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Hey everyone, my name is Andrew Warner, I’m the founder of Mixergy.com, home of the ambitious upstart, the place where hundreds of entrepreneurs, at this point almost 700 actually, entrepreneurs have come to tell you their stories. The question for this interview is how does a solo entrepreneur build an online repair business that generates over a million dollars in sales? Anthony Magnabosco is the founder of Milliamp, an iPhone, iPod and iPad repair company. So, as you probably guys in the audience know, few people realize that if they drop their phones and the screen cracks, they can actually get it repaired and the company that repairs them is Milliamp and that’s what I invited Anthony here to talk to, to find out about how he built up this business. And Anthony, you’re having some Internet issues today, right?
Anthony: I am, there’s a little bit of an upload speed issue, and maybe that’s because we have a voice over IP system and, of course, our phones are ringing off the hook, and so when we’re talking to them I think that’s affecting the video quality here, so I apologize.
Andrew: All right, it happens. In fact, I was looking, it was Road Runner by Time Warner Cable issue, they’re not giving enough bandwidth which happens from time to time. I used to be on their network and it was painful sometimes. Let’s get back to Milliamp and find out how you built up this business. I want to ask about this trip that you took to Vegas. You made a deal with your team that if they did something that you’d take them to Vegas. What was that something that they needed to do to get that trip?
Anthony: Well, that’s right. You know, number one we have a very hard working group of people. It’s like a small family. We’re very tightly integrated so when we have a good sales day we like to share that with the staff and of course, there’s some seasonality with our business and even down to the week we see a little bit of trending but come Cyber Monday and Black Friday, those are very big sales days for us. So about three years ago, I had a challenge to my staff and I said, tell you what, on Cyber Monday, if we break a $10,000 day of sales I’m flying everybody to Vegas and sure enough we actually hit that goal. We flew out there, stayed at the Bellagio, had dinner, a couple people saw a show and it was just one of those events that kind of go down in company history. You know, every once in a while somebody will mention that trip and how great it was and it’s just really inspirational and it was fun and it just generated a lot of good will.
Andrew: $10,000 sales in one day on Cyber Monday. What’s your typical day like? How much sales do you guys bring in?
Anthony: Our sales from range on a bad day from $1500 a day in sales to on a great day, I’d say $5000-$4800 in sales. We do see some seasonalities, too. You know, Christmas time is just crazy, we’ll see a 6600-$7000 day. But what’s interesting is that tends to trend throughout the week. Mondays and Tuesdays are very busy days. Saturdays and Sunday are horrible days and it’s almost always like that and I’m not exactly sure why. I have some theories on why that might be.
Andrew: What’s your theory? I would imagine if my phone broke, I wouldn’t deal with it during the week. I would just deal with it on the weekend.
Anthony: My theory, and I have no statistical evidence to back this up at all, I have a theory that the phone is getting broken on the weekend and their searching or talking on a phone to a friend and at that point they deicide Hey there is an options and then Monday, Tuesday they go back to work and then they act on that so that’s the working theory. I really have no idea, we’ve never polled our customers to see if that’s the case but always Monday, Tuesday very high sales and then it always trends downwards into the weekend and then we see a peak the following week.
Andrew: I got to tell you, I’m really surprised that you’re willing to share these numbers. I’ve had other entrepreneurs give me their annual numbers, give me this price they got when they sold their company but to break it down to how much revenue you’re doing per day and to say as you said earlier when I wrote down that you share you numbers with the team aren’t you concerned that someone on your team or someone out in my audience will see that there’s revenue in this business and will go and create a knock-off business?
Anthony: Listen, I thought about Tweeting out my numbers to be honest, I’m not afraid of it. I’m not afraid of sharing, we’ll maybe I wouldn’t Tweet out a bad day but I like to craw a little bit about good sales days. I think it energized the staff and on the same token I’ll be sure to explain to them how expensive things are to so they don’t just see money coming in the also see expenses going out. But no I’m not afraid of sharing that and I think that it helps demonstrate to customers and anybody watching this video that were not a fly by night company, we’ve been around for years we have the money coming in and in our bank accounts to back up the business so when we’re working on a $1,000 I pad and break it because we did something wrong, that happens every once in a while, if it happens we step up and buy a new one.
We’ve got the financial backing to do that and we do the right thing when we have to so I’m not afraid of that at all and as far as other competitors, we providing numbers in not necessarily going to encourage somebody to get into this space I don’t think. I’ve got enough people getting into this space without telling about how lucrative it could be. Everybody wants a website these days and to be in social media and to set up a business in their dorm room and compete with me and that’s a problem. I don’t think I would be exaggerating in anyway by just telling them my sales numbers.
Andrew: OK. I want to get in to the story of how you built up this business and how people can learn from your experience but since you brought up expenses, what are the expenses and what kind of expenses do you have? You tell me.
Anthony: When I first started the business and I started buying battery replacement kits from these companies that were out there and really getting the feel if I should enter this space. I thought my biggest expenses would be batteries and parts and packaging and tools and printed instructional guides and marketing would probably be lowest on the list. Well just the opposite happened. What I found buy buying in bulk you get to drive down the cost so he parts, the batteries, those are the cheapest things, it was actually the marketing and the getting the people to the website that really cost the most money.
Andrew: Well, I wouldn’t have expected that. Alright, let’s go back in time and see how you got here and see what you learned along the way. Go back to; let me see what I wanted to know. Right now your kids love the business. You and talked before the interview started about how your son will pretend to drop a phone and break it, your daughter can pretend to fix it. They basically are fantasizing about being in your business but before you got in this business what were you doing and what was the situation like as a result of it?
Anthony: When I first got in the business they were awfully young and I was doing a lot of traveling. I was working for an insurance company and doing some consulting as well. I’d fly out on Monday, I’d fly back Thursday and when my daughter was very young, I’d return and wake up the next morning on Friday and she would not recognize me at first and that just kills you. You start re-evaluating things and I decided that, I always wanted to get into ecommerce and that was just really the right time. I wasn’t happy doing what I was doing, I was at the very risk of bureaucratic red tape, departments not talking to each other company and said I just want to go on my own and start something new and that was really the genesis of it .
Today, this weekend I had to pop in and run an errand on a Sunday and my family was with me and they immediately went to the window, it’s sort of a doctor’s office window, walked in and my son was pretending to be the customer who dropped his phone and my daughter was pretending the New Lamp representative taking his order at the window and giving him all his options and all of this other stuff. I never really thought it would end like that, after speaking with you, you’re a…..
Andrew: Jeremy, the producer?
Anthony: Jeremy, the producer, really got me thinking that yes, it really has come a long way. My family life has been better as a result.
Andrew: You know, I’m glad we talked about that. As I did with you, I usually start my interviews by talking about the numbers so the audience gets a sense of how big this company they’re about to learn about is. But to talk about the value of building a business beyond the dollars and cents, beyond the number of customers and to really see that it enabled you to connect with your family is significant.
I’m glad that we talked about it and I should do a better job of talking about those issues. Both the frustrations and challenges of entrepreneurs is that they try to spend time with their family. Also, the upside once you get it right, and we’ll find out how you did it and how you got help and were able to spend time with your family. There is a significant upside.
You mentioned a little bit what you were doing before you started Milliamp. Can you talk a little bit more about it? You were working for, as I understand it, a large insurance company?
Anthony: That’s right. My background is actually logistics with a minor in information systems so I was developing access databases and anything that physically left the facility went through my department and I developed a few programs to keep track of that kind of activity. I just wasn’t happy doing what I was doing.
It goes back to when I was reading an article about how the iPods are very difficult to open up. That just sounds very silly to me. So I started this business on the side and I’d go to work, come home in the evening, and work on the website a little bit. When I finally launched it and business started taking off I was ducking out to take phone calls during the day. I would check the emails and the orders throughout the day.
I’d even go so far as to generate shipping labels and I would keep inventory in my car so that as I was driving home from my day job I could actually mail out the shipments for that day. Then when I got home I would handle all the customer service related issues, and website design, and all the other things that come with building a business.
Andrew: And who was doing the actual repairs?
Anthony: At that point we were primarily selling do-it-yourself battery replacement kits. 80% of our business was us packaging up a kit, which included a battery, a tool, and some detailed instructions for you to replace the battery yourself. We did provide the option for people to send their device to us. I say us, but at that point it was really just me. I’d change out the battery, test it out, and send it back.
That was really just a small piece of the business. I was doing everything. I was ordering material, I was filling orders, and answering phone calls. If you looked at the website you probably wouldn’t get that impression. I had an 800 number, I had five different email addresses, one for shipping, one for customer service. You name it. We had a different prefix for the email address just to make it look bigger than it really was. That’s really how we started out.
Andrew: How do you work a full day and then on the side build this growing company? Doesn’t it kill you? Doesn’t it exhaust you?
Anthony: Yes. I was exhausted. There was a point there where after several months of doing this my wife came up to me, and this was the day after I had fallen asleep at work at my day job. There was a little bathroom down the hall where if you kept walking down to the bathroom around the corner there was a bench and showers and that type of thing. I had actually laid down on that bench and fallen asleep for about two hours.
There were people walking around me and just didn’t disturb me, but I knew I couldn’t keep doing that at my day job. My wife basically said, ‘listen Anthony, you’ve got to decide are you going to keep doing your day job, or are you going to start doing this business full time?” I looked at the numbers and I really felt that I could make more money doing what I was doing with my side business, which became Milliamp.com, than my day job. With her support, I was able to do that, and here we are.
Andrew: I’ll ask you about how you launched and how you built to this number, but I’m wondering how long did it take you to build your business to a place where you were earning as much running it as you were on your job?
Anthony: I think we used $3,000 of our own money and got a business credit card and that really started the business. It wasn’t that expensive to start up. The website really didn’t cost all that much. I was naive and didn’t get a website with a lot of features, so that kind of ended up biting me, but you don’t know what you don’t know.
It didn’t take maybe $4-5,000 and about a month after I started the Google ads that we were running were generating enough income. In fact, when I launched the business, I mean I used a PR web press release for 200 dollars and started running Google ads. And, gosh, I was so naive with Google ads, but, you know, the sales for the first month stunned me. I actually had to turn off the ads for the following month because I was so overwhelmed with the orders that were coming in, and I was a one man show at that time. So I just really couldn’t keep it up. And I knew that I needed to re-evaluate it and retool it and become more efficient.
Andrew: Wow, so within one month you were earning about as much on your business as you were earning on your full time job before?
Anthony: Oh, absolutely.
Andrew: Wow, congratulations, that’s impressive.
Anthony: Yeah, yeah, thank you
Andrew: Where did the idea come from?
Anthony: You know, I had an iPod. And I would exercise with it every day and, I don’t know, I read an article in PC magazine or something and they were going on and on about how the iPod was specifically designed not to be opened. And that just seemed ridiculous to me, that a company would build a product like that. But it was true. And I thought, well you know, when my battery dies what am I going to do?
So, I researched it and found out that there were a few companies already out there selling do-it-yourself battery replacement kits. So I bought a few of them, tried to open up my iPod with it, and the kit was horrible. Their batteries didn’t fit in some cases. The tools failed. The instructions that they included then were in black and white and had typos and all that other stuff, so I knew that I could design something better. And that’s really kind of how it all started and, you know.
Andrew: You mean design better batteries? You were actually going to produce your own batteries for sale?
Anthony: No, we never got to that level although, you know it’s funny. When I first started I was paying, you know, just an insane amount of batteries, getting them from somebody in New York, you know. And as you start the business you start to work your way up the supply chain and get them for a cheaper and cheaper price, so. But, no we did find a company with just a very good high quality battery. They fit. In some cases I was able to get a battery that had more power then the original stock battery, so that was a nice selling point. And yeah, that was….
Andrew: How do you even find a battery company that’s going to supply you with batteries consistently, dependably and in a way that beats this competition?
Anthony: You know, when I first started I Googled it and I thought, you know, there’s no way I’m going outside of the country. I’m going to somebody in Michigan, it was Michigan actually, not New York. But yeah, I just started getting them and just paying a huge amount of money. But it was funny is suppliers seek out merchants. And anyone that’s in this business or a similar business probably gets a lot of spam to that affect. So the people were coming to me, suppliers were coming to me and offering to send me samples which we gladly accepted and tested out and really just narrowed it down. And I think a lot of the competitors at the time probably just didn’t spend, you know, spend the amount of time to research it and see which battery out there was the best.
Andrew: I see. So you’re just basically Googling and those companies were making themselves available to you the way that your customers Google and you make yourself available to them. Wow, I would have thought Ali Baba or some Chinese website or friend of a friend who introduced you. No, just standard Google straight up is how you found them?
Anthony: Pretty much. There was a time, I did actually do a trip in 2006 to (?), there was trade fair there and just to get some ideas and get an idea of some, you know, new sources of supply, you know, new suppliers for parts and that type of thing. But, yeah, very early on it was just, you know, again there’s a lot of naivet?© in there and, you know, in hindsight it just maybe sounds a little crazy to just Google it, but that’s exactly how it started. And you start to find cheaper and cheaper sources without sacrificing quality and that was really key to our growth.
Andrew: What did the first version of the site look like?
Anthony: I urge everyone not to go and look at the Way Back machine and look at what our first site looked like. I’m sure everyone will now. But it’s ipodjuice.com was the first website that we launched. And we actually still have that site but it looks a lot different. Way Back then…
Andrew: Now, it redirects people as I remember to Milliamp, right?
Anthony: We actually have, we still have the ipodjuice site up and running and you can even go through the check it out and place an order there.
Andrew: Okay.
Anthony: We have so many customers from the old name that are familiar with going to that site, so we really couldn’t bring ourselves to kill the site. So we do run both sites concurrently.
Andrew: Okay, people go, if, and you don’t want them to (wink, wink), they should. If they go back to the Way Back machine online and search for ipodjuice.com they’ll see the old version of the site and see what it looked like. What did it look like? Can you describe what was on there? You mentioned earlier that you bought a website without a lot of features, it screwed you later on. Tell me about this. What was there and what wasn’t there?
Anthony: Well, okay, so. You know, in my mind, you know, we provide batteries, new batteries for your iPod so I’ve got the domain ipodjuice.com and I thought well, juice, there is fruit juice right? So it made sense to me in my mind, at the time, to put a header up that was just all orange and then with our logo plastered on top of it and then we sort of persuaded the whole fruit motif throughout the site. So if you went to the iPod mini, for example, you would see a pineapple there or something alongside the iPod.
So it looked really, I mean I was very proud of it at the time and I’m still proud of it but it was confusing and a lot of people asked “Are you selling fruit juice or are you selling batteries?” They would literally say that so it forces you to rethink things and sometimes people don’t quite get the jokes at the start but, yeah, go check it out if you want a good laugh.
Andrew: And what did you use to build the site, what did you use to collect credit cards in the early days, how did you get this thing up and running?
Anthony: I never wanted to mess with PayPal, I still think there’s a perception that if somebody’s just making a purchase on PayPal, at least a physical product or service, not to take anything away from the listeners out there but I think credit cards add a little more stability. So from the start I wanted to have integration with a reputable merchant provider and we’ve been using authorize.net for six years and so we have integration for credit card processing there. The website was very basic it was not optimized for search. The checkout did not offer international orders, well that’s just ridiculous.
Now I didn’t know that at the time because it didn’t occur to me at the time to think about that but when you start getting emails from people in Japan, Canada and Australia that are having trouble placing an order on your website you start to thing Oh my goodness I didn’t even think of that so I can go on and on about those of little features that we were missing but again you learn mainly from your customers telling you but you learn what’s missing and what needs to be added and we’ve come a long way.
We have a one page checkout now, we ship nationally, our website pages are optimized for search, we’ve integrated, during the checkout, where in addition to putting first name, last name and email address, we ask customers for their Twitter user name so we can tweet and update to them if they like. So we’ve really come a long way out. I love talking about my business, the website and all that stuff and it’s just funny to see the websites evolve over time.
Andrew: You said it wasn’t optimized for search. How big a piece of you business is searched right now, customers that are coming to you from search?
Anthony: We do have a physical shop here in San Antonia with a walk in office where people can walk in and drop off their devices that compromises about 20% of our business all the rest of traffic, our business does come through our websites. Now we mentioned two websites there but we have several so we try to purchase domain names that have key words embedded in them so they rank a little bit better. We really learned a lot about natural search and we really had to, as I mentioned to the producer, we spent nearly $20,000 on Goggle Ads per month to drive traffic to the site.
Google was sending us Christmas gifts and that type of thing but it became apparent to me, especially as our business changed from one that just sends out do it yourself replacement kits and parts to one that needs to convey a sense of trust and convince people to send their expensive devices to us, we realized that natural search results were really critical to our growth and we had to phase out the pay per click and the paid ads.
Andrew: Was paid still working when you started to phase it out?
Anthony: Working? Ok, so the conversion rate on me selling a do it yourself battery kit was 8, 9, 10%, I mean incredible.
Andrew: Off of Google. 8, 9, 10% off of traffic you were buying?
Anthony: iPhone came out the battery was soldered in and those things were very difficult to open.. The writing was on the wall that we can’t in good faith sell a battery replacement kit for a battery that has to be de-soldered and soldered back in and of course you have to spend 30 minutes with specialized tools and knowledge to get into it so we realized that we really need this out so the conversion rates on somebody Goggling iPhone repair are much, much, much lower then somebody goggling a do it yourself batter replacement kit for a fifth generation iPod video.
Andrew: Oh, I see.
Anthony: Those devices are much easier to open. We can show a video showing those are my hands in the video, how I can replace the battery in two minutes. So, when you introduce the complexity of a repair, conversion rates are horrible. I don’t know, and there’s still people running it so they must be making some money on it or they’re not paying attention to the conversion rates. It’s the only conclusion I can come up with.
Andrew: I see. So if I understand you right, it doesn’t work for the repair business, but it did work buying ads on Google, it did work for the battery sales business and once you had to switch from battery sales to repair, you just couldn’t keep using Google paid ads and that’s why you had to go for SEO and SEO’s free. Actually, you tell me, what are the benefits of SEO beyond the fact that it’s free?
Anthony: SEO is not free.
Andrew: Search Engine Optimization is not free. Why not?
Anthony: Absolutely not, because while you may not be paying for a click, OK, just a brief 101 here, when you click a Google ad, you owe Google the going rate for that keyword.
Andrew: Two bucks a word.
Anthony: Two bucks. Let’s say two bucks. Exactly. So, they click my ad, I pay Google two bucks whether you buy or not. If somebody hits back on their browser and perhaps clicks on my ad again, I might have to pay them again if they’re not watching that type of stuff. They can be very expensive. In the natural search results, those first ten listings, I don’t have to pay Google a dime for a click, but it takes a lot of work to get there, and that’s what costs the money.
The money spent optimizing it, doing all the things to get links, and all that other stuff. There’s just a huge market for search engine optimization and it’s not free, so while the click itself is free, the effort that goes into it to get there is definitely not.
Andrew: OK. Do you outsource it or do you guys do it in-house?
Anthony: We do everything in-house with regards to that. We are huge into social media. We’ll do anything for a link. I’ve thought about standing on the street with a sign that says, “Will work for link” or something like that. But, yeah, links are very important.
We do spend a lot of our time. We do have a guy. He actually works from home, but I can AIM him so if I see something on the site that needs to be changed or I see a typo, or even right before this interview, I saw something and I was able to AIM him and he was able to update it before we even started the call. Yea, we do all that stuff in-house. We spend a lot of time on it.
Andrew: What did you message him about on AIM?
Anthony: We had a customer that called us last week. I ended up picking up the phone, and she was telling me that she was interested in buying a screen for her 4th-generation iPod touch, but nowhere on the site did it say if the screen was right for her 8 GB iPod touch, because there’s an 8, there’s a 32 and a 64. So, it never occurred to me that well heck, we should be showing the gigabyte capacity alongside the device so people aren’t confused.
A quick email to him, AIM to him last week, and he actually fixed that on milliamp.com, but right before the call, I noticed it was not on ipodjuice.com and I bet, I’m going out on a limb here, but I bet if you go to ipodjuice.com now and look on our homepage, and in the section for iPod touches, you should see gigabyte capacities there.
Andrew: I usually would go to it right now while we talk, but I don’t want anything to take away from our bandwidth. I’ve got an issue that you’ve had in the past, I’ve got an issue here at Mixergy where I am still doing way too much myself. You were a solo entrepreneur as I introduced you in the beginning, how big of an issue was that for you and how’d you deal with it?
Anthony: Early on, well, for the longest time, I was doing everything myself. I was ordering and filling orders and talking on the phone, and then it dawned on me that if I wanted to grow the business, I really had to get more people in. And so, my first hire was actually my brother who ended up, because I was working out of the house, so I wanted to bring in somebody that I could trust.
So, he was employee number two, and then it sort of dawned on me that I really needed to get someone in to help me with, at that time, Google ads and more time on the website and graphic design and really making things look as nice as I really wanted them to be. That being said, though Andrew, I got to tell you, I still work on the business. There are days where we’re short-handed and I will literally roll in at 4:00 in the morning to generate some shipping labels and package up some kits and head back to the house to get the kids off to school and then start my day.
You know, as much as I’d love to say that those days are behind me, but every once in a while, especially if we’re short-handed, this is my baby. This is my business and I need to keep it going. It is fun for me. It is definitely challenging, but there are times where you have to step up and even though there are days when I can leave at 2:00, those are somewhat few and far between still.
Andrew: There was a time there after I did a bunch of interviews about how to systemize your business that I was down to working on Mixergy three days a week and I had Mondays to just think about where I wanted the week to go. I had Fridays to work on new projects and something happened over the last few weeks where now it’s just stretching, my interviews have gone from being on just Tuesday and Wednesday to now I’m looking at this week and I’ve got interviews scheduled for Friday, interview scheduled for tomorrow morning, for Thursday.
So they’re creeping up on the rest of the week and so is everything else. I got to find a way to bring it all back and I think that answer is to go back to the system, to go back to everything that I learned about putting systems together.
Anthony: Well it seems, you know, my experience with dealing with you and your staff, you have some tools in place to do the scheduling and the meeting with the producer went very smoothly and I know we had a little couple stops and starts today but I think you got it down. I mean, I’m not exactly sure what else you have to do behind the scenes. I’m sure there’s a lot that goes into it with the premium membership and putting together all the content. I’m sure it’s very challenging. Yeah.
Andrew: Well, we’ll get it back under control. Customers. You mentioned premium membership, that’s what we sell here at Mixergy. You guys are all about sales. How did you get your first customer?
Anthony: Boy, you know, the first customer we put the website out there, it was not optimized for search and we weren’t even running ads, yet, you know, on page four of Google, there we were so, you know, people were finding us. And then of course when we did the press release, that really kind of got the ball rolling and then of course with the Google ads, but then we started nailing the natural search and there was a time we were running Google ads and we were dominating five out of the top 10 listings in Google. So we had the number one ad rolling at the top there and then we had four or five spots below that for iPod battery or iPhone battery, or something like that.
Andrew: And you could do that because you had multiple domains. So it was multiple businesses in Google’s eyes that were controlling the page.
Anthony: That’s right. Google still sees my business as several different websites, which is completely fine with me, you know, I want to have as many shopping carts and websites out there as possible.
Andrew: Yeah, you know what? That explains why a researcher here gave me a list of domains. Should I even give the domains or would you rather not have them out there?
Anthony: I don’t mind you mentioning them, I may have rattled them off incorrectly, because there are so many. But I can tell you, I’m proud to say that I was able to grab iPad repair a year before the iPad came out. That was just sort of a lucky guess.
Andrew: Oh, that’s not on the list that I got. That is great.
Anthony: Yeah, that is great. And, of course, iPad-repair, so, yeah. I mean, we really try to get those key words out there. It’s a really important though not to do business with those key words, those trade mark terms in your name. That was one thing that we had to learn early on is that, you know, iPod Use is not a very friendly business name and Apple’s very protective of their mark. So it was very important for us to get out of being so iPod specific, which actually made sense because now there’s the iPhone and the iPad.
Andrew: Right. What about the name Milliamp? What does it mean and I’m a little concerned that when I say it that the audience won’t know how to type it in, how to spell it. It’s M I L L I A M P. What does it mean and tell me about that domain, if you could?
Anthony: Sure. You know, it is hard to say, it’s hard to pronounce and when I type it, I’ll sometimes type it three or four times just to make sure I didn’t put an extra L in there, so in that respect it is a little confusing. But batteries are measured in milliamp hours, so the great the MAH or milliamp hours of a battery, the larger the capacity, well, the larger the ability of that battery to hold a charge, the longer that battery can hold a charge. So, it’s sort of a play off of sort of transitioning, a name that shows that we’re transitioning out of batteries into something larger and something beyond just iPod batteries.
So, yeah, that’s really how we kind of came up with the name. The domain name was taken at the time. I think I had to locate the guy that did it and paid him $4,000 or something for it and I’m thinking that one of these days a car manufacturer is going to contact me because I think it’s a great name and I think it would be a great name for a vehicle, so we’ll see but, I mean we’ve trademarked it and it’s a registered trademark now with the U.S. PTO.
Andrew: And so when I’m looking for a battery or a device that has a battery in it, I want a bigger number next to the milliamp because that means that it’s going to hold its charge longer.
Anthony: Yes, for the most part. Now, there are some companies that will design a battery that’s just too large and too thick and it could actually damage your device and so when you go to our website and you look at the milliamp hours of batteries, that’s the maximum number that you can get into a battery. There are some sites that will go, you know, let’s take it to 11, right? So they’ll do 40 more milliamps just to show that they’re more than our but it’s really not possible.
You know, Apple’s designed these things, especially lately, you really can’t put a larger, thicker battery into an iPod Touch [??] are thin, the battery that’s in there is really the best that you can put in there, and lately that batteries that we’re coming up we’re coming up with are comparable to the ones that are in there as stock batteries.
Andrew: What happens when someone sends you a device, they claim they sent the piece with the device a cable or something and you open it up and it wasn’t there. How do you deal with a situation like that?
Anthony: Well, there’s a lot of CYA in this business. Every once in a while you get an unscrupulous customer or sometimes something happens during transit. Whenever we [??], and we have cameras all over the place. You might even see them in the background there.
Andrew: I do actually now that you mention it. I didn’t notice it before, but there is one watching us.
Anthony: Yes, it’s up there in the corner.
Andrew: Upper left of my screen as I watch [??].
Anthony: Yes, it’s right there. So we’ve got these cameras all over the place, and we’ve actually thought about putting our cameras on line so that people can see how legitimate we are. And that there’s people coming in and we’re walking around. UPS is bringing in 80 boxes, and that’s the type of stuff I think sells and people need to see that to be reassured. Yes, but in that particular instance, we’ve received devices, and now we un-box them under camera. We have these cameras that hover right above the desk, and we un-box them, and every once in a while we open one up and there’s a device that’s missing. We had once instance where this woman was about to crucify us and go to the BBB, because we discarded her retail case, her $80 retail case that went with her iPod. And we didn’t have it, you know. We showed her the video, and she just apologized profusely and was so grateful that we had that video to demonstrate to her that no, just her device was in the box, and not this expensive case. And we’ve dodged a lot of bullets.
Andrew: How do you organize your video? How can you go back and find that one video of you guys un-box her product?
Anthony: Keith, grab me a bin guys, could I see a bin. When we un-box a device we will look up the order number, actually we look it up before hand. Hand me that green bin would you? Yes, that’s good.
Andrew: You’re going to put on up right now so we can see?
Anthony: Yes, I’m going to put one up for you. In this case we have our bins color coded. Color means something. So what we do is we actually write down the order number on the front of the bin. Face that up towards the camera, and then begin to un-box the package. So then that stays up there as a record, and we have this great system where everything is date, time stamped. So as soon as we begin the receiving process, we know when that happened.
And then we can just go back. It’s awesome, and we’ve got these cameras that are motion activated, so they’re not normally recording, but as soon as there’s some activity going underneath them, they can start recording. And it all goes onto a DVR, and we store them on a 1 gigabyte drive, and I never throw out a drive. I’ve got drives that go back years, because every once in a while we have to pull up a video from six months ago, and see what happened in a particular situation. So yes, the cameras have been a real lifesaver in many regards.
Andrew: You’ve got another issue that I don’t understand. You and Jerome talked about something going on with an employee who was, was he stealing devices, what was going on there?
Anthony: That was a low point. Your producer asked me what’s the lowest point you’ve ever been in this business, and I had to really think about it because there were quite a lot. It’s a challenging business, and sometimes it’s a thankless business. But you know, we had devices that were just disappearing. We would receive them in under camera. They would be repaired, they would be tested under camera, and they would be brought over to shipping and then they would just disappear never to be seen. And this happened about three times before it became obvious that there was something going on.
And one of the biggest challenges we have to overcome as a repair company in Texas that services people all over the country is. Hey, we are reliable, we’re not going to steal your stuff. When you send it to us, we’ll do a great job. We’re going to get it back to you in a timely manner, and that’s it. Well, to have devices disappearing, of course, was very awful. So you know, I was able to pull up the video from my house and I went through hours of video one night, and I was finally able to find an employee going through the motions, and putting it in his pocket, walking out to his car, coming back in a minute later and it was all just all right on. So, of course, once we let him go, the thievery stopped and the customers that ended up with their devices stolen, ended up with something nicer than what they had. So, it all worked out in the end.
Andrew: You ended up buying them devices yourself?
Anthony: Oh, yeah, they got a credit in full, and then we ended up buying them something comparable or better.
Andrew: Wow… What’s your proudest moment with the business?
Anthony: I think my proudest moment was when… There’s a time that my father and I and my two brothers, we went to Italy and I was able to go for two weeks, and the business ran fine without me there. That was probably the happiest and most proud moment for me. To start it in my house, at literally a card table, and then to be able to walk away from it for two weeks and know that payroll would get done, inventory would get ordered, people would still show up and do their job and that type of thing. That was probably the proudest moment, to reach that point where I could actually step away and have an enjoyable vacation.
Andrew: What did you have to do to get to that, to a place where you could take two weeks off and know that the business was going to completely run without you? In fact, it’s two weeks, as I understand it, without Internet access, so you couldn’t cheat and actually be doing work at night to correct mistakes that other people made. How do you get to a place where you can have that freedom and know that the business is going to run without you?
Anthony: It wasn’t easy. It took a long time, a long time of training and grooming people, and developing checklists and who to call if things blew up; that type of thing. I did have a cell phone with me, just in case we get an email from a lawyer or some injured customer or something like that. It just went really smoothly. Can I put my finger on it and say that there was one thing specifically that I did to get there? No, but a lot of training, a lot of oversight and, I hate to say that I’m a micromanager, and maybe my employees would disagree with me. I don’t think I am but I do like to get involved in the day-to-day activity. I want to make sure things work my way, and then if they don’t I’ll step in and try to correct it.
Andrew: What I wrote down was checklists, people, and training. Checklists, what do you guys have checklists for?
Anthony: Well, back at the time when I took that trip we would have a checklist for: here are the five things that you need to do when you unbox a package. Here’s the ten things you need to do when you’re testing out an iPhone, for example, so those checklists like that. In fact, we have this great system now where we don’t even have to have checklists; it just pulls up on the screen. When we unbox an iPad the 25 specific tests that need to be performed before we even put a tool to it, come up. A lot of that checklist is automated now. Giving people the tools so that they know how to retrieve a voicemail message and all that stuff. Not that we’re ISO certified or anything crazy like that. That just consumes a huge amount of [??].
Andrew: There’s a checklist for how to receive voicemail messages?
Anthony: Oh yes.
Andrew: Where’s that book? Here, this one. We interviewed the author of this book, “Work the System”, by Sam Carpenter and he told me the same thing. He said businesses run better when there are checklists, when there are specific procedures. That’s one thing that you did. The other think that you did was people, a lot of times when entrepreneurs have companies that are run by checklists, it feels to me like they don’t have people who can handle things beyond the checklist, right? Well, you tell me. What kind of people do you need in order to keep this company running?
Anthony: Listen, I need honest people. I need self-starters. I tell everyone that I interview that we wear a lot of hats here. I need somebody that is flexible so that if we’re getting really busy or backlogged in receiving and we have boxes piling up, even though you work in shipping I need you to go over there and spend an hour. Not only that though, I want people that will recognize before I even have to tell them that we’re getting a little bit backlogged in receiving so that they can leave the shipping post and help out over there. That’s a real key part of it. Computer skills are a big plus, and organizational skills.
Andrew: You said self-starter. If you have a business where everything needs to be done just so, and under-camera, and with a checklist, what does a person get to self-start?
Anthony: Well, they get training. We don’t ever just take an employee and just set them down and say, go to it. There’s a lot of shadowing that goes on. There’s been an employee shadowing me for the last week. He’s over my left shoulder here, and you can see he’s doing pretty good, actually. He’s doing the shipping. We do a lot of on-the-job training. As far as being a technician, there’s not a school you can go to for that. You can’t go to a school or get certified for that matter in how to fix an iPhone. That’s something that we have to do here, so as much as I’d love to say it’s methodical and very regimented, it’s not all that regimented. We do have specific objectives and we really try to teach to those things but you can’t teach everything. Nothing really beats getting in there, answering a phone, dealing with perhaps an irate customer, and learning your way around those types of situations.
Andrew: I see. I was going to ask you about training. That makes sense to just have somebody shadow you and watch what you’re doing and, I guess, he’s doing it too. Everything that you’re doing, he’s going to eventually do?
Anthony: That’s right, yes. There are some limitations. To become a technician the amount of training is just insane, So, we really have sort of two paths. Either you’re more customer, more all customer centric I guess you could say but, either you’re more of a customer support representative where you’re doing shipping and receiving or answering a phone call or unboxing a device. Or you’re a technician where you’re actually opening up a device and repairing it.
Andrew: Okay. All right, let me give a quick plug here for Mixergy Premium and then come back and ask you one important question. We talked a little bit about systems, I held up this book, Sam’s book. Mixergy’s Premium’s goal is to give you guys in the audience systems that come from top entrepreneurs. So we had the found of, who did we have recently? The guy who’s been pinging me for a week now, Max Teitelbaum. He talked about how, in an interview, talked about how he bought ads and generated revenue from it and built up this profitable company. Well I had him come back on to teach a course and in the course Max turned on his computer and showed how he, we’re still on camera by the way. And, in fact, Anthony the camera actually came back really good now, really strong. Now I actually can see, you’re a good looking guy. Before all you were was a blur on my screen.
Anthony: Wow. I’m glad that it improved then, that’s awesome.
Andrew: Yeah, I mean we’re still, it seems like the video and the audio are still not in sync, thank you Time Warner, but at least I could see you. So what I was saying was, Max Teitelbaum turned on his computer, showed people exactly how he knows which ads to buy, where to buy them, how he spies on the competition to figure out what ads work for them, and then how he creates banner ads based on what works for his competition so he doesn’t have to figure it all out himself. And then how he uses it generate revenue. Those are the kinds of courses that we have on Mixergy.com/Premium. If you’re a member go in there and watch Max’s course or any number of the dozens of other courses that are on there. And if you’re not a member I hope you go to Mixergy.com/Premium and join us.
So, Anthony, I get a lot of e-mails from people who say that I don’t talk enough about companies that sell physical goods. Now you’re not in the actual business of selling atoms directly, but you are in a similar business. What advice do you have others? Wait, I just lost the ability to speak towards the end there. It happened right with the way that I promoted Mixergy Premium. Some days I see my promotion’s really strong and other days I see that it’s not. Today was not.
And, anyway, started there and now it’s carrying on into this question. Basically what I’m looking for is, I’ve got a guy here, I’ve got you on. You’re not just creating another social network or another website where people connect and (?) how you make money. You’re dealing with physical goods. What do you say to other entrepreneurs, what advice do you have for other entrepreneurs who are in this kind of business? How do they learn from your experience?
Anthony: Oh boy. Well, you know number one I’ve noticed how, I was actually watching a lot of your interviews, the free ones, I haven’t signed up for your membership yet.
Andrew: Well there’s a lot for free and I’m glad you’re enjoying it
Anthony: I’m considering it. But yeah, I did notice that, that a lot of your interviews were more centered around services, you know, or large businesses that you know, did something. The Clock, the interview on Clockey was probably the closest to a physical product.
Andrew: Wow, you really did your work on that.
Anthony: Oh yeah, I tried to watch as many as I could until I, you know, hit the ones that were the paid ones. But I think I will sign up for your membership. Yeah, I mean, when you’re selling a physical product, you know, you want to make sure that you have quality. Word will get around awfully quick if you’re selling junk. So that’s the first advice, piece of advice that I have. You know sometimes you notice, you know sometimes we encounter a battery that’s giving us some problems. We implement a little testing phase now for certain batteries, just to make sure that they’re working. Because one of the worst things we can have happen to us is for us to ship product to somebody and it not work right out of the box.
So, quality is probably one of the most important things when it comes to a physical product. One of the nice things, I mean, if you’re not sure what you’re going to sell one of the recommendations that I would have is try to find a product that’s small, physically small. I mean I literally can buy a shoebox size of batteries that will, you know, fulfill 5,000 orders. So you know, a small item like that, doesn’t weigh a lot, doesn’t cost a lot to ship. And I understand that people can’t do that all the time. But that was sort of one of the advantages of this business is, what we ship is very light, it’s very small. Now it could be fragile, but you know you can find packaging out there that’s relatively inexpensive and even sometimes free. So yeah, so that’s probably the two that come to my mind as far as physical packaging.
Andrew: Small and no junk. And you know what? And that is different from software companies. Software companies it’s okay to make a first version Beta that’s not so good because you’re going to get feedback and you can correct it in real time. But if you send someone a battery that doesn’t work so well you’ve got trouble and a bad reputation.
Anthony: Word will get around. And you know we learned early on that if we do get a customer, and sometimes it’s not our fault. They were installing it incorrectly or they actually nicked one of the wires and damaged the battery. We learned early on that if that happens, we just send them a new one and we say, at your leisure just send the other one back. We don’t have them go through all these hoops where they have to send it to us and we have to inspect it and do all this. We really just try to make it really easy for them.
Andrew: What does it cost? I told you before the interview started that I saw my sister walk around with her iPhone with that screen shattered and we’ve all seen friends who had to walk around like that for awhile. They’re always waiting for the new one to come out. They don’t want to get rid of the shattered screen iPhone and buy a new one until Apple comes out with a brand new version of the iPhone. If they wanted to get it fixed, what does that cost?
Anthony: Well, it depends on the model that you have. An iPhone 4S screen would be more expensive than say an iPhone 3G screen.
Andrew: OK.
Anthony: But the prices can range anywhere from $49 up into $99. Of course, there’s a little bit of shipping to get the device to us and for us to ship it back, but I feel obligated as an e-commerce company to offer free shipping. I think most people expect that. That’s probably another thing, if you’re selling a physical product, really consider free shipping.
Andrew: So, about 100 bucks?
Anthony: Uh-huh.
Andrew: Max I end up fixing my screen if it shatters?
Anthony: That’s right. Yeah.
Andrew: You know what? That makes me feel like a dope for even considering the $50 cases.
Anthony: We still have people that put them in those expensive cases and boxes and they still get damaged. They’re not a cure-all. People come in daily and call us daily, where their iPhone was in one of those cases and they dropped it on carpet and it broke, so while it may help you a little bit, it’s definitely not a cure-all.
Andrew: All right. Well, if your screen is shattered, you can go to milliamp.com., and if you’re an entrepreneur who’s selling physical goods or repairs or dealing with physical goods or anything that needs to be repaired, hope this interview was helpful for you. Come back and let me know what you thought of it. Especially if you’re in a similar business. Anthony, thanks for doing this interview.
Anthony: Thank you so much, Andrew. It was a pleasure.
Andrew: Cool. Thank you all for watching.
