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Andrew: Hey everybody its Andrew Warner am the founder of mixergy.com, home of the ambitious upstarts, today I’ve got with me a bootstrap entrepreneur, I get a lot of requests from bootstrap entrepreneur and I think you are going to enjoy watching this interview. Today’s guest launched Hello baby, an online store that sells baby products, after two years in business his site does $ 62,000 in monthly sales I know because I asked him to show me his revenue dashboard before we started this interview. I invited him to make sure he talked to you about how he did it, Trevor Gin welcome to mixergy.
Interviewee: Hello everyone.
Andrew: Trevor before we get started you were telling me you got the inspiration for this business or for doing your own business online after seeing eBay drop shops, what are eBay drop shops?
Interviewee: Well an eBay drop shops is where [IB] everyone sold actually sold a forty year old virgin , the loving dress used to run an eBay drop shop, and it’s where people bring stuff to…, the idea is that people sitting on eBay is a bit pain in the ass, people you know at the end of times they bring stuff in the drop shop which does it on their behalf, and it’s a very popular business plan a few years ago, I think in the same shirt that auction dropped and a few other ones and I sold it and this used to be very fast many on venture capital funds and they also basically went fast because no one had actually done the math as to whether it worked or not, so I was working for [calimical] auction for you who were kind of the biggest in the UK and I, in the process of seeing this company fail I met an awful lots of people who were selling stuff online, I thought that I could…I thought that they seem to be doing quite well selling on market places many on eBay, I thought well I was pretty sure that I could do a better job, so I basically did some of the search and I decided that the nursery market was a good market was the market to get into.
Andrew: Did you…you just worked for auction for a year, right, you weren’t one of their franchisee.
Interviewee: I wasn’t a franchisee.
Andrew: And you said that nobody did the math on it, what was the math that was troubling in that business?
Interviewee: Well, the issue is really trust, it takes a lot of…okay if you got a typically the..,there was a franchisee model and the thing about franchisee like McDonalds it’s suppose to be a dead search, you paying, you pay your franchisee fee and you basically you know it’s a successful business you are buying and from it with drop shop it’s the basis wasn’t proven so people were buying unproven business which is not how really it’s suppose to work , now the way it works in the UK is the…typically what happens is the drop would take a third of the sale of the item, so out of that, the way my company is organizing , so out of that comes the eBay fees , the money you would pay to your… you know the franchise holder, you know the company that is running the brand and then what was left over goes to the franchisee, and eBay fees are roughly 10 percent, that’s a third of us , auctioning fee who comes to work for the day one to a third, so you know two thirds for us, the franchisee was left about 10 percent of the sale and you think about it you have to sell an awful lot of eBay products which is very time consuming to take the products, you know list it, you know deal with the [IB] etcetera for very little money and no one had really, the company I worked for had really done the math to work that out and I think to a certain extent a lot of this companies are just not
Interviewee: Enough money in it really, it’s too times conceiving.
Andrew: So a $100 sale the store owner the franchise might net about 10 bucks.
Interviewee: That’s about well yeah, from which they have to pay for everything. You think about the number of people that come in the door, to you know to do in basis something which people haven’t heard of. I mean most people don’t know these things exist. You think about it you have to come into the door with items to you know, to make any money at all. If you think about it, most items that most people own aren’t worth $100. And I think about it, how many things do I have worth $100 that I actually want to sell? Very few. And you know, most people just come in with, you know a lot of people come into drop shops with just complete rubbish, that just you know, so you know not everyone that comes in the door has everything worth selling. So it becomes a great problem, it’s a great problem of filtering out you know the right products and…
Andrew: What kind of products did people bring in?
Interviewee: Well it was just, that was the problem that the huge variety of the products. I mean that the successful, the way the companies were and I mean the basis, a lot of, a lot of what we in England would call tart I mean what you call garbage you probably thought, you know what I mean, stuff that’s not worth any money; old books, old clothes, you know some kind of antiques, well antiques work very well, some electronic stuff but then you have any problem with, say for example the electronic stuff that is, you know doesn’t work, you know, so it causes a huge, kind of customer service issues and the great thing about running you know, a shop like that one is that wants to get more stuff having it at my supplier and say you know I have got some money I would like to buy some stuff and they’ll bring it tomorrow. Well in a drop shop you have to, you have to really encourage people to bring stuff to you and the supply doesn’t work very well which is, I mean there’s some kind of companies that do it on a [IB] consignment selling which does, I mean like for example in the UK we have a big chain called John Louis which is probably I don’t know a very up market wall mart basically, sells everything and they have, you know a mountain of returns everyday, and at the moment they sell these to, you know the basis of very small percentage of their value was, you know a market place like eBay is a great place to sell these things. It’s a very, very good place for getting rid of the stuff. And I think that’s major retailers are just actually beginning to tap in to that, in terms of a way like a child to get rid of the excess stuff.
Andrew: I see. By the way I am seeing that you got your inventory behind you so you scout everything that you sell? Tell me again.
Interviewee: Well, we stock, the smaller items we stock here, the larger the items we get them, we [base] either buy them to, into order or we get drop ships, which you know drop shaping is basically when the supplier ships straight to the customer.
Andrew: Okay.
Interviewee: So we, that doesn’t mean, I mean typically, that drop shipping anyway really works for items which are large though which, you know which, you know, for example most of the companies I know that drop ship would charge between 5000-10000 to ship the item. So if the item is any worth $10 its just not worth it, whereas if the items are a prime or a [cost] or something, then you know it’s a great way of getting access to a lot of stuff without actually buying it.
Andrew: Well, lets get into how you got here, you look around you see auction for you, that model doesn’t work. How does auction for you lead to you selling baby products on HelloBaby?
Interviewee: Well I am, I kind of, I conclude that I, we got a name like… started thinking about this 3years ago and everything was little more buoyant in those days. You know people were, you know this is wasn’t a full recession. And you know online sells were growing very strongly in fact interestingly they still are but they were certainly those things called doomers and gloomers at the moment. And I thought why can’t I, once I, you know I met a lot of online retailers at those functions and I though that they were you know, just not very sophisticated, you know they didn’t , they sell on eBay and didn’t have, you know a lot of people sell on eBay and don’t even have any website which is, you know a great mistake. And I thought why could I do this just a whole lot better, I would on sell multiple channels, I have a great website, I have a great eBay shop, I do everything really, just you know optimize everything. And then the questions, I thought like, okay I want to give this a scale, I want, you now want, because I, you now I think I can do the job with this. So then the questions really, what products to sell?
Andrew: Right
Interviewee: So I kind of set some criteria, I thought okay I could set some criteria for products I want to sell. Because I kind of started with a blank slates, and I looked at electronics put them in, you know electronics are hugely capacity there is no margin in it. I do things like outdoor stuff which is, you kind of interested in a lot of sport and that is good but it’s kind of seasonal. It’s a bit kind of you now it base it’s season out here, I think is a problem with that. And I thought it’s got to be something I know about, so I had a, I just had a baby and is now three years old, but you know baby stuff it’s
Interviewee: [IB] it’s basically, and I just, it’s basically recession proof. Because people continue to have babies. In fact people have more sex during recession, because it’s basically considered like, you know a cheap, leisure activity I mean I’d say. I am serious, it really is. And the…what else…
Andrew: Not if you’re having a baby, then it becomes a very expensive leisure activity.
Interviewee: It’s called, yeah, it’s a very expensive.
Andrew: Alright, so you’re saying you saw a market that doesn’t with the economy, doesn’t change with the time of year, one that you’re actually interested in, and have a new born passion for, what else?
Interviewee: It’s also, yeah I mean. Well I think you got to choose something where… it’s also in terms of competition. The baby market is not as sophisticated as there’s something like, you know electronics is a good example or books. Because you know it’s very, very easy to compare the prices of books and electronics across different, you know across different websites and across different platforms. And so it’s hugely competitive and if you’ve got into you know say [calcu] , you calcu? I don’t know, and price will run you know shoving it past and sites. Most of, you know, you could, it would compare, you know both within the car screen as within you know a canon camera within the stores and also against other you know, they’ve got so many of one of the good other products. It’s very easy to compare the products whereas the attributes, whereas you know products its kind of a design element. It’s actually, basically what I am saying it’s a less liquid market. Less of a perfect market. So therefore it’s easier for people, you know to, for the smaller players to come in and actually start a business.
Andrew: I think also man, I think it’s fair to say, I don’t know if you agree with me, I think if anyone realized how difficult that thing was going to be they’d never do anything? What do you think? Alright, what you’re saying is that you saw the opportunity it made sense getting into the space but at the same time it was harder than it seems.
Interviewee: Well I think everything is always harder than it seems. I mean think that, I mean I am just saying I think that, you know I think that the online sales was very pleased with the decision I made. I thought that, you know a lot of things I had access to, I found some wholesalers, you know the best, I think I’d recommend people to get into sale like retail services. Just find some very good wholesalers that you can get stock from very quickly. Because if you can get access to a lot of stock, with that I mean you know very quickly you have to keep less, you know lower stock levels. And so you can, you know basically what we do, we put in an order pretty much every day to get more stock in. So that’s another important thing. Get, you know get your suppliers. And it’s not really, I mean…
Andrew: Let’s actually, lets do it as a story so that I can follow along how you built it up. We talked right now about how you came up with the niche?
Interviewee: Well, first thing I did I mean well I looked for I did, I investigated different, I did a lot of investigation in the markets to look at the different products that were available and also, you know I build the spread sheet, you know I built the prices to work at the kinds of margins I could get.
Andrew: How did you know what products you were going to sale?
Interviewee: Well I mean in, I mean broadly speaking there’s something like, kind of nursery products so and I started off with the, you know the sitting prams and the cot beds and stuff like that so I found suppliers for those things. And it’s very important to find like wholesalers that can supply the stuff because you know if you wan to get, if you’re buying stuff from individual sellers then you have to buy lots of one product, its better to buy small bits of, you know a wide range of products. Also I mean, it’s important to get, we started selling on, you know you could your sales channels right as well. So we started, initially we started selling on eBay because you know that’s just the easiest thing to start on. So you know we basically empower we’re working on developing the sales channels, getting, you know getting eBay…
Andrew: The first thing you say was before you even launched your own website you said I am going to sell through eBay, I know it because I worked at auction for you…and …
Interviewee: Basically yeah, basically. So I needed to, if you’re selling online its important to be, you know, to be interested and have a passion for selling on line or the passion for, you know otherwise. Because what happens to a lot of people is they say “okay, I am going to sell online”. Well they, then they end up, because they’re not really that, they may be they’re interested in the product but not really interested in the process. So they spend a lot of time, they have to get consultants in to help them do the work. And the consultants, you know, so you know they went to just get a job and you end up paying lots of money. So I think you have to be interested in doing it yourself.
Andrew: I see, so you see someone who is really passionate about hats, they hear that the internet is where it’s at, they start selling hats online, but they don’t really have a passion for selling online. A passion for figuring out where the audience is going to come from.
Interviewee: So…
Andrew: And the whole thing burns or they end up having to hire somebody like you to come in and straighten them out.
Interviewee: That’s very right , I mean I see that a lot with internet businesses . They don’t really, or people set up thingsS. They don’t realize how hard it is. Really, because takes, it’s a lot of knowledge involved and its different platforms and the kind of technology involved as well. And I see I mean for example something like just like you know taking car payments online, there’s a lot of …
Lots to learn about car payments. I mean we lost about five thousand pound in the first year because we didn’t understand about online fraud. And that’s just one you know great American airs you need to know about. And if you…
Andrew: You know let’s continue with the story then. I want to make sure that I get it all and I just took a note here to come back and ask you about car payment issues. So you knew the niche, you knew where you were going to sale, how did you know what products you were going to sale first? You were starting to tell us.
Interviewee: What I did, what I did is I basically, the [IB] things about eBay is the fact that you actually got a lot of, you can historical data about the products that are sold. So what I did is I got a, what I call a [table peek] which allows you to see historical product data. And so basically I got the wholesale prices for products. And like I basically first looked at eBay and I thought those kinds of products seem to be selling in volume. And then went and got the prices for those products. And did research on, trying to find out what kind on prices they were selling for. Put it on the spread sheet, worked out products that could make a good margin on [IB] those products. And I think that, a lot of people, I mean the question people ask me a lot is you know how did you find supplies thinking it’s going to be difficult. I mean one of the ways, you ‘just go into, you know, one of your competitive shops and you pick up some products and you write down the addresses of where they’re from. And you get them [IB].
Andrew: So you walk into local stores and you said which are these baby products am I interested in, lets see if I can find the name of the manufacturer and the address on this.
Andrew: Basically yeah, I mean it’s, you know I think people find its scary just bringing up supplies but fundamentally these people want to sell you products so you just ring them up and say you know will you, will you sell to me? And what’s, can you send me your wholesale price list? And I mean these days when I go to like shows I’ll say, you know the first thing I’ll say to people is you know will you sale to online any businesses because a lot of people won’t. And will you, do you know, can I have, if so can I have your pricelist? And if it’s like you know somebody sales prams or the [larger items] and I say now will you ship drop these products for me? Because I just don’t have the, I mean you could tell them I’ve got some space here, I have masses of spaces. So you know I need to find products, larger products. I need to get drop shipped.
Andrew: What are the first products that you started selling?
Interviewee: Well I started selling some baby safety products.
Andrew: Ah like the little plastic things that you stick into the outlets to make sure the baby’s fingers don’t go in?
Interviewee: Yeah, that’s [plug guards]. Things like those. We still sell this but…
Andrew: Why plug guards?
Interviewee: Because people think that they, we had, there wasn’t, it was just an example, and the things that I bought a range of products from the particular manufacturer that sold baby safety stuff. And there’s huge demand for it. It’s the goods’, you know it’s the goods brand that people know and they, everyone needs it. And when you have a, when you start a kid and they start crawling around, you need a lot of these things. And we sold huge amounts.
Andrew: So you bought if first and you started listing it?
Interviewee: Yeah, basically.
Andrew: How did it do? How did the first batch do?
Interviewee: I think it did, it sold very well I think. I mean some thing obviously. I mean it’s this [combination] is something sold very well and I something sold less well. I mean the, certain kind of ranges of products you know like baby safety, baby feeding stuff, people, everyone needs them. And you know, there are certain brands that the people aren’t that price sensitive but they need it. You know need it today, lets just buy it. And so you know, that they, the people who think what I need to do is I need to is I need to buy niche products and any that sales. I mean just not the case, you need to, I mean having some products that are kind of niche that no one knows is great. But you need a range of stuff. You know and things that, you know the everyday stuff that people need. You know it’s the, you know it’s the bread and butter of our business really.
Andrew: Did you make money the first month?
Interviewee: Sorry?
Andrew: Did you make any profits the first month?
Interviewee: No I think we, I didn’t even make money for about a year, really.
Andrew: Really?
Interviewee: I think so, I can’t remember. But the, I mean the sale at the end of the first year, we were selling about ten thousand pounds a month. And…
Andrew: How did you keep yourself going financially if the business was losing money for the first year?
Interviewee: Well I live frugally. I go, I kept costs very low. I got, I mean one of the great things about selling an online retailing business is actually its very cheap to stock. Because you can get by very limited amount of stock. You can, I mean these days you can, you don’t need to develop your own software. All you need is like you know a website on eBay shop or something and a platform to lift on. We sell, I knew the part that we use a product called E-setter pro which is a, online, it’s an E-commerce platform. I knew the people that wrote it and they let me use it for free for six months which is very nice of them. And then they charged percentage of sales, we pay 1.5% to them. So basically there’s no, there was no upfront cost of that. The, I mean we bought a fairly limited amount of stock to begin with. I got quite a small units which had no windows, so it’s half the price, and I did everything myself. So and I did quality consulting on the side to raise money which was the
Yeah I think that keeps you going and we have I mean, you know some, I didn’t, I had some savings which I spent as well. So I think probably spent about £20000 all together, may not seem much like I really pay myself a salary. So you know depending on how you count it.
Andrew: And where were the inventory, right now I am looking over your shoulder you got a nice little warehouse, what did you have in the first place, in the first few months?
Interviewee: Well, I mean, similar stuff to this except, you now it’s a bout, this is about 3 times the size of the original units.
Andrew: Did you rent the warehouse right away?
Interviewee: Yeah man this is rented.
Andrew: Before you didn’t keep this stuff at your apartment or your home somewhere, you just kept,rented a warehouse right away?
Interviewee: There is too much stuff, I mean it’s basically you know it’s a whole world of baby stuff here, I mean its like, you know the original unit was 200 square foot and also a lot of places were in sales to you , if you have, if you do it from your apartment, it would seem like a professional seller you have to, if you bring up supplies and say look you know like I want, you know to buy this stuff off of you, and say well you have to leave it to flat 12 [ebonies] house in my case, then they are just not going to take you seriously a lot of them wont just do it.
Andrew: So Trevor you are really taking a pretty big bag here, bigger than most people who I have interviewed who have online businesses, you are committing to this space. You are committing to this space, you are committing to the products because you are you keeping them in an inventory you are committing a lie.
Interviewee: Well, yeah. I mean that’s business. Okay, two things, the units I got right is on 30 days terms so I can get out of it, and it cost me £300 a month so was at $500 a month so its quite cheap. I started off with, I mean a lot of the stuff, a lot of the stuff was drop shipped so I mean I probably started off with about £2000 worth of stuff. And I mean I had access to a lot more than that. And so I suppose, I mean also I spent, you know I pretty spent about another £2000 on the setup of the website and eBay shop etcetera. But I mean you know when you are starting it’s considered to be very low setup cost for a business. I mean if you are developing a product, you know you, a software product or whatever, you know you would be spending a lot more awful than that.
Andrew: I am not so sure; I see a lot of people who end up just developing it themselves.
Interviewee: Yeah.
Andrew: Now, what if it didn’t work out? How did you even know it would work out? You’d be, its, that you start listing this stuff online.
Interviewee: I think basically the fact that, I mean I was quite enthused , I mean if you are doing an online retailing business right, its something other people have done in the past. You see you can be pretty sure there are other baby websites out there that work. Now you can say well you now, there’s a, you now the market is saturated, or you can say look this is a successful business where people are making money out of, and that was the view that I took. So I was, also being elegance and I thought that I could do a better job than other people. So I felt that, you know that I, it was all very it was all very doable. I mean as I was saying earlier, I think if I realized how hard it was going to be, I think I might have been a little bit less bullish about the whole thing. But I think that, you know, you got, if you looking at, I mean, giving an example developing your own product, then you know its something novel people haven’t seen before you really don’t know if its going to really work. Whereas there’s people out there who already have you know online retail businesses of all sorts that make good money. So I think you can be sure that if you do a good job off of it , across all the different things you need to get right then it will be successful. I mean it won’t be the next goggle, but it’s going to be you now a successful business and you know others are probably I was right but
Andrew: What made you so confident? You called it arrogance and I am going to call it confidence, where did that entrepreneural confidence come from?
Interviewee: Well, I mean I felt it was, I was really sure that, you know I suppose I was exited about was I like playing with things and I thought this was something I could do. I perhaps didn’t you know, I felt that there was an opportunity that, because you know a lot of people selling things online and I didn’t think they were doing a very good job. And in fact the biggest seller on eBay in the UK in terms of nursery stuff doesn’t even have a website so you know, that which is pretty week basically and I do. Incidentally they sell about 10 times as much as I do and they continue to do so.
Andrew: And all through eBay?
Interviewee: All through eBay. But they sell, I mean they sell, what they do is they would buy, that they sell very, very cheaply. They buy a lot of you now returns from major retailers sell them at a real bargain price. So it’s a huge turnover of stuff they’ve got.
Andrew: And because the turn over is so much I can imagine that their margins could be a lie
Smaller than yours that’s what I mean when I say you are taking big risk when you are start out because someone like that could have margins that are paper thin that you can’t possibly compete with, they have a broader selection than you still have and you are going up against them. Why didn’t you think that that was dangerous?
Interviewee: Because well I just said I felt, I could do you know, I think that, okay it’s not a perfect market to begin with, right, I think it is not entirely price driven either and I felt that you know my knowledge of online marketing, of you know selling at different market places of SEO etcetera, I could get in front of enough people to sell enough stock and I mean that seems to be the case and I mean if it was a perfect market then everyone would go to the cheapest place all the time but that’s not the case, people value good customer service and they a value good online experience and you know price isn’t everything. And I think that’s what people, people presume price is everything but it isn’t so that’s …I mean.
Andrew: What kind of customer service did you offer at first that made you stand out?
Interviewee: Well I think that it’s more in it, it’s more doing things, doing things well, I mean there is nothing, you know we ship things fast, you know we reply to questions, we you know take a lot of effort having very good photographs and good descriptions, I mean it’s the simple things you need to get right to make this work, so I think if you can concentrate and get this basic things right which a lot of people don’t , I mean it’s you know we solve problems quickly, we get things out of the door , I mean it’s not rocket science but at the same time there is a lot of people that don’t do this things and don’t do it very well and we have very good systems that allow us to track this things and a lot of people do this things on a, you know they do this things basing on a what we say back of a fag, on the back of a cigarette pack is, we also make things that allows us get an edge. So…
Andrew: Like what? What kind of things do you track that other people should be tracking too?
Interviewee: Well, it’s more in terms of the, we got more because our system automates the listing we can get the, it automates the, we have one inventory and it sells on different channels, so.., if we were to, you know did have such good systems then you could be selling you know something on one channel and then selling the other at the same time and you will be out of stock because you weren’t , it was not integrated, so we must keep this, you know we make sure that we got you know good stock control and therefore we, you know very rarely get things which are out of stock. So we, well my experience of buying more on people as they constantly have no idea what that stock is and you know it’s a bad customer experience we have to start cancelling things. And so, you know its really getting the basics right, and I think the same people don’t get the basics right, which is why, you know why we do well .
Andrew: Can you give me an example of what you didn’t do right when you launched? That maybe you noticed and you looked back and you’re what was I thinking? I could have fixed it.
Interviewee: Credit cards. We didn’t look into, I presumed that credit cards, I presumed that credit cards funds when they come into your account are actually cleared as it were, but you know you can be charged back in the first six months so we had some very kind of odd looking transactions. And I thought well the money is in our account, you know it can’t be forged and in fact it was and we got, we lost about five thousand pounds.
Andrew: How? What were people doing?
Andrew: Well if you, I mean its stolen credit cards basically. And if you don’t know enough about how people do online fraud, then, you know you’re liable basically and I didn’t realize that we were liable. But I did much to persuade PayPal that it was their fault. Which I, don’t know, like saying they could have, you know looked at it less, you know they certainly looked at it in another way and said actually no, it’s your fault. But they, they gave us the money back.
Andrew: So you were processing your credit cards at that time through PayPal?
Interviewee: We were at the time. We don’t do, we did take PayPal as, I mean PayPal has you know is the PayPal, PayPal service. And I also have credit card services where you can just put the credit card number and we were using that for both things but now we use a different service which has a more transparent flawed detection system.
Andrew: What’s the service you use now?
Interviewee: Something called Sage-Pay. I don’t know, I don’t know if you have in the US. I mean it’s similar to, I don’t know what you have, I don’t know what US card processing but it’s, something called, it’s the biggest card processor in the UK.
Andrew: Okay, so let me see if I understand this. People would take stolen credit cards, go to your website or find you on eBay, and buy babies’ supplies?
Interviewee: eBay’s fine. It’s just the website. Just the website.
Andrew: Just the website. So they’d come on the website, and then they would buy baby stuff?
Interviewee: Yeah, you see basically it just wouldn’t be baby stuff. It would be prams. If you buy a pram,
Andrew: A what?
Interviewee: A pram. Like a stroller like a cot or something, right. Its worth like two hundred pounds then you can like steal
Well you can resale it for fifty [cris] or something, £50. You know its worth, you know and if you, and multiply by probably do that with lots of [different] people. So you know, anything you can resell is worth stealing.
Andrew: I see. And how did you convince PayPal it was their problem?
Interviewee: Because I think that PayPal, again my view would be that PayPal didn’t take enough effort to explain to me, you know that these transactions were fraudulent . They should have pointed out that these you know, that that’s, if they addressed the measures, the things I need to look at in Pay Pal to actually find out whether these things are forged or not, which is very unclear. I and I also think that they because I, you know I wrote a blog and I was quite well known in the industry, I think that they wanted, they, the last thing that PayPal wants is a small businessman saying “you know PayPal lost me lots of money”. So its worth actually just compensating people to make sure that they don’t get bad PR on the market I think, because you know as soon as people start saying PayPal is not a safe payment service, then it just, you know that, its bad for their business. I think probably they just wanted to knit that one on the bars basically.
Andrew: Okay, let’s see what else I’ve got here in my notes. Let’s talk about the breakdown of revenues. You sell through Amazon, you sell through eBay, you sell through your own website, how does the revenue break down? How does it check out?
Interviewee: Well basically at the moment we sell about almost half on Amazon. Amazon market places have become very, very popular and successful. And we can become, recently became a platinum sell on Amazon which seem to increase our sales a lot. We then re-sell on eBay; we do about, what’s the name? Here we go; we do about another thirty percent on eBay and about twenty percent on our website. I mean at the time I am expecting our website to be the major sales channel, at least I am hoping it is. Plus I think for, I mean if you’d asked me two years ago what would be the major sales channel it would be the website. But I think that, I mean fundamentally, you know eBay and Amazon are just very, you know they got big, they’re good selling machines. They have a lot of people working on making these things work well. They’ve got a huge audience, they’ve got an international placing, they’ve got an international…
Andrew: You heard that? I hit the mute button but you still heard that!
Interviewee: No I saw you do it, I mean God [IB]
Andrew: I had to sneeze, thanks.
Interviewee: They, eBay and Amazon they’ve got a huge international market place. Right, they’ve got millions and millions of users, right? And its very difficult for websites to actually to reach that kind of exposure and so, basically you pay them fees to, you know to out base to outsource your market to them. So it’s a great way of businesses to start off. And we get at the moment, because we get about, about 1500 hits to our website everyday. But we just, you know I think it’s difficult you know developing a website with a good selling machine is difficult. And because of certain, because we affected we have an out of the box solution we have to work round that, to try and make a useable website, which we’re having, actually having our website we developed at the moment. But I mean usability I think is a big issue because I think it’s a big issue and because of, on, we sell on eBay and Amazon you’re busy piggy banking on the work they’ve done to create a useable selling machine. So my advice to people is basically: sell multi channel. You know, if we had, if we just sell on the website we would have gone out of business.
Andrew: I want to come back at the end and ask for specific advice for anyone who’s trying to build a business online the way that you are. But let’s talk for now about who’s working with you. You said earlier that there was someone in the office who was laughing when you knocked the bottle of water over, who is that?
Interviewee: That’s Stephanie, she is my lovely assistant and she helps me with mail, the customer service and the online marketing stuff. Also my father, who insteadly I don’t pay, is, this is how I keep cost down. I, he does my accounts for me and also built all those shelves you see behind you, he’s a very handy man. I also have two full time people working in Thailand. Two British people working in Thailand, who, what they do is that they list products on the website for me. Because it’s actually that at the moment we have 1 300 products on the website. Its actually, it’s a lot of work to get these products on the website you know you need to get the description, the photos need to be resized, and then you know they need to be listed on the three of the market places, so its very time consuming. So one of the things, one of the ways you can actually sell more stuff is just by having more products listed. So we’re always trying to build, build the inventory. And it’s just, you know takes, you know it’s too, it’s a full time job for two people to do that. So we’re very pleased with them, you know I took that [IB].
Andrew: How did you find them? These are two Brits who happen to be in Thailand.
Interviewee: I did find them in for [E-lawed] section.
They found me, I have been very pleased with them. I mean it’s a very great way of, they, you know obviously it’s not very cheaper to employ them out there, they, I think also because it’s, you know I think British people, I think these guys were, lets say they went over there and you now its kind of semi retirement and they got there and they realized they get, you know they got a little bored of sitting in the sun after a few years and they decided they wanted to do some work, so they, you know, I think the options for work for guys in Thailand is a fairly limited. I mean they are really not supposed to work because that is not their visas, so there’s, its great for them to be doing work for, you know in English you know its actually relatively good work. They you know they become part of the team and also I am just the best employer in the world. I mean I don’t give them many grief they never have to see me, we just exchange emails and you know they can get out when they want and why notI don’t hustle them so
Andrew: What kind of hourly pay do you give?
Interviewee: I pay them 3 pounds 50 an hour
Andrew: Wow that’s better than you could get for somebody who is local.
Interviewee: Of course. Well that’s about the UK minimum wage and I don’t think you now for the UK minimum wage you would get someone who is as good them in the UK. And they get, you now they, I think they enjoy the work, I mean it’s, you know they can do it when they like.
Andrew: You know I think there is a lot of opportunity for that. I see people here, they come to Buenos Aires because they want to live in South America and they try to get a job here just to be able to pay the rent. And it’s too, they are paid hardly anything here for the local jobs, they might as well find a jobs in the US especially since they don’t have visas, they are just
Interviewee: Exactly, you can do it as, you know you don’t have t tell the tax man. I mean I get all my development work done for [e-lance] as well. You know these guys in India, to do link building and also to do website development. So much, much cheaper.
Andrew: What kind of online marketing do you do?
Interviewee: We do, well I was in eBay [] that was my marketing chance, we do a lot of SEO basically you know it’s main stay of the online marketing. When I am moving into, I mean it’s all we do at the moment. Mainly because we haven’t got the, because of the way our website is set up, we haven’t got the tracking working for probably at the moment I hope to get that fixed soon and we are going to move into, e-mail marketing and we are going to reduce pay search again and also shop [capacity engine], we going to start using. But I think if you can get good at SEO you know search engine optimization it’s a great way of driving traffic. I mean we got somewhere between 600 and 900 unique visitors a day from Google which is free basically. And obviously there’s a cost attached to doing the work to get that kind of traffic perhaps. Our next base , we have got the traffic from Google , our next problem is to you know improve our conversion. But something we do actually we developed a, an Iphone app , which we guess we got a great PR for it. It cost us about, cost me about £500 to do it or so and we get about 500 hits from the website everyday from this. I can share, do you want me to share?
Andrew: Yeah let’s take a look. Actually you know what? Maybe I should just link to it from the poll so that people can see the screen shots for themselves because it’s kind of rough with the webcam.
Interviewee: Yeah okay. Anyway basically we came up with an idea from the Iphone, app I got an Iphone developer in China, who does the development for me and it was, it’s a great job and I think there’s so much buzz behind Iphone apps at the moment, it just created a great PR for us and also.
Andrew: What did it cost?
Interviewee: I think it was about £500 and I have to get the, I got the guy I think I paid him $200 in china then I got a designer to do the screen shots. I mean its super simple. I mean it’s basically just a picture and it makes an animal noise. But I its for children and it’s free and you know the idea really is that people will you know, I did a few, you got any children if you got an Iphone, but the you know people if they can download the Iphone app for free and it keep their kid occupied for 10 minutes, once, then that’s what its supposed to do basically and people, we got great feedback on that and I have got friends of mine that say they were around people’s houses and they were using my Iphone app. So you know its something that has been very, very successful. And we do things I mean for example, we know you know about, building links is a great way of getting traffic and what we are doing at the moment is sending out products to review [logs]. We have identified all the baby bloggers in the UK all the ones with descent websites anyway, I am not sending out products to them to review and they link get back to us. So you know it’s, we pay effectively, say a product is maybe worth £10, say we pay 10 pounds to get a link which is
Have been very cheap. So its very cheap advertising that we got , and at one point we were spending about £300 a month on upwards it’s a guess, about you know 50 hits a day and were getting you know 800 for free and that’s one of the reasons why I post it . Because I thought like you know this isn’t making any sense we got to work this out with the [IB]. But we were looking at the moment, I mean the website sales are not as good as I would like them to be. And I would like to, I think we need to start doing these other ways of online marketing in order to boost the website sales. Another thing we are going to do is get involved in the field of marketing and stuff like that, so really it’s just attack it on all sides .
Andrew: Do you have any field program yet?
Interviewee: No we don’t but I think we’re going to launch that soon. Its a, you know it’s been the reason we have been done these things it’s really kind of bandwidth and a also tracking, we’ve also, we’ve got the…, , I didn’t want to do these things, I thought that the conversion rates and all, obviously when you paying for traffic in one way or another, say if you are upwards then you wont, you know when people get your site you want to make sure that they are actually going to convert and I thought there was some usability problem with our site that meant we wouldn’t have to get the performance we wanted. Some one is to get those fixed first, so now we almost got that fixed so what I want to do is get these other forms of you know, paid online marketing. So yeah SEO, that’s my big tip
Andrew: But actually all that SEO that you are doing isn’t giving you more than 20% of your sales the book of your sales coming from eBay and Amazon.
Interviewee: That’s right, yeah
Andrew: So let’s talk about tips for getting customers from eBay and Amazon. What have you found that works?
Interviewee: Well I think that the secret really, I mean the thing about, well, on eBay really I mean Amazon is a different kind of fish but eBay, you got to have, the same is for websites really good pictures, good listing, I mean all the prices is important and you’ve got to get your eBay title, each product has an eBay title which is up to 55 characters long, Get the key words into that so that you get found, and you know it could basically also just increase the volume of products that you have, and another thing, you can end up with the more you have, the more you can sell. Also if you are prepared to ship stuff internationally, you can sell a lot more products. We sell 20% internationally, mainly to Europe. The thing is about at the moment for example the Euro is very strong, so therefore our products begin to look quite cheap and people are prepared to you know, say for example car seats, we don’t sell that many over here here, because we are not that competitive because you know you can buy [brightex] car seats is a very big maker of car seats, you can pretty much buy them in the local [howits] which is a big chain of car shops here, for about the price that we can buy them for. So we are not very competitive but of course people, and we can send these things to France for about £20 and people can’t get them in France, so they are very happy to pay 20 pounds to get them so its very, very easy to ship these, you know to faster sell stuff to Europe. And it makes it a bigger part of our sales. So you know, the broader range of people you can sell to that’s the better.
Andrew: What about Amazon? Any advice for somebody who wants to sell there?
Interviewee: Amazon has been a more difficult, Amazon is because…, eBay is a lot more [moon] if Amazon was the, eBay is a bit like the worlds west kind of anything goes really. You can create your own product listing, you can create the look and feel of your product listings while Amazon is very much fitting in with their model, I mean you know you can’t, you almost can’t tell you’ll buy from a third party seller at all.
Andrew: I can never tell until its time for me to check out and then they say this doesn’t qualify for the free shipping and that’s when I realize its not coming from them.
Interviewee: Yeah exactly. So its difficult really, you just need to have, and Amazon is a lot more to do with basic you know kind of exposure in terms of, you know its getting more products on there, I mean we found what we did is, we just increased the number of, at one point we were listing one of our products numbers, what, so we made a big push to see all our [products and our sales you know] basically doubled. So you know inventory is one thing.
Andrew: Is it because there are more opportunities for you to be found, or are they all interlinking so that if one product is found and the person doesn’t want to buy that product Amazon links to the others.
Interviewee: Yeah I think that’s a good point. I mean Amazon is very, very good at merchandizing and so it’s a very you know, it’s a very efficient selling machine. So that means, the also you know, the more just having like a bigger foot print like people are looking for these products and if you are there, if you have got the inventory you know and you list on as many places as possible then you have more chance for sales. I mean Amazon is much more price driven I think than a website or eBay because its really just, you know it’s a basic like a shop can pass inside really, I mean there are things that you can ship internationally, you know the kind of, you don’t have much control over the
The product listing, you always have control of the information you give people and there’s certain places you can kind of customize it but it’s not awful lot you can do. I mean we can, because we’re now platinum seller, we can create our install front but I don’t think that’s actually it’s going to make much difference to people sales. I think people find you know products through the for the products search. They don’t you know go to find the particular seller. They just to go Amazon they look for products then they try and look for the cheapest price. But Amazon actually does, you know you have the Amazon buy-box which is you know the kind of the top offer they have. Amazon will actually rotate the people in the buy-box, so if you’re not the cheapest price you will occasionally get into the buy-box and we’ll then find that we sold, suddenly sale ten of something, and hopefully we have ten, or hopefully as been, right if we got products here but if we don’t have, if its kind of a drop ship product which we have set as effectively in for an inventory, you know but sometime we’ll sell like ten of something and think “mmmh, you know I hope our suppliers got it in stock” which can be a bit of a problem. But then I think that, I mean Amazon is just, it is, its harder to have advice for them because it really is, you have much less control over what you do. I think you just, you know, you’ve got to make sure you offer people a good service so your feedbacks will stay up and your, you know they measure matrix in terms of how late you deliver products and stuff like that. So you just got to do, it’s the same. You know, some get back to us saying about basics. Get the basics right. Get the products out to people, you know what they ordered on time, you know manage customer expectations and you will, you know you can benefit from these different platforms. You know if offer bad level of services which a lot of people do, you’ll, you won’t succeed.
Andrew: Alright well, let’s leave it, let’s leave it there. I would like to invite you back on Mixergy when you hit that million dollar mark.
Interviewee: I agree with that.
Andrew: You and I actually met…
Interviewee: I would like to.
Andrew: a few months ago and you said Andrew this is my sales, and you gave me the sales numbers for January, and you said its also going to be this much bigger in February. And I often hear that from people but it never really happens, we’re now talking a few months later and not only did you hit that number that you told me, you actually exceeded it. So congratulations with that. I love how, the upward trajectory here and I’d love to have you on when you hit a million dollar in sales in the end. I know that’s coming soon.
Interviewee: Yeah, rock and roll. Thank you very much. Okay, I would like to do that. Okay, thank you very much for great [stuff].
Andrew: Thank you for doing the interview. Thank you all for watching.
Interviewee: Cheers! Bye bye!
Andrew: Bye!
