business for quite a while and growing and still learning. So, I just want to thank you for coming on and taking some time out of your day.
[00:56:18] Bernie: Thanks so much for having me on. It’s lots of fun.
[00:56:21] Scott: Okay. So, that was pretty awesome, right? I mean to be able to sit down and really just talk through business with an eight-figure seller that didn’t start out as an eight-figure seller by the way and you heard that from his story about how he started his business and kind of went in a different direction than was recommended by someone that he thought was a good idea but I guess his plan kind of worked out a little bit better. But it’s one of those things, you got to kind of trust your gut sometimes and then just go with it and just figure out a way to make it work.
But the one thing I want to highlight is Bernie has been doing this for quite a few years now and he’s learned so much through the process, but he is also constantly learning and pivoting and also figuring out how he can really position his brand in the current market. And I think we all can learn from that. The one thing I also want to highlight is how he really talked about building a brand in the future is really where he sees it as well. And Amazon I think it’s going to cater those brands and those businesses in the future. It will be easier to launch products for those brands. It’ll be easier to rank, all of that stuff. They’re going to give a little extra credit, I think, and I mean Bernie said the same thing, so I would probably listen to Bernie because he’s kind of been around the block a couple of times so pretty cool stuff there.
So, if you guys want to download the show notes, head over to TheAmazingSeller.com/480. You’ll get all of those links all of the stuff that we talked about, the transcripts, the show notes, and I would definitely encourage you to go over and check out the suite of tools that Bernie had created because he needed it for his business so now he’s offering them to the public, Efficient Era. I made a link that will be easier than trying to remember that or even trying to remember how to spell that so head over to TheAmazingSeller.com/Bernie and you can just drop on over there, check it out but also you can probably get in touch with Bernie there if you got any questions or someone on his team and he’s also extending a 60-day trial for all TASers.
[00:58:27] Scott: So, definitely go check that out. No strings attached. Love Bernie. Great guy and I really appreciate him sharing all of his knowledge today and I’m sure we’ll have him back on because we could definitely dig even deeper. All right, guys. So that’s going to wrap up this episode. I want to remind you once again that I am 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. Now go get them!
Click Here to Download Transcript <<