Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of Mixergy, where I do interviews with entrepreneurs about how they built their businesses. This one is a little different for me because today’s guest is recording this interview on his phone and the video is going in the wrong orientation, but as long as I’ve got his audio and he’s got a smile on his face, I think we’ll make this work.
Here’s the deal with today’s guest. He went bankrupt by the time he was 30 years old. Entrepreneurship can be really tough. Then he founded a company that today is doing tens of millions of dollars selling, get this, kitchen cabinets online. Yeah. Impossible or at least it seemed to be an impossible thing online, but he’s making it work. He’s growing his business, and I want to find out how he’s doing it. His name is Gary Nealon. He is the founder of RTA Cabinet Store, which offers ready to assemble kitchen cabinets.
And this interview is sponsored by two companies. The first is HostGator, which will host your website, and the second is a conference that I’ll be I was going to say speaking out, but more like hanging out with people. Yes, I’ll also be speaking there. It’s called Fireside Conference. I’ll tell you more about that later. First, Gary, it’s good to have you on here.
Gary: Awesome. Yeah. Thanks for having me.
Andrew: What was the business that sent you into bankruptcy? What was the business?
Gary: So it was actually my first venture into entrepreneurship. Not knowing anything about being an entrepreneur, I looked at buying a business. So I spent a couple years researching different niches, and it was actually a wholesale supplier for the dollar store niche. So it was low end products going into mom and pop dollar stores.
Andrew: Where were they getting this?
Gary: Everything was coming in from China. The business that we bought was importing containers into a warehouse outside Philadelphia and then redistributing from there.
Andrew: Okay. It seems like it was doing well. You bought it. You knew the numbers. It was ongoing. What happened after you bought it?
Gary: Yeah. It was like the perfect storm almost. Going in I knew the numbers were going to be sort of tight. We had accountants and lawyers go through everything. With my background in logistics, I thought we could definitely make it work. Unfortunately, we bought into the industry at a time right when petroleum started going through the roof and obviously everything in a dollar store is made of plastic. So that doesn’t bode very well for the cost of goods. Our costs of goods ended up going up by like 50% or 60% within the first couple months. The margins just didn’t make sense anymore.
Andrew: So you had to close down the company?
Gary: Yeah. So I spent a couple months trying to reposition it and find additional funds to keep it going probably longer than I should have. But I kept trying to make it work, make it work and then it just got to the point where we weren’t going to be able to sustain it anymore, so we had to shut it down.
Andrew: Wow. Do you remember what it was like to accept that you had to close down the business? I’ve had to do that. It’s really painful. What was it like for you?
Gary: It was tough. Growing up, I had always been what I would consider successful. I played college sports and always had good grades and everything. So this was like my first major failure, I would say, in life. I wasn’t so worried about myself. It was more the fact that I had investors that had given money in everything. I felt more like I was letting them down and family down than anything else.
Andrew: How much money did you raise for this business?
Gary: I think total we had about $250,000. Most of the money came from either myself or a small business loan.
Andrew: Did they give you a hard time, the investors?
Gary: No. I tried to be as honest as possible and just explained the situation. I actually ended up paying them back through the new business, but just explained to them the environment that we went through and how things just went sideways and it was out of our control.
Andrew: So why did you go bankrupt? Did you also take on personal loans for the company? Is that what it was?
Gary: I did. Since we were a small business and I was taking an SBA loan, a lot of that was tied to my personal assets.
Andrew: SBA loans, Small Business Administration-backed loan, they don’t actually make the loan, they back it. That’s personally guaranteed? I thought that because the SBA, the Small Business Administration was backing it, you didn’t have to offer a personal guarantee.
Gary: No. There may be options for that. For whatever reason at the time, ours had to have personal guarantees on it. Then we also had some other, as we were trying to keep it afloat, we took out some other loans that were personally guaranteed as well.
Andrew: I see. Okay. All right. How much debt did you have when you finally went bankrupt?
Gary: It was about $1.5 million, something like that.
Andrew: Wow. That’s enormous. Did you sleep well when you had that debt on your head every night?
Gary: No.
Andrew: No? What was it like when you slept?
Gary: I didn’t sleep very well at all. There was probably a six-month period where I wasn’t quite sure what the rest of my life held. I was worried that I was going to lose everything. I lost everything except for the house because there wasn’t enough equity left in it. So I still maintained that. In terms of a career, I knew I’d always be able to do something. It was a rough couple of months. That’s a tough pill to swallow.
Andrew: What do you mean? What did you know that you were going to do? Frankly, I sometimes think, “What if I lost everything? What am I going to do? I don’t know. I don’t know what I’m qualified to do.”
Gary: I think for me, I came from — I was a Director of Sales for a logistics company. So I always knew that I had that skill set that I could go back to. That’s what I ended up doing was going back, and I still had a well enough reputation in that industry to be able to get a job pretty fast.
Andrew: Okay.
Gary: I actually went back into sales while I tried to figure out what my next move was. I always knew that I wasn’t going to work for somebody full-time. That was kind of my means to get to the next opportunity, whatever that might be.
Andrew: Okay. I know that before disaster happens we always build it up in our head. Once it happened, what was the worst thing about it once you had to finally close down and you had all this debt?
Gary: It was just an overwhelming feeling that I let a lot of people down, I think.
Andrew: I see.
Gary: We had a handful of employees. They knew the situation. So I don’t think they took it that hard. But for every reason, I just felt really guilty that I let a lot of people down.
Andrew: I get that. All right. The way that you discovered this business was you were talking to someone and telling them what?
Gary: So the cabinet business, my business partner at the time in the other business, his uncle was importing kitchen cabinets. I had a background in marketing and information systems, so I knew that I wanted to do something with web design or something like that. I had approached him about letting me create a website for them because they had a really good business going, but they had no internet presence.
But he was pretty adamant that they weren’t going to be able to sell them online. So he was like, “If you guys want to do it, go ahead and create your own website, but we’re going to stay in that business.” So it was more me trying to — mentally I was like, “You know what? I’m going to prove them wrong. I know the internet works in terms of sales and ecommerce, so I’m going to show them that we can do this.”
Andrew: You just said, “Look, you don’t think this can be done. I’m telling you it can.” And you had to show them you can sell. What did you see about it? Frankly, if a day before I discovered you someone would have come to tell me that kitchen cabinets could be sold online, I’d say, “Maybe a little bit, maybe some guy selling it on Amazon, but not really.” What did you see that I would have missed before knowing about you?
Gary: I think, again, it was a perfect scenario in terms of the niche itself was very antiquated. There were a lot of people that had websites, but all of them required you to go into a store to buy them or to call somebody and talk to them on the phone. At the time, I had a couple of friends that were in internet marketing, and I started seeing what they were doing with different things.
There’s a way to disrupt this and kind of create an easy to use website that people can feel comfortable buying online. It was right before HGTV and DIY Network started getting into all the really big home improvement shows. That was kind of our first foray into that. We got in touch with some of the producers for some of those shows. We were able to get product into the TV shows early and kind of start building the reputation of the company through that.
Andrew: I see. All right. Let’s get into how you built it because that was the first thing. You just built the site and you told our producer, “I’ve got a 30-pack of beer to get things started.” How did the 30-pack of beer — first of all, I didn’t know they did a 30-pack of beer. I had known about the 24-pack, but 30 seems pretty big. What were you guys getting ready to do?
Gary: So when we first launched the company, I had this like really low goal. My whole goal was just to be able to pay everybody back.
Andrew: All your creditors?
Gary: Yeah.
Andrew: I’m sorry to interrupt, but I’ve got to ask you. It was a company that you started. They were investing in the company. They’re big boys and girls. If the company does well, you know that they’re going to do really well. If the company doesn’t and closes, you’re facing a world of pain. They suffer a little bit, but they’re big girls and boys who understand this is the way life works. Why did you feel like you had to go back and make good on something like that?
Gary: I don’t know. I guess it was like my first business, I saw that people trusted me enough to give me some money. So I figured if I could be successful again, then I owe it to them to at least pay them back what they put into me. I guess that’s what it is.
Andrew: Just a personal sense of obligation. Okay. So you said, “I’ve got to find a way to make right for these people.” So come back to what you were telling me about the 30-pack of beer.
Gary: Yeah. So we launched the website. We’re like, “How do we start getting traffic to it?” I was just learning about paid traffic and everything else. At the time, Craigslist was popular for finding stuff. It was a lot easier back then as well. We literally just started posting a couple ads on Craigslist, and it was like instantaneous people responding like, “Hey, we want to buy this. We want to buy that.”
So just kind of like a light bulb went off and I grabbed a couple of my friends like, “Let’s hang out for the afternoon. You guys help me out. I’ll help you out.” I grabbed a 30-pack and just sat there and started posting ads in like every city in the United States and it worked. So we’d get together a couple times a week and just do the same thing over and over again.
Andrew: As if you were individuals selling your cabinets online, it just happened to be lots of individuals representing people all over. I see. Okay. And you were getting sales from that and that kept going and that’s where you got your initial bump of sales.
Gary: Yeah.
Andrew: Okay. I’m looking at an early version of your site. I think you told our producer that it wasn’t beautiful, but I can see how it was functional. You launched when, 2010?
Gary: Yes.
Andrew: What I’m not getting is I can see how you can put this together fairly quickly if you have some experience. What I’m not getting is where’d you get all these cabinets? You’ve got a ton of cabinets here, lots of different wood types, lots of different sizes. Where’d you get all this?
Gary: So over the years, we’ve sourced from multiple vendors. Right now we work with probably about seven or eight vendors. We’ve shifted our model over the years. We went from all drop ship to then a combination of importing our own brands. We figured out that we were not good at logistics at all in terms of inventory management and everything, and now we’ve shifted back to solely drop shipping. We stick with probably about seven or eight really core vendors that we know can supply all the product and do a really good job of managing inventory for us.
Andrew: I see. They ship. They create. Your job is just to sell online. The way that you got your initial customers was Craigslist. What did you do after Craigslist? You can’t get an infinite number of people from there.
Gary: Yeah. It was a long tail game. I started doing a lot of content creation, a lot of articles, a lot of blog posts. We were posting — at the time I was still working my full-time job because I wasn’t taking money out of this. I was traveling for sales, and then at night in the hotel I’d spend like two or three hours knocking out like three or four articles
Andrew: What can you write about cabinets? I’m sitting here thinking — I don’t know that I could come up with five different articles.
Gary: Yeah. So what we started doing was — I guess in hindsight this was smart, especially now the way that Google’s ranking works. We started taking all the questions that we were getting about the cabinets and just creating articles about that. We were basically taking the FAQs, turning that into —
Andrew: What’s an example of a question that would come in?
Gary: It might be how difficult are they to install or how long will the hinges last or how do we maintain them in terms of conditioning and cleaning.
Andrew: I see. So each one of those would become an article, and then Google at the time was especially generous with its traffic, and so it would see that you were writing a lot, see there was content around a lot of long tail keywords and start sending you traffic.
Gary: Yeah. Even to today, we’re still ranking within the top 5 for about 30 of our most prominent keywords that we targeted. So it’s lasted. It was a really good strategy for us from the beginning, because we never took a hit when Google did all the updates like Panda and Penguin and all that stuff.
Andrew: How much work did you put in to learning search engine optimization so you could do the SEO yourself?
Gary: I was spending any free time I could just reading as much information as I can.
Andrew: Where’d you get the best knowledge about it?
Gary: So there was an event called Underground that Yanik Silver used to run every year.
Andrew: Yes.
Gary: So I started that. I started with that stuff. One of my good friends from college went there and told me about it. I started gobbling up information from anybody that spoke there, and then I actually joined Mavericks and started to get to meet some of the people. I was like a sponge. Anytime somebody could tell me they’re doing something with their business, I could usually figure out how to apply that to our niche in some way, shape, or form.
Andrew: And Yanik’s group is largely info marketers, right?
Gary: Yeah.
Andrew: But you were pulling all the info marketing techniques and using it for yourself.
Gary: Exactly. Yeah.
Andrew: You know what? I’m looking at an early version of your site and there’s something — where was that? I have way too many tabs open when I talk to people, Gary. In my day-to-day life, I shut tabs off incessantly. If I have too many, I have to close them to focus. In my interviews I keep way too many so I keep track of everything. I can’t find the one tab here, but I did see one where you showed a photo of yourself, I guess it was HGTV TV show. It seems like that was a really helpful strategy for you also. How did you get on a TV show, and how did it impact your sales?
Gary: A lot of it was just press releases. That was back when WebWire and PRWeb and everything ranked really high on Google. So the strategy back then was you get to the first page just by writing a press release if you did it the right away. So I was pumping out articles, press releases, all that stuff at the same time. It was just a random day, one of the producers called us and was like, “We’re in a bind. Our original supplier backed out. We need them in a week.” I’m like, “We can do that.”
We were blown away. We shipped the cabinets out to California for a show, and it went over so well. That was a show called “Carter Can.” So Carter came from “Trading Spaces,” which used to be a big one on ABC or NBC. Once that show kind of got word about it, they passed it on to other shows, and the producers moved on to other shows and it just kind of spiraled. So ever since then, we’ve been doing like 40 or 50 shows a year just supplying cabinets for the back end of it.
Andrew: You supply cabinets and then what do they give you? Do they give you on air mentions?
Gary: Each one is a little bit different. Some shows give us on air mentions. Over the years, the shows have become so popular it’s been harder and harder to get the on air stuff. But before, I would go to the show. I’d be on the show and kind of do that kind of stuff. Now it’s more for the actual marketing content. So they give us better pictures and videos than we could ever create of our own cabinets. So, in part of our contract, we always mandate that we get just a slide reel or just like a highlight reel and then high-res images of all the kitchens, and then we try to get at least our logo and some other stuff in the show.
Andrew: Got it. I see. And can you measure results from that? Can you see how much sales you’re getting from it?
Gary: Yeah. Actually, our two highest converting video ads from Facebook are from the TV shows. So we spin them into different types of ad platforms and everything else. It works far better than anything we can create.
Andrew: Unbelievable. It does add a lot of credibility. I don’t get suckered into the whole celebrity lifestyle, but when I see something was on a major TV show, I feel like they have access to everything and anything on the planet. If they picked RTA, then maybe there’s something here.
Gary: Yeah.
Andrew: All right. Let me take a break and then when we come back I want to ask you about where your revenue is today. I want to ask you about that one big revenue goal you had and why you printed up signs to help you hit it. I want to talk a little bit about Facebook and other social media. But first, I’ve got to tell everyone who’s listening about an event called Fireside. Have you heard of this, Gary?
Gary: I have. Yeah.
Andrew: You have? How’d you hear about Fireside?
Gary: I get invited to all these different events over the years, and it’s gotten to the point now where there’s so many of them, it’s hard to keep track of who’s inviting who and where they’re coming from.
Andrew: I’d never heard of this. They just invited me and I usually say no, but I like the whole idea of it. They were invited by a friend of a friend and I said, “You know what? Let’s do it. I’ll go speak at this event. I’m in. I’ll even promote it.” The cool thing about it is that it’s largely outdoors like summer camp. They have a bunch of different events that you can do. I’ve got a list here — waterskiing, tennis, basketball, there’s a private lake which I hope to do a lot of swimming in. There’s rock climbing, which I’d like to do.
But to me, the big attraction is that fun stuff plus people who I get to know through doing that stuff with them. My problem with conferences, Gary, you might have that experience too. Like with Underground, Underground has fantastic speakers, but where I got the most value was just hanging out outside.
Gary: Yeah, exactly.
Andrew: Having drinks with the people who are there, getting some inside information, pointing over to that guy and saying to the person I’m talking to, “What do you think of him? What do you think of his business?” That inside stuff is the biggest value for me for conferences. Well, most conferences, you have to sit in sessions endlessly. This one says, “Forget the sitting in sessions endlessly. Let’s just all talk to each other and we’ll have all the things you need to keep the conversations going and let you bond with people.”
So anyone who’s listening — you too, Gary — I’d love to see you there. If you want to be a part of Fireside, I’d say come hear me speak, but frankly, it doesn’t seem like that’s the big attraction. The big attraction is come hang out with lots of entrepreneurs, including people from the Mixergy audience. We are going to get to know each other. We’re going to hang out.
They actually told me, “Andrew, you’re a big celebrity. We can arrange for you to have a private room.” I said, “Usually I would want a private room. I never want to share a room with anyone. But for this event, I want to be in the room with other people. Just pack them in. I want to get to know people before we go to sleep. I want to get to know people throughout the event.”
Partially, frankly, that came to me, Gary, because my friend Bryan Johnson, who sold Braintree, said that he was bunking with like Tim Ferriss at an event. I said, “Bryan, you brought your own jet to come over here,” I hope I’m not revealing too much, “Why do you need a room?” Then as he told me what the conversations were like when you’re just kind of hanging out in the same room with people, I said, “I’ve got to try that.” So that’s what we’re doing here at Fireside.
Again, anyone who’s listening to me can go to FiresideConf.com to sign up, but I don’t think you should. The reason is they explicitly have an invitation screening process. They want to make sure only the right people come in. If you’re listening to this, part of my agreement with them is they will automatically let you in because I think if you’re a Mixergy listener you’re going to be great people for them.
And they’re going to set up a bunk for us and they’re going to have a table where we can have dinner, where you and I can have dinner. I don’t know if I’ll be in your bunk, specifically if you’re listening to me. But I do know that we will get to have dinner and we will get to hang out. That’s the goal here. Let’s go play — I don’t know that I could play tennis. I could try tennis. But let’s do rock climbing. Let’s try some activities together. Let’s swim. Let’s talk and let’s just get into private conversations there. Go check them out at FiresideConf.com/Mixergy.
All right. Revenues today, Gary, do you mind sharing where you are? I have it here on my screen, but I won’t reveal it if you don’t feel comfortable?
Gary: I’m fine with that. Our goal this year is we’re on target to hit anywhere from $35 million to $40 million this year.
Andrew: And last year where were you, 2016?
Gary: We were right around $25 million, I think, or somewhere around there.
Andrew: What about your profit margin?
Gary: Margins aren’t as high, obviously, because it’s a physical product. We go more for volume than anything else. But at the end after overhead and everything else, it’s usually somewhere around eight and nine percent.
Andrew: Eight to nine percent, that’s pretty considerable considering the competitive market and the cost of goods that you’re selling.
Gary: Yeah.
Andrew: Let’s go back in time to before you got there. Your first revenue goal was how much?
Gary: It was $40,000 a month.
Andrew: $40,000 a month. And you told our producer, “I had some signs printed up.” Talk about those signs. I don’t want to give away the story because it’s too amazing.
Gary: Yeah. One way I always motivated myself was just keep reminding myself whatever the goals were. So originally, when we first started, like $40,000 a month, that gives me enough to start paying everybody back. Once the business started growing, I was like, “Maybe now we need a bigger goal.” Then we went to I think it was $10,000 a day. So I would print out these signs that just said $10,000, and I’d put them everywhere that I would normally go like multiple times per day.
Andrew: So if you were sitting at your computer, there would be a sign there?
Gary: Yeah. So taped it to the wall in the kitchen. I put it on the refrigerator. I put it in my car. It was always somewhere that reminded me that I needed to be doing something to get me to that goal every time I see it. We just started blowing those numbers way out of the park.
Andrew: Do you have an example of something you were able to do because those signs were everywhere on your computer, on your car, imagining in your bathroom? Do you have an example?
Gary: I don’t know if I have a specific example, but I think one of the things, when I look back at it, is every time I saw that, it might be one of those days where you don’t feel like doing anything, but when I would see that, it would remind me like, “Okay, I set this goal. We have to get it.” That was sort of my motivation to be like, “Stop being lazy,” or, “Stop procrastinating and do something that’s going to get you closer to that goal.”
Andrew: So what could you do? I think one of the challenges with having a big goal like that is that it fires you up, but there isn’t a clear direction for that energy. So what would you do when you have that energy? If you looked down and you saw $10k, what would you do based on that?
Gary: It would be either something like write an article or review the Facebook ads or figure out a way that I could either drop costs or raise revenue in some way, shape, or form.
Andrew: I see.
Gary: So we started getting really good at article content creation, and we knew a really good article would bring in x-number of dollars. So I could almost correlate like sales to an actual article writing process.
Andrew: I see. So if nothing else, you could always sit down and write some post that you’d put up on the site and would bring in more sales. You actually even beyond going into your own questions, you went on to other sites to see what are people asking there, and you figured that’s good content direction for you too.
Gary: Yeah. So we would go to like the home improvement sites, because we figured that’s our target audience right there, but also if they’re asking a question, then our customers are probably going to have the same question. So we would just scour different home improvement sites and look for questions related to the kitchen or bathroom or cabinets, try to answer it and then at the same time create an article out of that.
Andrew: I’m looking at some of them. “How to Install RTA Cabinets,” oh, this is from a recent collection of blog posts. Some new cabinet styles you may not have heard of. You’re just writing all these posts out there. “Stain Your Kitchen Cabinets for a Brand New Look,” I see.
Gary: Yeah. It gets really hard to come up with new topics, I can tell you that much.
Andrew: I bet. I bet it really is. And then for you to have to sit and write, did you get writer’s block at all considering how much you had to produce?
Gary: Absolutely. I don’t create them anymore.
Andrew: But when you did?
Gary: Yeah. I absolutely was just like I can’t come up with anything new. So, as we started hiring employees, I started getting them involved in the process. Look at what I’ve written so far and even if you duplicate it in a different voice or terms, create some content so that I don’t have to keep doing this.
Andrew: “Contractors: Maximize the Revenue on Your Kitchen and Bathroom Renovation Bids,” “Rev-A-Shelf: Introducing Our Latest Addition to the Product Line.” You’re just pumping this stuff out. I’m going back in history, and I’m seeing a whole lot of posts. What about advertising? At the period in your life, were you doing advertising?
Gary: I would say we didn’t start doing paid advertising until a couple years in. We were just getting so much organic traffic, and I wanted to make sure all the revenue we kept dumping back into the business. I’d say it was probably like year two or so that we started to actually do some paid advertising. We started with Google, got Google up and running and I wouldn’t say mastered it, but at least got it to where we were profitable and then started shifting over to Facebook and Pinterest and everything else.
Andrew: This was you figuring it out?
Gary: Yeah. So usually, at that time, I didn’t really know any experts in the space. It was really just me buying courses, reading it myself, figuring it out, and then as we got big enough, then I would hire somebody that actually knew a little bit more than me, but I knew enough that I could monitor them and offer suggestions as well.
Andrew: What does the RTA in the name RTA Cabinet Store stand for?
Gary: Ready to Assemble.
Andrew: I see. Okay.
Gary: It wasn’t the greatest name in the world, but at the time it was for SEO purposes.
Andrew: I see. So I started doing a search right now as we were talking for “buy cabinets” and I see a ton of businesses there. I imagine, as you told our producer, in the beginning there wasn’t a lot of competition. But now that there is, how do you deal with all this?
Gary: Yeah. It got tricky over the years. There have been some sites that literally duplicated our site down to the design and everything. We’ve always tried to stay one step ahead in some respects, whether it’s just narrowing down the avatar of our customer and coming up with creative content from a marketing standpoint.
What we’ve come up with is called the wagon wheel process. So we’ve created social media assets around the company that kind of insulate it and create almost like a contained audience that our competition can’t touch. We’ve got access right now between all the different Facebook groups of about 2.5 million people. So anytime we run like a sale or we want to come up with a new product, we can market to them within a retargeting campaign versus having to go for cold traffic.
Andrew: So you know what? I’m on your Pinterest account and I see a bunch of different boards. I was on your Facebook account, and I see that you guys publish regularly, but I just don’t see millions of people. What I see on Facebook is 41,604 people like it. What I see on Pinterest is 6,959 people following. I just don’t see that — or 4,960 followers, excuse me. I don’t see that many. Where are you getting the million-plus people?
Gary: That’s kind of our secret sauce that you’re going to let out here. What we do is we create non-branded pages based off of the hobbies of our customers.
Andrew: Okay.
Gary: An example for the homeowner, which would be one of our five types of customers, it’s usually the female of the house that’s the ultimate buyer. The husband kind of checks out the quality and everything else. For a female audience, what we did was we created a gardening page, a cooking page. For the husbands, we have like a golfing page, a car page, another sports page, but they’re all non-branded pages. So what we do is we talk to them on a platform where they’re comfortable and relaxed, and then we have them within our retargeting group so that anytime that we run something, we can run ads to them, but they don’t realize it’s coming from that page.
Andrew: I see. Can’t your competitors buy ads and target those fans of those pages?
Gary: They can. What happens is if they buy ads, those are basically cold traffic ads. So Facebook looks at it as, “Okay, you don’t have a relationship with this customer. So we’re going to charge you a higher price per acquisition, because we don’t know if your ads are going to convert.” We build up all these social media assets and put them under one umbrella. Facebook sees that as us already having a relationship with them. We can actually run retargeting and lower campaign ads, and our cost per acquisition ends up being a quarter or two, sometimes half, sometimes a quarter of what our costs would be for a cold ad.
Andrew: I see.
Gary: It’s just night and day versus our cost per acquisition and everything.
Andrew: That makes so much sense. And then who manages all these pages?
Gary: So I used to manage them all, and it got overwhelming, but it taught me a lot about it. Since then, we’ve actually outsourced it to another company that kind of runs everything for us.
Andrew: I see. You put up a bunch of stuff. I’m even looking at your Facebook page now that I see it’s not the only space, I feel like, “Wow, this times all those other pages? That’s a lot of work.” It’s a lot of beautifully designed shots of households, of kitchens. There’s not even much content around it. It just says, “Here’s a classic kitchen. It just looks great.” There’s one here that says, “Testing. . .”
Gary: We try not to sell a lot. I hate spammy Facebook pages. Everything is just sale, sale, sale. So we just try to add content or visuals to get them inspired. Then whenever we have a sale, we don’t actually post it on the page. We just run ads to the audience.
Andrew: It’s like cabinetry porn is what it looks like. It’s just nothing but photos. I like this old reclaimed wood door. I can see liking it. It looks like Facebook is number one for you. I’m looking at SimilarWeb to see where your traffic is coming from. Facebook is number one by far and then Pinterest is number two.
Gary: Yeah.
Andrew: You do something similar on Pinterest?
Gary: We do. On Facebook, we have multiple funnels, obviously. We have a couple sub-funnels that we do for like the Ask Method from Ryan Levesque and surveys and different things like that. That’s where a lot of our Facebook traffic goes, simply because it’s a longer sales cycle. Most of our Google and Bing traffic, it actually converts much better, gives us a higher ROI. But there’s less of it to be had at this point. So Facebook still drives a predominant amount of our traffic. We also get it from Pinterest, Twitter, Instagram.
Andrew: Instagram doesn’t seem that big?
Gary: Yeah. It’s not a huge amount of traffic. But what we find is that people will have multiple touches with us. One of the things that we had to really do was dive into multichannel attribution, because when we were looking at cost per acquisition on certain platforms, if we didn’t dive deep to see how many times they were coming back, we would actually think we were losing money. But when we broke out multi-channel attribution and found out that most people come back five or six times before they buy from different channels, we were able to attribute more revenue to sites like Instagram and Pinterest and everything that we would have basically walked away from otherwise.
Andrew: All right. Let me take another break and then I’m going to come back and I’m going to ask you about the idea that if my ads are good, I can get somebody to come and sign up for Mixergy Premium, because if you’re an entrepreneur, you just need it. Your ads can be the best in the world, but if I don’t have a kitchen to remodel right now, I’m not going to be persuaded by an ad to do it. I’m wondering how do you know when it’s the right time to come to people? How do you create a funnel, as you said, considering that it’s not necessarily the right time when your funnel is suggesting that it is?
But first, I have to tell people about a company called HostGator. Have you ever hosted on HostGator, Gary?
Gary: I have not. No.
Andrew: They’re a pretty popular hosting company. What I’ve realized is lately when I do an ad for HostGator, often people have hosted or are currently hosting with them. That’s what happened recently with the founder of Needls, who I interviewed. The reason is that HostGator is fast to set up, great tech support, inexpensive. That’s largely what people want.
What they don’t know is that when your company grows, you can scale up with HostGator, meaning you can just get the bigger and better package, one that will allow you to host with less downtime because you’re not sharing a server with someone else, one where you can get managed WordPress hosting, where they take care of the plugins, the security and make sure that your site is up and running and you don’t have to do any of that. That’s what’s beautiful about HostGator.
If you’re out there and you hate your hosting company, go use the one that I just built my new business on. It’s HostGator. And if you’re starting a business or you have a lot of clients and you need to get them on a hosting package, HostGator is fantastic, because not only will it be easier for you to manage them, but also if your clients have issues and they want to talk to the hosting company, HostGator has great support.
So we have a special URL that I can give you where you can sign up. You’ll get 45 days money back guarantee, unlimited email addresses, unmetered disk space. You’ll have 24/7, 365 tech support, meaning Christmas day, everyone is at home, you still will have tech support if you happen to need it. All that and 50% off if you go to this special URL. It is HostGator.com/Mixergy. Think of that alligator, the gator, HostGator.com/Mixergy. And let me know how your experience is with them. I always want to hear how my audience is doing with my sponsors.
Andrew: All right. So why don’t we start with that first question I had before, which is if somebody’s not in the market to buy, your ads are just kind of falling short. So how can you tell when it’s the right time, and then how does your marketing stay in touch with them so that when it is the right time in the future, you can tap into their lives?
Gary: That’s a big challenge for us because our buying cycle, it’s not like an impulse buy or like a t-shirt they would see and instantly want to have it. Our buying cycle can be anywhere from one day to two years in some cases. So we really do have to kind of think long term with a lot of these people.
Getting them before they’re actually ready to buy is probably what’s been our most effective thing over the last couple months, simply by getting as many people into a pool or audience and then funneling them down into different buckets based on when they’re actually thinking about doing it, that’s been kind of a game-changer for us, because we’ve built out auto-responder sequences based off of when they think they’ll be ready.
When they say they’re going to purchase in the next two months, then we’ll build out a sequence that only lasts for two months. But if they say, “We’re not going to be ready for six or seven months,” we’ll just stretch that out and give them a lot — we won’t be down their throat as much as we would otherwise, but we’ll give them a lot of really good content and a lot of thoughts and ideas of what they could do so when they’re ready they come back to us.
Andrew: And it’s the same sequence of messages just dripped out over a longer or shorter period of time?
Gary: In some cases, we change that up. We have a couple different criteria when they’re going through our sequences. We’ll kind of do it based off of time, based off of budget, based off of style if they already know what type of style they’re looking for or what kind of color. And then whether they’re working with somebody or whether they’re going to try to do it themselves. So all those different factors, we then have different buckets that segment them out into it and then have longer or shorter sequences based off of that.
Andrew: Where do you do that? I signed up for your email just now to see if on the confirmation page you’re trying to figure out when I’m ready to buy. I didn’t see it then. Where do you do all that?
Gary: We actually don’t drive most of our traffic to our homepage. We drive it through different funnels to kind of get that information out of them first. I’m not going to give all my secrets away to you here, but our kitchen contest is probably one of our biggest factors for that. So, in most cases, those people aren’t ready to buy yet. When they see a free kitchen contest, they’re like, “Wow, I really need to do my kitchen at some point.”
So we’re grabbing them at a much cheaper cost per acquisition, because they’re not buying terms that they’re using, getting them into the cycle, segmenting them into different buckets and then putting them through our auto-responder sequences.
Andrew: I see. What do you use to run your contests?
Gary: It’s actually all custom-created. Our whole site over the years has been custom created. We couldn’t find a platform that could do everything we needed.
Andrew: That explains why when I look at SimilarWeb to see where your traffic is coming from I see a bunch of contest sites or sites like FreebieMom.com. Do you know them?
Gary: I don’t.
Andrew: Free.ca. Those are sites that run contests and discounts and so on.
Gary: I know a lot of sites have picked up our free giveaway contests to try to add other content to our sites. So that’s probably where some of that stuff is coming from.
Andrew: Yeah. That’s what it seems like. And then you also do short-term discounts on your site, right?
Gary: Yeah.
Andrew: And that seems to work, kind of like an old Groupon model, where at the top of the site, I’m looking at it right now, it says, “This sale ends in 10 days. You have 10 days, 10 hours, 31 minutes to buy and get this 10% discount.”
Gary: Yeah. So they’re actually true removable discounts. We do that particularly through our kitchen contests. So if somebody comes through our contests and they are ready to buy in the next 30 to 60 days, they will get a true significant discount if they buy from us at that point. If not, the prices on the site go back up to what they usually are.
Andrew: You use every tool in the book. I’m looking at your site using BuiltWith — Qualaroo to survey people using short-form surveys, you have MailChimp, you have Olark, it just goes on and on. It feels like there’s someone in here who’s just really into tech of building the site, right? Is that you?
Gary: It’s sort of me and it’s sort of my main IT guy. What I do — it’s kind of one of the reasons I go to these conferences, just to pick up on what other people are doing, like new tools or techniques and stuff. We test everything. We’ve probably gone through four or five different chat services. We’ve gone through multiple email providers, and we’re not afraid to double down and try different things to see what’s going to be the best outcome for us.
So we use a lot of plugins, a lot of those services to kind of automate. One of my rules with the company is that if we can automate it, we’re going to create it or use a software. Let’s eliminate the duplicity and wasted time that people spend.
Andrew: What are some of the systems that use internally to run your company?
Gary: So, as I mentioned, our CRM and shopping cart and everything was totally custom built over the years. We’ve actually just trademarked that, and we’re spinning that off as our own software CRM. We created an internal content distribution systems. So the way I use content is I can basically create 12 different types of content out of one piece, like PDF, PowerPoint, video, audio, and all that stuff. We have a system that we created internally that does that for us automatically.
Andrew: So if someone writes a blog post, it will automatically turn it into a PDF, which makes sense, and into a PowerPoint?
Gary: Yeah. So we usually start with an audio file or video file so we can transcribe it, turn that into a blog post. We film a lot of videos in our office now of like cabinet assembly or cabinet installation, those kinds of things.
Andrew: Okay.
Gary: That will get transcribed into a blog, which will then be turned into a PDF. We’ll include some images for JPEGs and everything to be factored in there. We can take the audio out of it, put that into an audio file. Then we’ll do PowerPoint slides based off of the steps in the process or whatever. So the way I look at it is everybody digests content different ways. So if I can create every type of content that somebody would absorb, they’re going to find it somewhere.
Andrew: So what do you do with the PDF?
Gary: The PDF just goes on like — I think we put all the PDFs on Scribe.
Andrew: I see. So, you say, “Hey, look, there’s a platform that accepts PDF. Part of our process is to take our stuff and put it there. There’s a platform that takes PowerPoint slides, SlideShare. We’re going to put that on there.” I see. So it’s taking the stuff you have, automatically changing it for whatever platforms exist out there and putting it out there. Interesting. Can you measure how effective that is to know if it’s worth your while?
Gary: Well, there are two factors. If we get any traffic from it, that’s a bonus. But I also look at the amount of links we’re creating back to our sites from these high value content creation sites. So just by having those multiple links coming back in, it’s just having a domino effect on the subpages and everything else for organic ranking.
Andrew: How do you automate that? How do you automate the process of creating a PowerPoint deck and not have it be ugly?
Gary: That’s a good question. We have standardized templates that we use. A lot of them look very similar. But once you transcribe it, it’s not that hard to do. We have multiple VAs that manage the process. Some of those things might be manual. Some of them might be automated. We use a Trello board. We’ll just drop one piece of content in there, and everybody knows their role. We’ll edit it, drop it back in. We have manual approval, and then it gets pushed back out.
Andrew: So I am now on SlideShare.net looking you up, and I see in some cases it seems like it’s just a straight up repost of the article, right?
Gary: Yeah, it could be.
Andrew: Where it just gets taken and repurposed and essentially someone is copying and pasting it or a system — here’s one, for example, “A glimpse at RTA Cabinet Store, 461 . . .” is that you guys?
Gary: That was our old address, yeah.
Andrew: Got it. Okay. So there is that. It’s just a text article. It’s on here and it has 766 views. And it’s just text. I don’t even know who’s reading it, but I guess that’s your point.
Gary: Yeah. It’s just being out there everywhere is our goal, especially in the beginning because it made us look much larger than we were.
Andrew: Because you were everywhere.
Gary: Yeah. We were literally everywhere that you searched for us.
Andrew: It does look like some of your competitors are trying to steal your keywords so that they can get some attention for their stuff.
Gary: Yeah. It’s become a much more competitive niche. But we just keep reinventing ourselves to stay ahead of the game.
Andrew: Okay. Let’s talk about creating your own stuff. It seems like once you got good at selling other people’s stuff had having it drop-shipped, you decided that you wanted to do this yourself, that you wanted to start creating it, kind of like Amazon with Amazon Basics. Talk to me more about the logic behind doing it and then what happened after you did?
Gary: Yeah. I always wanted to separate ourselves from the competition, just to have sort of our own brand and then also be able to do wholesale to other kitchen cabinet companies. So we originally went out. We created a brand called Eco Cabinet Line, which we trademarked the name and the logo and everything. It was going to be like eco-friendly cabinets, like bamboo and different types of materials. We were bringing it in for about a year and a half. The challenge with this particular type of product is that there are so many SKUs and to be able to manage that type of inventory, it takes a huge amount of money just to have enough supply for like a three-month supply.
Andrew: I see.
Gary: So we were doing it for a while, but we find that we run out of one size cabinet and then it would have a domino effect, because you try to substitute something else and then you run out of that. We just didn’t have the staff or the systems in place. We were really just a virtual company. We’re really good at driving traffic. We’re not good at managing inventory levels and everything else. So we gave it a shot for a while, and then we started scaling that back and working with the vendors that we knew could actually drop ship for us.
Andrew: And there’s no individual item that is consistently purchased over and over again. Everything is so custom?
Gary: Yeah. Like one cabinet line can have anywhere from like 150 to 200 SKUs. One week it could be one cabinet size sells a lot, and then you might not sell another for another two months. So it’s like trying to gauge that without putting $7 million, $8 million in an inventory is really hard to do.
Andrew: That is painful. Wow. All right. Do you have a big financial goal right now, now that you’ve hit every one of the previous ones you talked about?
Gary: We do. It’s pretty audacious, but my goal is to have a $1 million day.
Andrew: $1 million single day?
Gary: Yeah.
Andrew: How close have you come right now?
Gary: When we have our holiday sales, we’ve come pretty close. We were off by — I think our last holiday sale was off by about $200,000. It’s a big difference, but I don’t think it’s that hard to make that number up.
Andrew: You know what Gary, you told our producer, “I didn’t get into this because I have a special fondness or passion for cabinets. I did it to prove this guy wrong.” Now I’m wondering, do you like cabinets enough, or how is it to be in a business that you didn’t start out for the passion of the product?
Gary: What I fell in love with is the process, not necessarily the product. What we’ve done we can basically do with any physical product. It really doesn’t have to do anything with that particular product. I just love the marketing of it, like figuring out how to get in front of people before they’re ready to buy, how to keep them engaged. That’s what’s really kept me going is that whole process. It’s constantly evolving as you know. Every day, something changes with Facebook or Google or whatever, so you constantly have to keep up on things to be in the forefront of all the things that are changing.
Andrew: I always wondered what would happen if someone who didn’t sell the online marketing products that everyone at like Yanik’s events is selling. What happens if someone took that and brought it into other industries, like cabinets, like pens, like clothing, like anything? What happens if you take all those strategies? I can see it here.
What happens here is you get this collection of email funnels that totally make sense and allow you to grow your sales. You use these short-term sales on your homepage. The whole business just makes so much sense. I get why you’re growing so well. Thank you so much for being on here. This has been such an eye opener. I never would have known this business would be doing so well.
Gary: It’s one of the worst products you could possibly sell online.
Andrew: Right. Because it’s so heavy, because people want to see it for themselves. I can’t freaking believe you were able to do it. The way you did it is if you could sum it up with one thing, the reason you were able to do it is what?
Gary: One thing. . .
Andrew: Is it online marketing? Is it the drive? What is it that if I could take one big lesson from you?
Gary: I think if I had to go with like the biggest thing to have the biggest impact on everything that we’ve done, it is understanding our customers avatar to the finest detail.
Andrew: How can you get to that level? That’s a real challenge.
Gary: I think that really changed everything. You have to have some sort of data to start with. We didn’t figure it out until probably year two or year three. But once you figure that out, it changes everything. It changes your marketing strategy, changes your sales copy. It was a huge game-changer. I think that was one of the biggest things that we did is really understanding who our actual customer is. Most people don’t take the time to do that.
Andrew: Did you do that based on who was buying from you and then you said, “Let’s understand who they are and extrapolate from there”?
Gary: It was over probably like a three or four-month process, but we started doing a ton of surveys. We started surveying non-customers, existing customers, dropped them into Facebook just to get an idea of what their profile was. So just across all those different platforms and different surveys, just started figuring out who they were, what their hobbies were, what are their income levels, and all that stuff so that when we’re talking to them, they feel like we actually know them versus just running sales ads and all that stuff.
Andrew: What’s an unexpected aspect of their personality that you had to go through this process to understand?
Gary: It would have to be their skill set. So most people, what we found out were just watching home improvement shows and they’re like, “Oh, I can do this myself.” When they get into it, they get so far over their head. Rather than asking for help, they’ll just bail. What we created was basically three different buying processes that no matter what your skill level is, you can feel like you’re comfortable and you’re not in over your head. So, by doing that, I think that also helped our conversion rates on the site and increased optimization and everything else.
Andrew: All right. It’s exciting to see what you’ve built. Thanks so much for being on here. The website, of course, is RTA Cabinet Store. Why are you doing this interview, by the way? You’re not going to get a lot of cabinet store customers from here.
Gary: It’s funny. I’ll speak at events and stuff like that and they’re like, “What are you selling?” I’m like, “I’m not selling anything.” I enjoy the whole marketing aspect, talking about it, kind of sharing a story.
Andrew: I appreciate you doing that. All right. For anyone who wants to see all this marketing in action and how subtle but also effective it is, go check out RTACabinetStore.com.
And if you want to get together with me in person, we’ll have dinner, we’ll hang out, we’ll do all kinds of stuff, come to the one conference that I’m going to be doing this summer. It’s called — actually, this is in the fall, isn’t it? It’s called FiresideConf.com. If you want to automatically get accepted, go to FiresideConf.com/Mixergy. The hosting company that I use to launch my new business, it’s called Bot Academy is the business, the website is managed by HostGator. Check them out at HostGator.com/Mixergy.
Gary, thanks so much.
Gary: Awesome. Thanks a lot.
Andrew: You bet. Bye.
