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Andrew: Hello everyone. My name’s Andrew Youderian, founder of eCommerce Fuel where we talk about building profitable eCommerce companies with small teams and individuals and in today’s interview I want to learn how to leverage email marketing to grow your eCommerce business even if you don’t have a list or a newsletter right now. My guest today, Ed Hallen, has helped some of the nation’s biggest online retailers and regular retailers develop custom email marketing solutions and he’s also the co-founder of a startup called Klaviyo, which brings powerful email marketing segmentation to smaller eCommerce merchants. Ed, thanks for being here.

Ed: Hey, Andrew. Looking forward to it. Glad to be here.

Andrew: This should be a lot of fun and before we actually get into
some of the questions I’m excited and want to allude to a
partnership that we’re actually going to be engaging in.
Obviously, you’ve got a very rich background with email. You
understand that very well and personally myself, I’ve done some
things well with my eCommerce stores but one thing I’ve really
neglected is email marketing throughout the years and having
gotten to know each other and chatting, we’re going to be doing
an exciting partnership where you’ve graciously agreed to help
up implement some email strategies across our store and with
Klaviyo, your new software solution and we’re also going to be
sharing that publicly here on the blog and letting people know
how we set it up, what considerations we have and then in terms
of actual results, what results we’re seeing and so we’ll talk
about that a little bit more near the end of the interview but
just did want to mention it and it’s something that we’re really
excited about doing.

Ed: Andrew, we are too. You’re certainly not the only ones out there who
haven’t taken advantage of email marketing so it’s just an area
of big opportunity and it’s a pretty exciting one, so it should
be good for customers and good for you too.

Andrew: I hope so. It’s one of those things you know you should be
doing and we just haven’t, so it’ll be good to finally get on
the ball with that. Ed, can you start off by just giving me a
little bit, sharing a little bit of your background with email
marketing and the path that led you to starting Klaviyo?

Ed: Absolutely. So really I, as well as the rest of the Klaviyo team,
have spent the better part of the last ten years working with
many of the largest offline and online retail companies on their
marketing. Both email marketing and other marketing and also a
lot of the big tech companies like Google and I think throughout
this generally what we’ve seen is that these big companies for
years have been throwing tons of engineers and analysts and PhDs
at these marketing problems and all of a sudden technology has
reached a point where the typical eCommerce store or even
smaller stores or even these large stores can all of a sudden
get a lot better at marketing broadly, but also email marketing
specifically is just a huge area of opportunity that a lot of
people, I think like yourself, haven’t touched yet. It’s
intimidating. It’s tough to get started and it seems unclear
what the results are and I think what we’ve seen across these
big companies as well as a lot of smaller eCommerce players as
well is that email marketing’s probably the biggest opportunity
out there and it’s probably the most under utilized opportunity
too.

Andrew: It’s funny because when I think about growing my business,
immediately what pops in mind for me is SEO and almost to a
fault. I think, one thing I’ve learned, especially over this
last year is, I’m probably too SEO focused and not diversified
in some of these other channels. Stuff like email marketing just
doesn’t spring to mind and yet when you look at, do you have any
stats or any figures on, a lot of times they’ll rank different
channels for customer acquisition or for marketing in terms of
the return on investment, so how much you can expect to make on
average if you put a dollar into this channel. Can you give us
an idea of where email ranks in an echelon between SEO and pay
per click and all the other ways that you could potentially
drive traffic?

Ed: Absolutely. SEO, I think, is fantastic. I think what we see though is
that email really gives it a run for its money far away and
beyond any other channel. The amazing thing about email is,
unlike SEO, is that email really is once you have that customer
base going, it’ll really just keep driving itself year in, year
out and a lot of those benefits, once you have a loyal, a great
customer, email just keeps driving that relationship forward and
can really take you to new heights of profitability.

So definitely a time and a place for SEO. Definitely something every
store should focus on, but to leave email behind, just really leaving
just a lot of opportunity and money behind and I think numbers that
we’ve seen and studies report is that every dollar
spent on email marketing can turn into $40 of benefit and I
think what we’ve seen with our customers is for a lot of
eCommerce stores that’s absolutely true. You throw in, really
just a couple of emails and you will immediately start to see
pretty major impacts on your business from these sales.

Andrew: So why is it that nobody is doing this? Ed, I want you to read
my mind and tell me why I’m not doing this. I guess, if I had to
be honest and say why haven’t I done this, I’ve been doing this
full time for five years now, with, some of the stores have a
very, a pretty strong customer base and I’d say I haven’t done
it well because it’s confusing to set up potentially. I don’t
want to hassle and annoy people. For some reason I think, ‘These
people came and bought from me but if they want something else
they’ll just come back.’ I don’t want to be that guy who’s
spamming their inbox and I guess there’s a sense of me who
that’s part of the reservation why I haven’t done it.

Then part of me is also, maybe one of the hesitations is because
there aren’t a lot of good integrations. For example, we use
Magento but when I think about a lot of the integrations,
there’s MailChimp and there’s AWeber, and I guess those kind of
tie into Magento but at the same time, it’s kind of confusing
with, I guess I just, it’s all been kind of confusing for me. I
feel kind of dumb saying that because there’s a lot of people
doing it well and I feel like I’m a fairly tech savvy guy but
those are some of the reasons why I haven’t done it. Can you
share maybe some of the reasons you hear from other people why
they just haven’t gotten started with this?

Ed: Yes. You hit the nail on the head. Ninety nine percent of eCommerce
business that we talk to either don’t do email or they might
have a newsletter and really a lot of the reasons we hear are,
it’s either they largely don’t want to hassle people or they
feel like they start to write newsletters but just find that
just the time spent or the content involved just doesn’t seem to
be worth it because they’re not seeing the results on their
store.

You mentioned spam and I think unfortunately a lot of people who
run eCommerce businesses look at the emails that they’ve gotten
over the past ten years and they’ve [inaudible 06:49] given
email marketing a bad name but really the reason we founded
Klaviyo is that you can, this doesn’t have to be true anymore,
so it’s really possible to go from that world of spam and
ineffective email marketing to what we like to think of as
customer centric email marketing. Really sending the emails that
you would want to get if you were your own customer. We see that
those types of emails are great. Customers like them. They
really drive revenue and at the end of the day you’re probably
sending, you’re not actually sending that many emails, you’re
just sending the ones that really work.

Andrew: That will tie into some of the segmentation which I think we’ll
talk about in just a few minutes. One question I have is,
sitting at the cusp of this journey, for lack of a better word,
in terms of implementing email, what are some realistic
expectations from a percentage of revenue basis. Let’s say we do
a very good job and we segment a lot and we do a lot of the
things that you’ll talk about in terms of best practices and
really being effective. What can a store, maybe after a ramp up
period, expect to be able to generate in terms of the percentage
of the revenues that come from email, from a really well
optimized campaign and then for maybe just a real mediocre one
where you just, you take some steps. You get a basic newsletter
up but you’re not doing anything super fancy. What kind of
percentages could we expect from something a little more
simplistic?

Ed: Absolutely. I think what we see is that if you really nail it, email
both can drive one campaign can drive 5% additional revenues
every single month, but once you start to add together, you’re
actually probably sending abandoned carts. You’re sending follow-
up emails. You’re sending newsletters. Those percents really add
up and I think, we see that those reach far into the double
digits and what’s really amazing about it is it feeds off every
single channel, so every time you add a new customer via SEO
your email benefits are going to add on to that customer every
single month and they don’t go away, so it’s this compounding
machine that just keeps moving forward and that just keeps
growing your revenues every single year.

Andrew: It may be safe to say 5 to 10% for real basic, entry level,
send it out to everybody who’s ever ordered from you kind of
approach and then if you get a little more specific, a little
more targeted, it’s safe to say maybe 25% is not unrealistic?

Ed: Not at all. I think that’s right and even, I think what we’ve seen is
if you just send, there’s probably one email we’ve seen that if
you send once a month, 12 times a year, just so you know to, if
you say email to everyone who hasn’t bought in the last six
months but used to be a customer, that email alone will probably
rive several percent gain and take minutes to implement.

Andrew: That’s crazy.

Ed: No, it’s great.

Andrew: I’m excited to see what this is going to do. I can feel my
profit center here just starting to jump out of my stomach.

Ed: That’s the goal.

Andrew: People traditionally, they think email marketing is sending out
a basic newsletter. Kind of like we talked about, but what are
some of the lesser known yet really powerful ways that email
marketing can be used to help grow a business that people might
not initially think of when they think of the term?

Ed: It’s a great question. The reason, if you look at what most people
do, they really are focused on newsletters and really the only
reason that’s been true is that it’s been hard to find sets of
customers so everyone defaulted to, back when you used to put
ads in the newspaper, you sent them to everybody. Now that you
have emails, you send everybody the same email and you just
don’t have to do that anymore. The way we think about it is
there’s really three phases. There’s the things you send to
customers before they purchase, that’s things like newsletters
that keep them engaged, keep them interested, special offers,
special events, then there’s the things that you send during
purchase and the simplest ones here really, if you see someone
come to your site, start to check out and then go away, send
them a follow-up just to remind them that they were shopping
with you and we find it’s a lot of those purchases, it’s not
because they’re not interested it’s just that life gets in the
way and something else comes up.

Then the final one is really post-purchase and this is things
like letting someone know that their order’s on the way. If
you’re a store where people typically might come back every
three, six, nine, 12 months, just send a follow-up [inaudible
11:13] and check in and see how things are going and it’s these
types of emails that, if you think of the customer, they’re not
getting many of these. They might get three or four a year from
you but they’re the ones that usually drive actually purchases
immediately for those customers. Between those three buckets,
they’re all really important and I think if you only think about
those emails in terms of the pre-purchase, you’re really missing
out on the people who have purchased and have already shown that
they’re excited customers of yours.

Andrew: It’s an entire life cycle. It’s not just one static point in
time?

Ed: Exactly.

Andrew: Like I mentioned, you’ve been really involved with crafting
some high level email customer campaigns and custom technologies
for some really big retailers. What are some of the powerful
things that some of those guys are doing that most smaller
merchants aren’t implementing?

Ed: I think probably the number one thing that we see is that they’re
tying the emails they send back to purchases and who’s
purchasing, what they’re purchasing and then using that to drive
the emails that they’re sending and the main takeaway there is
just that emails need to be held accountable to helping you out
so you don’t want to spam people. I think you want to do what’s
right for your customer so these companies, the biggest
companies have done a good job of knowing what that point is. On
the other hand, I think we’ve been surprised with the more
eCommerce companies we work with is that if you’re not one of
the big guys, you have a bunch of advantages. One is you don’t
have a bunch of different departments fighting to send emails.
You’re not tied down by a lot of these kind of really old
systems or other things you’re doing, so if you’re an eCommerce
store you can send just a few, a couple of emails and be a lot
more effective than a lot of those guys just because it’s a lot
easier for you to know your customers and know what it is they
want to receive.

Andrew: Have you found that being able to personalize emails, and not
personalize like, ‘Hey, Ed. Thank you for purchasing,’ but in
terms of conveying more of a personalized business. One of the
things we did, we just did a big relaunch of one of our sites
and as part of that our Contact Us page. Something that I had
never really traditionally though was that important. It was
always pretty generic. Based on some advice from another
interviewee that I had chatted with, Andrew Bleakley, he said,
‘One of the biggest things I’ve seen in terms of helping create
trust and generate more revenue is really personalizing that
About Us page.’ So I said, ‘OK.’ Tried that out, so we put
pictures of both myself and my sales manager on there. We really
were transparent. We said, ‘We’re a small company. We’re in
Bozeman, Montana. We’re outdoorsmen ourself.’ Really tried to
connect our interests, our shared interest with our customers
and I think it’s been pretty helpful. Is that something you see
where if you have a real personal slant from business and you’re
not just completely corporate like some of these big guys that
that’s going to help engagement and even make your email
campaigns even that much more effective?

Ed: That’s a great anecdote. I think what we really see is if you think
about every new customer that you get, a lot of the expense goes
into giving that customer the first time and a lot of why
customers stick around is that if you can build that
relationship with customers if they can know you and you can
start to know things about them, people appreciate it. Then they
recognize that. It’s all about building your own brand and then
once you do that, once you know that you’ve built this following
out there of customers who, you’re doing great things for and
they’re helping you out, those customers come back year in and
year out and they’re really what makes your business, takes your
business to the next level. You can wake up everyday and know
that you’ve got these customer relationships and they’re going
to drive your business forward.

Andrew: I’d love to get into the nitty-gritty about how to start
implementing this. Let’s go ahead and take it from the top so
someone who, they want to get started with email but they’re not
ready to spend a bunch of money or maybe they’re really busy and
they just need to do one thing to get the ball rolling. What’s
that one thing that a merchant can do to get the biggest bang
for the buck to get started with email and start making this
happen in their own business?

Ed: It’s a great question and the number one problem we see is that
people just don’t get started. Once you send that first email,
you’re doing great. It’s tough. I think what that really is, is
for every eCommerce merchant that we’ve seen, if you’re to the
point where you have customers and you’ve been around for more
than a year or even more than six months, reach back out to
those customers who bought with you earlier but haven’t come
back and just provide a short simple, personalized email. Give
them some reason to come back to your site, whether that’s just
highlighting new products or that’s highlighting free shipping
or something like that.

That one email will drive back a lot of visits and a lot of
customers to actually make purchases. So by biting off that one
small chunk, you’re literally writing a single email, that’s
just a great way to get started and quite frankly if it works,
you just automate that. It’s just something you say, ‘Every time
somebody goes a year without buying, I just send that email
again and if they want to come back, they will, and if not, no
problem,’ but that will drive revenue for the vast majority of
stores and once you see that revenue, it’s really easy to get
inspired and send the next email.

Andrew: What are a few best practices in terms of someone who’s going
to be doing just a, I guess these would apply to email in
general but even if you just got a single newsletter because
starting the blog and then having an auto responder with
eCommerce Fuel and seeing some of what traditional Internet
marketing folks do with AWeber, there’s this whole process, and
it happens on my side. If you want to get on an email list you
put your email, name in, right? And then you get an email that
says, ‘Click on this link so that we know it’s actually you.’
That’s a double opt in process.

What are the best practices in terms of eCommerce email
marketing because obviously it’s different, right? You’ve got
someone who’s purchased from you. They voluntarily shared their
information but at the same time you’ve got to be sensitive to
the fact that they may or may not want a bunch of correspondence
from you. So how does that work? If they buy is it pretty, is it
fairly reasonable to just put them on a list and give them an
easy way to unsubscribe? Do we have to make sure that there’s a
little box on the checkout page that says signup for the email
newsletter? What are some best practices for that because I’ve
always wondered about that.

Ed: This is a great question. I think what we generally find is for most
businesses, most customers are fine being included on those
follow-up emails as long as you’re not sending a huge amount. If
we’re talking a handful of emails throughout the year, all with
clear unsubscribe links, that’s certainly something that we find
unsubscribe rates incredibly low and that customers generally
like. Generally the best practice there, we would recommend, as
you progress from being brand new with email up the curve to
really maximizing your value, I think what we usually see is
that there’s a set of customers who want that newsletter, who
might want to hear from you once a month. They might want to
hear from you every couple of weeks and that’s one group.
There’s another group who, quite frankly, don’t want any of
those emails but are OK with getting a couple of emails a year
that highlight things that are really important to them. Maybe
it’s a special you’re having or big changes in the business or
just a once a year check-in. Over time, starting to kind of
break into those groups is really what the best practice, the
top email marketers are doing.

Andrew: It’d be fair to say that you can, everyone that purchases from
your store, you can mail three, four, on a quarterly basis,
maybe, let’s say, without any problems and then maybe, based on
the reaction that you see to people opening those emails, to the
percentage of sales that are driven per specific customers, then
that’s where you can say, ‘These guys are very receptive to
this, we’re going to go ahead and add them to, maybe, List B
which is a monthly or a weekly way of mailing something like
that.’

Ed: That’s exactly right. So it’s really build that over time. I would
say, if you’re getting started, just focus on just a couple of
emails to customers based on where they are in that life cycle
you mentioned. I wouldn’t even start with newsletters at the end
of the day but just start as simple as you can with the first
email and then expand to these things like the quarterly
newsletter, then the monthly newsletter and build from there.

Andrew: I’ve got to share this with you, Ed, because you’re going to
laugh. When I first started Right Channel Radios, which is
the business we’re going to be focusing on for the email
marketing it was on Zen Cart, which was a real old school, at
this point, pretty antiquated cart, and we were using AWeber for
our follow-up emails because there just wasn’t a good system in
there, so every time somebody purchased they were opted into the
AWeber list but to get all the follow-up emails on the order
email and stuff like that they had to double click and verify
one of the emails that comes back that says, ‘Do you want to be
included on this list?’

I knew it was just an ugly system but I was in the bootstrap
phase. It worked for awhile but looking back on it now it’s just
like, ‘Oh, gosh.’ That’s a great, for just getting started, so
in terms of someone who really wants to make this happen, is
willing to invest some time and resources, let’s say, for
example, maybe we can just use my business, for example,
Right Channel Radios, the CB business. How can we do this
right? How can we go through this process to get the highest
ROI, and what are some of the things that we really should be
focused on to drive the biggest impact in terms of crafting a
really powerful, effective campaign?

Ed: A great question. At the end of the day, I think this is really where
it comes back to making your email customer centric and just
focus on the customer in the emails that you, if you were your
own customer would want to get. The way to maximize it is,
we think going back to those three buckets of you’re
going to have a set of emails designed for customers who either
haven’t bought yet or who are just preparing to buy in the
future, so that pre-purchase set of emails. This is usually
going to be highly visual, good looking email templates, good
looking pictures of your products, get down in the process of
whatever your timeline is, just say, ‘I’m going to put one of
these out once a month put that together, just put aside the time
and make sure that the customers who want those get them.

Andrew: Sorry to interrupt but how do we, in terms of capturing those
leads because obviously these are prospects, people that have
not purchased from us, is that something where we just put a
little newsletter signup form on our website? I always see those
and I always wonder how effective those really are because, for
example, for, this isn’t a good example because it’s in a
different industry but for eCommerce Fuel, for the eBook, I feel
like, to build up my subscriber base and to build up a community
I have to give something away. I want to and that helps a lot.
Is that also a best practice for creating that email newsletter
list for prospects?

Ed: Yes. It really is, in terms of, as you think about
just engaging people to sign on to that newsletter, you can
either give something actual way, like an eBook or often just as
you build that brand experience and you can give away content,
you can give away just an experience of sending someone products
they like to look at, depending on what type of store you’re
offering. You can give away an email that people like receiving,
that they’re going to forward on. That initial process of
building that list, can be tough and certainly the
customers who have bought from you are probably an easier
starting point but if you can build that list over time what we
see with our customers is that you really can start to convert
those customers from the newsletter to buyers at a pretty good
rate and those tend to be very happy customers who, once they
sign up for the newsletter they tend to be customers who, once
they buy, they buy more than once and they keep coming back.

Andrew: Sorry to interrupt you. Didn’t mean to pull you off the
original question.

Ed: Back to best practices. If you really want to maximize it, do those
newsletters well. Build the list. If you had to do something
tomorrow, I would say nail down the things you do during
purchase, like abandon carts, you’ll see some people getting
creative and doing things like, even in the order confirmations,
advertising for other products or sending out recommend a friend
discount or recommend someone to the email list discount, those
can work really well and then getting into the post-purchase.
Really nailing down an automated set of emails after someone’s
bought. If you think your customers come back three, six months,
send the emails around whether it’s discounts in the future or
reviews or whatever it is just make sure you guide them through
that process of making sure they come back to your store. If you
nail those three, you’re great.

What we’d say is, we’re all comfortable with different things.
We all had different businesses. Start with something that seems
like it’s really going to work and really get that down. Send an
email out. See it drive results. If it doesn’t work, try
something slightly different and make the next one just a little
bit different, but then each time you do that you send the
email. Measure and then once you fix on what that is, just
automate it. You’re going to say, ‘I’m going to send this email
going forward,’ and then you can move on to the next email and
ultimately you’ll find that you really get your email marketing
down and you’re really not putting a lot of extra time into it
each month. It’s something that runs and customers like
it, and you’ve seen it do well and you don’t have
to really touch.

Andrew: In terms of launching an email campaign, especially for a
business like mine where I’ve got a lot of Legacy customers and
some of those are five years old and they’ve never received an
email, some of those guys, if I mail to them, they’re going
to say, ‘Who in the heck is this guy?’ They’re not even going to
remember me and so how do I take a big database of customers
I’ve never mailed to and, because obviously you want to, I want
to, I want to take advantage of the fact that I’ve got that big
pool and there’s obviously there’s probably some customers that
haven’t purchased in awhile that would still be interested but
you’ve got to be sensitive to the fact that some of those really
old ones also aren’t going to be receptive and even beyond that,
it, I don’t know if this is an issue but in terms of
deliverability, in terms of if people mark your messages as spam
too much from that IP all of a sudden Gmail and
other mail clients start taking your messages and throwing them
in the spam filter and your reputation suffers. Maybe that’s a
whole different topic for a different interview but how do you
roll out something like that with such a big bulk of customers
all at once? Is there any best practices for that?

Ed: It’s a great question. This is really where, earlier you mentioned
integrations. I’m obviously biased because I founded Klaviyo.
This is where it really works. You stick to that idea of
customer driven email marketing. You can really solve some of
these problems, so if you took those five years of customers,
the person who bought last week and the person who bought five
years ago and sent them all the same email newsletter, you’re
probably going to annoy some people, which is not the goal. But
what you can do is say, ‘I know these people.’ There’s a set of
people who haven’t bought in five years, and using something
like Klaviyo you can just pull those out but you can also pull
them out of Magento and say, ‘Show me the group of people who
haven’t bought in five years. I’m going to send them a message
that’s really tailored around them.’ It’s probably going to be
something that’s, you’re going to reference the fact that you
haven’t emailed them in a long time. You’re going to put in a
really clear unsubscribe link and you’ll probably want to drive
them back to the website to highlight your new products or give
them a special offer, something that just, focus on the fact
that you realize, ‘This is a rare occurrence,’ when they’re all
of a sudden getting this email.

That personalization and recognition of what you’re doing goes a
really long way to making people okay with it. So it’s not some
random newsletter they’re getting all of a sudden, it’s you who
they can relate to saying, ‘Five years ago you bought this. Just
want to let you know we’re still here. If you come back, we’d
love to have you engage with us and if we see you open emails
and do that we’ll keep emailing you but if not, we’ll stop.’

Andrew: It’s like if somebody stops at your house at 11:00 at night and
they just walk in and they want coffee and they don’t say
anything. You’re like, ‘What are you doing here? It’s 11:00 at
night.’ But if they ring on the doorbell and they say, ‘I
realize it’s so late. I’m sorry,’ but you’re going to be much
more receptive to them actually, whatever it is that they need.

Ed: It’s pretty easy, just like, ‘What would you want to
get?’ You know, through that lens it helps you be creative
about, ‘This is something I wouldn’t mind getting and I would
respond positively to,’ so you show up at my door with a pizza,
I’m probably going to let you in and be pretty happy to see you.

Andrew: That’s a great point. One thing you see a lot in business and
especial online business, that has always driven me nuts is you
get these high level articles or high level piece of advice that
say, ‘Just go find all your customers that haven’t purchased in
a year and that live in Alabama and just send them an email.
It’s super simple.’ Ninety five percent of people, I don’t know
how to do that. The software doesn’t know how to do that and so
a lot of these best practices are things that you would ideally
like to do and are powerful because of the segmentation, they’re
just not practical. Yes, I could go on eLance or I could go on
oDesk and hire someone to do that for a one off thing but on an
ongoing basis, I’m a small shop.

We’re a small team and I don’t have the capabilities. I don’t
have an IT guy in-house who can script that up for me in 12
hours. It’s not going to happen. That’s always annoyed me with a
lot of general advice and one of the things I love about Klaviyo
is that you’ve got some really dynamic and really powerful
segmentation in terms of being able to accomplish those kind of
things without having to have an in-house programmer, without
having to be a programmer yourself. Those are some of the
things, one of the reasons why we’re talking now. Why originally
we got connected and can you tell me a little bit more about
Klaviyo and some of those powerful segmentations and features
that are going to allow you to do some pretty powerful things,
some of the off the shelf platforms or mail services that just
aren’t possible.

Ed: Would love to. I think, we really set out to
make, with Klaviyo, to make your email customer driven and as
part of that you just have to know your customer. One of the
things that really makes Klaviyo different is that with just a
couple of minutes integration we plug into almost every shopping
cart out there. Whether that’s Magento, or Shopify or Zen Cart
or any of the others, we hook into your shopping cart and we
pull in your customer information and make it literally a 30
second job just saying, ‘Show me everyone who bought last week
but not the week before,’ whatever that group is. That’s just
going to bring that data together and saying, ‘This shouldn’t be
a programming exercise, or this shouldn’t require an engineer,
or someone technical.’ Whatever you can come up with as the
store owner, you should be able to quickly find and group those
customers and then make it super easy to say either email all of
them or send this email next week or automate this such that
every time a new customer looks like this email, that type of
integration with the shopping cart and then automation is really
what makes that email great from both your standpoint of driving
revenue but also the standpoint of just being able to automate
this and let it just perpetuate itself going forward.

Andrew: Can you set up, is Klaviyo powerful enough to be able to say,
not just on a ‘Let’s talk to customers who haven’t purchased in
X time, or let’s talk to customers that have only purchased over
X amount.’ Can it do it on a product by product basis as well?
So I can say, ‘Anyone who’s ordered this package or this kit or
this product, they’re either in this type of niche or in this
type of customer segment but even more powerfully can I create a
custom follow-up email that goes out three months later and
says, ‘I know you bought this. Hope you’re liking it. If you
want to get even more value and more use out of it, here’s three
or four accessories that we’ve got on sale for you all week,’ or
something like that.

Ed: That’s a great use of Klaviyo and honestly it’s those emails
that we see just really drive major benefit and newsletters are
great, they’re going to drive a lot of benefit. They’re worth
doing but for every email like that that you send them saying,
‘You bought this. Here’s some accessories that you might want,’
those are the emails that customers tend to love because they
generally want those accessories but also really work well for
you. The other types of things, some of the neat things we’ll
see people doing is also filtering down to customers, just
customers who bought from a certain area. I was working with a
company yesterday who was going on vacation. I said, ‘I just
want to meet the customers I have who live in Seattle.’ Use that
to send an email and say, ‘I would love to buy a cup of coffee
for customers here,’ or that will use Klaviyo to say, ‘I want to
send out this special offer but I know it doesn’t really apply
to people who look like this, so filter out customers who have
open support tickets in Zen Desk or who just made a purchase
last week,’ but tailoring in on, lasering in on exactly who
those people are and people really appreciate that and they
respond to it.

Andrew: That’s neat. I remember Amazon, excuse me, Amazon being one of
the first companies that did that really well and I’d buy
something on Amazon and three weeks later I’d get an email
campaign and it freaked me out because I was like, ‘Wait. This
is all the stuff I love. I don’t want to get these, I’m going to
double my spending on Amazon every month.’ I remember thinking
that was so powerful and that was so neat because I could feel
the, it effected me and emotionally made me want to buy and I
always thought at the time, ‘It’d be really neat if I could do
this with my own store,’ and real excited to see how that
actually works out now that I can.

Ed: It should be great. It doesn’t, especially for a lot of eCommerce
stores, you know, the fact that you’re already focused on a
subset of products, there’s just a really big opportunity to,
you already know who your customers are and you can really
identify with them and send them something that they’re really
going to love in those emails.

Andrew: Ed, what are a few, and you touched on some already in terms of
really just blasting out a blanket message to everybody?
Segmentation’s obviously, something that’s really important but
in terms of that are there any other big mistakes that you
commonly see merchants make when they roll out an email campaign
that they could avoid if they heed your advice right now?

Ed: Yes. I think the number one mistake, I said, is not sending, so
definitely get that email out the door but once you’re sending,
a couple of things I’d say is there are a lot of free tools out
there to make your emails look great, so if you are focused on
newsletters, one, on our site there’s a free template creator
but there’s also, again, other tools out there, there’s some
great resources within 10, 15 minutes you can make a great
looking newsletter.

Andrew: What are some of those resources? Because that’s something I’ve
always wondered about because I’m, again, an AWeber guy and when
it comes to, I have ugly emails. They’re awful, so what are some
of those resources I can use to spiff them up a little bit?

Ed: I’m more familiar with ours. We’ve got a full suite of drag and drop
email creation that will do that. There’s a couple other,
there’s some companies out there like Litmus and some others
that will let you test their emails, so they’re definitely out
there and forgive me for being mainly familiar with ours. It’s
not necessarily, you can often just add some color, add some
pictures, some simple plain text and HTML formatting. All of
these tools make it pretty easy to make that email look great
and it’s not hiring an artist or hiring a designer. It’s just
take those little steps to improve them, can go a long way.

Andrew: Is there a difference in, kind of going back a little bit to
the email marketing side, maybe more from an Internet marketing
or just a communications, a non-eCommerce aspect, there’s been a
lot of testing on just saying plain text emails usually work
just as well as really pretty, dolled up emails and then I’ll
see there’s a consideration of a lot of clients like Gmail. If
you send an email, unless you trusted that sender, it’s not
going to automatically load those images and so unless you know
what you’re doing and you know to look for that, you’ll get this
email from someone and it’ll be blank because it’s all images
and so is there a certain time where images work best for email
marketing and a different time where just plain basic text,
something a little more straightforward is going to get the job
done better?

Ed: That’s a great point. Both work and I definitely, for most
stores out out there don’t hesitate to send plain text emails. I
think day in, day out what we see is just a plain simple email
that’s personalized and gets straight to the point is going to
honestly do better in terms of opens and clicks and actually
amount of [inaudible 36.23] driven then a lot of these really
good looking image rich emails. That said, if you’re sending
multiple emails to customers over time, what those image emails,
image [inaudible 36.36] good looking emails can do is they just
really help build that brand with your customer and let them see
products that they might otherwise not see.

I guess what I’m saying is there’s a time and a place for both.
If your goal with the email is to highlight pictures of
products, you have to send those pictures. Works a lot better
than text. If your goal is to identify a special offer or just
to get someone to come back to your website to see a new
collection, oftentimes just starting with that plain text email
is going to be easier for you as a store owner and also just
better for the customer at the end of the day. Something that
they’ll actually engage with more.

Andrew: Got you. Well Ed, thank you. A lot of really interesting stuff
and again, I’m excited about this partnership and so in terms of
just to highlight what we’re going to be doing, so folks have a
rough idea of what to expect down the line, obviously kicking
things off with this discussion to be able to get a good idea of
what Klaviyo is and why email marketing is important and then
going forward, the next step is going to be very shortly in the
near future we’ll be doing a post on eCommerce, to back up,
you’re going to sit down with Pat. Pat’s is my sales manager,
the right-hand man at my company here and
you’re going to chat and just put together a real high level
game plan on how to best roll this out, which we’re going to
detail in a future post, so you can see the things, a lot of the
things we’ve been talking about. How we’re going to roll this
out to a big customer base that hasn’t been contacted in awhile,
different segments, we’re going to create things like that.

Then after that, on a regular basis, it may tweak a little bit
but probably the first month out and then on a quarterly basis,
at least for the first year, just provide some updates on how is
this actually working in terms of what percentage of revenue is
for the store or actually driving how receptive people are being
and what’s been most effective and what hasn’t. It’s going to be
a full-on, real world case study and I’m excited to see how
everything rolls out.

Ed: It works out too. It’s a big opportunity and I think it’s going to be
exciting to see what happens. Looking forward to it.

Andrew: Should be fun. Ed, where can people go to find out more about
you and then specifically Klaviyo?

Ed: We’d certainly love to hear from anyone. Always glad just to talk
email marketing and some of what we’re saying and share some
case studies. Klaviyo is klayvio.com and we’ll certainly look
forward to being on the blog in the future.

Andrew: Then Klaviyo, just out of curiosity, where’d the name come
from?

Ed: It’s a great question. Klaviyo is actually derived from the Spanish
word for the metal spikes that help you scale rock faces when
rock climbing. Kind of inspired to try to help everybody reach
the top of that mountain and drive all the benefit and reach
their goals. Little hard to spell but memorable nonetheless.

Andrew: Very cool. Cool background. Well Ed, thank you so much for
taking the time to do this and looking forward to chatting in
the future and hopefully reporting 90% of the store revenue
coming from email marketing.

Ed: We’ll see what we can do. I’m looking forward [inaudible 39:44]

Andrew: Thanks so much, Ed.

Ed: Thanks.

The site for sale was MyPopcornMachine.com, a drop shipping business specializing in concessions equipment and supplies.

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Andrew Y: Hello everyone my name is Andrew Youderian and I’m the founder of eCommerceFuel, where we talk about building profitable eCommerce businesses online. And in today’s interview, I want to learn on how to pick the best shopping cart for your needs and apply best practices to get it built, customized and launched; particularly, if you’re going to be working with a developer. My guest, Andrew Bleakley, eats and breathes shopping carts for a living as an experienced cart developer. He also blogs about and reviews shopping carts at andrewbleakley.com. Andrew, thanks a lot for being here with us.

Andrew B: It’s my pleasure. Thanks for having me.

Andrew Y: Absolutely! So first question, out of the gates, how many custom ecommerce sites have you worked on in your career, just to give people kind of a sense of how familiar with this space you are.

Andrew B: Hundreds.

Andrew Y: Hundreds?

Andrew B: Yeah, it would be hundreds; if not thousands or more. We’ve been doing carts things like post scripts that used to be custom written to run on UNIX machines back in the late 90’s and all the way through the hosted cloud solutions like BigCommerce and Shopify. So, I’ve been there right through. I’ve seen every sort of fad and methodology. And loved it the whole way.

Andrew Y: So, you were doing it back in the day when even like young guys, not like us, (I would say like us but we’re getting old) but even when people weren’t used to it or afraid to shop online cause it was not as sketchy. You were doing it back when ecommerce was, still you know, people weren’t comfortable with it.

Andrew B: Yeah, I’ve been doing it since like 1994. That’s just one great big Perl script that had to be bashed around in notepad. It wasn’t as much fun as it is now.

Andrew Y: Yeah, I can imagine. That’s really neat of a perspective. So, in all of this time that you’ve been doing it, you know the hundreds of maybe thousands of sites, what’s the craziest product that you’ve helped somebody sell in terms of developing a shop for? What is the craziest product line or product that you’ve seen?

Andrew B: I did one, not long ago, that was for condoms that had me in stitches the whole time because I just could not imagine anyone going online to buy, especially, condoms.

Andrew Y: Did you just say condoms?

Andrew B: Condoms, yeah!

Andrew Y: There was actually a guy, a friend of mine who interviewed me, Terry Lin. He actually interviewed a guy, JP I believe, I’m kind of struggling. Does that ring a bell at all?

Andrew B: Well, the site was called Big Richard. And the marketing team and the design and creative team will just, they went to town with this thing. They brought out underwear; they and all these add-ons. It was just hilarious! I enjoyed every single minute of it just because it was fun for a change. It wasn’t this pressure to do it; “it has to be here” and “we got to make a million dollars” and “the house is riding on it”. It was a job that everybody involved just laughed from start to finish. And poked fun at the fact that we’re trying to sell condoms on the internet.

Andrew Y: See that! It’s kind of funny, as ecommerce gets more saturated, seems like it kind of having that unique personality, being funny and being a little bit different is getting a lot more important. Let’s think of razors, for example. Like how boring razors are but have you seen, for example, the Dollars Shave Club, you know their kind of promo. Have you seen that video?

Andrew B: Yeah, the classic.

Andrew Y: Yeah, you know, great, hilarious! I’ve watched it for half a dozen times. And if you can be different and stand out like that, it helps a ton.

Andrew B: We’ve all got a lot better on the internet and we’ve worked out how to see through the obvious and sort of the marketing nonsense and play a little bit on the internet long enough to sort of be able to picks some depths out of the profiles and the front that you usually puts up.

Andrew Y: Well, let’s dive into some actual carts specific issues. You obviously work with a lot of people; I’m guessing all kinds of small individual businesses up to larger ones. In all your experience, what do you think are the common mistakes people make when they’re picking a shopping cart that you see?

Andrew B: The biggest, I think, the worst mistake I see is not picking a cart. People that spend 12 months to 18 months analyzing every single cart they come across and question every single decision, every single time we’re seeing a new cart. Then, 2 years after, when they had their thought to get on to ecommerce, they still had nothing up. It’s crazy. Paralysis by analysis. Software and ecommerce software generally is pretty good. You could pick anyone and sell your product and make a few dollars, really. At the end of the day, they are all remarkably similar despite what their marketing teams will have you believe. They’re just looking for so long for this perfect piece of software. You’ll go nowhere. You’re better off picking something, selling something and then reinvesting as you learn your lessons. You can’t learn every lesson about ecommerce and online stores by reading blogs.

Andrew Y: It’s kind of funny you say that because, I mean, my first ecommerce store was launched on ZenCart which I know you are familiar with. And for people who aren’t, I’m guessing, Andrew is going to pound them and later when I ask about carts not necessarily to use. Back in the day, they weren’t too bad but by today’s standard, it’s a rough cart. It doesn’t even hold an edge against a lot of competitors. And despite of all the shortcomings of it, it was what I used to get my first successful online and it worked great. I think you’re dead right. Spending time on marketing is way more important than the type of cart that you’re gonna have and in connecting with customers and really improving the descriptions, names and design that you said that are all important. And I think you’re right.

Andrew B: Absolutely! You know try a few of this cart, pick and few that you’ve heard good things about. Give them a quick test run if it feels right, it ticks nearly all your boxes. And the important ones are would it accept money from customers in the way you want to handle it. So, if you do PayPal does it do PayPal? If you use 2Checkout does it use 2Checkout? Does it support the postage method that you have to ship the products? If it does this, get it up and start making money! That’s got to be the goal. If you’re not in this to make money, what are you doing?

Andrew Y: And at the end of the day, if you hate the cart, you can change. You’re not locked in to these things. I think, I’ve gone through kind of the process of going through my second big site, revamp and it takes some work but it’s not nearly as complicated or as scary as people might think.

Andrew B: No, it’s quite a simple process to kill one and start another. They all make it pretty easy. If you look through enough of the website, you generally find a switch link where their sales team will switch you.

Andrew Y: Yeah, I’ve seen those too.

Andrew B: There’s no such thing as you’re stuck with the cart forever. You’re not stuck with the cart until you find a better one.

Andrew Y: You’re not getting married, you know.

Andrew B: Exactly!

Andrew Y: I don’t know if engagement is even a good term for it. It’s a long extended weekend date.

Andrew B: It’s really just an employee. As long as it’s doing the job that you’re paying it to do, keep it. If it stops doing that, switch.

Andrew Y: Yeah! So, don’t focus too much on the cart. So, that being said, that being kind of the first point to keep in mind, let’s talk about specific carts and kind of breaking these down a little bit by category in terms of the merchant who’s going to be using them. So, out of all the carts out there, what are your favorite carts for a new ecommerce merchant, I mean new is probably is not even the right word, for a beginning ecommerce merchant. Someone who has never had an ecommerce store before and let’s say they’re smart, they learn quickly but they’re probably not super technically savvy. They don’t know PHP, they might know a little bit about HTML but not a whole tech background. What would you recommend for a cart for them.

Andrew B: I would say just go with Shopify or BigCommerce. They’re both very non-threatening, very point and click, very self explanatory and you know, reasonable priced so that you can wade in without feeling too overwhelmed with the whole process. And you can get your products online, get a thing in there cheap of for free and you can just test this whole ecommerce thing without the stress of a full blown implementation.

Andrew Y: Do you have a favorite between the two? If there’s someone out there who is going to be one of those paralysis by analysis folks and they this they’re going to spend the next three weeks comparing the two. If you had to pick one for that new guy, which one would you recommend?

Andrew B: BigCommerce! It gives you more features for free than Shopify.

Andrew Y: Okay, got you! BigCommerce, between the two, over Shopify. In terms of somebody who was maybe a little more intermediate to advance, a little more technically savvy and maybe a little more concerned about the flexibility and the features and have the ability to be able to implement them on their own or at least who’s comfortable about contracting with either someone like you or another developer to get something up for speed. Would your recommendation change? What cart would you recommend in that case for someone who’s a little more advanced?

Andrew B: As stores grow and people really do starting to invest on their livelihoods in ecommerce, I tend to suggest they move more from the hosted BigCommerce / Shopify type platforms to something they can put on their own server, something they can secure, backup, make redundent. You know, it is their livelihood and no own should be in-charge of your livelihood but you. I love BigCommere and I was a huge fan of InterSpire which was an installed product when they had it but it’s no more. But you know, there’s software like Magento, there’s Prestashop, OpenCart, all of which you can put on the server you are in control, you can configure and edit it anywhere you like. And you can be responsible for your store like and other brick-and-mortor store.

Andrew Y: Got it! So, just to make it clear, Magento or excuse me, Shopify and BigCommerce, those are hosted solutions so if you sign up with those guys, you don’t have to worry about servers. The hosting comes with it and it’s called the hosted solution, is that the right term for it?

Andrew B: Yeah, it’s perfect! And a lot of people call it fee-based or software as a service, there are a million names for it but basically it means, you pay them to do it for you.

Andrew Y: And then for some of these other ones, you are talking about for more of an intermediate person, they’re gonna be hosted servers or self-hosted solutions where you’re gonna have to go out and set up a web posting account with you know, Bluehost or GoDaddy or somebody to upload the software, configure it yourself. It’s more flexible but it’s gonna be a little more technical to set up.

Andrew B: Yeah, it’s gonna be a little more technical to set up and you’ll probably gonna need a developer at some point. But again, when ecommerce is at that point where it’s gonna be your livelihood, you’re gonna take responsibility for it.

Andrew Y: I’m gonna press you again just like I did on the last one, you know. So, you mentioned those three different names on there, you got to pick one for a great self hosted solution for kind of an intermediate ecommerce entrepreneur, what would you recommend?

Andrew B: I’d say go with Prestashop.

Andrew Y: Prestashop, really? That surprise me! I thought for sure that you’re gonna say OpenCart from the ton of good stuff I’ve heard about it.

Andrew B: OpenCart, I love. And it’s really strong in the SEO community but it’s a bit new. Prestashop’s got a more of the kind of solid background with its years and years of development behind it. If you’re just starting a little bit in ecommerce, keep it in mind, and try it out. But I’d say Prestashop is a more stable long term solution.

Andrew Y: Got you! It’s really interesting! It’s funny because I, obviously, I planned a lot of these questions after reading your blog and a lot of things and I have all my own pre-conceived notions about shopping carts and I thought for sure you’re gonna be like Shopify for the beginner, absolutely! I thought you’re gonna say OpenCart for the intermediate. So this has totally surprise me which is great!

Andrew B: You know, it depends! BigCommerce has impressing me a lot lately because of the new version that’s coming up which I think the general public would see at the end of January. OpenCart’s just dropped a new version recently which got a lot of new feature and a lot of stuff for Australians that I really like. But you know, at the end of the day, stability counts so Prestashop has been around longer and has a proven track record and has got a larger development community. And if you want the best in the market, that’s what you should get.

Andrew Y: Now, this is good. I’m not trying to talk you off your picks. You are the expert here, it’s just interesting to hear! So, those carts you know, we got the BigCommerce, Prestashop, some solid choices for folks. What carts would you really recommend people avoid and this could be both hosted, self-hosted and you can throw a couple of names out there. Anything that you would like to tell people to shy away from.

Andrew B: At the moment, the only ones that I really don’t like would be osCommerce, ZenCart and Xcart. And there’s nothing wrong with them. For a decade osCommerce was the gold standard in online shopping cart software. But that was decade ago and really from a development point of view, from a user’s experience point of view, we’re looking for different things now than Zencart, Xcart and osCommerce style carts are offering. Most importantly, it’s simplified administration. You want to give clients a very easy solution to manage themselves. If anyone’s seen the backend of osCommerce and the backend of Shopify, you’ll know exactly what I mean. The one has massive menus that give you access to everything you could ever want to see. Shopify, on the other hand, gives you access to the only things you want to see. You know, with the world taking a little shift, these cart has not caught up really. Better to do some move from it and start with something that’s new.

Andrew Y: It’s funny you mentioned the backend, kind of the admin panel because I remember really clearly moving from ZenCart on my first shop which is an osCommerce based cart. It’s built on the osCommerce platform I believe. It was kind of like a can of worms with menus, it took a while to get a hang of it. You remember where things were but the first couple of weeks were brutal trying to figure it out back there, you know.

Andrew B: That’s what people wanted 10 years ago. Ten years ago, people who are getting into ecommerce were a lot more tech savvy, they wanted access to everything. Now, ecommerce and the internet are so readily available that you got almost anyone who wants to getting into the space and first thing they say is that, I don’t want to see that, I just want to see this stuff. And they want it to be that simple. Just show me how to add a new product, that’s all I want to do or just show me where to ship order, that’s all I want to see. Software across the board generally just gets more and more simplified. So why not eCommerce software.

Andrew Y: Yeah, I agree. Let’s kind of change gear and tackle a little bit about developers; working with developers. They can help you customize a new site that you’re getting to be launched up. As a developer yourself, what are some of the common mistakes people make when they start working with you? When they engaged you, what are some of the things that people do that just drive you nuts, that waste time, that waste money, that make you less like want to work with them? What are some of these pitfalls that people can avoid?

Andrew B: The least one is leaving things off your feature list. That one always makes me bang my head against the wall. You know, you’ll get a client that says I want a cart that does this. I’ll find the cart that does that and that does that well. And then all of a sudden, the changes come in. It might be something like gift registry or wish list, you know, that the cart you use doesn’t do. That’s just crazy! That means a whole u-turn and a lot of extra time and cost. I guess it’s the same with anything. You just put simple solid thought into the whole process, it goes a lot smoother. If you prepare and you’ve got product shops already and you’ve got descriptions and product title and pricing; if you got these things ready, it’s gonna be a lot smoother, a lot faster and your time to launch will be a lot less.

Andrew Y: So in terms of working with you though, correct me if I’m hearing these things correctly but, sounds like you’re saying that people come in and they give you something to do maybe like helping them pick a shopping cart or maybe it’s to build out a feature for open source shopping cart and they really haven’t sat down and really thought through exactly what they need before they have you do something. And so, because of that, you go find the perfect thing and then you have to come back either modify it or do some more research because there wasn’t enough upfront investment in really figuring out what that person needed.

Andrew B: Yeah! And then, I see a lot of people that in apparent hurry and they walk in and just say I just need this done. Okay, you know, let’s take it in and talk a bit about it and find out mainly what it is you want done but also why you want it done. Because, generally, there’s more than one way to do something and that’s all about outcome really. You don’t just sit down and pick a shopping cart and hope everything works. You’d like to test these things. You’d like to make sure that they implement it in such way it gets used.

Andrew Y: That’s an interesting point! Actually, I’m a huge fan and a huge advocate of using, as much as you can, using stock templates. One of my ecommerce stores run on it and soon or shortly, both of them will be running on stock Magento templates, slightly modified. And you can do a lot with existing things. I think a lot of people think to do really well with ecommerce, you have to go out and spend $10,000 on a custom theme and have all this development stuff done and they end up with this beautiful shopping cart that looks gorgeous an is really feature-rich but they haven’t spent any time in marketing and nobody buys from them. So, in your experience, what have you seen? Is it important to customize and what should kind of be left as is or can be left stock that is not kind of a big of a deal? Is there kind of either templates or feature sets that falls on each one of those?

Andrew B: Really, you could leave almost all of it untouched. And most of the time, it would be better to get the style up and spend some dollars maybe in it. And then, put money into and re-design it or re-brand it. I think most people underestimate how expensive it is to develop a brand an implement it and how long that takes. That takes months to do a website project especially for an ecommerce one. If you had to customized the look or the features, I suggest you customize the look because people, they kind of like that. They’ll buy in a store that looks good because it looks good. It’s just human nature. And all those features an add ons does not really have too much value and don’t improve the conversion which is, at the end of the day, is your primary goal. You want traffic and you want those people to spend money. It should be simple math.

Andrew Y: And having a professional look is important. You got to look professional, otherwise, you’re not gonna have the trust level, the credibility level. Cause lots of time, if I land on a site, you everyone knows the Amazon, they know the big names, but if you land on a site selling English tea pots you know, myenglisteapot.com, you don’t know them. At least I largely base my decision based on whether I trust them or not, not entirely but largely on the quality of website. It doesn’t have to be phenomenally perfect but if it’s looking like one of those sites that you were developing way back in the early 90’s or late 90’s, I’m gonna be significantly less likely to buy from them.

Andrew B: The thing I’ve seen that increases conversion almost single handedly more than any aspect of the site, is the About Us and Contact Us page.

Andrew Y: Really, no kidding?

Andrew B: If you put yourself and your heart and soul into those pages so that people can visit your site and realize you’re a real person, you get their trust immediately. Far more than pasting 500 logos in the footer of your website to say you’ve been certified by, you know, everyone that ever bought a dot com domain. The website should be able to show who customers are doing business with. I don’t know why so many people refuse to put their name and photo and their address and their phone number and all these things.

Andrew Y: That’s a great a tip! I would not be, if you’d ask me what were the top 5 things you could do to increase conversion, I wouldn’t even have thought about the contact us page.

Andrew B: People just love to buy from other people. And they’ll do it time and time again just because they can see you . And they have a feeling that they know whom they’re doing business with. Yeah, what are you hiding from? Put your face on it, put your name on it.

Andrew Y: That’s a great tip! That gives me some things to do tomorrow on a site I’m re-designing. This is great!

Andrew B: Yeah, I’ve seen it. I’ve seen some of your website.

Andrew Y: Yeah, well, I’ll send you the increase and conversion rate for people who visited the contact us page form half a percent or four percent. You mentioned a lot of people underestimate how expensive having custom development is. And if you’re in the development community, or you have a programming or designed background, you’ll kind of understand those rates but I think a lot of people when they get a quote especially an hourly quote to have custom work done, they’re just floored by how much it is. And I think it’s important to set some realistic expectations in terms of rates. So, can you just give us a kind of a general idea of, I’m sure they’ll vary a little bit but if you’re looking to hire somebody for a custom development work on shopping cart, what’s kind of the range, the ball park range that you should expect to pay on an hourly basis for quality work?

Andrew B: Between $70 and $140 an hour I would say; depending on the shopping cart, depending on what sort are you doing. Quality work with reputable developers will probably fall into that range but then again if you go for an agency, it’s gonna be a lot more than that.

Andrew Y: And is that in US dollars or Aussie dollars?

Andrew B: They’re just the same.

Andrew Y: They’re the same. Perfect! So, ballpark range is a $100 range is about right. And one thing I think a lot of people end up doing is especially if you’re new to this and you’re not really technically inclined, I think a lot of times when people see that hundred dollar price tag and they buck and they go and find someone on oDesk for $15 that can claim to do same thing and they got through the hastle of doing all that and you know, some people can do that, some are technically inclined to that and maybe there are some people out there but a lot of times, especially with higher end stuff, you do get what you pay for. And so you go through that route, that doesn’t work out and you can come back for that original quote.

Andrew B: And then the cost will be going off the roof cause it’s more expensive to fix someone’s mistake than to just have done it right in the first one.

Andrew Y: Right.

Andrew B: And it comes in the properly thinking out of what you want and the outcome you want because if you got all that information clear in your head, and go to someone, they won’t say oh $300 an hour and who knows how long it takes. They’ll say it would cost you $250 and I can do it in 2 and a half hours. No problem, sent and laid out. And that’s it. You got a fix price for the work, you know exactly upfront what it’s gonna cost. But all it comes down to knowing what you want, you know, why you want it.

Andrew Y: And to clarify again to the $100 roughly an hour rate. That’s assuming working with someone local. So, for you, you know, you will be working with someone in Australia, for me someone in the States. Dealing with a local developer, kind of in your own time zone, same language that you can chat with really easy on the phone.

Andrew B: It comes in handy. I mean the internet has made it such that you can work with people everywhere. I’ve worked with every continent on Earth, in London. There’s always an advantage in working local and you should always try and work local because, you know, local is your community.

Andrew Y: Yeah I agree! And I’ve done both. I’ve worked with kind of folks like you who are really very much experts, producing high quality work in about a $100 an hour range. And I’ve also worked with, you know just recently I had some very specific things that I need to be done in Magento, and you know I’ve got a light programming background that when I need to I can really make some ugly hackable PHP but that’s about the extent of my experience and my ability. And so, for them, I know exactly what I needed and being able to find it, I was able to work with somebody on oDesk but there were still, you know, almost about $35-$40 an hour and it was something where if I hadn’t had any experience with Magento in the past, and if I have no programming background, it would have been a nightmare to try and do that. And so you can leverage some of those differences sometimes. But if you are kind of a new to intermediate person with ecommerce, hiring people with experience usually, a lot of times it will pay for itself especially getting that first store up.

Andrew B: Absolutely! Otherwise, contact the proper developer and say I want to put this job on oDesk, can I charge you for an hour to fix it up so that it’s right. Several people send me oDesk job descriptions, saying can you just fix it up so that if I post it on oDesk it gets done properly. And you just go in and you just correct the wording and you make statements final and you clear out some of the non-technical things they’ve had so that there’s no question about what’s going to be delivered.

Andrew Y: So, you’re kind of the translator between the non technical person and the programmer.

Andrew B: Yeah, why not? They’d pay the developer $50-$100 for a few minutes of their time to make sure that the job description you post will get you the work and the result you want.

Andrew Y: Absolutely! It’s a whole new industry. It’s a brilliant idea! I haven’t even heard of that before.

Andrew B: Funny because people send this stuff to me and I say sure, why not. And this always seem to work cause they don’t come back and say there was a problem. The work always gets done and I’ll follow up later and it’s all looking fine.

Andrew Y: I just get that it goes back to just investing the time upfront to make sure you communicate; everything written down clearly and you communicate well and that will pay huge dividends and saving your time and headaches down the road. So, we’ve been talking about developers and kind of what we need when we say that is the developer someone who is probably more of a programmer; can get and modify features, the code base who really can get in and under the hood with a lot of the feature sets. A developer is very different though from a designer who’s gonna have much more of a graphical background maybe more focus on the aesthetics of the website. When you’re working with folks, is it common or would you recommend for people to find someone who can do both that can do the features and also do some graphic work? Or do you think, would you recommend people to go out and find a qualified developer for kind of the technical custom features that need to be integrated and then a designer to actually skins something or create a custom theme? What’s your experience and recommendation with that?

Andrew B: I’ve never seen anyone who could do both jobs efficiently well. I’ve seen spectacular designers who could write a bit of code and I’ve seen fantastic developers who could knock up a quick template. But generally, you get a professional to do the job and get a specialist. You won’t get a plumber to come in and fix your toilet and then re-hinge the door while he was at it. I’m constantly in awe the work developers do. Unlike designers, developers really, their job is pretty easy. But designers they can create this looks and this feels for sites and and then just stand over your shoulder while you implement it and sent you back notes that say can you move this one pixel left. I’ve got code eyes, I can’t see single pixels. It’s got to be at leeast ten pixels before I notice something is out of alignment. I wouldn’t find someone who can do both. I don’t think you’ll get the best result. And you’ll probably pay him more for it anyway.

Andrew Y: Yeah, that’s something I’ve heard a lot from people and I think everyone in their own lives can see that too. I mean, I can like I said, I can hack horrible php code and I can hack horrible design but I’m a marketer and I’m a guy who likes to market and pursue business opportunities. And I think everyone has that one thing that they do well or love to do well. And it’s really rare to be able to find someone that can do both.

Andrew B: But I’m sure there can be a lot out there who can do it but if I was a guy that has both of those skills, I’ll be charging and have an absolute fortune out of it.

Andrew Y: Oh yeah! It would be amazing! If we could all be just amazing in everything, how wonderful the world would be.

Andrew B: Yeah, that is the sole solution, I think.

Andrew Y: You work obviously with a ton of different store owners so just kind of stepping back, from a macro look at the success of stores and storeowners that you see. Are there any common traits that over the years you’ve identified among successful store owners, certain habits or traits that you see the successful ecommerce entrepreneurs consistently doing that leads to really good outcome and strong businesses? What would those be, if any that you’ve identified?

Andrew B: Yeah the successful ecommerce storeowners work, basically. I couldn’t tell you how many times people send me briefs to build eCommerce stores because they want to retire. And it’s just not like that. I don’t know who started that rumor because it’s ridiculous! An ecommerce store is a store! If you want to make a lot of money, and you want to be successful, you got to market it; you got to be online to answer questions and emails, you got to be finding ways every single day to get more traffic and to serve that traffic better. Just because you can do it at home in your boxers, you keep running around and your wife bringing you a cup of tea doesn’t mean you don’t work. It just means you work slightly differently and you get to have a great time at home with your family but it is still work. And if you’re attitude towards ecommerce is you want to retire, you’re probably gonna struggle. You just have to work, it’s great fun, really enjoyable work.

Andrew Y: That’s a great point. It’s kind of tough because I interact with a lot of readers and email back and forth and I do hear that on frequent basis when people say, I’m interested in ecommerce and exactly like you said. I want to get a store up and go ahead and be making $75,000 a year within the next 12 months part time. And it’s tough because, I think, you need to have realistic expectations and I think you can retire with it. But I think what you have to realize is you’ve got to take a step back first, and you know. I’ve heard it said that if you want to start a new business you have to have one of two things: you either need to have a lot of time on your hands or a lot of money. And if you don’t have one of those two, you know, it’s not gonna create itself and so if you’re willing to invest one of those two in a big way, and take a little bit of a step back from maybe a full time job to put in some sweat equity to really invest into the brand and the business. Maybe 3-4 years down the road, you definitely can retire; and maybe a couple of years if you work your tail off non-stop. I guess it was funny cause you surprise me once again. I was expecting maybe some answers like, you know, they’re brilliant marketers or they do a ton of niche research and I don’t know what else I was expecting but I think about it’s as good of an answer as you can give.

Andrew B: All those are valid things that you have to do and sort of do well to succeed but you have to do them. And what I’ve seen more often than not with ecommerce is that people just don’t “do”; there’s no doing. You know, they put up the picture, they copy the product description from the manufacturer’s site then they sit back and fsay “Why aren’t I making sales”? You know some focused hard work will build a brilliant store that will set you up for very very nice life.

Andrew Y: Andrew, really appreciate you coming on. Generally, I learned a lot in terms of, you know. I’m gonna get a new Contact Us page tomorrow!

Andrew B: You know in your sites, you have to just really tell people whom they are doing business with. Introduce yourself; make the site an extension of yourself and people will trust you, people will spend their money with you because they’ll feel comfortable and that’s what you have to do. You don’t walk into a brick-and-mortar store and the owner turns and runs out the back door does he? They put their head up. They say h ello and they shake your hand. They walk down the isles and they ask you would you like any help with that? Ecommerce is the same it’s just there’s this disconnect. But there’s plenty of tools out there that can help you fill that void. The first one is to own it.

Andrew Y: Great tips! For people who are thinking about launching a store or they want to get in contact with you, you know, could you give us just a brief idea of the services you offer and what it is that you specialize and also how people can get in touch with you if they want to talk with you about potentially getting assistance in getting a store up and running or they have some sort of custom ecommerce needs, what do you offer and how can our readers could get a hold of you?

Andrew B: Lately it seems that I function more as a sounding board for people which is fine. And they don’t do a great deal different then just find me on my website, get me on skype and we sit down and talk about this. And they tell me what they want and we go and find the right cart for them; set them up with a trial and then at that point we work on if they want a custom theme if they need a custom theme any custom development. And if I can do it, I’ll tell them I can do it if not, I will help them find someone else. I also do shopping carts developments, building sites, but I don’t do the designs but there are many designers that I worked with so I can bring them out.

Andrew Y: So, pretty much anything from helping somebody narrow down maybe in case they missed first half of the interview where you identified some of the carts. But you know, maybe finding that perfect cart for exactly a specific feature set all the way through really doing some custom features development or just helping people through the process, maybe finding developers. You can really folks through the whole process of getting into ecommerce; selecting and getting a site launched up and running.

Andrew B: Look, an hour spent with who knows what they’re talking about in skype or on the telephone will save you ten hours of fooling around. You know, people could always email me and I do get back all the emails and people asking questions and whatnot. I put up a form so that people can ask me questions and seek feedback on my site.

Andrew Y: Perfect! So, the website again is andrewbleakley.com and can you spell that, I mean it will be in the show notes of course but if people are listening, can you spell that please?

Andrew B: andrewbleakley.com.

Andrew Y: Great! And even if you don’t need any work done, I just recommend you checking out the site. A lot of great information and great reviews on different shopping carts. If you’re just looking around and starting to get your feet wet and try to learn about the field of the carts that are available. A great resource for checking out.

Andrew B: Absolutely! And check out the comments because they’d probably provide more value than reviews themselves. A lot of people over the years have put some very good feedback at the bottom of those reviews and it’s just invaluable.

Andrew Y: Hearing from 10-15 people who have actually used the cart, yeah that is really valuable.

Andrew B: Oh yeah!

Andrew Y: Well, Andrew, it’s been a pleasure having you on and I really appreciate you, just
sharing so much of your expertise and experience with ecommerce and hopefully in the future, perhaps when we get back on and maybe do this again next year.

Andrew B: And see who upgraded to what!

Andrew Y: Yeah! Wonderful! Well, thank you so much Andrew, I really appreciate it.

Andrew B: My pleasure, thank you!

Andrew Y: Thanks for watching everyone!

We used the following assumptions to further narrow down our list:

Prefer Audio?  To download the MP3 right-click on this link and click “Save Link As”.

Andrew: Hello everyone, my name is Andrew Youderian, and I’m the founder
of eCommerceFuel.com, where we talk about building profitable
online stores and eCommerce businesses. And in today’s
interview, I want to find out how to find, hire, and train
Filipino workers to help you grow your own eCommerce business.
Now, I’ve had the privilege of working with a fantastic, top-
notch Filipino VA for the last three years now. It’s been a
great experience. I more or less kind of stumbled into
outsourcing to the Philippines, just by haphazard. It worked out
really well, and I’m thankful it did.

Today’s guest is – his focus and his area of expertise is solely
in Filipino outsourcing. He’s got a lot to say on the topic.
John Jonas is a recognized expert in Filipino outsourcing, and
he’s the founder of the ReplaceMyself.com VA training program
and onlinejobs.ph, a job board for virtual assistants from the
Philippines.

John, thanks for being here.

John: Hey, no problem, man. It’s good to be here. Good to talk to you.

Andrew: So, dive right in. At this time right now, how many VA’s from
the Philippines are you actually working with and employing?

John: I have 12 VA’s that work for me full-time, and that number is
pretty steady right now.

Andrew: Wow. Is that pretty historically you’ve had that many people on
your payroll?

John: No. We hired our newest one probably six months ago. You know,
I started this like seven years ago, and it just has steadily
gone up over time.

Andrew: So, 12 VA’s. A lot of people I think listening, and myself
included to some extent, you know, keeping one or two VA’s busy
full-time, they’d think how in the world would I do that? What
do you have these 12 full-time VA’s doing for you?

John: The interesting thing is that Filipinos are really dang good,
and they do everything for me. They do everything from all the
programming, webmaster, technical work in our business. I have
one, two, three, four full-time programmers.

Andrew: What type of programmers? Are you talking like PHP WordPress,
or are we talking…

John: I have some guys that are really, really, good PHP programmers,
and they’re not doing WordPress because I don’t have them
working on a WordPress system. I have another guy that’s a
fantastic programmer who works on WordPress. He’s also a really
good designer, and if you’re looking at any of my stuff, he’s
done the design work on a lot of it. He’s just really, really
good. Some of my stuff that I don’t have him do design work on
is not so good. It’s not so well designed, but the stuff that he
does is fantastic.

Another one of my guys does design or just programming, and tech
support for stuff. Then I have a designer, another designer, on
her own. She designs PDFs, does layouts for them, or just
creates graphics, or webpage layouts, stuff like that. Then I
have some VA’s that – it’s kind of hard to explain what they do
- they will do everything for websites for me. So, they’ll do
industry research and tell me what websites we should be
building, or what niches we should be going into. They will find
the domains, they’ll write the content. They do the marketing
for them. They do the SEO, they do the video marketing articles.
They do the [indiscernible 04:10] research. They’re doing all
that stuff. They’ve been trained to do all of it. I have a girl
that is doing some specific marketing tasks for me like
publishing to Kindle, or iBook, or Nook. She’s also doing some
specific video marketing for me or doing a little bit of SEO.

Andrew: You’ve got people across – and that’s one of the things I was
really wondering about was in my experience and with
outsourcing, I think a lot of times, too, I think, oh, I can get
a VA, and maybe they can do some Tier 1 e-mail support. They can
do a little bit of market research for me. But in my experience,
I’ve always been really hesitant to outsource some of those more
complex, especially technical tasks, programming, graphic
design. I mean, one of the questions I had was, you can
realistically get solid, good programmers, and solid, good
designers when you’re outsourcing like this to the Philippines.

John: That’s the easiest. I mean, I have a girl that’s doing Facebook
marketing for me right now. Like, logging into my Facebook
account and posting status updates, status updates that she
wrote, that she created a marketing calendar for. She sends me
every day, here’s what’s going on Facebook today. Here’s what’s
going on tomorrow. Here’s the contest. Here are the questions
we’re going to ask. Here’s the graphic. She’s done all that
stuff for me.

Andrew: Wow.

John: All of this stuff requires training except for the
programming/design work. If you go look at onlinejobs.ph, that
entire site was programmed, designed, layout, logos, back-end,
database, everything on that site was done by my guys in the
Philippines.

Andrew: And we’re going to get into that a little bit later when we
talk about finding VA workers. But again, like I said in the
intro, that’s a site that you started for actually connecting,
finding, and hiring Filipino VA’s.

John: Yeah, yeah.

Andrew: So you’ve got this, it sounds like a very capable army of
workers in the Philippines. Do you have anyone stateside that
you hire? Are there some things that you prefer to kind of keep
locally, or that work better when you keep them sourced in
state?

John: This is new to me, actually. I hired my – I’ll tell you my
experience. Typically people don’t – what you’re saying about
who you can hire, or who you shouldn’t, is people’s usual
experience is that, like, I don’t think I can really get people
to do this for me, or people often don’t know what’s possible.
You don’t know that it’s even possible to hire someone overseas
who can do this kind of work. That’s the first barrier that I
typically come to.

So then, your question right now is, what do I prefer to have
here? Well, my experience years ago in hiring people from the
U.S. was the first thing they did was they learned what I was
doing in my business, and they quit, because they wanted to go
do it on their own. They wanted to go make the money themselves.
I was teaching them how to run my business or how to make money
online, and it was like, forget it. So that’s kind of why I went
to the Philippines in the first place.

Why that works, there’s a whole different story. Six months ago,
I hired my first U.S. person. Over the last six months, I have
four girls working for me, one of them I just started this week.

Andrew: So, these are U.S., four U.S. workers?

John: These are U.S.-based people. So, one of them is creating
training. She creates training to give to the Filipinos so that
we have trained people. One of them is creating marketing
campaigns for me, like landing pages, advertisements, stuff like
that. She’s super, super talented. One of them is handling all
of our PR. So, Filipinos write press releases, and then she
edits them and makes them really, really good so that we’re
getting top-notch distribution on them. And another girl is
writing my newsletter.

Andrew: So a lot of times it sounds like some things your team in the
Philippines can do a great job on, but also sounds like some of
the U.S. team will also act as a buffer between you and them for
some writing things to do a little quality control on that.

John: Right, and actually, one thing I forgot to tell you was I have
a writer in the Philippines who edits all of the other
Filipinos’ work. They’ll actually say I need this written for
our website, and they’ll send it to her, and she writes it and
sends it back to them, because her writing is perfect. She loves
it, and she can write so much that that’s all she does is
writes.

Andrew: I’ve found writing is so important, because you can have
someone – I’ve dabbled in Spanish a little bit and traveled to
Spanish-speaking countries, and when I have to speak or write in
a second language, you know, my I.Q. drops by about 90% to
people who are listening, right? And so, this is by no means a
bash on Filipinos, but it’s tough when you have someone who’s
very smart, but maybe their English isn’t that great. As a
native English speaker, it’s easy to tell, right, when you get
that e-mail. I’ve gone through maybe three or four VA’s before I
started working with the one that we’ve had now for over three
years. That was always an issue was that written English, when
you’re online and doing stuff, I mean, almost everything you’re
doing is written, and so having someone with English that seems
native is so huge.

John: It’s a really big deal. And it is hard to find. You really have
to filter people in order to find that perfect, perfect English.
I have a couple girls that are perfect.

Andrew: It’s definitely, it’s hugely valuable. Well, maybe we’ll
transition into salary and cost. If you’re going to be hiring
someone, because I believe your philosophy is don’t hire someone
for an hour here, an hour there. Hire someone full on and treat
them well, and get them on as a full-time employee, and that’s
where you’re going to see the most benefits. When we’re talking
about that strategy, what are going to be the costs to hire
someone at three different levels, and I’m sure they vary, but
let’s talk about a general entry-level VA that has good English,
but is going to be doing a lot of maybe e-mail support and
administrative work, so a general VA; a content writer with
excellent English, someone who you could say, hey, go write this
article for a decent website, and you wouldn’t have to worry
about spending a whole lot of time re-editing it; and then
third, finding a talented programmer or designer. What would
those three tiers run you per month?

John: This is all full-time. I only deal with full-time. There’s such
a huge, like what you said, your experience is a completely
different experience when you’re hiring full-time or part-time.
And actually, when you said hiring an hour here, an hour there,
the cost is about the same to hire someone for 20 hours a week
on a contract, temporary basis versus hiring a full-time person.

Andrew: Sure, because there’s more stability and they can count it, and…

John: There’s more stability, and you’re paying someone $3.50 an hour
on oDesk, or you’re paying them $300 a month full-time, and
you’re getting half the work done on oDesk for the same cost.
So, for a VA, for a general, entry-level VA, you could pay $250.
$250 a month for someone who is starting out and they’re
capable, and their English isn’t perfect, but it’s good, and
you’ll never have any communication problems with them. You’ll
always understand them, they’ll always understand you,
communicating isn’t an issue in the Philippines at $250. If you
were to pay $300 or $350, typically as the price goes up, you
get better work. It’s not always the case, I mean, the first -
I’ll talk about a programmer. The first programmer I ever hired,
I hired him through a service, and I was paying them $750 a
month, and they were paying him $250. So, he was making $250 a
month, the guys blog was a page rank six. He had written
numerous WordPress plug-ins, which were being used by thousands
of people.

Andrew: I’m sorry. What was the difference again, the split between how
much you were paying them, and how much he was getting?

John: This is always so shocking, I know. I was paying the company,
the recruiting company, $750 a month for this guy, and they were
paying him $250.

Andrew: Wow, that’s bigger than I assumed. Actually, with my VA right
now, and just for sensitivity, I don’t want to – because I may
actually have her on as an interview later, I don’t want to
disclose her actual, what we’re paying back and forth, but she
was originally when I found her, she was working for a VA firm,
one that was based in the U.S., but they had operations over
there, and through a series of events, they went under and she
kind of ended up being on her own. So, I went back to her and
offered to work with her on a freelance basis, and it was like
your experience. I mean, when we agreed on a price, I think it
doubled her salary month-over-month; doubled almost. And it
saved me a substantial amount as well. It was a huge win-win.

Andrew: I’ll tell you my situation with this particular programmer. He
gave me his 30 day notice one day because there were office
politics where he was, and he couldn’t deal with it anymore. And
I was like, no way, dude. This guy, literally, was the best
programmer I have ever seen, and I’m a programmer. I graduated
from college in Computer Science. I worked as a programmer
before I figured out how to make money online. I know, I’ve
worked with some really, really good programmers. This guy was
unbelievable. He gave me his 30 day notice, and I said, no way.
I will hire you on your own. What are you making? He told me
$250, and I said, I’ll double it immediately. And I said, but
you can’t like quit tomorrow, you just gave a 30 day notice,
you’ve got to stay for the 30 days. And he quit the next day and
started. He was so excited to make $500 a month, and you know, I
was now saving $250, and he had doubled his salary.

Andrew: Did that cause any problems between – because I remember when I
hired with that VA firm – they made me sign a non-hiring clause.
Once they went under and didn’t do a very good job of managing
the transition process, I had no problem with hiring them.

John: That was my issue, too, but he had already – he was quitting.
He was quitting the company, and he was quitting me, because of
the company politics, and . . .

Andrew: He was quitting before you offered him the money, it’s not that
you’re offering, right?

John: Yeah, right. In terms of a good programmer, that guy today he
left me a couple of years ago to work in Singapore making $2,500
a month. I think today he’s making like $4,000 a month. The guy
is freaking unbelievable. If he was in the Philippines, he would
probably be getting about $2,000 a month, and that’s $24,000 a
year. He’s unreal. He’s a $100,000 a year person in the U.S.,
easily. But you can find – our other really good programmers are
making between $500 and $750 a month full-time.

Andrew: So, the scale ranges anywhere from $250 for an entry-level
person to about $750 to $2,000 for a top-notch programmer,
depending on where they’re at.

John: My really, really good content writer, I’m paying her $600 a
month, and she’s amazing, and I doubled her salary Monday. I had
hired her at like $300 a month. So, and she’s unbelievable.

Andrew: And I imagine, I mean, one thing I’ve found too – and I think
this true in all of business whether you’re in the United States
or your outsourcing – if you try to get people at cut-throat
market rates, if the going rate is $250 and you’re paying $250
and that’s it, that might work for two weeks, a month, three or
four months, but you’re not going to be – I mean, maybe they’ll
stick with you, but if you invest that additional amount,
especially with the kind of leverage you can get from the
pricing difference between here and the Philippines, that just
pays such huge long- term dividends in terms of loyalty, in
terms of the VA’s doing a better job for you because they’re
excited and they feel appreciated. I mean, it’s definitely
worthwhile to pay your employees well.

John: Very, very true. I have a couple of different guys that I have
doubled their salaries one day because they were doing such a
good job for me. When you find those rock stars, you’ve got to
do what you’ve got to do to keep them.

Andrew: Yeah, well said. So that being said, there’s probably a lot of
people who’d be listening to this saying, $250 a month, how can
you ethically pay somebody $250 a month in the Philippines? I
think it’s a legitimate question. Is that something you struggle
with? What would be your reply to that question?

John: If you haven’t done this before, if you haven’t hired someone
before, then you don’t know. You don’t know what they’re like
without you giving them a job. First of all, I have a couple of
responses. Number one, the person I’m paying the $250 a month
was asking for $100 a month. Like, they said they wanted to work
full-time for $100 a month, and that’s how it is in the
Philippines. I mean, you’ll see when you look at resumes, when
you look at what they’re asking, they’re asking for $215 a month
for full-time work, because there aren’t jobs in the
Philippines. They don’t exist, and so if they’re not working for
you, they’re not working. It’s not like they have another
option, you know?

Here’s another good one, here’s two examples. One of my guys
told me one day that he lends money to his dad on a regular
basis, because he makes so much more money than his dad does. He
makes $450 a month. Another one of my guys told me that he’s
teaching his friends how to do what he does, because he makes
more than double what any of them make. He makes $450 a month.
So, when you’re paying someone $250 a month it’s not great in
the Philippines, it’s kind of average, but here’s the
difference. At $250 a month, they’re working as a manager in a
store in the mall making $250, six days a week, 12 hours a day,
or they come to work for me and they work eight hours a day, and
really they’re working six or five hours a day, five days a
week, and they’re working from home, and they’re making the same
amount or more. That’s why if you don’t want to hire someone in
the Philippines because ethically you have an issue with it,
what you should know is that person that you’re not hiring in
the Philippines isn’t eating because they don’t have a job.
There’s not another job for them. And if you want to, pay them
more. I love giving bonuses to my guys. I love doubling their
salaries, because they do great work, you know? So, there’s kind
of my bit on it.

Andrew: I think it’s a good answer. In terms of workability and
scheduling when you work with VA’s, I’m in eCommerce, most of my
audience is also either in eCommerce or aspiring to get into it,
and with that – if you’re just writing articles, it doesn’t
matter if you’re doing it at the same time that your counterpart
or the team in the United States is doing it, but with eCommerce
operations a lot of times, you need to get back to customers
that same day for order issues, and it’s more time sensitive. It
really helps to have people that are on the same work hours as
the U.S., which in the Philippines, unfortunately, it means
you’ve got people up all night a lot of times, which can be
tough. Is that something that a lot of VA’s expect to do, or
it’s kind of standard, or is it something you have to pay a
premium for? What’s kind of the rule with that?

John: Here’s two different solutions to that. One, you definitely can
do it. And I’ve had people working for me before at night. In
fact, when I very first started, that was one of my things, I
wanted them to work at night so they’re all during my time.
After a couple of weeks, I asked the guy, how is it working at
night? He was like, it’s hard. He’ll totally do it, but it’s
hard. And I said, that’s fine, work during the day. You know,
I’d like to make your life better, work in the day. So they’re
definitely willing to do it to get a job. It’s not even
something that you need to pay a premium for, because they’ll
still do it. It’s hard. Nobody here wants to work the graveyard
shift because it’s hard. So that’s one thing.

Here’s the second thing. When I get up in the morning, I don’t
usually get to my computer until like 11:00 in the morning,
maybe noon. Sometimes I will still have them, one or two of them
communicating with me, at that hour. And then usually from like
11:00 or noon to like 4:00, I don’t get anybody. Everyone’s
sleeping during those hours. But then at 4:00, I start getting e-
mails again from people, because they’re up and they’re working,
and some people are morning people, and some people are night
people. And so, you can pretty easily find people, someone
that’s going to work until 10:00 pm in the Philippines, or 11:00
pm or midnight, and then you’re getting some good morning hours.
And you’re going to get other people that are going to want to
get up at 6:00 am and start working, and then you’re getting
some good afternoon hours there as an alternative to requiring
them to being online 9:00 to 5:00 U.S. time.

Andrew: Because a lot of times, you don’t have to be able to talk all
eight hours throughout the day. It’s just nice having a little
bit of overlap, where on a daily basis you can catch up, you can
talk, and then…

John: Right, which that’s a good point. You’re talking about talking.
In the Philippines, culturally, they have some embarrassment
issues where they feel like they’re not good enough, or they’re
not going to qualify or they’re going to let you down. Talking
to you is one of those things. They know they’ll understand you.
They watch American TV, they watch American movies, they know
they’re going to understand your English. They’re very self-
conscious about their English, and they think that you won’t
understand them. And so, unless you absolutely have to talk to
them on the phone, try to avoid it.

Andrew: Yeah, that’s actually, it’s funny you say that. I think it was
probably, with the VA I’m working with now, it was probably the
first year, I could tell she didn’t feel comfortable chatting
with myself and my team on the phone. We’ve been together three
years now, and so when we get on the horn and talk it, she’s
very comfortable now because we’ve built up a rapport over all
this time. But I remember there was one time – I think it was a
different VA – I was out for, I have an eCommerce business and I
was out on the road, and there was an issue that came up and I
didn’t have a U.S.-based team member who could handle the phones
at that point. This guy was just freaking out about something,
so I had my Filipino VA, I said, you know, why don’t you call
him and try to tell him what the issue is, and it was just – it
did not go over well. I think I asked her about it later, and I
think she was really embarrassed. I think the customer was like,
what? Who is this? What’s going on? You know, it was…

John: Really?

Andrew: Yeah. I mean, it was just – because she got really nervous, and
then he was wondering what was going on. So phone work with, at
least Filipino outsourcing, has been something that I haven’t
really focused on.

John: I do have a girl who makes phone calls to the U.S., and if you
got a phone call from her, you wouldn’t know that she wasn’t in
the U.S.

Andrew: That’s amazing.

John: People don’t know she wasn’t born and raised here, but you can
definitely find people willing to work on the phones. Every
major call center, every major company is moving their call
centers to the Philippines. Amazon is in the Philippines, Apple
is in the Philippines, HP is in the Philippines, Dell is in the
Philippines. They’re all in the Philippines now. All of their
call centers are in the Philippines.

Andrew: Wow, I didn’t know that.

John: So, you’ll definitely find good people.

Andrew: I think it was more, in my case, I think it was more of a case
of she just hadn’t had a whole lot – I mean, her English was
pretty good, but she got really nervous on the phone.

John: You do have to find the right person.

Andrew: That being said, what are some of the common mistakes people
make in terms of finding and hiring Filipinos, and then also
managing and training them? Maybe those are two big sections, so
let’s take the finding and hiring first. What are some of the
mistakes people make?

John: You’re right, these are big sections. Some of the biggest
mistakes that I see people make are trying to find that perfect
VA. You go into the job site, and you go and search and sort
through, and you find the perfect one for you. And you e-mail
them, and they don’t respond to you, because they have another
job. Filipinos are so loyal that if they have a job and they get
an e-mail about another job, they’re very likely to not even
respond to that e-mail. So that’s one of the mistakes.

What I’d recommend instead is to contact 20 people who could be
relevant to you, and e-mail them all and see who responds. And
then e-mail them again and see who responds, again. And then e-
mail them again, and see, and communicate with them numerous
times because you’ll get a much better feeling for their
English, for their personality, for how they fit with your
company, for their attention to detail. There’s all kinds of
stuff you’ll get as you communicate with them numerous times.

Another common mistake that I find that people make is trying to
hire someone that they don’t have to be involved with. Trying to
hire someone who’s an expert already, and you don’t have to give
them any training or feedback, and they’re going to do it all on
their own. And that’s a really big mistake. With the issue that
we talked about already, with Filipinos feeling embarrassed and
shy, they need your feedback. They need positive reinforcement,
they need you to tell them how they’re doing in their job, and
to tell them what they’re doing well, and to provide good,
friendly negative feedback on stuff.

So what I find people often doing is finding one single mistake
that a Filipino made and giving up, rather than working with
them through that issue. For example, I got an e-mail from a
Filipino this week saying they had gotten a job with someone
else, and that person wanted to talk with them on Skype, and her
microphone doesn’t work on her laptop and she couldn’t talk on
Skype, and the employer fired her immediately. It wasn’t for a
speaking job. She was going to be writing and doing WordPress,
but he wanted to talk to her on the phone, and that was it. That
was the end of it. Yeah, end, done. I mean, that’s a huge, huge
mistake. With Filipinos, you need to – you’re paying them $300 a
month, there are going to some issues. You’ve going to have to
deal with issues, and that’s a big mistake that I see people
make is not wanting to deal with any issues. So, there’s one.

Andrew: And that’s something that they will go again, that’s kind of a
universal truth for anyone. If you bring anyone in on-board as a
full-time employee, and you just throw all this stuff at them,
and say, hey, figure this out, you’re going to get crap results.
You need to – it’s kind of the input, what you put in is what
you’re going to get out of it, for VA’s or anybody.

John: That’s even more true in the Philippines. For example, I had a
guy that told me one time, John, I tried what you’re telling us
to do, and it didn’t work. Well, what did you do? I hired like
20 people, and I had a project manager, and nothing ever got
done. And I was like, well, would you do that in the U.S., like
hire 20 people all at once, and expect something? No!

Andrew: Sounds like a nightmare.

John: Rather than trying to hire a project manager – this is another
mistake – people go out and try to hire a project manager
upfront, and hire three others for them to manage. You know,
people say, holy cow, this is so much more affordable than doing
it in the U.S. Go out and hire one person, and get that person
doing something really, really well. Get them doing something
that you’re currently doing. Give them something like off of
your plate. And this is another tip, as I see people make this
mistake. People try to hire someone to do something that they’re
not doing, something that they don’t know how to do, something
they don’t have any idea about, and try to hire someone to do
it. For example, hiring a technical person, hiring a programmer,
where you have no idea about programming. You have no idea about
the technical stuff, you don’t even really know the skills
you’re looking for in hiring someone.

So what I recommend instead – and programming’s a different
story, technical stuff is not something you want to learn, but
let’s talk about marketing, traffic generation, something like
that. Rather than hiring someone for something that you’re not
doing, something you know nothing about, hire them and get them
doing something that you do know, something that you have an
idea about, and something that you can provide them meaningful
feedback on so that they begin to trust you. What happens is
with the Filipino embarrassment issue and them feeling unworthy
and feeling like they’re going to disappoint you is that if they
don’t learn to trust you, then when there’s a problem with
something, they don’t want to let you down. They don’t want to
disappoint you, and so they’ll just kind of disappear. And so if
you give them a task that you don’t know something about and you
expect them to figure it out, they’ll get to a point where
they’ll get stuck and then they’ll disappear. And then you just
lost a really good employee. So rather than trying to do it that
way, try and get them to do something that you do know. Try and
give them something off your plate, so that you free up your
time. Then you’re more effective at the other things that you
are doing, and they’re getting good at what you were previously
doing, because you can provide meaningful feedback to them. And
now when they’re good at that, you can teach them to do
something else.

Andrew: That’s such good advice. I mean, you can’t teach somebody and
you can’t manage somebody if you don’t know, if you haven’t been
there. People don’t come in as a manager, historically, if they
haven’t done something, because they have no idea what or how
long something should take. They have no idea what a good
quality product on the back-end is going to be. It’s so much
harder if you haven’t done something yourself. In terms of my
outsourcing, everything I’ve done, whether it’s to people in the
U.S. or overseas, if you don’t do it yourself first, it is so
much harder to do. And doing it yourself first, even if it takes
a little bit longer upfront, it’s going to make it easier when
you outsource and set up processes and manage those people.
Otherwise, you’re just asking for a huge disaster.

John: 100% true. I mean, that is really that’s how you get to a point
where you create systems in your business, where other people
are working your business. And the great thing about Filipinos
is they’ll never quit. As long as you treat them well and build
trust with them, they’ll never quit. Which means over time, the
more you teach them, the more you can start to step away from
your business and kind of walk away and work less, and pull
yourself out. Where so many people are like, I’m working in my
business, I’m doing this, and when you get someone else, you
start to step away, and you can start running all your business,
and less in your business, and it’s a really, really big deal.

Andrew: Yeah, it is. I don’t know if you realize how funny that looked,
you getting right up in the camera like this, but it was the
perfect illustration. I think it was well done.

One thing I wanted to ask you right off the bat and totally
spaced it because we were talking about some other great things,
but why the Philippines? I mean, you’ve got India, right? If you
want a programmer, you know, Eastern Europe is kind of a hot
spot for programmers. There are a lot of places that outsource.
A lot of developing countries, as well as kind maybe more
affordable second world countries, so what’s so great about the
Philippines?

John: There’s a whole bunch of things. Number one, you’re talking
about more affordable. The Philippines is about as affordable as
anywhere in the world. India is going to cost you three to five
times more than the Philippines.

Andrew: Really?

John: Yeah, it’s crazy the wage difference. In the Philippines,
English is a primary language, like mandated by the government
that business be conducted in English. In the Philippines,
street signs are in English, billboards are in English, radio is
in English, TV is in English. Elementary school is taught in
English. It’s not always for all these things, but it’s
everywhere. So, English isn’t an issue. They’re very, very
westernized, so there’s a huge difference between the way people
think in India versus the way they think in the Philippines. And
it’s not bad in India, it’s just different. So when you
communicate with them in the Philippines, they’ll always
understand you.

And there’s some really big cultural things with India that make
it difficult. We don’t have time to get into it, but they’re
very concrete and documented, like, this is – and it goes back
hundreds and hundreds of years of why culturally it’s hard. And
the Philippines doesn’t have those things. The Philippines was
kind of like an American colony for a number of years. The U.S.
kind of saved them in World War II, and they were kind of under
our government for a number of years – I don’t know the whole
story about it – but they really look up to foreigners. So then
you combine all this stuff that I’m telling you with the fact
that in the Philippines they’re honest, and not everyone’s
honest, but you’ll know, really quickly. I mean, you would know
the people you’ve worked with, you know immediately if they’re
honest or not. They’re loyal, almost to being a fault of theirs.
They’ll never quit as long as you gain their trust. They’re hard-
working, they speak American English, they have computers and
internet access, which means you don’t have to go through a
service to hire them.

The really, really big one is they’re not entrepreneurial. They
don’t want to know how your business works so they can steal
your business. They just want a paycheck. They want a stable,
secure paycheck they can take home and support their families
with, which means when you combine all this stuff together, it
means that you can teach this person stuff you would never teach
someone else, and they can run more of your business for you.
Stuff that other people couldn’t do or you wouldn’t want someone
else to do because they might steal it, they might go out and do
it on their own, you know? They’re going to work for you for a
long, long time, so that your training upfront doesn’t have to
be perfect, you can train them over a period of time, and get
them working for you well, and that’s okay, because they’re not
going to quit. Then the next person you hire can go to them for
answers, and that makes your life so much easier. So, there are
all kinds of cultural things that when you combine them
together, and it really changes the way that this whole thing
works.

Andrew: Yeah, I think the loyalty is a huge one that I’ve seen, and the
English speaking, obviously. I think those are the two big ones
that in my experience have been just deal makers. You said,
honest. In terms of personal information, if you’re going to
effectively outsource, at some point, you’ve got to give up
server credentials, you’ve got to give up credit card
information, you know, you’ve got to give core sensitive pieces
of information about your business to somebody that you’ve never
met, and it’s scary. How do you deal with that? Is that
something that you worry about? Have you had problems with that?

John: So, I’ll tell you, they’re honest to the point where my guys
have my credit cards, they have my bank account information,
they have my home address, they have – usually even passwords to
my personal e-mail. They have remote access to my desktop
computer, they have user passwords to all of our servers and
hosting accounts. They have access to my PayPal account.

Andrew: Wow, that’s a scary one. I mean, that’s one where you can just,
you send money, and it’s gone.

John: Yeah, they could send themselves money, and I know that. I’ve
helped literally thousands and thousands of people hire
Filipinos over the years, and one time I’ve heard of someone
having stuff stolen from them. And that was because they had
done some really stupid, crappy stuff to that Filipino worker
and that Filipino worker wanted revenge. And I’ve never once
seen it outside of that. Having said that, please, whoever’s
listening to this, please don’t go do something stupid that
you’re not comfortable with. Please don’t go do something just
because I said they’re honest, don’t go giving them your credit
card the first day if you’re not comfortable with it. But,
again, if you think about it, your credit card, what’s the worst
that can happen? They go and spend $50, $200 on your credit
card, and you go to the credit card company, and say, this is
fraudulent, and they give you your money back.

Andrew: And you fire them and you move on.

John: With credit cards, that’s how it works. Your websites, your
servers, you know, they could do more damage. I’ve never ever
seen it happen. So just don’t do something that you’re not
comfortable with, that’s the big thing.

Andrew: So, it’s possible, but don’t be paranoid, there’s not a track
record of scams and abuse. It’s not like outsourcing to Nigeria
where there’s a hotbed of internet fraud.

John: It’s the opposite, there’s a track record of honesty.

Andrew: So, we’ve talked about a lot of different things, the mistakes
people make, some of the pitfalls people fall into. Let’s talk
about the right way to do this, from start to finish. And
actually, it’s very fitting we’re having this chat right now,
John, because my VA that I’ve had for three years, a fantastic
worker, she actually has been cut back to just a couple hours a
day because she’s moving on to a different career, something she
loves to do, and we’re really excited for her. But we are going
to have to fill that spot, and so we’re going to be looking to
hire a new Filipino VA here in the next two to three weeks. So
I’d love to walk through it. If you could walk us through the
step-by-step process so if somebody’s listening and they’ve got
a pen and paper, they can jot down one, two, three, four. How do
we go from right now no VA, no systems, not knowing anything
about it, to the point where, in let’s say, a month or so, or
two months, we’ve got somebody who can consistently help us with
our business. Where do we start, and where do we go from there?

John: Okay, first thing, decide what you want them – you know what? I
have a document, Seven Steps to Getting Started Hiring in the
Philippines.

Andrew: Oh wow, it’s almost like we planned this, which we did.

John: Yeah, totally, and I’m going to go through it with you. And I
can tell you these things, but I’m going to make sure that you
guys can get this in the end. What I was saying before was in
step number one, decide what you want them to do. Decide, find a
task, pick something that you want that person to take off of
your plate, and get them doing it. Whether it’s dealing with
your WordPress or dealing with adding products into your cart,
or writing descriptions, or categorizing, or writing articles
that you can market. Pick something, and decide what the skill
is that you want this person to have in order to do that task.

And if the task is writing articles to do marketing, the skill
that you want them to have isn’t article marketing. The skill
you want them to have is really, really great English. If it is
adding products into your shopping cart, the skill isn’t
eCommerce experience, it is someone with really great English
and a little bit of technical skills. They can learn what you
want them to do. More important is to find someone with really
great English, unless you’re finding a programmer or a designer,
okay? Define the job, decide the skill, then go to onlinejobs.ph
and find the person.

Andrew: Okay, so step one, define the job, and write down exactly the
skills, not the position, but the skills you need for that
worker. That’s step one.

John: That’s right. And those skills, there’s not very many of them.
You don’t need someone who can write perfect English and do
programming and do design work and is a WordPress expert and can
make phone calls for you.

Andrew: They’re going to be mediocre at everything.

John: They’re going to be mediocre at everything, and you’re going to
let them go. First of all, you’re not going to find them. I got
an e-mail one time that said, John, I need a person who can,
one, write six articles a day that are perfect that I don’t have
to mess with; two, spin those articles into 18 articles a day;
three, write custom plug-ins for WordPress sites; four, make
WordPress themes that look really great; five, answer customer’s
phone calls. There were seven things on this e-mail, and I was
like, you’re trying to hire me, and I’m not even good at all
those things. You know, like, you’re crazy. So, pick something,
and the skill that you should be hiring for is one skill that
you’re looking for.

Andrew: So, step one. Nail down that position. Let’s go to step two.
What’s step two?

John: Go and start searching out candidates. And there’s two
different ways to do this. You go to onlinejobs.ph, which
onlinejobs.ph is one option, bestjobs.ph is another option. When
I found bestjobs.ph, I thought I was in heaven, and this was
four years ago.

Andrew: Sorry to interrupt. Bestjobs.ph, and these will all be in the
show notes, but bestjobs.ph?

John: Yes, bestjobs.ph or onlinejobs.ph. The difference is
bestjobs.ph is kind of on a downwards trend, but when I found
it, there were like 30,000 Filipino resumes, and today there are
like 11. And onlinejobs.ph is kind of on an upwards trend. It’s
like two and a half years old, and there’s like 65,000 Filipino
resumes there. Another couple of options – you can go through a
service, like you and I talked about earlier, agentsofvalue.com,
or 123employee.com, they are a couple of options if you don’t
mind the $6,000 or $10,000 a year mark-up, that’s okay. You will
be finding the same people. You’re not going to get a better
candidate from them. I know they’re recruiting on onlinejobs.ph.

Andrew: So, you’ve got the option for – and those are going to be
recruiting agencies – either local or even sometimes national
outside. They’re hiring firms that go in and hire a bunch of
Filipinos, house them, and then they subcontract them out to
individual people.

John: They mark them up and then lease them back to you.

Andrew: Yeah. I think probably the ones most people are familiar with
are oDesk, Elance, some of these really well-known freelancing
sites. What do you think about those?

John: You just said it right there, they’re freelancing sites. You’re
hiring a temporary person. If you go through oDesk, you go
through Elance, here’s the thing. You are hiring 100% turnover
in your business, automatically. That’s the definition of it is
you’re hiring yourself turnover. In a month, they won’t work for
you, they will work for someone else, and when you need
something else changed of what they’ve worked on, you can’t. You
have to go back and find someone else. You will never step away
from your business while you are dealing with freelancers. You
can get a lot of work done, but you’re not automating. You’re
not automating your business that way. For me, there are three
ways to automate. You can automate with hardware with machines
in a car factory; you can automate with software, software tools
that do a bunch of steps for you; or you can automate with
humans, and have them – or you can automate with humans and
software, humans using software. If you’re using contract
workers, it is not automation because you are always still
involved in steps of a process.

Andrew: Well, if you have a contract worker, they’re not someone – I
think a lot of people may not understand this, but maybe they do
- but just to clarify, a contract worker, you can’t always – I
mean, you set up a contract for a limited project or a limited
amount of time, but you can’t just immediately with a contract
worker shoot something off at 3:00 in the afternoon and say,
hey, I need this done by the next day. They may have time to do
it, they may not. They may want to do it, they may not want to
do it.

John: Well, regardless, it’s not part of the original agreed upon
agreement. This one thing that you need done, that’s not part of
the agreement. Forget it.

Andrew: The one thing I’ve found oDesk and Elance really helpful for is
very specialized work for a defined amount of time. Like, for
example, my eCommerce sites run on Magento, and Magento is a pig
to customize. It’s complex, and it’s powerful, it’s really
powerful, but it’s definitely an area of expertise you need to
be able to customize it well. So when I need to have some real
detailed changes made to that, I go on oDesk and get a great guy
who can do it. He’s a little more expensive, you know, he’s $50
an hour or something, but he does it and he’s done. But, not a
great place to find workers that are going to help you systemize
your business, kind of in perpetuity, so you can step back.

John: That’s so true. Specialized one-time things, absolutely. What
you should do, I think, is hire a programmer in the Philippines,
someone who doesn’t know anything about Magento, but they’re
good at programming, and let them start learning it. Give them a
simple modification task, and in three or six months from now,
they will be able to do anything you want done. In the meantime,
if you don’t have something for them to do, let that person do
technical customer support. Let them do customer support,
whatever it is. There’s so many things they can do, but then
they’ve learned Magento. And now they’re the expert, and they’re
working for you instead of at $50 an hour, they’re at $3 an
hour. There’s a lot of hours that you can waste when that’s the
cost of this.

Andrew: You don’t have to be quite as much of a taskmaster.

John: You don’t have to be so productive every single second, you
know. Okay, here’s the thing. Go into onlinejobs.ph, and like I
said before, don’t go in and narrow it down to one single person
and e-mail them. There’s two ways to do this. You go in and e-
mail 20 different people that look like they could be correct.
If you do the advance search in onlinejobs.ph, you can search
for multiple skillsets at the same time. So, you can get someone
who is a programmer and understands – we don’t have a Magento,
there’s not a Magento category at onlinejobs.ph – but stuff like
that where you can go through someone who understands PHP, and
MySQL, or someone with PHP and eCommerce experience.

So you can search for multiple skills and start to narrow it
down, and then e-mail 20 people and see who responds. And when
you e-mail them, send them a generic e-mail. Don’t say, I need
someone who is an expert at Magento and can modify this piece of
it and has this experience, and is going to do this and this and
this. You will scare them off, because if there’s one thing in
there that they don’t think they know, they’re not even going to
respond. And so when you e-mail them, send them, hey, I need a
programmer. I would love someone with some eCommerce experience.
If you know Magento, that’s even a bonus, if not, I just want a
good programmer, reply back to me.

Andrew: In these e-mails, should you say, here’s my budget, here’s how
much I’m looking to spend, or should you wait until you find
somebody?

John: I personally don’t say, here’s my budget, here’s how much I
want to spend, because I want to find the right person. If
they’re at $600 a month or if they’re at $300 a month, you know,
if I find the same person at $600 or $300, I’m going to hire the
$300.

Andrew: Okay.

John: Just so you know, typically if you have a $300 or $600 person,
the $300 person is not as good as the $600 person. That’s pretty
standard across the board. But, I hired a guy at $300 a month
who said he was a good programmer, and he wasn’t as good as he
thought he was. And so we gave him a few other tasks to do, and
today he’s fantastic. He’s a good programmer and he’s a good
designer, and that was a good hire.

Andrew: Find out what you want, step one. Step two is go to bestjobs.ph
or onlinejobs.ph.

John: Onlinejobs.ph is a much better option. I was just giving you
guys different options.

Andrew: I’m sorry, I’m looking at my notes here, and that one’s the one
my eyes settled on. But go to onlinejobs.ph preferably, and then
send out e-mails kind of with broad descriptions to 20 or 30
people. So, we’ve done that, so what’s step three?

John: So, another option there is going in and post your job.
Different people kind of work differently, and when I do this, I
want instant feedback. I want to know what I’m looking for, so
I’ll go in and e-mail people. Other people just work
differently, they’ll go in and post a job and wait for everyone
to respond to them. There’s another option.

Okay, step number three is interview people who respond. So,
people who respond to you, start interviewing them. Ask them
lots and lots of questions across multiple e-mails. Ask them if
they have another job, how many hours they’re working, and where
they live, and how they learned English, and what their skills
are, and what their best skills are, and how they got those
skills, and what experience they have, and ask them all these
things over multiple e-mails, and you’ll get – you’ll have a
much, much better understanding of who they are and how they fit
into your company.

Andrew: So, when you’re doing that, let’s say we e-mail 20, and let’s
say 7 reply. Do you do this for all 7 candidates? Do you kind of
go through and vet and say, yeah, this guy looks like he may be
better, do you kind of, I guess, cut the finalists, based on
what you see?

John: I will do that throughout the e-mail series. So, everyone who
replies to me, if 7 people reply, 1 or 2 of them are just
completely not qualified and I didn’t know that, because I don’t
spend half an hour in the first place e-mailing 20 or 30 people.
I went in and looked and found people that were relevant and I e-
mailed them. And then, 7 replied, 2 of them are just not
relevant, and I won’t reply, and 5 of them are, and I’ll send
them some questions. And I’ll read their responses and send them
questions, and they’ll respond. And 4 of them will respond back,
and 1 of them will kind of just drop off, and I’ll just keep
going through that until I narrow it down to the one person I
want to hire.

Andrew: So, really it’s just correspondence. So, you’re not going in
and saying, okay, 5 candidates, here are three potential
customer e-mails you could get, please write me a reply, and
kind of role play how you respond to this. Or if it’s a
programmer, you don’t say, you don’t test them, or you don’t
give them a mini-project to say, get a WordPress blog up in such
and such a time, and do this customization. You’re really more
just trying to get a feel for what they’re like as you
correspond back and forth.

John: So, all those things that you just said are things that I do
do, but I just started doing it, like, in the last three weeks.
One thing you don’t want to have them do – and here’s the
problem. You say, oh, you’re a writer. I want to see your
writing. Write me six articles about whatever your eCommerce
site is about. Immediately, they’re going to say, you know what?
Screw you. There have been enough scammers that say, hey, I’m
interested in hiring you, write me six articles so I can see
your work, and then they get the articles back and then
disappear.

Andrew: Free labor.

John: So, you can definitely test people, you just need to be careful
with it. Don’t have them doing work that – let them do work that
they see this is unique and you’re not going to use it in your
business and run off and steal it, because otherwise, you’re
going to lose good potential candidates.

Andrew: Or if you are going to do that, if that’s really important, let
them know that maybe you’ll compensate them for the work that
they do do.

John: I’ve done that. Hey, I want to see how your work is. Do these
three designs for me, and I’ll pay you $30 whether I hire you or
not. You know? Put up a WordPress blog for me, and maybe it is
or it isn’t one that I want to have done, and I’ll give you $10,
you know? Maybe I’ll do that with four people. And maybe two of
them do it, maybe three of them do it, maybe all four do. So,
you definitely can test people. Sometimes I will pay them,
sometimes I won’t. It just kind of depends on what it is.

Andrew: So, we’ve got the field narrowed down, and let’s say, it’s
based on some e-mails, maybe some potential tests, we’ve got
that one person we want to hire. So, once we’ve got that final
candidate, what do we do to move them into our actual workflow?
I guess a couple of things, when to pay them, and then,
secondly, how do we get them up to speed? What are some of the
best practices for integrating them into our businesses?

John: That’s step five in this document. Offer them a job, tell them
you’re hired. Here are my expectations, I expect you to work a
40-hour week, you can have time off whenever you want, I just
need to know ahead of time. You know, they have Filipino
holidays that we don’t have, and you know they’re going to work
over Thanksgiving. They’re not going to work between Christmas
and New Year’s, nobody does in the Philippines. Tell them how
much you are going to pay them, how often you’ll pay them. When
you get started, you’re going to have to pay them once a week.
Don’t ever pre-pay for work. Always pay them after the work.
When you get started, they need to trust you, and they’re scared
about doing a whole bunch of work and not getting paid, so pay
them once a week for the first two months. After that, you can
switch to paying monthly. I pay all my people monthly. I have
them send me an invoice on the same day of every month so that I
remember to pay them, because otherwise I will forget.

Andrew: You don’t have that automated?

John: The payments?

Andrew: Yeah, there’s not like a – the way I’ve got it set up with my
VA is just an automatic monthly salary for the work that she
does through xoom.com. It’s the same amount every month, so it
just kicks in, you know?

John: There are a couple of things with that, and you need to be
careful with that. One, the exchange rate changes, and you need
to pay attention to that. So if you’re paying them $300 a month,
I’ve seen the exchange rate as low as 38 to 1, and as high as 51
to 1. That’s a 25% difference in their salary that they get.
Right now, it’s pretty low, it’s about 40 to 1. So, if you
contracted them when it was 45 at $300, and you’re still sending
them $300, they’re losing a significant amount of their
paycheck, and so you probably need to be paying them more.
That’s one of the reasons I don’t automate that through
xoom.com.

Andrew: Can you set it up to pay in the local currency, so you just pay
$40,000 or $20,000, and then it just charges, you know? Maybe
that would be work, but . . .

John: I don’t know, you probably can. The other thing is, I like to
send them bonuses. And so when I pay them, I’m going to send
them a bonus rather than sending two different transactions and
having to do it twice and having two fees, that’s it. The other
thing is, you just mentioned xoom.com. Up until two months ago,
I always recommended xoom.com. Xoom.com is going away. They are
specifically disallowing commercial transactions, which means if
you are paying someone working for you, xoom.com does not want
to be a part of that anymore. For the last couple months, we’ve
been researching, trying to find a better solution, and we’re
actually, we’ve been working with another company who we found
that is going to be a much, much better solution. It’s going to
be at payments.ph. It’s not available – maybe it will be
available tomorrow. Another issue with xoom.com is if you’re in
the U.S., xoom.com will not take transactions from outside of
the U.S., so everybody in the rest of the world can’t use
xoom.com. Payments.ph will work from anywhere, have lower fees
than xoom.com, higher exchange rate than xoom.com or PayPal,
which is a big deal for the Filipinos that if they get an extra
30 pesos in a month, that costs you an extra dollar, 40 pesos is
an extra dollar. That’s a full meal for them, maybe multiple
meals for them. It’s a big deal. So, having a higher exchange
rate is a big deal. Payments.ph is going to be a much, much
better option going forward.

Andrew: Assuming payments.ph, you know, xoom.com may be, probably not
going to be a great option going forward, apart from
payments.ph, what are some of the other alternatives for
payment?

John: PayPal is another option. PayPal is just slow. PayPal takes a
couple days to get them the money, so you have to be prepared
ahead of time. The Filipinos are dependent on this money. This
is their life. If you don’t pay them on time, they do not eat.
And that’s pretty important. So PayPal is an option, sometimes -
PayPal usually takes three days to get them the money in the
first place. Sometimes PayPal will screw you over, and just say,
no, sorry, we’re not going to send this money anymore. Not that
they – they’ll never take the money, and the Filipino won’t get
it. I’ve never seen that happen. With PayPal, I’ve seen it
numerous times where they say, no, sorry. You can’t send money
to this person anymore. They have to eat, what do I do? The
other thing with PayPal is their exchange rate is super low.
Like, a point lower than other places, and that point when
you’re sending it 300 times is a big deal. So, there’s a couple
issues with PayPal. Other options, they’re just more expensive.
Emoneygram.com, remithome.com, westernunion.com you’re wiring
money. That’s what you’re doing with xoom.com, or emoneygram.com
or westernunion.com, you’re just wiring money. There are other
options.

Andrew: So, there’s a number of options. So once you hire them, you set
up some payment stuff, maybe talk a little bit about getting
them plugged in. Why don’t you talk about ReplaceMyself.com, and
how that ties into being able to get someone up to speed in your
business?

John: So, you have to give them their first task. And this is where
most people see the process, and they say, oh, man, that’s so
painful, I’m not even going to do this. I have to give this
person a task, and I have to give him some training, which you
do. You really need to train them. And if you have something
specific that you want them to do upfront, you know, hire them
and work with them through that training and give them one
specific task and then provide them feedback as they go through
it.

What I realized years ago was I’ve done this enough times that
I’ve created all this training, and it’s training specifically
for a Filipino, and I could make all of my training available to
other people. So that’s what ReplaceMyself.com is. It’s all
about trying to make this hiring process and your experience
easier, so that you hire someone and then you give them my
training that I created so that you don’t have to go through
that training process. And if can, give them the training of
mine about something that you know so that you give them the
training, you don’t have to provide the training, but then you
can provide intelligent feedback as they work through that.
That’ll just make this easier. Or if you don’t want to do that,
if you don’t want to use ReplaceMyself.com and the trainings
that I’ve created, you’ve got to give them training.

One thing you can’t do is you can’t go buy a product that was
intended for you to teach you how to do something, and give it
to the Filipinos. Every info product I’ve ever seen is intended
for you, the CEO, to implement and which assumes that you’re
going to be making the business decisions, and if you give that
to a Filipino, they’ll come to a point where they have to make a
business decision, they don’t know how to make that decision,
they don’t want to make the decision, and they’ll disappear.
And it doesn’t really work.

Andrew: So, don’t go buy How to Make $10,000 In Thirty Fast Days for a
$1,000, hand it off to your Filipino VA and expect the money to
come rolling in.

John: Not going to work. You have to be CEO of your business. I mean,
that’s a big transition. A lot of people right now are trying to
start their own business. They’re trying to run an eCommerce
site. They’re trying to be an affiliate. They’re trying to do
whatever it is, but they’re the grunt worker. They’re doing all
the grunt work, and they’re not the CEO of the business. And so
there’s a big transition phase there from being the one who’s
doing everything them self to being the one managing everything
and letting other people do the work. And in that transition,
there’s lots of training that has to happen. And some of that
training is for you, and some of that training is for the
Filipino, and some of that is for how you guys work together.
And that will happen over time, but initially, you’ve got to
give that Filipino training. And then you have to kind of step
away from that and not micro-manage every tiny, little piece of
it and start focusing on the bigger picture, focusing on working
on your business instead of working in your business.

Andrew: So, the ReplaceMyself.com training modules, how are they set
up? Are they PDFs? Are they videos? And then also, what topics
do they cover? What can you, after you give a VA some of these,
what can you expect them to do?

John: So, they’re, the ReplaceMyself trainings are a whole range of
trainings. Some of them are PDFs, some of them are video, some
of them are audio, some of them are web pages, some of them are,
you know, a collection of specific web pages, other people’s
information that have the best information. And they’re
filtered. So, like, go look at this page and ignore the first
paragraph, the first couple of paragraphs, because it’s not
relevant to what you are going to be doing. The page entries are
at least six bullet points, something like that, or videos that
we’ve created, that I’ve created saying, hey, look, here’s how
we’re going to do this. So it’s combination of things. They
cover the whole gamut of marketing. So, like Facebook marketing,
or Twitter marketing, or article marketing, or video marketing,
or SEO, or link building, or copyrighting, sales copy. We have
local business stuff like Yelp, or Google Places, or building a
mini-net, or QR codes or building mobile websites, or …

Andrew: Wow, you have training on there for Filipino VA’s on how to
build a mobile website?

John: Yes. And that training is, there are multiple options. There’s
like, here’s how you build a single, stand-alone mobile website
in five minutes, here’s how you turn a WordPress site into a
mobile-ready website, here’s how you build a bigger, more fully
robust mobile website. Here’s a couple of different tools, you
can use this one, this one costs this much, this one is free,
this one costs this much, here are your options. Here’s how you
use them. So, here’s how you integrate QR codes into this mobile
stuff, you know? Here’s how you do Facebook with mobile
marketing, here’s what you do for a local business.

So, we have all of these trainings on how to do this stuff for a
Filipino, and that’s the really big difference between what we
do and what anybody else does is training on how to build mobile
websites is geared at you targeting the client, or you for your
website. What we do is targeting at a Filipino to doing it for
their boss, where we say, look, when you get to this point, you
don’t make this decision. You shouldn’t make this decision, ask
your boss, because they should make this decision, and they’ll
tell you what to do and you do it. And that’s how this should
work. You should be making the decisions, they should be doing
the work.

Andrew: Got it. Very cool stuff. That sounds like pretty comprehensive
training, too. I didn’t think you would have as much stuff as
you said.

John: We don’t have like eCommerce. We don’t have specific Magento
training, something like that. We do have some – in SEO, we talk
about SEO for eCommerce stuff, where you’re [indiscernible
1:04:29] a specific page with a specific product name, and
you’re linking to that specific page, and keywords, and . . .

Andrew: Got it. So, getting close now, we’ve been talking for an hour.
It’s just flown by with just tons of good stuff. So, I do want
to wrap this up, but one last question. You’ve been doing this
obviously for so long, what are some of the tools or websites or
utilities, what are the resources that you use that are really
helpful in terms of communicating with VA’s, managing VA’s? What
are some of those that you can share that would be really
helpful for people getting started?

John: We’ll talk about a couple of them. Number one, I communicate
with my people using e-mail, I’ve already talked about that a
little bit. Instant messaging, either Skype or Google Talk. They
all use Yahoo Instant Messenger, which I don’t use, so I have
them use Google Talk. I use a project manager system, which as
part of ReplaceMyself.com we licensed the project manager system
that I use from the company, and so you get that with it.

Andrew: So, if you buy ReplaceMyself.com, then you do get the PM
manager system with it?

John: You do get it. You also get free access to onlinejobs.ph. And
so there’s a whole bunch of stuff you’re going to get with
ReplaceMyself.com. Jing is a total game changer for this. I wish
I could download it here – you’re not seeing my screen – it’s
screen capture, screen recording software made so stinking
simple that it will save you an hour a day not writing e-mails
and not rendering videos. Jing is free, which is crazy.
Jingproject.com, it’s made by the makers of Camtasia. I’ll just
tell you real quick, it sits up on your desktop, you drag it out
and capture like a square, either an image or a video. If it’s a
video, you talk to it, and it records your screen, and your
mouse, and you do your voice, and you can explain something
exactly what you want, or you capture an image and you annotate
it and draw arrows and stuff, and you send that. You click a
button, Jing uploads it to a server, and gives you the URL, so
all you have to do is click ‘paste’ into an e-mail. And you
don’t have to render or FTP your files or host or any of that
stuff. It just works. It’s so fantastic.

Andrew: Yeah, it’s a great tool.

John: We use Google Docs for a lot of stuff, for tracking stuff, for
writing, for spreadsheets, for – it’s really great to be able to
share something back and forth and not have to send the document
back and forth. And they can keep it updated, and it just works.
We use that for some task management, you know, managing like
tasks on a project sometimes, or the project manager system, or
we’ll link to that in the project manager system, and – I’m
trying to think of what else we use on a regular basis. There
are software tools…

Andrew: Go ahead, I’m sorry, John.

John: There are software tools that we use to do things, but those
are kind of more specialized. Jing is the really big one. Jing
changed everything. When you start using it – when I started
using it, it changed everything for me.

Andrew: It’s so much easier to – if you want to show a process to a VA,
instead of having to walk them – instead of having to type out
an e-mail for ten minutes step-by-step, you just do a screen
cast and shoot it over to them in a minute and a half, two
minutes. It’s great. Too, I would add, for project management
and kind of collaboration, Asana is a great one that I use.
Again, this will all be in the show notes, but Asana is a great
tool. It’s free up to 30 users, so unless you are getting to the
point where you’re at John’s level and you’re hiring so many
people you’re past 30, it should be free. And then Skitch – I
think it’s only for Mac, but it may be available for PC, I’m not
sure – but Skitch is another great tool for taking awesome
screenshots.

So, who’s that?

John: This is my baby, and she just walked in. I have a – I work from
home. I have an open door policy at my house, and we just moved
and we don’t even have doorknobs on our doors yet because we
remodeled everything. And she walked in.

Andrew: What’s her name?

John: This is Lila.

Andrew: What was that?

John: Lila.

Andrew: Lila, got it.

John: Say hi. Can you give smiles? She is the smiley-est, happiest baby.

Andrew: How are you doing, Lila?

John: Hey, look. Look at that.

Andrew: Is your dad getting you trained in outsourcing techniques here
at an early age?

John: That would be my 9-year-old.

Andrew: John, awesome. Well, I think that does it. We’ve chatted for an
hour and fifteen minutes. I really appreciate you coming on,
talking, sharing a lot of this stuff. And again, I know we’ve
been over it before, but if you want to find out more about
John, ReplaceMyself.com is where you can find those training
modules and access information about them. Onlinejobs.ph is the
job board he referenced. Any other sites that you’d like to tell
about or resources that people can come and find out more about
you from?

John: I blog about a lot of this at Jonasblog.com. So, that’s – you
can find me at johnjonas.com, but I blog about a lot of this at
jonasblog.com

Andrew: Well, John, it’s been a privilege chatting with you. I learned
a ton of information, and thanks so much for coming on.

John: No problem. Thanks for having me. It’s been great to be here.

Andrew: Thanks, everyone, for listening. We’ll talk to you soon.

Prefer Audio?  To download the MP3 right-click on this link and click “Save Link As”.

Andrew: Hello everyone, my name is Andrew Youderian and I am the founder of ecommercefuel.com, where we talk about building profitable online stores. And today I have a great interview in store for you. And in this interview, I want to find out how my guest grew his ecommerce business, which he started in the late 1990’s using a website which his 15-year old son actually built for him, into a highly profitable full-time business. My guest, Dave Huckabay, is an ecommerce entrepreneur with over a decade of experience building profitable online stores. He’s also the author of the, “Grabapple Guide to E-commerce”, which is an in in-the-trenches guide to selling online. Dave, thanks so much for being here!

Dave: No problem. Glad to do it.

Andrew: So, the question I want to start out with, we’re gonna dive into the history and the story of kind of how you gonna where you are today. Before we do that, I’d like to ask a question, I think a lot of people are probably wondering which is, what do you do in revenues right now?

Dave: Right now, we’re doing, year over year depending on the economy, between three quarters and just under a million dollars a year.

Andrew: Wow! Okay, and how many different stores is that gonna be? Or is that split among?

Dave: Most of the revenue comes from 3 big stores but about 30-35 percent of it every year comes from about a half a dozen smaller stores.

Andrew: Half a dozen. Okay, got it. So, quite a few.

Dave: So, there’s a lot of different websites.

Andrew: Got it! And could you give us here, I’m not sure how many are all of them obviously, but could you give maybe an example or two of specific store or stores that you run and what you sell on those?

Dave: Sure! Smtinspection.com is where I do a stereo microscope called amantics. I also do ultrasonics on a website called sonicsonline.com. These are ultrasonic cleaners and cell disruptors. It’s laboratory and manufacturing equipment.

Andrew: So, the microscope, this will be things that are used in government labs or medical labs.

Dave: All over the place. Everything, from people working on dental appliances to people doing hair transplants which maybe the single’s most disgusting application. I’d describe the process to you but you wouldn’t really want to know about it. But a lot of RMDs stuff, life sciences, and the core customer room for that particular site, probably print circuit board manufacturing and inspection. Hence the name SMTinspection stands for surface melt technology.

Andrew: Wow! So, you have a bunch of in markets and customers who are using these microscopes.

Dave: Right.

Andrew: And then, you mention some sonic equipment, can you give a little more detail on what you mean by that?

Dave: What most people would be familiar with when you talk about ultrasonic is things like the cheaper ultrasonic cleaners, like what you would see on Amazon.com or sharper image or something like that and they are just use for cleaning jewelry. We kind of attack the industrial end of that. I still do some consumer items and we ship quite a few of them, but we kind of shy away from the low-end of the market. That’s actually true on all the sites. I am typically doing the higher-end equipment and the higher-priced equipment.

—– Approximate 5:00 Mark in Video ——-

Andrew: Yeah, okay. I mean that’s probably going to be tined on your over-all treasure next niche selection which I didn’t go into a little bit further. But the real issue here exactly is, how you got into some of these markets are obviously not your everyday run of the mill markets. So, let’s take a step back actually. So, that’s obviously where you are today, you have some great successful businesses and a lot of experience with e-commerce but can you take us back to what your life was like before you got involved with e-commerce as a manufacturing rep and sales rep and can you give us an idea of what you were doing and maybe some of the struggles involve with that.

Dave: Yeah. Andrew it was a living hell. Yeah, for example, with the action of dying in a car wreck is what we used to describe it is. I was covering three stages as a manufacture representative for a group of industrial manufacturers. And they’re making equipment that other factories would use to make consumer goods and government electronics like spy phone and those kinds of stuff. And driving anywhere from 50-70 thousand miles per year, usually about 60 thousand miles per year, and spending at least 1 or 2, 2 to 3 day periods away from home, every month. And I did that from when I got out of the navy in the middle of 1988 all the way up through ‘99 full time, which was kind of the point when the internet really started to move and after that, I scaled it back and formed out a lot of my driving to an employee. And as of 2003, I did shut down the manufacture representative and ended the business completely. And we went completely online.

Andrew: Okay, so, how did you make that jump because it sounds like, at the beginning when you were driving 50 thousand, 70 thousand miles a year and really hating your life, there is a transition somewhere where you were actually an employee?

Dave: Actually, it seems funny when you say it that way but I believe that most people get up in the morning and hate what they do. Maybe not most but I know there is a significant percentage of us, that they get and go to a building not always full of people that we really want to be around. And we stay there all day and doing stuff that maybe we don’t enjoy that much. That’s the situation I was in, but I got a wife and kids and I gonna make some money. The turning point came in the late ’90′s. I just got the first notebook computer and they have Windows 3.1 on it. Awfully. The Windows 95 which made it slower was, that was awesome but my oldest son was playing with it. And he was the kind of kid that you could give in, he was not the kind of kid who’s gonna break something or tear something apart. And I noticed the screen was covered with texts, just texts flowing from the top of the screen to the bottom. And I ask him, “Shawn what are you doing?” and he said, “This is a role playing game and we’re playing a game about orcs and dwarves and stuff.” And I’m like, “Okay”. And you could look at the texts and you could see it was kind of like dungeons of dragons and text space. I asked him, “Who are you playing with?” He said, “I was playing with some graduate students at UVA”. And I thought, “Wow, that’s pretty weird.” And that was the first time I ever realized that there was something called the internet or I didn’t even know if it was called the internet or the worldwide web at that point.

Andrew: Approximately, what year was this?

Dave: Oh gosh! That must have been like mid-nineties or ‘96. There wasn’t a web like you and I think of it today. It wasn’t too long after that, that he came to me, holding my notebook and he said, “Look at this!” And he had found a site and I can’t imagine or I can’t remember what they were selling but it was an online store. And it was the first one that I have ever seen. And he said, “You know Dad, I bet you could sell your WA Brown stuff on one of these things”. And I thought, “You know what? Maybe I could.” And it was shortly after that, that we were contacted by Virginia Power. We were based here in Virginia. And one of the things we sold at that point in time was Industrial Infrared Heaters which are actually quite an amazing pieces of equipment. They are very, very hot and very powerful. One of the reason why Virginia Power was interested in us was that, despite all of their talked about conservation, what utilities do was sell power, right? So, they wanted to help me sell more power so they gave us server space. And my teenage kid figured out how to write code and put up a website for our company, the Virginia Power Servers.

Andrew: That’s amazing! And was he 15 at that time? Was I right? I think that was right.

Dave: Yeah! He was about 15 when he put up that first site.

Andrew: That’s amazing!

—– Approximate 10:00 Mark in Video ——-

Dave: Yeah, I thought so too! Wow! How does this all work? And he figured it all out. To begin with, you really could buy anything online. All that he did was pull phone numbers. People had forms, where they could send us some form and I will get an email and they would mostly call. But it started to make some money. And it did pretty well! I mean, there was no real SEO like what we have right now. There was definitely no social media but it actually worked well enough that when I finally bought the company I was working for in November of 1999, I contacted a friend of mine who was an inventor. I was selling one of his inventions at that time. I hand held X-ray system. Yeah, I know, very CIA. You could see through walls with it, literally. Literally!

Andrew: You should be selling some of those. I would be interested in buying one of those.

Dave: Oh man, you don’t even want to know.

Andrew: I’d probably couldn’t afford one, though.

Dave: No, no. I guess not for this interview but I guess great stories on doing demonstrations of those things for the _____ (19:20).

Andrew: So Dave, sorry to interrupt but I just want to make sure that I understand exactly what happened there. So, in those early days, cause you had your son put up the website, I think something that a lot of e-commerce entrepreneurs struggle with, was that first, I don’t know but I struggled with it, that first three to six months is brutal because every time you’re building something from nothing to get to the point where you can get momentum and build credibility and actually get some revenue going, some substantial revenue going, it takes a lot of work. Was that something that you experience? Those early days, did things take off pretty rapidly, pretty quickly? Or did you really have that kind of first three-six-nine month period where you put in a lot of work and just thinking, “Man, is this gonna pay off?”, “Is this something that’s gonna work?”

Dave: Not quite, not quite. Actually I put it “no work”, but it still took three-six-nine months. What we did was, we put the website to our business cards. And that time when we were still going out on the road, we had a thing called a “line card”, which we just shoot out telling these are all the equipments that we sell and here’s what it does. There you go, right? And every time we make the sales call to at least some of those with the purchasing department or whatever. And overtime, it just kind of snow-balled and on top of that, the people of Virginia Power were nice enough to send us people. So, they were sending us some traffic too.

Andrew: Got it. So, a lot of word of mouth and a lot of relationship or relational marketing is really what got your business off the ground.

Dave: It really is! That really is the truth of the matter and as we always saying with the guy with the x-ray invention. The reason why I was talking about him is that he was the only person I knew that had a real website on his own domain. So, I called him up and asked him how he got it and how did all of that work and he’s like, “I don’t even know, Dave, but here’s my guy.” He didn’t know! And he sent me to a guy, I don’t even know his name but, Adam Brawer, which was a very lucky introduction. And Adam built our first two websites.

Andrew: That’s amazing! I mean, you got this unique perspective of having seen, being involve with e-commerce, if not for the whole thing, then, for the majority of the evolution of it. From when the internet got started and to where we are today. I mean, what are your thoughts between the ease of, I mean, it’s gonna be such a contrast between what you had to do when you started selling online back in those days and what you can do now. I mean, what have you guys done in terms of evolving with different platforms. Or was there a point where you changed all of your platforms to something like shopify or yahoo stores? Where does that evolution been like?

Dave: Yeah, actually, first we had decided on the Virginia Power Servers and then we had a couple of costumed sites that were built by my friend, Adam, using Perl Script and HTML. I mean, he just coded everything from scratch. He just built it all from scratch. I love the guy but he was kind of a nightmare because for him, it was a hobby, because he’s wealthy and he was wealthy back then. And he just knew the guy that owns the x-ray company so he said, “Yeah, if I did it for Joe, I’d do it for you too”. Those sites worked really well. I finally had them both redone in the, let me see, around 2006-2007 time frame. I had them completely reworked simply because they could no longer keep up and they didn’t have the features that you needed to do e-commerce and to change the environments. Yeah, we really have seen a lot of changes. You know, if I can get in a time machine and take what I know now about SEO and search engines and promotion and marketing. It really has been continuous of non-stop self education since 1999. I would be a very, very wealthy man.

Andrew: I mean, if you could go back and get a head start on all the SEO’s stuff in 2001-2002 would be, I mean, ten-year head start is, I mean even the best of us. I mean, that’s quite a wall.

—– Approximate 15:00 Mark in Video ——-

Dave: Really, literally! I’m not joking, man. We used to be able to rank by just putting up a page. Just call it moosenuggles.com and put up a page that just said moose snuggles 20 times on it and you rank number one for moose snuggles.

Andrew: The old, the classic key word stuffing strategies that worked.

Dave: It worked perfect. Nobody knew what they were doing. It still works, not the keyword stuffing but the SEO still does work to some extent. One of the things that’s really happening now with the search engine especially Google is not so much of that SEO doesn’t work as well as it used to. It’s just that Google is changing the way the surf’s look.

Andrew: Yeah.

Dave: I think, going forward, we’re going to see if it’s going to be a lot more difficult for big commercial terms to rank at the top of the search and it doesn’t mean what it used to mean, either. You know, the surf used to just feature the surf, now it’s the ads.

Andrew: And when you say the search, you mean, the search engine result page.

Dave: It is the result’s page, I’m sorry.

Andrew: Yeah. That’s what I noticed too. I did an analysis of kind of the number one keyword ranking, because that’s some of my sites do. I think some of yours probably do, too, rank number one for different keywords. And back in the day, if you were number one in Google, you could expect 50-60-70 percent of the search volume for a specific term. And now, like you said, with just three or four ads, they’re very tough. A number ranking, I did some comparisons and I think, base on what the keyword tool says in a given month and what my sites actually receive in a given term, it’s something anywhere of 25-30 percent for a number one ranking.

Dave: Yeah. And you know, Google is not in it. It’s not a charity. They’re in it to win it, they’re in it to make money and make their shareholders rich and they’re making a good job but it really is a different environment. And going forward, at least, what we’re doing is trying to pull much traffic as possible from other sources. We’re gonna be pushing really, really hard. I know, it’s very difficult for industrial equipment. We’re pushing really hard to get into some of the prime directories and some of the social sites. All of that is just so difficult. I’m still managing it but it’s just hard to do. You really have to haunt for people who want to click on your widget blending machine website. I love widget machine blender.

Andrew: It kind of segues into your marketing and SEO efforts. Obviously, earlier on, a lot of relational marketing is what really got your business off the ground. Is that still what you depend on for the majority of your revenue today? Or have you gone into transitioning to more of an SEO approach or more of an organic traffic and advertising approach? Where did you get your customer? Where did they come from?

Dave: Well, right now, it’s a mix of historical customers, customer based, SEO, people coming in just over the transom through the search engines, Facebook pages, stuff like that and advertising; although I try to keep my advertising spent at a minimum. I really have to have some proof to spend some money on a keyword. I have to know that the keyword converts. And one of the things that I noticed that you also gonna look at is, advertising on a keyword because it converts as an organic search does not necessarily mean that it’s gonna covert as an advertising keyword so you really have to watch your metrics or you’ll end up throwing a lot of money after a keyword.

Andrew: Really? So, let’s say for sonic jewelry cleaner, (it’s probably not aright keyword but) you’d see a difference in conversion using a pay-per-click visitor from that keyword and an organic visitor from that keyword?

Dave: Absolutely!

Andrew: Really? And why do you think that is?

Dave: I think it comes down to the kind of person who clicks on ads. You have to remember that I’m selling industrial equipments and a lot of my searchers are professional buyers and they’re engineers. And those people, I believe are a little bit more internet savvy than some mom sitting at home looking for jewelry cleaner. I’m not always amazed anymore but it astounds me sometimes how little people know about internet. When really, in ever increasing extent, it drives the entire economy or drives a huge chunk of it. And a lot of people don’t know the difference between organic results and advertisements. They don’t know what’s been paid for and what’s really there. Just because it ranks, because it’s an authoritative website, or because someone spends a lot on Google and had it ranking, whatever the case may be. Those are the most different knowledge levels to where people click on the page.

—– Approximate 20:00 Mark in Video ——-

Andrew: Got it. Dave, let’s maybe shift gear just a little bit. You’ve got one of the biggest questions, I think one of the biggest struggles that people face when they’re getting ready to start an online store or thinking about it is, “What do I sell?” And it’s tough! It’s a big decision and you should research it a lot but it’s a huge, I think, road block for people who are trying to get started. You obviously insert a lot of different stories and a lot of different niches. But what are some of the characteristics and traits that you look forward to market or niche that you’re thinking about going into?

Dave: Well, number one, I want either enthusiasm, if there’s a consumer basis to it, if it’s something that someone’s gonna use in their home. I want to see some enthusiasm, I want to see some movement, I want to see that the people are gonna be excited about it. Or that they are trying to get away from pain. You know, those are the two big drivers; moving towards pleasure and moving away from pain. And when I say pain, I mean actual physical pain or emotional pain. When I say pleasure, primarily, I mean guys and their freaking toys, man.

Andrew: I found that too. It’s amazing what guys would spend on stuff when it comes to recreation.

Dave: Right. My dad was an avid fisherman and he spent lots of money on fish and stuff. My mom used to say, the only difference between man and boys is the price of the toys. And that’s so true. Having said that though, if you find a niche or if you identified something that you think would make a good hobby as website or a good outdoor interest website or what interest you’re going after. When I see something like that, I also want, if it’s possible, for there to be industrial or has business component to that, too. And you know, it’s not always possible, it’s not always the case but you can think of any number of hobbies where you might have a website to sell products which might extend from the personal or private domain into the business domain. And that does a couple of things for you. And just right at the top of my head, what about the guys who are into woodworking, ok? I got a friend that makes pool cues. He makes really beautiful pool cues with marble and ivory inlay and everything and that’s he’s hobby. I remember when he started doing it and his lathe was really a simple piece of machinery but if you go over and look at his garage right now, it looks like a freaking machine shop, right? Because he’s so into this stuff. He’s actually buying commercial equipment. That’s one way you could look at it. Another way is that..

Andrew: So Dave, sorry to interrupt. So, when you use him as the analogy, are you referring to him as he had a hobby of one who creates, you know, his pool cues for a hobby base but also he got so into it, that he gets to buying industrial machinery because it was such a passion, he’d want to be able to do it on his own?

Dave: And now it’s such a passion, he’d want to be able to do it on a higher level and has become a small business for him. And that’s one way that having both the personal and the business into a website can help. The other way is that, if someone comes to your website and they want a home, let’s just say, a home sterilizer; baby bottles or whatever they’re doing at home that they want to sterilize. There is some cache and there is an aura of authority if they see on your website that, “Oh, look, he does this big commercial sterilizers too!” This is the ones that the hospitals used! But now he’s got this little unit here. And I always thought that, that added something. And that meant something to people. And maybe I’m wrong but the other thing that it does is it opens you up to completely different customer base. If you’re gonna sell widget blenders, why not sell the personal widget blender for the home but let’s put the big ones on there too! Why not? Because once and a while even if you’re not going after that market, once and a while the guy at widget USA is gonna hit your website and you’re gonna get an order for like 5000 bucks. It happens! It happens all the time! There’s no reason not to do it. If you’re at the start and you’re looking at niches and trying to stand up and go all the way up, why not? The hardest thing, I think, about getting started with this, and I want everybody whose watching this to really listen to this, the hardest part about getting started is to get started! Guys just pull the freaking trigger because I tell you what, even if your niche doesn’t working and this isn’t the one that’s gonna be “it”. that doesn’t matter because you’re gonna learn a lot by doing the research, and putting your first store together and doing your first marketing campaigns and getting out there. The odds on you making zero money are pretty slim, you’ll probably make something but you may realize you know in 8-10 months, this one didn’t work, well then you can have it to something else or you can expand that website into a different area. If nothing else, when you find the next niche that you want to go after, don’t worry but that would let it pick up, when you find the next niche that you want to go after, you’ve got a website that you can shelve.

—– Approximate 25:00 Mark in Video ——-

Andrew: One thing, too, Dave, that I found and I think is a kind of road block for me and I know other people is feeling like, I put a website up that’s not nearly as pretty as a lot of other website. They’re not gonna look nearly as professional but when we were chatting earlier and let me know if this is an experience you’ve had but my first ecommerce business that I threw up, it was hideous! It looked awful! You know, it was not gonna win any design awards and it still made money because of probably a couple of different reasons but I was focus more on the market. I was focus more on providing a lot of information and value to the customers and the degree to which it was, it wasn’t professionally designed, didn’t matter as much.

Dave: I think that’s absolutely right. It might not be as true as it used to be. My sites are still ugly but I’m making money. They are, they are! Smtinspection.com is actually kind of a pretty site. That one’s okay but the rest of them are all pretty ugly and it doesn’t seem to make any difference. What they are though is they’re very functional and there’s a ton of information on them and it is all hand-written. No duplicate description, nothing like that.

Andrew: You’ve got a great chapter in your book, in “Grabappple Guide to E-commerce”, which really talks about content creation and making product listings that stand out and add value and will gonna be really valuable resources that are getting ranked well. You did a fantastic job! Can you talk about it a little bit and maybe hit on some of the things that you do to add value to a product listing that other people might not, so that you can build trust and build authority and build rankings. What would you add to your product sites?

Dave: Well, the first thing that you want to do is you want to actually get the product and take your own photos. And the next things that you want to do is you want to actually sit down and, as we used to say in the navy RTFM, “Read The Friendly Manual”.

Andrew: Friendly, I’m sure.

Dave: Friendly, of course! And you want to go through there and you want to make sure you know everything there is to know about them. The next thing you want to do, believe it or not, is you want to go to your competitors’ website and you want to subscribe to their newsletters and if they got their manuals up on their websites, you want to download those manuals and you’d want to take a look at those too. Because what you’re going to do is, you’re going to pull out differentiators, places where your product does something that the XYZ Company’s product doesn’t do. Another thing that you might want to do is actually buy your competitor’s product, I’ve done that, and use it and try to break it. The other thing that I do a lot of time is, and this is old school, everybody knows this and I don’t know how many people actually do it, go to Amazon. And look at not just your product that you’re selling if it’s on Amazon but look at all the similar products and when you read through the reviews, which you want to look for is people that actually had a problem with it. You’ll find sometimes, if you get into the Amazon’s reviews on really popular product, in those reviews, there’s actually a dialogue going on. “Man, I couldn’t get the adjustor knob to turn in.” and then someone else will put, “Oh yeah, but you know if do this first, it slides in perfect. You shouldn’t have given it 3 stars. It’s just awesome!” That is fantastic content!

Andrew: It is! That’s great!

Dave: It’s a great content, so you put a proposed on your blog or you put an article on your website about, “you know this is what we found…” The other thing that you want to do is, hopefully, if what you’re selling is consumer item, if you identify yourself in discussing passion to it, go to the sites where people hang out. Don’t spam their forum with a bunch of crappy forum for profile links. Get in there and really look what people are saying and look at how they are actually using the equipment. And you’d get a number of different things on that, not only are gonna get great content ideas, you’re gonna get ideas for different pieces of equipment, as well.

Andrew: Got it. So, do you create your own user manuals? Maybe not user manuals but your own kind of here is how you get the most out of the product based on the experience we’ve had and based on the customer have had, and put that on the website and the product listing to add value. Is that something you’ve done in the past as well?

Dave: Yeah, typically we bust out into a separate section of the website. It will be like ask the expert or whatever and now we’re migrating all that stuff over to blogs and some of it on to FaceBook. But yeah we do incorporate all of that. Another valuable source for content, believe it or not is the contact form on your website and the emails people will send you because people ask questions. I’m telling you, man, if I got 3 emails, over the last 2 mos. and they’re all about, “hey can I do this with my widget vendor?” And they’re all addressing that single issue, I’m telling you, man, I don’t care what the Google ad tool or keyword tool says or anything says, people want to know that.

—– Approximate 30:00 Mark in Video ——-

Andrew: Yeah.

Dave: You’re getting emails from real live human beings, you need to write an article about that and stick it up on your website. And tell people what they need to know. This goes back; actually, it ties back in to whether or not a website needs to be beautiful. I would actually say that there is an adverse relationship between how useful a website is and the requirement for it to be pretty.

Andrew: Yeah, It’s not like it’s so easy to get fixated to the design and the layout and everything that you spend so much time on that that you don’t focus on what you really need to include which is including as much information and answering questions that your customers are asking.

Dave: You see, what you gonna do is build trust because, I’m telling you, I don’t care what you’re selling, they can find it in someone else, cheaper. Every single thing that I sell, you can find it somewhere else, cheaper and you can actually find it in the first page of the search engine results. Every single thing.

Andrew: Yeah, competing on a price is a rough way to go.

Dave: You know, the guy that I bought the company from, Bob, may he rest in peace. He used to say that price is what to use when you don’t have anything else. And that he was an old-school-driver-on-the-country-type kind of a sales guy but he was right! He was right! Even back then, it’s all about customer service. And in those days, it was about actually carting a piece of equipment to a factory, demonstrating it, showing them how they could do it. Or flying the customer up to their equipment factory and taking them on a tour, whatever. It was a really big order. Now, it’s about the fact in your website. Your website has to do everything that brick-and-mortar stores do, what people and objects. In the book, I call out the example, I believe, of a Lowes or a Home Depot. Let’s say, you are trying to sell generators, okay, home generators for when there’s a snowstorm or whatever. You’ve gonna give them a reason to get the generator from you instead of just going down to home depot and just picking one out. And what you’re in competition with is whoever first going to be there at home depot to answer their questions. When I think about the last couple of times that I went to home depot, maybe that’s not that big of a hurdle to get over, but you’ve gonna give them reason to trust you. And to go ahead and click that freaking button on your website instead of hopping in the car.

Andrew: Do you worry about, this is an objection here from people. Do you worry about providing all these rich, fantastic information to help a customer make a decision to really inform them about the product and then, once they have learned everything from your side, they hop on over to Amazon and purchase it there at a 15% discount? Is that something you worry about it?

Dave: No. The reason that I don’t worry about it is because; number one, there’s not a damn thing that you could do about it and number two, if you don’t provide that information, there’s no reason for them to come to your website in the first place and number three, if you don’t have a comprehensive website with good information on it, they’re probably not gonna rank in there and they’re not gonna see it anyway. So, it’s something that you can worry about if you want but there’s nothing you can do. Not everyone that comes to your website is gonna buy. That’s just the way it is.

Andrew: One thing I found, too, is, you’re can’t worry about it, because you’re always gonna have those people that are just plainly price sensitive and they’re gonna use you as a resource. I think you’re also gonna have people that come to your website and based on the information and the expertise that you present, if you help them make a purchasing decision, a lot of people don’t forget that. They’d appreciate that. And as long as your product is not grossly overpriced, a lot of those people will thank you by giving you the business.

Dave: They absolutely will. And I think most of us are like that in our own lives. When I click something out for a bid, when I want to get something done on the house or something, I don’t usually take the lowest priced contractor. And I don’t usually take the highest price but sometimes I do. Mostly, I use the guy that makes me feel the best. The guy that walks through the house and I think, okay, this guy actually understands what’s happening here and he understand how to do this. Maybe he talks about another person, two streets over he had the same problem and he fixed theirs’ whatever, whatever the case may be. It’s about establishing trust and coming up with the level of comfort.

Andrew: Yeah. I agree.

Dave: None of it has anything to do with how pretty your website is.

—– Approximate 35:00 Mark in Video ——-

Andrew: Yeah, that’s true. Great point! Speaking of which, I’d love to transition into the supplier’s quickly. So, in terms of the products that you sell, do you stock in terms of percentage maybe a break up. Do you stock all of them yourself, do you drop-shift them from the manufacturer? How do you source your product? And how does that work?

Dave: What I normally stock are the consumer items. They tend to be smaller, easy to ship. Most of them weigh under 20 pounds. I also stock consumables. In the case of ultrasonic cleaners, I’ll stock the cleaning solution because a lot of time, people just wants to get what they all concentrate. So, people just might want one quarter of that. The things that I have drop-shift straight from the manufacturer are the big machines. And that’s for a couple of reasons. Number one, by just having them drop-shift, I don’t have to buy them in advance and carry all this inventory. At any given time, I’ve got at least $30,000 worth of equipment.

Andrew: Wow!

Dave: Yeah. I wish I didn’t but I’ve gonna have that much. I stock the accessories for the big stuff. I stock the small consumer stuff and I stock consumables. Big machines, 3D microscopes, all of that really expensive stuff. Drop this stuff, shipped from the factory all because I don’t want to hold of the inventory. And also, shipping is not insignificant one of our most popular item is a box that’s 31’’X 27’’X 24” and weighs 43 pounds. And I’ve gonna tell you man, some guy wants it second day for Virginia to Bakersfield, California, you really gonna do a few hundred dollars. I’m not gonna pay to have it shipped here and then, I have to ship it all the way out there. And at some point, it just become a little too much.

Andrew: So, this suppliers, the ones that you’re drop-shipping, I’m guessing because of the edge of the equipment, you know, they’re high-end, industrial products, they don’t just accept, they probably don’t advertise and encourage people to drop-ship based on the business models. So, are these suppliers that you found based on your previous experience in the industry, or are they suppliers that you found on your own? How did you come to build a relationship with them?

Dave: It’s actually a mix but let me back you up just a little bit. When we talked about drop-shipping, a lot of manufacturers have their product line split up and some of the stuff that they sell; they actually have their own direct sales people. Other stuff, smaller items, they can’t afford to fill a direct sales force. So, they just use distributors and that is what the distributors are for. You are going to be their sales force. They don’t have to pay your medical insurance; they don’t have to deduct FICA, they don’t have to do any of these stuffs that they have to do with an employee. With you, all they have to do is let you buy it from them and give you your cut. So, don’t think that it’s hard to find manufacturers that will drop-ship. The hardest thing to find is a manufacturer who is actually in the US.

Andrew: Really?

Dave: Yeah, yeah. It’s a lot harder than it used to be. And that is actually one of the reasons; one of the things that actually pushed me from being a manufacture’s rep into going full force with internet sales is that starting in the early 2000’s, you’re way too young to remember this and I’m a lot older but I could remember Ross Perot running for President and back then the big debate was over NAFTA, the “North American Free Trade Agreement”. And Ross Perot used to go around telling everybody that sucking sound you hear is all your manufacturing jobs heading for Mexico. Forget the politics or you think whatever you want about that, but he was right. What the people of Mexico did not understand though is that Mexico is just where we stop to refuel on our way to China.

Andrew: So, with products today then, is it possible, if you have a manufacturer in the States, you can chat with them, and maybe come back to how to approach them, in a minute but is it possible to be able to drop-ship from, a lot of these manufacturers overseas, do they have maybe a warehouse that they’ll ship everything to in the United States that you can then say that once it gets imported then you can drop-ship it to a sub-warehouse? Or are you just out of luck?

Dave: No. What you’re describing there is exactly right.

Andrew: Okay.

—– Approximate 40:00 Mark in Video ——-

Dave: One or two things that are happening normally, because so many manufacturers took foreign stuff out to other countries where labor is much less expensive and where they can do a lot of stuff they can’t do here in the US, to save custom and manufacturing. And they would only have one or two situations where everything will come in on a ship from China or whatever and there will be a US location and the equipment will fan out via drop-ship to individual customers if you got that kind of arrangement. Or they will ship inventory to bigger distributors. I even had a couple of situations where I can buy either from the manufacturer directly or I can buy from another distributor. Let me just add in the side here, I want to tell you guys, don’t be afraid to your competition. Those guys can be a tremendous resource, absolutely tremendous! I have a couple of competitors on one of my product lines where if I’m out of something, I can call them. I can email them a packing slip and they will drop-ship it to my customer for me. And I do the same thing for them.

Andrew: Wow.

Dave: So, cover each other’s stock requirements.

Andrew: That’s a great tip! That’s such great advice!

Dave: Well, you know, being in competition with somebody doesn’t mean that you want their children to starve, right? It’s a big internet. It’s a big country. There’s a lot of stuff going on. It doesn’t have to be mean spirited.

Andre: So, how do you find these manufacturers? You know, let’s say, for someone with your experience and your back ground, you have some industry connections by also managing, sometimes you have to go out and find suppliers without, maybe, having those connections. So, for someone who’s listening and who doesn’t have e-commerce business but maybe they have an idea for something that they want to go online. There’s kind of the traditional rites, you can go the world wide brands, you can go to some of these whole set directories, you can go online and search but are there any other ways that you approach the kind of supplier’s search the contact files into find them and outsource them?

Dave: Yeah, absolutely. When I have identified something that I want to tackle or niche that I want to or what kind of equipment I think I might want to sell; first off, I want to find out who’s already selling it. And go to their website and take a look at it, take a look at the pricing and maybe make up a spreadsheet, you know, to find out what kinds of pricing people are getting up and I’ll try and find out who the manufacturer is. And sometimes, it’s just easy as just, very carefully looking at pictures of the product they are maybe, downloading it or blowing it up or whatever, trying to find that data. Sometimes, what I would do is actually buy the least expensive one from someone that’s already selling it and just have it sent to me and normally then, you can find the manufacturer, it will be inside the owner’s manual or it will be on the label on the back of whatever it is but you’ll be able to find out who’s actually either manufacturing it or let’s say, a couple of page in China or Malaysia or something. You can find out who the main importer is.

Andrew: Will that main importer be stamped on the product?

Dave: It always has been. There’s always been something; there’s always been a way for me to track it down. Another thing that you can do is, you know, and this is gonna break the heart of some of the people watching us. Guys, you gonna have to pick up the phone, okay?

Andrew: That’s pretty terrifying for a lot of people.

Dave: You know what? It is kind of scary at first but, you know, ask yourself, what’s the worst thing that can happen, right? What’s the worst thing that can happen? And they will like, no click, okay. And it just reminds me of asking girls out in high school. I gonna the “no click” on the face to face for four years straight. You know, it doesn’t hurt that bad. You get used to it. The thing is that, when you start doing that, a technique that I’ve used and that I talked about in the book is what I used to call the “Amazon dance”. I’m an Amazon affiliate and I don’t do much in affiliate sales. I prefer to sell direct but I do from time to time, stuff will come in from Amazon but the main reason why I’m an Amazon affiliate is so that I can use pictures and other content from Amazon. One of the sites that I’ve got up right now, I actually was just haunting around for just a consumer item and I, myself, have a problem with my lower back and I sort of looking for back related products and I found one. And I actually built a site just using pictures on Amazon or off of Amazon and wrote my own descriptions and, I think you’ve seen it; it’s a nice, little website.

Andrew: Yeah!

—– Approximate 45:00 Mark in Video ——-

Dave: Once I had it set up, which is some basic stuff from Amazon, I just called the biggest company in that industry and pointed them on some of my existing sites and pointed them on this site and I said, “Hey, I would like to sell some of your stuff too.” Now, the stuff that was on my site, I mean there was a real shopping cart on there and you can buy it off the site but I had my price set so if you bought it from me, I can turn around and buy it from Amazon and then, send it to you. Okay? And actually that’s not a long-term thing but if you want to have something to show somebody, if you want to have something to establish some credibility, that’s one way to do it.

Andrew: So, what you’re saying is, in some of this manufactures, they may not drop ship for everybody, they’re not gonna be putting out fliers to try to drive people to drop-ship because that’s maybe not their business but if you can track record, maybe in your case, or if you can put up a website that looks credible and then you call them up and say, “Hey, here’s what I’m doing, here’s what I have,” and establish some trust and credibility. Then, you’re saying that, a lot of times for manufactures will be willing to drop-ship for you if you can convince them that you’re worth their time and hassle.

Dave: Yeah! And it doesn’t necessarily mean that they’re gonna drop-ship everything but maybe they’d want you to buy a few first or whatever. Sometimes, there’s an element of risk but, you know, here’s the thing about setting up a site and doing what I call the “Amazon dance”. It’s disingenuous, yes, a little bit, but when you talk to one of these people at the manufacture’s place, you’re talking to sales manager, what that person on the other end of the phone wants to know is, you know, “Are you for real?” Or are you just gonna be another scrub on her email list which she’s gonna be sending pricelist and letter throughout and you’re gonna work her and you’re not gonna do anything with it. When you show them that website, especially if you take care and you really build it, and you try to sell stuff on it and you know what, for me it actually worked. I sold a few things even though I had the same stuff that was on Amazon or it was higher-priced. It worked! And then, this big manufacture looked at the site and they were like, “Yeah” or “You can sell our stuff too!” And then I just blew the site up and put up all of their stuff on it. That’s one way to go about it.

Andrew: Wow! So, you can use Amazon as just, even if you’re not making a ton of money, but you can use them as a temporary supplier to test, not only to test the market but to get in the door with the manufacturer.

Dave: That’s exactly right!

Andrew: That’s great! Dave, can you tell me about your team a little bit? Some people, I mean I would love to hear the logistics and the behind, kind of the back office stuff, on how an e-commerce business works. Can you give me an idea of the people that you use, your team, how you ran your phones, just kind of behind the curtains look at how the business operate?

Dave: Sure! The way it’s set up is like, I don’t know if you can tell but I love to talk, so, I handle both the interaction with the customer who call in and a lot of our businesses, people are calling in. On top of that, I got my son, he sometimes comes down and he covers for me, he works for me when I gonna go out of town or vacation or whatever, doctor’s appointment or whatever that is. He’ll come in and cover for me although he has his own thing going on with all the Virginia. Aside from myself and him, my wife does videos and graphic works in addition to her own full time job. But then, I got a team that’s really kind of scattered all over the world. I have a guy that’s does coding for me that’s in, I believe, in Suri, England. My lady that does graphics for me is in Oz, she’s in Australia.

Andrew: And are they part time contract workers or employees?

Dave, No, they’re not employees. They are just like, when I need something done, I’d shoot out an email and then they’d flip it around and they send it right back. I’ve got a guy that does Word press sites for me who’s also an Oz. I don’t know if I’ve just been lucky but, you know, every single person I talked to from New Zealand and Australia has been awesome. They’re very cool people. They’re just really cool people. So, I got 2 people over in Oz, I’ve got the guy over in England and Cody, the lady that handles my main e-commerce website stuff and my yahoo stores stuff, the coding for that, is based in Illinois. Who else have I got? I’ve got a couple of other people that I use here, but that’s really the core of the team. And you know, that doesn’t count obviously, the people who manage your business gross you’re gonna have to have on board anyway which is, of course, you’re gonna have your accountant and your lawyer and do bankers always at least 2 banks. That’s pretty much it.

Andrew: So, really, you’re kind of handling, when it comes to interaction and then, you’re really leverage a team of contract workers. You’ve got access to programmers and designers and writers but you don’t usually have to have long staff all the time, which is great.

—– Approximate 50:00 Mark in Video ——-

Dave: No, absolutely not! And I don’t think at this point, in the way the world is working, I don’t think there’s a reason to. And I forgot to mention Lisa, my contact lady. Hi Lisa! She might watch this. As I can see maybe you have 30 e-commerce stores or just 2 gigantic ones, you know, maybe you need to do that but when you’re going after niche stuff like I am, I just don’t need full time employees. I just contact them as I need it, I just send them. And I actually enjoy having people on the other side of the planet. One of the reasons is that, I have an idea at an odd time of the day and I’ll shoot her down. I’d say, “Hey Belinda, I need this and this, can you do anything for me”. And I get up in the morning and it’s in my inbox.

Andrew” Yeah, the wonders of different time zones. Now it’s outsourcing.

Dave: Yeah and I love it!

Andrew: Yeah, that’s great! Dave, I want to chat about your eBook for a little bit here. So, the “Grabapple Guide to E-commerce” and if anyone wants to check that out right now, it’s grabapple.com. Is that correct?

Dave: That’s right. All in one word, grabapple.com. It’s spelled just the way it sounds.

Andrew: grabapple.com. So, can you tell me a little bit about the eBook? And what made you right it? And then, specifically, what it contains that would be helpful to us, e-commercefuel listeners and readers.

Dave: Okay. What the eBook actually is; is really two parts. Part one is how I ran an e-commerce business and I am talking detail. I go down to the level of how I organize the files in my file cabinets, I mean, really down into the nitty-gritty; what it looks like day to day, how I talked to customers, what kinds of things you say to customers, what kinds of things you don’t say to customers. With regards to suppliers, not just how to find them but the importance and how to develop a relationship with the person inside the factory. You know, you gonna find yourself a champion or if not a champion, then at least some who knows what’s going on. And there will be someone at every factory or at every major distributor that you can trust but I go in to how to find that person and how to work with that person. I talked about run a website where you’ve got products from competing manufacturers and the right way to juggle that and handle that so that you give everybody their just due without them worrying about the fact that they’re on the same website with someone they’re competing with. And there is a way to do that and to do it right so as that you don’t cause anyone any consternation. We go into first starting out, setting up your website, how to build your team and how to deal with competition. I got a big chapter in there on hoe to generate content. And that’s all part one, it’s actually the nuts and the bolts of it, how to put it together. In part two, I actually take a website with just a giveaway, the free word press thing and put an e-commerce site up. And I do it step by step. And I walked you through that step by step. And you can literally take the book and read through the first part of it; set up, people and company and everything, and read through the second part of the book and actually build the site. You can build a site just reading the book. Just do what I do, it’s full of screenshots, everything’s in color and you can literally put together your first e-commerce site just reading through the book.

Andrew: So, I mean, in primer from beginning all the way through getting the site alive and running, how to get an e-commerce site built based on your ten, twelve, fourteen years of actually doing it.

Dave: That’s exactly right. Not just to put that first website together for nothing but how to go about finding the products, how to go about finding suppliers, all the rest of it.

Andrew: Is there a sample, I can’t remember if I saw this right, is there a sample that you provide on your website for people who may be interested but they’re not sure?

Dave: Sure! As matter of fact if you go to the website, if you look in the upper right hand corner, if you sign up for the mailing list and I will not bombard you with emails, don’t worry guys that’s not what this is about. If you sign up for the mailing list, you get chapter 10 right away, which is the chapter on content creation. And you can judge by reading though that chapter whether or not the rest of the book is gonna be worthwhile. I gonna a pretty good kill writing on that, when people look at that chapter, they normally come back, a lot of them and buy the book.

Andrew: Yeah. I’ve gonna say and I obviously taken a look at the book and it’s a fantastic resource. It’ in depth, it’s detailed, it’s 200 plus pages, it’s well laid out and it’s really comprehensive. So you know, if you’re thinking about getting involve and starting an e-commerce business for an investment, it’s not much, it’s right around $50, maybe a little bit less.

Dave: I think it’s $37 right now.

—– Approximate 55:00 Mark in Video ——-

Andrew: It’s $37. It’s an incredible bargain for the price. So, having personally seen it, if you’re a regular on the blog and you see what I put out there, I don’t promote a lot of stuff, I don’t try to hawk a lot of things but this really is a pretty valuable resource. And if you buy it, and it’s not worth it, I’m sure there’s a money back guarantee, but if there’s not, I’d be happy to refund anyone’s money who buys it and doesn’t think it’s worthwhile. It’s a quality product. And again, that’s grabapple.com. That’s right?

Dave: Grabapple.com. There’s a 60 day money back guarantee. If you flip through and you don’t like it, just send me an email and I’ll take care of you.

Andrew: Perfect! Dave, it’s been wonderful chatting with you, picking your brain and kind of seeing the evolution of your business all the way from the nineties to now. As a parting note, for the audience, for someone out there who’s thinking about starting their own e-commerce business, not quite sure but what advice or what parting word would leave with them as a kind of getting started with this journey.

Dave: You know the best time to plant a tree is ten years ago and the second best time is right now. If I was gonna tell your readers one thing, I would say, pull the trigger. Pull the trigger, right now! As soon as your through watching this, pull out whatever spreadsheet or saved websites or whatever research you’ve already done while you’re thinking about this, or filling with it or trying to make up your mind and just do it, man. Pick something, put up a site, it could be a little word press blog with a free shopping cart, do it! My book is great! Andrew’s course is great! His website’s great! But you got to get in a tranches, man. And when you get in a tranches, resources like the ones that Andrew and myself are providing are gonna make a lot more sense to you. So, if I get to tell you guys one thing, it’s do it! And do it now!

Andrew: Yeah. Dive in, get your hands dirty.

Dave: Absolutely! Get in there and just get filthy.

Andrew: Yeah, good advice. It’s been a pleasure having you on, again great peek in your brain and chatting with you and a lot of insights and wisdom. Hopefully, in the future, maybe we can get to do this again. And maybe focus on one area and a little more detail but again, thanks for coming and it’s been a pleasure.

Dave: Same for me and I look forward to doing it again. Thank, Andrew.

Andrew: Absolutely! Thank you everyone for watching and hope to have more in the future. Take care.

Dave: Thanks guys!