Andrew: Hey, there freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. And I use a competitor of today’s guest. It’s a very well-funded competitor, as far as I know. And I’m wondering how today’s guest could even survive in that world.
Number one, he’s charging less than the company that I use. And number two, well, he is charging very little. Anyway, here’s what this interview is about. I want to learn from him about how he’s bootstrapping this company and competing with some pretty big dogs in the space.
His name is Jason Macek, and he runs a business called Dollar Fulfillment. The idea is, you send your stuff to him, he stores it, and then when it’s time for him to ship out a product to one of your customers, he just ships it out for you, all for $1.
And here’s the part that gets me, it’s not $1 plus shipping, it’s not $1 plus shipping and storage, it’s not $1 plus this. It’s just a freaking $1. I don’t know how he makes money on it.
What I do like about his business is, it’s super clear. You guys might have heard me say that I use these meditation beads to stay focused a lot, if you’re curious about them, you could see them at truemind.com/guide, you can see how I use them. And I’ll send these beads out to people. They’ll buy from me or sometimes I send it out as a gift, and I use a service that would automatically send it out. I don’t even know what I’m paying per bead because there’s storage costs, shipping . . . It’s just too freaking confusing. I do like how he’s got a really clear pricing structure. I wonder if I could work with him instead of the company I work with. We’ll find out about that within this interview. And figure out how a guy could bootstrap an operation like this.
And we can do it thanks to two phenomenal companies. The first will help you hire your next great developers. Jason, you should check them out. It’s called Toptal. And the second will help you host your website right. It’s called HostGator. Jason, if you hate your hosting company, I’ll tell you why you should check out HostGator first.
Jason, welcome.
Jason: Thank you. Glad to be here. I’ve, you know, watched a lot of your podcasts over the years, so it’s interesting to be sitting here now.
Andrew: Thanks. Good, then I can understand why some of the things that I was saying before we started were not phasing you at all, good.
Jason: No, not surprised.
Andrew: What’s your revenue, Jason?
Jason: Last year were just under $10 million.
Andrew: Under $10 million revenue? Wow. Are you guys profitable?
Jason: Yes, very profitable.
Andrew: By very profitable, are you saying you’ve got more than a 10% net profit margin?
Jason: It’s just a little bit more, yeah.
Andrew: Get out. Wow-wee. On a $1 per?
Jason: Yeah. And I just want to be clear, make sure your audience understands, we charge $1 fulfillment fee. We do have to charge postage on top of that.
Andrew: Oh, you do? I thought before we started that you said, “No postage,” I thought that was shocking.
Jason: No, $1 plus postage. I wish, but, yeah.
Andrew: Yeah. Because postage is fairly expensive. So you’re saying, you pick it, you put it in the box, you address it to the person and then you ship it out. And I would just have to pay you $1 per bead, plus whatever it costs you to send it anywhere in the world.
Jason: Yeah. And it’s $1 per order. So if your order had two of your bracelets in there, it’d still be $1. And that includes the packaging that it goes into, receiving the inventory, keeping counts. So, it includes everything.
Andrew: I feel like the childhood-you would be really proud of this. The childhood-you was very entrepreneurial, always looking for a little side hustles. You know what I’m talking about?
Jason: Very much so.
Andrew: What are some of the things that you did?
Jason: We had lemonade stands. We had car washes.
Andrew: Literally lemonade stands?
Jason: Absolutely, we lived out on a kind of a country road, and so we’d only get maybe 10 customers a day. But, hey, that was $5 in lemonade that we sold, and you know, one more pack of baseball cards or whatever that generated.
Andrew: What did you do with the money? Are you the type of kid who would go out and buy baseball cards or save it?
Jason: Yeah, I was not much of a saver at a young age. It was definitely to fuel my passions. We didn’t grow up with a whole lot. And so, if I wanted it, I had to buy it. And so the money that I made went to buying sports gear or baseball cards or whatever the thing was at the time.
Andrew: You told our producer that you didn’t grow up with a lot. What’s the money situation that you had growing up?
Jason: I mean, we weren’t like destitute or anything like that, it’s just there wasn’t a lot extra for sports or travel or trips like that. And it was a good childhood, don’t get me wrong, it’s just if I wanted to do the fun extra stuff, I had to pay for it myself, so.
Andrew: For example, you were on a baseball team?
Jason: Yep, played base . . . I pretty much played all the sports, which is you know me being a part of the teams and so if I wanted a new bat or a new glove or things like that, I was fine to . . .
Andrew: You pay for it yourself.
Jason: Yep.
Andrew: And how do you feel looking around and seeing all these other kids not pay for their own stuff, get it and then also get candy on top of it when you have to pay for the essentials?
Jason: You know, I’ve never been a look at other people and want what they have. I was taught to appreciate what I have, and so it really wasn’t a big deal. And I just worked hard to get what I wanted and probably appreciated it more than they did.
Andrew: I have to say, I felt a sense of superiority. I was in a similar . . . Well, my parents would give me a bunch of money, but when I started making my own money, I felt superior to other people who were given money. And I at some point just said, “I don’t want money from my parents.” I, to this day, if I go out to dinner with them or lunch or anything, I pay for it and I insist on it. And it feels good. It made me feel like I was in control of my life where the other kids were just kids who were pawns in their family’s story. Does that make sense?
Jason: Yeah, no, I totally understand.
Andrew: You went to college. You seemed like a super disciplined person.
Jason: Very little college. I went to one semester of college and hated it.
Andrew: And then did you flunk out or did you say, “This is not for me. I’m getting out”?
Jason: Yeah, no, I failed most of my classes because I stopped going to them and just quit because I really didn’t know what I wanted to do. I’d just gotten out of the Marine Corps, and I was tired of the regiment. And so I wanted something just a little bit less regimented and so I dropped out and just went to work.
Andrew: Why do you go to the Marine Corps?
Jason: A really smooth talking recruiter, to be honest with you.
Andrew: Really?
Jason: Yeah. I signed up for a free keychain and he came out and met with me and convinced me that the Marine Corps was all that and a bag of chips, and I like a lot of what he had to say. I was only reserve. So I didn’t go full time, but I went to boot camp and all the training and stuff, and that’s the . . .
Andrew: What’s the thing that got you? What was it about what he said that touched you, that struck a nerve?
Jason: You know, like just duty to the country, and stuff like that. And then also, “The Marines are the best and it’s the hardest and the most respected,” and I always wanted to be the best, so.
Andrew: Okay, I get it. And so after you flunked out, you realized college wasn’t for you. You started cooking at a restaurant. I guess, you did that in high school. At some point, you started selling insurance. Why did you get into insurance?
Jason: So, yeah, I immediately went to work at a restaurant after I flunked out of school. And I was working two jobs and I bought a new car and went in to get insurance from a family friend, and he convinced me that it was a way better gig than working at a restaurant. And so I dropped the restaurant.
Andrew: Because you can make more money. I get that, in a sense, makes a little sense. Right?
Jason: Yeah. You’re not going to get wealthy working at a restaurant. I knew that. And I just wasn’t sure what my path was going to be. And so I thought, “Maybe insurance would be it.” So I started doing that, and I liked it because there was no real cap on earnings. The harder you work, the more you can make.
Andrew: And so I was listening to Dave Ramsey podcast episode. I’ve been listening to him because it’s all about money discipline, and I’m watching these people who are in deep college debt, just like to hear their stories are heartbreaking. They got very little for college but they ended up with $30,000, $40,000 in debt. Anyway, you’re saying that working as an insurance salesperson is great at first because you can hit up people you know, and then at some point you’d run out of friends, you’d run out of like second degree relations and you can’t sell anymore and the dream starts to fall apart. Is that what happened for you?
Jason: Yes and no. So you run out of those people but then, you know, so I don’t know if you ever did like Cub Scouts or anything like but, when I was young, I went door to door selling popcorn or fundraising for my baseball team or whatever, and so, cold calling was not foreign to me. And so once you run out of your first degree of influence, you just start going out and hitting up business owners or hitting up whoever and, you know, so I was pretty successful in the insurance business but other opportunities came along.
Andrew: Part of this had to do with a friend of yours who had an online company. What year was this? What was the company?
Jason: So they started, I want to say in about 2002. The company was called Bird Tricks, just like it sounds. And that’s actually a fascinating story as well. It was two brothers, one of them being a professional magician. And their parents had two macaws as pets, and these birds were just mean as hell. And you couldn’t touch them because one of those birds can literally take off a finger.
And so the professional magician told his brother, “Hey, help me train these birds because I want to use them in my magic act.” So, they set about finding out what they could on bird training. There really wasn’t much information online at the time. They got books and stuff and started filming themselves doing all of this training in their parents basement. I don’t know how long it took them, probably a couple months. But they started having success and eventually these birds became tame, and they filmed it from start to finish, “The Good The Bad And The Ugly.” And then they said, “Well, we should now sell it.” And so they started selling it online. And this was back, I think when the internet was pretty new and in infancy, and so it got really popular. And I think within their first year they did $1 million in sales.
Andrew: Selling how? That’s shocking.
Jason: Yeah. They created a website and then went to work learning from all the, you know, Dan Kennedys and people like that. They wrote on their own copy. They built their own website. They were dubbing all of the videos themselves on like 40 VHS players in their parents’ basement.
Andrew: Really?
Jason: Yeah.
Andrew: Wow. You know what? I’m looking at there at their site from back then, Taming, Training and Tricks. Let me see what the video sold for. It looks like one of them had a pair of earrings and a thin [beater 00:10:17], is that right?
Jason: That was the magician, yep, Dave.
Andrew: Wow. And I see that old style like copywriting in there, complete with highlighted sections, you know, like a highlighted [inaudible 00:10:26].
Jason: Oh, absolutely.
Andrew: A highlighted, “Here’s how to order right now, there are two different ways, you can pay by credit card or,” I’m guessing, the second one, since this is a page from 2003 is by check maybe.
Jason: Yep, yep.
Andrew: Is that right? Wow. All right. That’s fantastic. There, here we go. “You could send a check to Spokane, Washington P.O. Box 9598. Womach Brother Productions.”
Jason: Yep, yep. Those are the Womach brothers, Dave and Chet.
Andrew: So, when you see that, do you start to feel like, “Wow, the world of possibility, the thing that I gravitated towards as a kid. It’s exciting, the world the possibilities here in front of me”? Did it start to touch you and change you?
Jason: Yeah, 100%. So my wife and Dave’s wife, the magician’s wife, were best friends from high school and so that’s how I kind of got to know them. And they were my age or a little bit younger, and they were kind of living the life I wanted. Yeah, they were working hard, but they were making a ton of money and they weren’t going to an office every day. And so I was always kind of putting the bug in their ear, “Hey, if you ever need help with anything, I’ll learn it. I’ll figure out how to do it. Let me be part.”
Andrew: Okay. I’m looking at the . . . I can’t stop looking at their page, I got to put it away. They were there really good back then about not just sending people directly to a sales page but you could buy from the home page, but they would give you free lessons and a video if you entered your name email address, and that allowed them to start marketing.
Jason: Yeah. It’s all little old classic marketing stuff.
Andrew: Yeah. And you said, “I want to do anything. If there’s something I could do, let me know.” And what’s the thing that they say that you ended up doing with them?
Jason: The very first thing is, so they, you know, obviously, they had all the success, and to the point where they no longer could ship out their own products, and so they hired a real 3PL company out of California, shipped all their products to them and it was right before Black Friday and so they had a huge sale, and then, three weeks later realized that company hadn’t sent out a single product for them. And it almost put them out of business with refunds and charge backs and, you know, because they were just young guys and they didn’t know what they were doing really at the time and . . .
Andrew: So 3PL is third-party logistics company. You send your stuff to them and then when you get an order, you tell them about it and it’s on them to ship the order out and to charge you. Why do you think that third-party logistics company didn’t do it?
Jason: I honestly don’t know. They never told me kind of what the problem was. They just came to me and said, “Hey, you said you’re interested, do you want to start shipping our products for us?”
And so my wife at the time hated her job. And so we just set up a shop in our condo and we got all the products from 3PL and then had probably a two to three week just crazy time. I took time off work to try and help get everything caught up and shipped out.
Andrew: For the holidays?
Jason: Yeah, yeah. Because, I mean, like holiday type stuff, and people ordered them for gifts and so we had to get them there before Christmas. And so we just buckled down and got all their orders out, and kind of just took over all their shipping.
Andrew: Are you and your wife still together?
Jason: Yeah.
Andrew: When you think back on those old days, do you ever just look back at how far we’ve come, we’ve been in this together since the beginning. Does it create that bond?
Jason: Oh, 100%, yeah.
Andrew: Yeah?
Jason: So she started out, you know, and they were and they were doing hundreds of orders, she would literally have to type in every address to USPS on their website and print labels out one at a time, all the boxes to our truck to the post office. And it’s just, I look back at her, because she was it, to begin with, and I admire the amount of work and effort she put into it. And we wouldn’t be where we are today without it.
Andrew: Because you were doing what?
Jason: I still was selling insurance. It was, at that point, only enough for her to quit her job. I had to keep mine for now.
Andrew: Do you remember how much stuff you had in your apartment, in your condo? Was it overwhelming?
Jason: Yeah. So we had an 1100 square foot condo with a one-car garage and the garage was completely full of stuff and our guest bedroom was completely full of stuff. It got to a point where we had to get a storage unit not too far from the condo, and so it was pretty crazy.
Andrew: And then at some point they said, “Look, the next great thing in marketing is search engine optimization.” Did you take that over for them too?
Jason: Yeah. So they came to me and said, “Hey, we really want to do SEO. So do you want to learn how to do it?” I said, “Absolutely.” I quit my job selling insurance, we went to a . . . I don’t know if you ever heard of Bruce Clay. He’s a big SEO guy. And so we went to one of his conferences, spent a week learning from him and then the rest was kind of trial and error.
Andrew: What year was this? I want to go back and see like your impact on their site?
Jason: It was probably like 2005, I believe.
Andrew: Oh, wow, okay. All right. So, I’m kind of on 2006. Let me take a look at how their site changed back then. I still don’t see like a blog or any content on the home page.
Jason: Yeah. So the home page should have had some basic content, but then we, you know, back then, it was all about content silos. And so we’d pick a species of bird or a specific problem and create content silos with a bunch of interlinking, and so it felt like all we were doing is just creating tons of content.
Andrew: Okay. So, like I see, parrots, there’s a Quaker parrot, the macaw, the Indian ringneck, that’s you creating those sections for content around that.
Jason: Yeah.
Andrew: “The Indian ringneck parrot. Today enjoy the love, affection and fun of a parrot. Today enjoying love and affection and fun of the parrot is very popular. Owners love to teach their birds to talk, as well as other tricks that will keep the family entertained for hours on end.” That’s you writing all that content.
Jason: I didn’t write the content, no. I would have the content written and then I would, you know, we used FrontPage back at the time, you know, Microsoft FrontPage. So I’d build out all the HTML pages and upload them and, you know, I’d do all the interlinking and stuff like that.
Andrew: Okay, and eventually you guys went to Blogger, I could see that. Got it. I could see the transition. I’m wondering why. Why would you decide that you’re going to do SEO? You had like a nice little 3PL business going with just one client.
Jason: Yeah, no, and it was good, but it was like I said, it was only really enough for one of us to be supported by. We still needed more income.
Andrew: But Jason, why didn’t you then go out and say, “Screw this SEO. I’m not going to do that. I’m going to going look for another company that does videos and see if I could send out their videos. I’m going to see if there’s another local company that maybe does anything, not video necessarily and say look, ‘I’m doing these videos all day long. I could do yours too'”? Why don’t you expand that business?
Jason: I appreciate you calling me out on that. I don’t honestly have a good answer, and that’s what I should have done. It just took me a few years to figure it out. So, yeah.
Andrew: I see. I’m not calling you out. I’m just wondering, because as I look at your background, everything about you says, “This is an entrepreneur.” Like in the core. From the start, it’s in there. Even like the reason that you sold insurance is coming from an entrepreneurial point of view. I could figure it out myself and I could find a way to do this and I like the unlimited upside.
Meanwhile, you did have Macek Consulting back as far as 2004. So were you doing other projects or was it just these two?
Jason: Yeah, no, so it was just those two, and so Macek Consulting was just the little LLC.
Andrew: Oh, Macek. Got it.
Jason: And where you get to have a company to do the fulfillment for those guys. And then they also paid that company for the SEO. I was always a third-party provider.
Andrew: That’s got to be like auto correct. My assistant will go through your LinkedIn profile, highlight the sections I need to look at and then start typing in a short version of it for me.
All right. Let me talk about my first sponsor and then we’re going to come right back in here and talk about the next step when you decided, “You know what? I’m actually going to do this beyond one [inaudible 00:18:08].”
So my first sponsor is a company called Toptal. Actually, who does your development, Jason?
Jason: I’ve used 99designs, primarily. And then I just get it code by . . .
Andrew: And then coding by, who?
Jason: XhtmlChop is what I used last time.
Andrew: Wait, is this whole thing just a WordPress site?
Jason: Yep.
Andrew: And then do you have any back end stuff? How do you communicate back with your clients to get their orders?
Jason: Yeah. We use a program at the time, or right now, called ShippingEasy, so.
Andrew: What’s ShippingEasy?
Jason: It’s like ShipStation. I just like it better.
Andrew: Got it. And we used ShipStation. I had no idea this is how it work. We used ShipStation and then it sends our order to ShipBob and then ShipBob sends it out. And the reason that we use it is because it connects into Zapier. Ship Easy, does it work with Zapier?
Jason: I believe there is an integration for Zapier. Yes.
Andrew: Okay. I feel like with everything, I just need a Zapier integration, I’m happy. Got it. Wow, I can’t believe this whole thing is just freaking WordPress. And then what do you use to manage all the inventory in your office?
Jason: Actually, it’s a very complicated system. We use just Google Docs.
Andrew: Really?
Jason: Yeah, we’ve got them updated in real time. So we’ve got, it’s a little bit . . . It’s just not complicated. Our whole goal has been to keep things from getting too complicated, and we may move away from it at some point, but I haven’t found anything that provides anything better than, you know, with Google Docs you know exactly how much you have on hand at any time, and that’s really all you’re looking for.
Andrew: I was going to say, if you ever need software that will automatically tell you where things are, make it easier for you to pack and ship, you can go to Toptal, but the truth is, there are third-party providers who do this. Yours is a business where there are off-the-shelf solutions for that. So you know? You may not ever need Toptal. you can probably build your whole business doing nothing but this.
I talked to an entrepreneur the other day. He has a standard operating procedure management software. So if you have a checklist for how things are done in your company, you’ve got software. It works great on the desktop, it’s horrible on the phone and I get why he doesn’t want a phone app. Most of his work is done on desktop.
But imagine if he said, “You know what? I do need an iPhone app.” He could go to Toptal, he could have a team of developers within no time at all create his first version. People who built similar products before, create his first version and then handed over to his team to iterate and improve and maintain and so on. If he decided that what he wants was a Chrome plugin, I have a great idea by the way for him for Chrome plugin. Imagine if you’re on a site, like your email marketing software site and the Chrome plugin just came up with the popup, “Here are five different checklists that your team has created for how to use your email software. Just click on the one that you need and follow the steps,” right? Easy.
Jason: Yeah. Great idea.
Andrew: He doesn’t have a Chrome plugin guy. What he could do is go to Toptal and say, “Do you have someone who’s created something like this? Here’s exactly how I need it to work. I’m also someone who’s heavy on documentation, so I want someone who could build it, has built it several times before and is anal about documentation like I am.” If he does that, Toptal will go to their network, find the perfect person, have that Chrome plugin up and running, and then even say, “Hey, look, here it is, Trent. Take the whole plugin. Here’s our documentation, your team can run with it. Sayonara, we’re going off and working on another client’s project.”
If you need someone part-time like that or full-time or even a team of people, all you have to do is go to toptal.com/mixergy, when you go there, you’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no-risk trial period of up to 2 weeks. If at the end of the period you’re not 100% satisfied, you will not be billed. But do not worry, the developers who you hire, they’ll still get paid.
Oh, and they also do designers. I should say that too, Toptal. And for me what I do, Jason, with them is I hired a finance guy. He looks over all my finances and I get on a call with him once a month. I hired him from Toptal. And he pushes me, says, “Look, Andrew, you’re clearly not recognizing that you’re spending too much money on this one category. You think it’s important. I think you don’t need it.” And he’s just like pushing me and pushing me and pushing me, until I recognize all these expenses that we don’t need. And thinking about how we could get the whole team to cut expenses. It’s just phenomenal, phenomenal, and pushing me to find ways to increase my revenue. It’s been well worth the money to hire a finance person from Toptal. I’ve hired developers from them. It’s great.
Jason: Okay. They’ve got lots of things. That’s awesome.
Andrew: It’s actually three different areas, designers, developers and finance, like MBA stuff. Like if you ever want to go raise money and you said, “I don’t know how to put together the finances, the spreadsheets that my investors are looking for, I don’t have the patience for it, I don’t have the patience to put together the slides.” They’ll find somebody who worked at a VC firm who can go and do this . . . Anyway, that’s what they’re about. All right.
Jason: Good deal.
Andrew: I can’t stop talking about them. I should shut up. I should, you know what I should do is set a timer and then just shut up after the timer stops.
Okay, so, at what point did you say, “You know, I think I’m ready to go all-in on this and find other clients”?
Jason: I think it was about 2008, and I had been talking to other entrepreneurs in the e-commerce space who were having the same kind of struggles that my friends had had with finding 3PLs and with finding 3PLs that the billing made sense, and it wasn’t charge for every little thing. And so I thought, “Well, we’re doing this for Chet and Dave right now,” and then Chet and Dave . . . Dave started a dog training business. And so we were also doing all of their dog training products. So I was like, “Well, we’re doing this for $1 per order.” And it was right around the time The Dollar Shave Club was blowing up and so I thought, “Well, why the heck not? We call it Dollar Fulfillment, charge $1 per order and start going after other clients.” I lost your sound.
Andrew: Pardon me. I do a little bit worried about being locked into it into $1 per. I always look at those $1 stores and I think, “Well, at one point it made sense. They were just everything for $1. But now, what’s the connection?” Do you feel that, that that’s an issue?
Jason: It very well could be on, some day. Right now we’ve been doing it since about 2008 and it hasn’t been. And I’ll be completely transparent there, we do have clients that come along that need some extra special type of packaging or something. And we don’t charge $1 for that. The $1 is kind of our base fee for just kind of like something easy, like your beads, and so, yeah, but maybe someday, you know, a bubble mailer will cost $0.85 and we can no longer do it for $1, but for now that’s who we are.
Andrew: Was the site launched on 2017 . . . ? When was it launched?
Jason: That’s probably about when the newest version was launched. But I think it was probably 2008, 2009 is when Dollar Fulfillment’s first iteration came about.
Andrew: I didn’t realize The Dollar Shave Club launched back then. I should go to the Internet Archive. The reason that I bring this up is, I’ve learned now to just start using on my guest’s sites Ahrefs to get a sense of what their SEO is and what they’re doing. And when I look at the chart to see where you’re starting to get links, yeah, you got some in 2015, but the real batch of links started coming in 2017. That’s when you started to get a bunch of traffic. And it seems like at some point earlier this year, you started getting a bunch more links to you. Is that a coinciding with marketing efforts?
Jason: Yeah, there’s a little bit of marketing efforts and to be honest, we really haven’t done a ton of marketing over the years. I’ve probably spent a couple grand on Facebook ads or something, and we’ve been to a couple of conferences. But initially I went out to some of the influencers in the space at the time and just offered them free fulfillment for a certain amount of time, and then they did reviews and I sent them iPads. And so then we just had a bunch of kind of word of mouth after that.
Andrew: Wait, so you went to influencers and these are people who are training other people to build online companies and you said, “I’ll do your fulfillment for free, just mention me if you think it’s good and refer me to you or people if you think it’s good.” They would do that.
Jason: Yeah.
Andrew: And what’s the iPad thing that came in?
Jason: If they went ahead and referred us, I’d send them an iPad or something just to say, “Thank you,” and they’d do a YouTube video showing the iPad and once again tell us how great we are and, so.
Andrew: Wow, who were some of the influencers who did that.
Jason: Probably no one you’ve ever heard of, they’re just small, you know, kind of like Youtubers and stuff. One guy named Mohammed.
Andrew: Mohammed, what?
Jason: I think its last name is Ali. I don’t know how to spell it.
Andrew: Okay, that’s going to be really hard to find online.
Jason: It’s going to be tough to find, yeah. I could still find the YouTube video that he did, that I think it generated like 20 clients for us.
Andrew: Wow. How would you find these guys? Are you in that world? Is it through chat? Is it through something else?
Jason: Yeah, I’ve always paid attention to all the online influencers, and we’ve gone to tons of the different conferences, and so.
Andrew: Like, what’s an example of a conference that’s especially good?
Jason: We’ve gone to all like all the ClickFunnels events. Tanner Larsson does one. Yeah, Dan Kennedy’s put on mastermind events.
Andrew: And you’re just hanging out with people? How do you go from a Dan Kennedy mastermind event or a ClickFunnels event to getting a customer? What’s your process?
Jason: So it depends. Some of them will have actual booths at the event, like the last ClickFunnels event we had a booth and it was not great. And other ones we’ll just go to and just spend the time meeting with people and setting up appointments to meet with clients and getting referred at the events, so.
Andrew: The original set of customers came from referrals, from Chet and . . . I’m sorry I forgot the other brother’s name.
Jason: Dave, yep.
Andrew: Chet and Dave. They knew people in the space because they were Dan Kennedy students, they were in that world. They would say, “Hey, my friend Jason, he can take care of this for you.” They would refer people to you, start doing work for them. Then it was you going out to conferences yourself, masterminds and things like that, networking with people, letting them know what you do and getting customers that way.
Jason: Yep.
Andrew: What’s the process for getting to know someone and then converting them into a customer? I always feel like I’m really good at the friendship part. I’m kind of bad at saying, “Now that we’re friends. Can we do some business here or what?”
Jason: Yeah. So, I agree. I’ve always thought it’s kind of an awkward process, moving from the friend zone to doing business. And so, I’ve always figured, if I have an offer that’s speaks for itself and is irresistible enough, I don’t have to sell, the offer can sell itself. So just explaining to them what we do and what we offer, like you and I talking to begin with today, it’s like well maybe that makes sense for me because that offer it’s a good enough offer.
Andrew: Okay. And then, at some point you said to our producer, “Look, we have no outside funding. It’s actually been really tight at times. There have been times when our credit cards were maxed out.” Give me an example of the thing that happened that caused you to maxed out your credit cards.
Jason: Yeah. So our first fourth quarter where we really started becoming, not just a one-man show where we had employees and a bunch of clients, I mean, at that time, anyway, we had to pay for the postage upfront and so every order that went out the door, we were paying for the postage upfront and then turning around and not billing our clients for that for two weeks or a month. So that, I think it was that first December, every credit card we had was maxed out, every cent we had was invested in postage, waiting, hoping, praying that our customers would actually pay us and come through.
Andrew: That’s such a painful place to be in, and you don’t want to be too eager and you know that sometimes it takes people a while. I’ve done that, I’ve gotten to a place where I had to call up a client and just say, “Are you guys really going to pay?” And it’s such a weird thing to do because you want to act like you’re big enough not to need it, but I just want to know.
Jason: 100%, yeah.
Andrew: And then when you changed your model, what was the new pricing structure?
Jason: Our pricing structure stayed the same.
Andrew: What about the payment structure? Did you at some point change it and say, “No”?
Jason: No.
Andrew: Always pay us after?
Jason: 100%, yep.
Andrew: Do other people do that? Do I . . . ? I think . . . Actually, let me think about it.
Jason: There are two models. Yeah. Some people get paid after and some people at fulfillment houses, they make them pay upfront and keep a balance in their account and when that balance runs out, they stop shipping.
Andrew: I would have thought that we’d need to do that. That I think that’s how we work. But I’m not sure.
Jason: And we’ll do that to some degree sometimes with some international clients because we have no recourse to go after them if they don’t pay. But for domestic clients, we bill either two weeks or a month out depending on how big their account is.
Andrew: Now, look at these, your early clients. I’m saying there’s Chet Womach. He had the dogtrainingsecrets.com site.
Jason: Yep.
Andrew: David Sinick, one of my favorite people, one my favorite Mixergy interviewees. He runs PaleoHacks. I’m guessing you were sending out his books.
Jason: We did all of his thumb drives for a summit he did and so we’ve done a ton of thumb drives over the years for all these different people who put on summits, and then they sell the their recordings on USB drives.
Andrew: Does that work anymore?
Jason: Oh, yeah.
Andrew: It still works?
Jason: Huge, yeah.
Andrew: People still want a thumb drive of the sessions?
Jason: Yeah. We still send out like, they’ll actually do create written transcripts in like a book form, like 600 page books and people are still buying those.
Andrew: Get out.
Jason: Yeah.
Andrew: I had no idea. I do these things online. I just give it to people afterwards, Maybe we should be selling thumb drives, recordings of it.
Jason: Yeah. Absolutely.
Andrew: By the way, what’s that ding?
Jason: It’s my cell phone.
Andrew: What are you using, Outlook?
Jason: No, it’s my cell phone texts coming in. I’m not sure how to shut it off on my laptop.
Andrew: I could tell you had a lot . . . If you go to the upper right, you should see these three lines on your Mac, three lines and dots next to them. Hit that and then scroll up to the top. And if you go to the top, you’re going to see a Do Not Disturb. It looks like the first version of your site was built, or one of the earlier versions was built on ClickFunnels.
Jason: Yep.
Andrew: You’re totally enmeshed in this whole world.
Jason: We’re ClickFunnels people and so, yeah. Yeah. Yeah, I like this world a lot. I’m not finding it.
Andrew: Look at this. Okay. That’s not a problem. The Detox Summit. I’m guessing that’s another thumb drive thing. Underground Wellness. Wow.
Jason: Yep. Those are a lot of our some of our early big clients doing that. And so, because they were there selling thousands and thousands of these thumb drives.
Andrew: So I was saying, “Maybe I should switch over to you.” I wonder what it’s like to switch, to have my stuff mailed from one company to another. I’ve kind of discovered that it’s easier to just have it shipped from China, just throw this stuff away, ship it from China to our location because it’s still way cheaper than it should be to ship a product from China. I know that their price are going to go up but it’s super cheap.
Let’s suppose I send it over to you, and then you hold onto it and send it, send my beads whenever I need to send them out, what’s the minimum? How many do you need to do?
Jason: So typically we require at least 1000 orders per month. There are times we make exceptions for people that we like though.
Andrew: The reason you do that is because you don’t just want to sit on product that’s taking up space. You lose money on a product that takes up space.
Jason: Yeah, absolutely, we don’t charge for storage at all. And so, we typically ask our clients to try and keep a month to two months’ worth of inventory with us at any time. And so they’re not sending us 40,000 books and they sell 1,000 a month because that, obviously, makes no sense for us.
Andrew: And the reason you’re doing this is you want to keep your pricing structure simple. You don’t want to have to figure out how much to charge people. Do books take up more space than beads? Do thumb drives take up not much space, so shouldn’t charge much? Right?
Jason: Yeah, absolutely. Most of the places are going to calculate storage either per pallet or like per cubic foot. And to be honest, I don’t want to try and keep track of it or figure it out. And so, if we can keep it simple, then we’ll just keep doing it.
Andrew: I’m wondering how to even do it. All right. Let me talk about my second sponsor. It’s a company called HostGator. You’re telling me that the whole summit thing still works. So imagine this, imagine we wait for the next diet craze. I know what it’s going to be. Everyone’s getting a little bit anal in the tech space. Imagine if the next thing is count your calories craze. Do you have friends who do that?
Jason: Yes, absolutely.
Andrew: You do? Like they’ll go into their app after every meal and they’ll type it in?
Jason: Yep.
Andrew: I do that. Have you ever done it?
Jason: Yep.
Andrew: You do? What app do you use for that?
Jason: MyFitnessPal, I think.
Andrew: Yeah, there’s MyFitnessPal and Lose It. Those are the two big guys for it. I get a lot of satisfaction out of doing it. Why do you do it?
Jason: Well, I’m not doing it currently, but went I’m trying to lose weight I pay attention to it because when, you know, it’ll hold you accountable and you realize exactly what that meal just cost you.
Andrew: Yeah, that’s the way I feel about it too. I’m not doing right now but I go on and off it from time to time. I just want to be aware what am I actually eating. And there are things that I didn’t think had any calories in them because they seem so small and insignificant, they have a ton of calories. [inaudible 00:34:56], right?
Jason: Absolutely.
Andrew: There’s a sense of pride and simplicity that comes from this type of thing. So imagine if what we did was, said, “You know, I get a lot of satisfaction out of it. I know people do. I’m going to write some content around this. Like, what’s the way to keep track of your calories, what’s the difference between MyFitnessPal vs. Lose It, maybe there’s some service that if you just take pictures will automatically plug that data in from the calorie count into your app, whatever it is.” I just write about it and then we do a summit. Lose weight by being aware of your calories . . . What’s the word? I don’t know what it is. We’ll find some kind of verbiage for it that’s part of the diet movement.
And we do a summit, and the summit means that all these people start to help you draw in a crowd. They then get an email address for people who register, right? I think that’s the way it works. You have a big crowd of people who are watching. And then we sell thumb drives and we hook up with your business, with Dollar Fulfillment to ship out the thumb drives. Do you guys even create the Thumb Drivers or do we have to do it ourselves?
Jason: No, we’ve got a source in China that we order all the thumb drives from and then we actually load the content in our warehouse.
Andrew: Really? Also for $1 or that’s got to be more?
Jason: No, that no cost more, yeah.
Andrew: Yeah. All right. But you load them up.
Jason: We only charge $1 but to actually buy the thumb drive to load the content, it just depends on the size of the thumb drive and how much content we load.
Andrew: There you go. There’s our business. We take it over to HostGator. We’re hosting is super inexpensive. It’s just a few bucks a month, and we’re up and running with this business.
All right. Whether that’s your idea or something else. What you have to do is just go to hostgator.com/mixergy, just bring your idea over there, experiment with it. Mixergy was not going to be an interview site, Jason. You probably already know this because you listen. I’ll tell you, it was just me one day, sitting down in my apartment in Santa Monica and I said to Olivia, “I need some space.” So I took my favorite little one seater couch that I had into the office in my apartment, I locked the door and I just kind of sat there with my laptop. I said, “Well, what would it be like if I created this? I think I like this free theme.” I don’t know why I went for a free theme. I think I wasn’t fully committed to it, I wasn’t sure what was going to go. I found a free theme for WordPress, I installed it, I kind of like the design of it, I made some changes to it, I said, “You know? I’m going to publish it.”
And the first version of it kind of sucks. And so I got rid of it because the first version of it I was going to do this whole thing where I was going to get 1000 people on LinkedIn, let’s see how . . . And then I said, “Who cares?” So I deleted the whole thing. And then the second version became something much more meaningful.
Anyway, when you have a HostGator account you can do that really easily, one-click install of WordPress or, frankly, any other platform that you like, it will even work with WooCommerce which will allow you then to start selling easily and then send all of your orders over to Jason’s company and Dollar Fulfillment will ship it out for you.
Whether you have that idea or any other idea, bring it to hostgator.com/mixergy. They’ll give you the lowest price possible and . . . Is it the lowest price possible? That’s not honest. They’ll give you as far as I know the lowest price that they have online and you’ll be supporting Mixergy by doing it, hostgator.com/mixergy.
What about people? At what point do you start to hire people beyond you and your wife?
Jason: It was when we started to focus on growing, it didn’t take very long before we needed people. And so within the first couple months of actually pushing a little bit of marketing, doing some of those influencers, we hired our first person and then after that we hire his dad and then we hired his friend and it just kind of snowballed. And so . . .
Andrew: And that’s [the first 00:38:21] people to work. Who were the first people you hired?
Jason: Just kind of a warehouse person, operations to pick and pack orders and keep the warehouse running. And my wife was still doing a lot of the, you know, printing the labels and customer service and things of that nature.
Andrew: Wow. And were you guys just using just standard like Microsoft Word or Google Docs to print this stuff out?
Jason: No, at that point we had found like shipping software, like via Endicia and so, it was a it was a little bit more high tech at that point.
Andrew: Okay. What’s the software that you guys used?
Jason: It’s ShippingEasy, currently.
Andrew: Okay. And ShippingEasy does everything, including the labels and the whole thing?
Jason: Yeah, absolutely. So ShippingEasy hooks up to whatever e-commerce platform that our clients are using and all the orders that import in. We can print the shipping labels using whatever, you know, postage, or FedEx, UPS, whatever they want to use, print the labels and it sends the tracking number back to the e-commerce platform, and it’s all very API driven.
Andrew: I’m seeing it right now. I love that the software is out there. How are you finding out about the stuff?
Jason: You’re just researching. You know, you need shipping software and so we demoed a bunch in and landed on that one.
Andrew: It seems like you’re also well-connected in the space. Like I was telling you that I was using ShipBob and you said, “Oh, yeah, I saw them just the other day.”
Jason: Yep.
Andrew: Why would you go and see your competitors like that?
Jason: You know, I’ve known Divey for probably . . . I don’t know, about a year and we just kind of keep in touch and, you know, they’re doing the same thing that we’re doing. They’re on a little bit different track than we’re on, but he’s a great guy and so I just went out to see his facilities and see how they operate, and they’ll probably come out and see how we operate differently.
Andrew: And you’re not worried about him seeing the stuff that works for you? He’s not worried about you seeing that the way that he’s selling?
Jason: Yeah. No, not at all. We’re kind of doing, it’s the same basic concept but our core customers are kind of different.
Andrew: According to Crunchbase they got $62.5 million over five rounds. Bain Capital, Menlo Ventures, Hyde Park Ventures, all invested in them. That doesn’t intimidate you, huh?
Jason: No, not at all.
Andrew: Because you’ve got different customers?
Jason: Yeah, we’ve got different customers. We’re not, I mean, we could have some of the same customers, I guess, but who we’re trying to attract is different than them and they’re obviously, you know, like I said on a different trajectory than we are. And so I don’t really want outside funding. I like having the final say on what happens and so, yeah.
Andrew: Who is your ideal customer?
Jason: People like yourself who have simple products that are easy to pick, pack and ship, and that you do a fair amount of volume.
Andrew: So it’s not somebody who has a Shopify store with 20 different products and maybe 100 sales of each one. That’s not your spot.
Jason: Not ideal. It takes up way too much space to keep it in the warehouse, and to pick an order, let’s say, has three different things, you have to go to three different spots, find them, put it in. Whereas if we got an order, 100 orders a day for your beads, they just drop it in the bubble mail and out the door it goes. You can do that in an hour.
Andrew: Yeah, yeah, I can see that this is like a simple solution, super clear, super straightforward. Who do you admire? Who are you following along to try to stay on course? It feels like there’s this sense of simplicity that’s coming from somewhere. If you were a software person, I would have said, “Basecamp people probably influenced you a lot,” because you keep things simple, you reduce options and you don’t take outside funding. I feel like this mentality that you bring to your business is coming from some core values that come from somewhere.
Jason: You know, honestly it’s just been why confuse what is a really simple process? I don’t need to make putting something in a box and handing it to the UPS truck driver any more complicated than it needs to be. And so, that’s really where it’s come from and not necessarily any outside influence.
Andrew: And so then the challenge seems to be that you haven’t yet found your source for growth, right? It’s largely just you going to events still, word of mouth still. Am I right?
Jason: Yeah, it’s mainly been word of mouth. I mean, we’re growing, we’re on the Inc. 500 List three years in a row, and so I mean, we’re growing while . . .
Andrew: Wow-wee. And you’re growing largely from that? There’s no like online thing yet? You said, you are, I could see you’re doing something on Facebook. Are you beyond buying traffic, are you doing stuff on Facebook?
Jason: Yeah, we’ve run a couple ads but, I mean, probably we spent less than $5,000 total in advertising costs.
Andrew: Yeah, I’m looking at SimilarWeb, it says 94%, 95% of your social traffic comes from Facebook, and then about 5% comes from Pocket. What are you doing that’s getting you Pocket traffic?
Jason: It’s a great idea. I don’t even know what Pocket?
Andrew: They store articles. Are you guys doing long form blog posts? Is that what’s doing it? No?
Jason: No.
Andrew: No content strategy? That’s it.
Jason: No. And I told you, I used to do SEO. I’ve never done a stitch of SEO on our site. We just put it up and been too busy with other things.
Andrew: Yeah, I can see it. To be honest, I was a little worried that maybe you guys weren’t, like I thought, “Maybe this guy is just getting started and he’s on shaky ground,” because of a couple of things. Number one, I could see that you got the 99designs look, there’s some kind of like bubbly-cartoony thing that they’re big on 99designs. I don’t know what it is, but they did do it and you have it. I look at your website. Not only does have that design, but like the copyright on the bottom is 2017, which tells me, “Maybe they just haven’t updated it and refreshed it in that long.” But then you don’t even have like the Inc. 500 badge, which everyone who is in Inc. 500 seems to spread.
Jason: Really? I thought it was right on the header.
Andrew: Let me take a look. Let’s see. Maybe I’m not scrolling over to the top fast enough.
Jason: I’m pretty sure that Inc. 500 List is on the header.
Andrew: All right, let me try to do it without content blockers, let me see. Go straight to the top. No, I’m going to share my screen. I have a feeling that we’re going to lose it for, that no one’s going to get to see this. Look at how understated this is. Do you see it? Am I missing it?
Jason: No, I think it’s supposed to be kind off the right of the robot on the top. So, I’m not sure where it is at.
Andrew: Let we try to . . . Oh, there it is. Look at that. I had it like, there it is. I have to stretch my screen out for that to show up. Stretch the browser window. Got it.
Jason: Well, that’s good to know. It’s not popping up for everybody.
Andrew: Yeah. This isn’t a big thing for you. As a guy who’s in the online marketing space, you’re not big on online marketing. It’s just all networking, getting to know people, that’s it. And the reason you’re doing this interview is part of your interview, like push right now, are you trying to get a bunch of podcasters to talk about you?
Jason: I believe in transparency, and so I hired a guy out of San Francisco and he worked for a huge 3PL and he pushed me to start doing some of these interviews and so that’s why we’re here.
Andrew: All right. Because of what? Because this is what was working for his other company, and so he’s saying, “Jason, do the same thing.”
Jason: Yeah, pretty much.
Andrew: And look at this, like I’m looking to see on Ahrefs where you’re getting your traffic. It’s freaking Ahrefs, now that I’m using it for interviews it’s adding whole other layer of understanding. You should do this on your competitors. We might need to do this together for your competitors. If you want, I’ve got an account. I could do it for you.
I can see your 99designs contest, complete with the 95 entries that you got. I can see that the person you picked was someone named ADS. It gives me a sense of you’re thinking about your design. I can see that you have been doing a few podcasts, like there’s something called the 2X eCommerce podcast, that sends you traffic. The 925 Millionaires site, you were on there for a bit, the Less Doing podcast, which is actually really a good fit for you, I can see that because you guys don’t do that much crazy stuff, you stay super focused. Radio Public, I can see this whole thing.
Has it helped? Have you gotten business from all these podcasts?
Jason: I don’t think so. No.
Andrew: Really?
Jason: No. I mean, if we have, they haven’t told us that’s where they came from.
Andrew: And I do feel like people who come from podcasts are pretty big about letting you know that they’re fans of the podcast. They want us . . .
Jason: I’m sure that’s going to change with this one, though.
Andrew: I wonder, actually. Let me know if that works.
Jason: I will.
Andrew: Here’s another one, amazonsellersclub.co, you’re on there. Yeah, I can see you’ve been doing a little bit of a marketing push. What I’m doing is just going to Ahrefs and selecting back links and I can see exactly what people are doing. Right. Let me do ShipBob. Hang on a second. ShipBob isn’t even your competitor. But I use them because they’re not super big competitors. Like if I had someone who is more directly competitive with you, I can see that it might be more of a turnoff for you. Okay, let me see.
They’ve got four brands to know from the New York Times, your denim upgrade. They’ve got Shop My Favorites from glitterinc.com . . . No, let me. Yeah. Looking through their back links. I should be doing. I bet they’re people who are listening go, “Andrew, there’s a better section here that you should be going to.”
Let’s look at their top pages, I found that’s . . . No, damn. I don’t have the top pages for them. I guess I need to upgrade to get that. That I found it’s helpful to see the like the one piece of content that’s doing especially well.
Jason: Yeah, absolutely.
Andrew: Lifehacker, they’re on there. I can see that that’s worked for them. Look Book. Listed . . . I don’t have much to offer from ShipBob, I still don’t have enough info for them.
Jason: Nah.
Andrew: All right. I love your company. I can’t freaking believe that I hadn’t discovered this before. I definitely would have use you guys if you would have accepted us. I wonder if we do enough of this. I feel like our problem is we do big burst of orders and then we stop.
Jason: Yeah.
Andrew: And I don’t think that’s right for your model, right? You don’t want me to do a bunch and nothing.
Jason: Well, yes and no, I mean, if you’re wanting to keep a year’s worth of inventory, maybe it doesn’t work but I’m pretty sure there’s a way we can figure out how to work together.
Andrew: All right. I like that. I’m having trouble trying to figure out what the pricing is. All I need is like Zapier integration and then I get to send it out from ClickFunnels, I could send it out from our WordPress form, plugin, boom it’s done.
Jason: Yep. All right, so you use ClickFunnels too?
Andrew: I do use ClickFunnels. Check this out. I’ve actually been like excited about this.
Jason: Oh, Two Comma Club.
Andrew: Look at that. Two Comma Club.
Jason: Two Comma Club. Love it.
Andrew: One little thing, one funnel. I remember when Russell was on here and he talked about the Two Common Club all I thought about was, “It’s kind of cool, it’s like a marketing thing. I like how he’s building up his cult. People are getting excited.” I never thought it would be my thing.
And then one day I checked in with my team, I said, “Wait, don’t we have a funnel like a simple page that we’ve been updating forever because that’s the way that I operate and hasn’t done over a million sales, is it?” “We’ll take a look but, yeah, we’re almost positive.” Sure enough. Yeah.
Jason: There it is. Now you’ve got the plaque.
Andrew: Yeah, it’s a great company. You know what else happened? I lost my earphones, my AirPods, playing with the kids. I posted on Facebook that I drove an hour and a half out to this freaking playground in South Bay to go find them. I couldn’t find them. I get back home three hours later and I see a post from David, ClickFunnels, he goes, “Andrew, well, we could just send you another one.” I go, “I can’t take it.” He messages me back. He goes. “Andrew, you and your problem with accepting gifts, you got to get over it.” I don’t think I’m ever getting over it. Thank you, that was nice of you. Let me show you what he sent me. Hang on a second.
This will just give you a sense of who they are. Oh, man, I just dropped it. But, one sec. He sends me a box, a note, “Andrew, here it is. New AirPods, no strings attached.” And the attached string that was like not tied. And then got me new AirPods.
Jason: That’s awesome.
Andrew: Yeah, they’ve been phenomenal. When I went to speak at their event, they invited my kids to come along, which was nice, and my wife to come along in Utah. We had a good time there.
All right. Thank you so much, Jason, for doing this interview. I’m excited you tell me what you’re doing.
Jason: Yeah, thanks for having me.
Andrew: And thanks also for being a Mixergy listener. And for anyone who wants to go check out your site, go check out, guys, dollarfulfillment.com. Let me know if this works for you, if you’re a customer of theirs or you if much about them, I’m excited.
If you’ll take my business, I would like to find a way to get all my stuff over to you and have it work.
Jason: Absolutely.
Andrew: Have you guys send it out. All right. And I want to thank my two sponsors who made this interview happen. The first will help you hire phenomenal developers, it’s called Toptal, check them out a toptal.com/mixergy.
The second will help you host your website right. It’s called HostGator. Check them out at hostgator.com/mixergy. And if you like this podcast, and you want to find another one, my friend . . . Who was I going to . . . ? I don’t know, I’m blanking on his show name. It’s just Jordan Harbinger. Jordan Harbinger sends me a text message, says, “I’m no longer doing the Art of Charm,” I go, “Why?” He goes, “Andrew, I can’t get into it, I’m starting over brand new.” I go, “Oh, dude, you should find a way to get back to the Art of Charm.” I’m messaging the Art of Charm people saying, “How is he not on this? You guys are making a big mistake.”
He’s a little bit worried, but he starts from scratch. The freaking guy builds up his podcast back to where it was before. It’s at the top of the charts, doing interviews and the big thing that he’s doing is interviews with more mainstream people. So, if you’re looking for another interview program to watch, to listen to, go check out the Jordan Harbinger Show. I’ve been really enjoying the fact that he’s growing and I’m enjoying his podcast. Go check him out, Jordan Harbinger Show. Thanks Jason. Thanks, everyone. Bye.