It is so easy to hear all the stories about business online and success that others are having and to think that the journey toward that success is easy. But that is the furthest thing from the truth. On this episode Scott he's going to give you an inside look into his income figures for the first quarter of 2016. He's doing this to show you that even those who seem to be successful have their down turns in both profit and success. He wants you to go into your private label business with your eyes wide open so that you can prepare yourself for the obstacles you will inevitably face. So grab a drink and sit back and listen to this great episode where Scott bares all.
Business profits on my private label business are down.
The personal revenue Scott is receiving from his private label sales are down from what he desires and expected. But it's not something he’s letting himself get down about. Instead, he’s taking it as an opportunity to up his game. What happened is pretty simple. When he started this podcast a little over a year ago he began to focus on many things besides his private label business. His time was divided and he began to coast when it came to paying attention to the business. This downturn is showing him that he needs to pay more attention and that he has to be more diligent. On this episode Scott is going to share his plans with you about how he is going to turn around his profit figures.
Differentiating your products is key.
When Scott first started selling as a private label seller on Amazon he chose a product and got it on to the Amazon platform quickly. As he went along he discovered that products are more successful when they are differentiated within the niche. His first product wasn't standing out enough and consequently his profit figures have begun to drop. On this episode you will hear the steps Scott is going to take to address that issue and make his product a one-of-a-kind item within his niche. It's a lesson all of us learn sooner or later and you can walk right along with Scott as he makes improvements.
Building a brand means more than one product.
In the big picture the health of the business is more important than the health of one particular product. That doesn't mean you want your product sales to get any of your individual items, but when one does dip it isn't the end of the world if you have other products to back it up and pick up the loss. On this episode Scott emphasizes the importance of building a brand that includes multiple SKUs within your product line. You're going to learn a great deal by listening to the hard lessons Scott has endured over the past quarter.
Pretend you’re in danger of going out of business every day.
One of the pieces of advice that Scott has received from Gary V. is to pretend that your business is in danger of going under every single day. That mindset will force you to up your game, increase your effort, and be smarter about the way you run your business overall. You can learn a lot from Scott's example and the illustrations he gives of how he is going to implement that advice if you listen to this episode. So take the time, set aside the time, make the time, and listen to this episode of the Amazing Seller.
OUTLINE OF THIS EPISODE OF THE AMAZING SELLER
- [0:05] Scott’s introduction to this episode!
- [0:30] How you can learn from today’s personal story from Scott.
- [1:22] A shout out to Scott’s Periscope followers!
- [2:32] You can get transcripts of every episode!
- [3:07] Why Scott’s Amazon business has slipped a bit in the past year.
- [7:52] Scott’s latest numbers – for the first part of 2016.
- [11:40] Lessons learned and what Scott is going to do about his slipping numbers.
- [12:01] The importance of differentiating a product line.
- [13:07] Adding more SKUs can help to build your brand.
- [16:31] Steps Scott is taking to build an outside sales funnel.
- [18:46] Scott’s summary of the ups and downs of running a private label business.
- [20:26] A tip from Gary V. – pretend you are going out of business every single day.
- [24:55] How this downturn is forcing Scott to up his game.
TRANSCRIPT TAS 194
TAS 194 : Income Update: Numbers are Down and WHY I'm Excited!
[00:00:05] SV: Well hey, hey what’s up everyone. Welcome back to another episode of The Amazing Seller podcast, this is episode number 194 and today, we’re going to be talking about my income update. I’m also going to be sharing with you why numbers are down and why I’m excited. Wait a minute, Scott what did you just say? You’re excited because your numbers are down? Well I’m going to explain here shortly.
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This is going to be a little bit of a personal story and I'm hoping that because I’m going to share it with you that you’re going to learn from it and you’re also going to see that no matter where your business is today, you will have challenges period. You will have challenges I will guarantee that, all right? You will have challenges. I’ve been in business with my father, with my wife, I've managed other businesses that I've been associated with, either working for them or just being a part of that company, and I’ve always seen challenges. There is never going to be just smooth sailing and if it is, you might want to take another look at the business and see if you're really pushing it to its limit, to where you can get the most out of that business, all right?
Now before we jump into today's discussion and some numbers that I’m going to share with you, I wanted to give a little shout out to my Periscope peeps. Why? Because you guys are awesome, and you guys know that I hang out on Periscope quite often and really it's a place for me to share the ups, the downs, the challenges, the things that we’re excited about, the things that we’re looking forward to, certain rants that I go on. That right there is happening on Periscope and a lot of you were over there already and if you're not, definitely come over and join the party. It’s a great platform, I'm really loving it right now because I’m able to connect with you more on a personal level.
If you guys have any questions or anything like that, that’s a great place for you to connect with me and get those questions answered and we can do that in real time. If you guys are not Periscope head over to Periscope.tv, look up @ScottVoelker, you'll find me, follow me and then you'll get any updates when I go ahead and click that live broadcast button, definitely go over and check me out on Periscope. If you guys want to see any of the past periscopes that I've done, I record usually all of them, I have them uploaded to YouTube, you can check them out theamazingseller.com/scope, S-C-O-P-E.
[00:02:32] SV: Also want to remind you guys that we are including show notes now to all of the episodes. Doing that for you by the way because you said that you wanted them, so we decided to include them. You can download them on this particular episode or on any future episodes. This one here is episode 194, so you can head over to theamazingseller.com/194, you'll find all the show notes there, you can read them there or you can download them. We also have show notes with kind of bullet points of what we covered here and all of that stuff, so definitely go check them out if you're interested in grabbing those show notes and the transcripts.
Alright, so let's go ahead and get into it. Let me go ahead and before I share any numbers or any kind of lessons learned or things that I've learned over, let’s see here, we’ve got February and March. Those are the two months that I’m going to be covering and what kind of gave me this realization of things that I need to be aware of, right? But let me just say that the podcast in the very, very beginning, I had no idea what it was going to grow into. I didn’t know how many people I would be reaching, and I didn’t really care at the point. I was doing it I still am, is to just help people and share my journey and then now other people's journeys because now I’m helping people that are doing better than I am, which is great right?
I never wanted to be that guy that said like, “Look at my numbers and they're always good, they’re always great, there is no downside. Scott never has a bump in the road.“ That's the farthest thing from the truth, I never want to be that guy, I never will be that guy and it's kind of like you take it or leave it okay? I just want to stress that because there's a lot of people out there that are saying, they're only showing their best. To me that's not authentic that's not real. We all have struggles you will have struggles.
If your business is doing well now you probably will have a dip and you need to know how to mentally deal with that and I’m going to share with you how I’m mentally dealing with it and what I'm doing about it. I just want to put that right out there and I never want to tell you something that doesn't work or that I haven’t tried. I don’t want to do theory. If I'm going to share something it's either something I've done or something at some else is done and that I know that has either worked or hasn't worked. Sometimes if you share something doesn't work that's also helpful because now we know not to do that or maybe we got to be more cautious.
Bottom-line is guys, I want to be an open book and that's what I’m going to do here today with you as well, I’m going to share with you what I'm going to do to hopefully get through this. I'm to share with you my current issues my struggles that I'm dealing with. One of them right now, one of my big ones right now and I haven’t shared this really with anyone is that since doing the podcast, since starting this thing over almost 14 months now, 15 months now, my Amazon business has slipped a little okay and the reason is, and I know why, it’s because my time has been spent away from my Amazon business.
[00:05:36] SV: I kind of went on cruise control right, things were going good, so guess what? I let off the gas pedal little bit because now I'm focusing on over. I've got this podcast which is great and I'm reaching a ton of people and people are getting tons of value and they’re starting their own businesses and are doing 10,000 a month or 20,000 a month and in some cases 60 or $80,000 a month and they are all doing great. Some people are figuring out if this is the right business model for them and so you're helping a lot of people but then something is sacrificing.
There’s time that goes into everything and since I’ve kind of realized this I’ve been trying to put things in place that allow me to focus on all of it but it’s not easy right? It's not easy and you'll find that if you have a 9-to-5 job and you're trying to build this Amazon business on the side, you know that something is going to suffer somewhere, either you’re going to spend too much time on your Amazon business and then your boss is to say you're not paying them enough attention to your job.
We know that, something has to give so you got to find that balance and that's really what I am struggling with right now but that doesn't mean that all of a sudden I say, “Okay guess what? I'm not going to do the podcast anymore, I'm not going to help anyone, I’m just going to focus on this thing here.” That’s just not me and I don’t think anyone should that. I think then you should look at what you're doing and then figure out a way or figure out those weaknesses and then have other people either help you with those weaknesses.
In this case I have reached out, a lot of you know that I have a second brand that I’ve started with a partner. That partner now is helping me in my regular everyday business as well with the daily operations. I’ve been totally open with you guys about that. I think anyone that can leverage someone else should do so, if it's the right fit of course. You have to understand that if you are focusing all of your attention somewhere and you're not paying attention to your other side of things then something is going to give.
I believe that that's part of my issue. I’m going to go over all of the things that I’m going to do to fix this situation and hopefully this'll help you by me being open and honest and really being transparent is allowing you to see what I'm doing but also know what I've learned in, and kind of like what I'm doing to fix these different situations. Let's go ahead and just take a quick glance at the numbers. I’m not going to drill down into the nitty-gritty as far as like I bought a ream of paper and all that stuff.
[00:08:02] SV: Basically, the numbers look like this, so February 2016, actually January I had a pretty good month is like 35 grand in revenue. That wasn’t profit but that was pretty good. February, we took a hit, this is the one brand, $21,500 was generated through that brand. It was 1328 orders, 1495 on the units, so about 1500 units sold. Our Pay Per Click was at 2500. Our margins went down, and again I’ll get into this in my lessons learned, about 22 to 25% margin and one of the big, big reasons you guys heard me talk about when I had that issue that I had to pull my inventory because I had a problem with one of the bundles? I had to pull that inventory, well guess what? That took a lot of profit out of there because I had to pay to get that pulled and I got to pay to get it reshipped back again. We’re trying to also liquidate some of that but again, it's like a breakeven on that.
You lost but you didn't quite lose because you haven't sold it to make your money back out again if that makes sense but that's part of the reason I'm saying that that month there the numbers were down on especially that product because well we had an issue there so we had to deal with. You didn’t want to but you did, so that was that.
Brand two, $6119 was generated which is pretty good and after cost of goods and all that stuff that was there was 1000 bucks.
Basically, between the two brands we’re able to still do about $27,200 in revenue, and again about between the two about 25 to 28% margin. Again not great, not where I want to be but again you can see that we have diversify, we have another second brand going, that kind of help pull things along. Then the other brand, we’re still trying to figure that stuff out. Again just to be totally 100% honest with you guys and showing you guys like this is like the inside look. Now March 2016, the numbers for the one brand was $19,831.52, we had 1243 orders, 1407 units, 1407 units sold total Pay Per Click was about 1800 bucks there.
We are still about 23 or 25% margin again because we ran into that issue. We had to pull that inventory and now trying to liquidate it as well and trying to just get rid of it because we had that issue with it. Get rid of it in a sense that we had to take it back, we had to repackage it in a sense and then ship it back in. You're eating into your profit whenever you have to do something like that, that's why it is important that you either get a third-party inspection company or you inspect it yourself.
I personally did not go through all of my boxes and a lot of you know that I have my stuff shipped to me, now I have it shipped to my partner and then he can go through it but we don't go through all 2000 units but an inspection company they can do more of a thorough look like this. We are looking into that. Again, then second brand we did 6675, so combined, if you took those two and combined those two, we’re still right over, what was that? That was 27,000, again about 25% margin, may be upwards to 28% margin. Still trying to work on those margins after we get through that liquidation that kind of what we had to pull that inventory, now trying to get that money back out again.
[00:11:29] SV: Just to let you know these past couple of months have been a little shaky right? That's why I really had to have this look. I had to say, ”What the heck is going on here Scott?” We got to go ahead and we got to figure this stuff out. What can we do to fix this situation alright? That's what I want to go through here with you and this is like the lessons learned and then also what I'm now doing about it. Okay to help grow the businesses. Number one and this is a big one and I'm learning this in brand number one, is I didn’t differentiate the product as much as I should have in the beginning.
Again, this was something that I learned in the very, very beginning because I was kind of like that rapid-fire guy, I went to test out this product, I test it, it did really good out of the gate, did really well, I kind of just let it ride, I'm still letting it ride and still doing okay and that right now that is coming back to bite me a little bit because I got comfortable. I put that on cruise control in a sense, right? My biggest thing here is don't just slap a label on something okay? You need to make it different, you need to add features, you need to bundle and these are all things that I'm doing currently right now that I'm trying to implement myself. Okay.
Some people will say, “Well, Scott is it harder now than it was when you first started?” And the answer is yes it is in a sense that you can't just put your label on something and then expect to sell it without differentiating it. That's the big change I would say, and it's not a huge change but yes, you have to look through people's reviews, see what you can change, see what you can fix, see what people are complaining about. Make your product better and so that's one big take away that I would say.
Number two is, I'm finding that adding more SKUs can definitely help your brand. Now I don't mean just go through a bunch of stuff out there and see what sticks, that’s not what I’m saying but I’m saying is having a plan in place to launch more SKUs. Now that could be, maybe, and I’m kind of playing around with this as well, maybe wholesaling a few products to get more SKUs in there, your margins are less, but maybe doing a wholesale almost like you’re doing AliExpress method, where you can test a product at a lower price okay as far as inventory goes, seeing what does stick on that. See if you can get some momentum and then private labeling that and making the product better than another.
[00:13:46] SV: That’s another option, I’m not sure if I’m going to go 100% down that avenue but I'm thinking about it, alright? Currently, right now, we've got two products, actually, let’s see, three products that are in line. One of them just went live, two other ones are about four weeks out, we’ve got about five other ones in the hopper. Now that's another thing, okay, and this is another part of the lessons learned is while you're sitting back on cruise control as I was, you probably want to have some research being done on a regular basis. Now I was doing some research here and there but it wasn’t scheduled.
I think once you get up and running because you guys know that I've always said this, that once you're starting, that’s the most work you're putting into this thing. Once you get up and running, you know the system, you know how that the launch process works and all that stuff, then it's really just a matter of ring some repeats, right but you still need to be doing that research. This way here you can have a hopper of different products that you can just go, “Okay, which one’s next? That one.” Then you can go ahead and let’s just validate it really quick, let’s verify it and let's boom, let’s go ahead and launch it.
I’m talking about doing the research but then also get the suppliers lined up so you don’t have to do all that work, you can just go ahead and pull the next product and get ready to start launching it okay? And that's what I'm working on right now, I've got like I said I've got three in line, I’ve got five others in the hopper and I’ve got maybe even about three or four other ones in the next hopper because I think that that's really important, to schedule that time to do your research so you can start to have these other SKUs that you can put in place okay, when you're ready.
I think when you have more SKUs, you don't necessarily have to be banking on one, two or three products and that's kind of what I fell into the trap of because I had three or four products that were doing okay but now if one of those goes down then it kind of takes everything with it, but if you have 5, if you had 7, if you had 10, if you had 15, if you had 20, you can see what I’m saying the more you have, without again diluting just by you out there throwing out crap, we don't want to do that. Throwing out products that you feel are going to be added to your product or your secondary brand or however you want to do it all right? But by doing that, you diversify the products and the SKUs so if you have 3 sales over here, 10 sales over here, 8 sales over here, they all start to add up.
I'm starting to see more of that now even within my own business and that other brand and I'm seeing other people I'm working with that that also makes a difference, so that's that. Again researching, having that part of your, I guess, it doesn’t have to be in your day to day but it has to be in your plan. It has to be in your weekly plan. Maybe you set aside an hour or two, or three and do that product research so this way here, you’ll have those products in place. Don't get comfortable all right.
[00:16:32] SV: Now the last thing I want to mention here is something that I am also experimenting with and I'm pretty close to where we’re almost ready to start doing it but I have to wait because the product isn't here yet. Once it is, it definitely fits the criteria of building an outside sales funnel. This is kind of what we’re looking at, so let's say that we go and we identify the market or the place that our market is hanging out. Let’s just use Facebook right? Let’s say Facebook has a fan page that is all talking about cooking and Italian cooking and everything around cooking. It's my market because I'm selling garlic presses right. I would then take and create a Facebook ad that would target that Facebook fan page or that audience and then I would create a piece of content on a blog that I can then send people from the Facebook ad over to the blog post that gives them information about this particular market.
If it was Italian cooking, it would be the top five quick recipes for the busy mom. Something like that and of course you would have your garlic press nested inside of that content or wrapped around that content, or inside of that content and then from there, people are getting value and they may want to buy your product, especially if you’re making mentions of how beautiful it works. The concept here is to find the audience, run an ad to that audience, drive them to a free piece of content on a blog, have a place for them to opt in and give you their email address so this way here they can get on your email list, so you can then send them more information about what they just signed up for, what they just requested for, could be 5 recipes, could be 10 recipes.
Then every week you send them another five recipes. You're able to communicate with them and then you can either point them to your Amazon listing or you can point into your e-commerce store, so that’s what we’re really starting to work on as an external channel, so we’re not so dependent on Amazon but again, I would always start on Amazon, validate, verify, once we get momentum then we start building up external channel and that’s what we’re looking at doing, again I'll be reporting back on this because this is an experiment that I will be running and I’ll be sharing it with you. If it works, great, if it doesn't, I'll let you know that too.
That's really everything that I wanted to share here on this episode and to let you know that there's going to be ups and there’s going to be downs. If you just sit back, once you start to get some momentum and you just sit back and take your foot off the gas, you will lose in that game because what’s going to happen is you're going to get really comfortable and then you're not going to be trying to expand or you're not going to be trying to add. Then what’s going to happen is, if you start to see a dip in sales, everything is going to be affected rather than you continually growing.
[00:19:21] SV: You almost need to put a plan in place that says every quarter or every month, we launch one new product right and if you do that, think about that at the end of the year you'd have 12 products and that's kind of like my mentality now, is like every quarter, I want to have at least three new products launched. If I have more, great, if I have three than that's what it's going to be. At least this way here I know the process, I know what I need to do in order to make that happen but the deadline is each quarter there needs to be three new products, three new SKUs that are in there.
Then from there, the other part of that would be once you get that product up there, once you get it validated, once you start getting some momentum, once you feel like you've exhausted the Pay Per Click and all of that stuff then you can say, “Okay, now let's start building up this external funnel so we can start getting an email list and also some other outside traffic that can bring people back to Amazon or even sell on our own e-commerce store.”
That’s like the big overall picture of what I'm looking at, I think everyone should be but you have to start small right? You have to start somewhere all right. The one thing that I want to share with you guys, one little tip here I learned from Gary Vaynerchuk, Gary V that is. He said this one thing, it really stuck out to me, it really like made an impression on me and it makes a lot of sense because I'm kind of like feeling this in a sense but you need to, this is what he said, “You need to pretend that you were going out of business every single day.”
Pretend you're going out of business every single day and what that will do is it'll make you hustle, it will make you always need to go out there and grow your business. If you're not doing that again, you’re just like a week goes by, you’re good, a week goes by, you’re good, you put in these little tentative goals, okay, cool, whatever. If you pretend that if you don't do what you're setting out to do, you will be out of business and then what right, then what?
I think that's a great thing to implement into your thought process ,that's what I'm going to currently doing that, that’s what I'm currently doing now even I'm not going out of business but I do want to think like, “ Oh my gosh, I’ve got to get a hold of this thing because I want to grow this thing. I want to grow this thing to be the best that it can be.” I don’t want to just settle, I don’t think anyone should settle.
[00:21:42] SV: Depending on where you are in the process if your brand-new, then just understand that it's a process okay, and you got to get started. That's the first thing for you is to get started alright? The second thing to this is people that are already making some money, could be 5000 a month, could be 10, could be 20, could be 50, 100 whatever it is. Even though you’re at those different numbers, you're still facing the same obstacles because of that, you just need to understand that if you get comfortable, your business will slip eventually and you do not want that to happen.
Again pretend that you're going out of business every single day and it will force you to hustle, it'll force you to grow your business, your brand and take you to the next level and that's currently what I'm working on as we speak, as we record this. I'm actually excited about it. I'm actually excited that this actually is happening in a sense because it does force me to be aware, it forces me to pay attention, if my numbers just stayed consistently every single month, I wouldn’t think anything of it, I would be like, “ oh, that’s cool, okay, we’re good, we’re good, we’re good,” but if you want to grow you have to pay attention to the numbers and if they don't move, well then we don't know if we’ve grown or we don't know if we've kind of like went backwards right?
We need to pay attention to that stuff but whenever you start to slide, guess what? You wake up in a hurry. I’d rather make it so we can grow, slide back a little, grow, slide back a little, grow, so this way here you're never coming back down under what you started at. I’m kind of rambling here guys but I just wanted to share with you kind of my experience. Kind of being totally transparent with you so guys can see that someone that could appear to have everything under control doesn't necessarily always have everything under control and this goes for people that are multimillionaires as well. They have problems as well, they have ups, they have downs, it’s just different levels right? It's different levels and we’ve always heard that, the more you make the more problems you make and that's true because you can afford more but same thing happens if you're the small guy.
You still have problems, if you're trying to get that first product to market but you're running into a customs issue that's a big problem for you but the person that has a business $200,000 a month and they run into customs issues they have problems too. Same, just at a different level. All right so hopefully this is been helpful again, I just wanted to kind of put it all out there for you, let you guys know that business is about ups and downs, it's kind of a roller coaster ride and you just have to be willing to adapt, you have to be willing to accept it and also see it and then be able to react.
Again, I just want to leave you with that what Gary V. had said which was, “Pretend that you're going out of business every single day,” and if you do that it's going to force you not to be comfortable. It's going to force you to take action, it’s going to force you to grow, it’s going to force you to do all the things that you need to take your business and make it more stable and also grow and go to the next level. Then just by learning through these experiences will help you in the future when you face these other certain problems. Okay.
[00:24:55] SV: Again I'm glad that this is happening to me, I'm excited because it's forcing me to wake up and get out there and hustle and that's what I'm doing. I’m going to try to balance everything like I said for you guys because it's something here now that with the podcast I don't want to ever give up I want to be able to still go out there and help people and at all different levels and this podcast has definitely allowed me to do that. I want to thank each and every one of you that have reached out and then have said, “Scott I love it that you share everything with us, don't stop and this episode was definitely for you because I know that myself personally too, I don't want to just see all of the glory, all of the good I want to see the ups and the downs, the struggles, the things that happen in someone's business every single day.
This way here, we realize that it's normal and it’s okay and that can help us and push ourselves when we go through one of those obstacles. That’s it guys, that’s going to wrap this up I think that I've talked long enough and I wanted to once again just say thank you so much for being a listener of the podcast, you guys are awesome I really, really do appreciate each and every one of you and thank you so much for sending the emails, the blog comments, iTunes reviews, wherever you're connecting with me, thank you so much I do appreciate it and I read each and every one of them. I just wanted to say thank you.
Remember I’m always here for you, I believe in you and I’m rooting for you but you have to, you have to … Come on, say it with me, say it loud, say it proud, “Take action.” Have an awesome, amazing day and I’ll see you back here on the next episode.
LINKS MENTIONED IN THIS EPISODE
- www.TheAmazingSeller.com/scope – get connected with Scott on Periscope
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