EP04: Using Direct Marketing Principles to Sell More on Amazon w/ Kevin King

EP04: Using Direct Marketing Principles to Sell More on Amazon w/ Kevin King What if you could learn from physical product entrepreneurs that have risen up from the trenches to dominating their market by creating successful physical product brands? Well, this podcast is hosted by me, Kanoe Campbell, and it's about breaking the mold to becoming a smarter, savvier, and better product entrepreneur. You'll discover how to take physical products from concept food lunch and to scaling up from physical product entrepreneurs who've taken their revolutionary ideas to 1 million, 10 million, and 50 million plus in revenue businesses. You'll also join me on my journey to build 00:00:46 This is the Physical. 00:00:58 Product Business Podcast. I'm Kanae Campbell. Let's get rolling. Welcome to the Physical Product Business Podcast, and you know this is a spin-off of the 2x E-commerce Podcast because basically I was doing lots of marketing as well as entrepreneurship on the 2x E-commerce Podcast. I've decided the Physical Product Business Podcast would be a podcast purely for entrepreneurs, people who really want to launch businesses around physical products and are looking for guidance from proven entrepreneurs. And speaking of proven entrepreneurs, I have with me Kevin King. He is going to bring out a lot of knowledge from his experience with Amazon and how he does seven figures with absolutely no employees. I'm not going to say too much, but I just want to introduce you all to Kevin. Kevin, welcome to the show. Great. 00:01:55 Hello, everybody. Glad to be here. Fantastic. Could you take a minute or less to introduce yourself and tell us why you're here, what's brought you to being an Amazon entrepreneur, please? Sure. I've been an entrepreneur my entire life. I've been doing e-commerce and direct response. In the old days by mail, I've been sending out direct mail and been doing e-commerce since I think my first store was 1996. We started selling online. So, I've been doing it for quite a while with my own websites, my own businesses. And I've always sold on Amazon more as a hobby kind of for several years. But then when this FBA kind of selling method started blowing up not too long ago, I decided to give that a shot. 00:02:45 I've been selling the FBA since about a year and a half now where I'm doing the private label and actually developing my own products from scratch as well as finding stuff in China and the US and repackage them in such a way or improving the product and selling that. So, I've got five brands and five different categories on Amazon right now. Okay. Have you got a single store or have you split it across five different stores? I have everything under one account right now. But there's five different brands, five different brand registries for all those. I probably, it should have done it in five separate ones. It would make it easier to sell it down the way if I wanted to spend one of those off and sell it. 00:03:27 But I just didn't want any trouble with, you know, Amazon doesn't really like you having separate accounts. And, you know, you can get approval and they'll give you maybe a second one or third one if you got good reason. I decided to lump them all in and I'll take my chances on what happens down the road. Fantastic. So how are you doing revenue-wise on Amazon? Right. This year we'll do on Amazon about, I'll probably hit $1. 5 to $1. 8 million on Amazon this year. That's Amazon US only. And then I've got other channels that do additional. My goal is to hit that, and that's with nine products. Two of those don't really do very well, don't really contribute much to the bottom line at all; $10 a day. 00:04:10 No, I've got nine products, nine SKUs in the five, and I'm introducing additional ones. One of the reasons I did the five different brands when I launched, because I do have a background in this, and I've dealt with China and dealt with China. sourcing overseas, so none of that scares me. A lot of people are afraid to wire five grand over to China, what's going to happen to their money. So I've been doing that for a while, and so I decided to dive in, and I wanted to figure out what works and what doesn't, because each category is slightly different, and there's different pieces and different ways to market it and stuff, so I've learned quite a bit. 00:04:44 I'll probably be discontinuing one of those brands, and maybe two of them, and focusing on three, but I did that to spread my risk into If one goes down or one has an issue, I'm still up and running with the others. Okay, okay. I want to talk about, not many shows talk about this, but I want to talk about capital. Lots of shows would focus on the successes and the marketing and all. You're running, so in one and a half years, you've pretty much managed to do over a million dollars in revenue from nine SKUs and five brands. What kind of capital got you fired up? What kind of capital did you put in at the start? And up until now, how much of your money have you put into your Amazon FBA business? 00:05:37 I mean, right now, one of the things, like you said, nobody ever really talks about the money. Everybody always paints the shiny object that, look how much I'm making, and you see screenshots out there, and some guy's making a million dollars a year, and you're like, damn, that could be me. But what you don't know is, what's he putting in his pocket? That's what the number says online. How many of those were promos? How many of those, because on Amazon, those sales figures include full price for promos. So this guy may be giving away $100 a day just to sell 10, or whatever it may be. So I want to know, it's not what you gross, it's what you put in your pocket. And that's what nobody really talks about and no one really opens up. 00:06:14 You hear people say, 'I got 40%, 50% profit margins.' I think most of those are bullshit. I mean, occasionally you might hit something like that, but they're not factoring everything in. They're not factoring in their returns. They're not factoring in their advertising costs. They're not factoring in their warehousing and storage fees. They're just looking at it as a pure and simple cost of goods sold versus what they're selling it for. So when you get down to the nuts and bolts, in my experience and in dealing with a lot of other successful sellers, you're ranging between 15% and 30%, depending on the product. Nets. Bottom line, nets that you can put. Now, that's nets. Then, if you've got employees or you've got VAs or to pay yourself or – rent for somewhere, whatever. 00:06:53 So that's your contribution margin at the end of the day that you then can take everything and pay for everything else out of. So most of my products are in the 20 to 25% range. So to answer your initial question, I did this a little differently when I started. Most people will go and find a product in China and stick their name on it and private label it and start with five or 10 grand. I started with a low six figures amount in this. And one of the reasons it took that much is because I developed two products from scratch and two of my five brands rather than going over to China and saying 'here's you know XYZ product, let me look at the reviews and improve it or bundle it differently or package it differently or whatever it may be. 00:07:34 I did that on some of those but on these two, I literally sketched them on a napkin or not a napkin on a piece of paper, hired designers on Upwork to do the CAD work, It had the custom molding made. And one of those products had to do with Apple computer stuff. And so it was a very expensive process where I had to order... How did you get Apple approval from it? I did not have any MFI on it, so I didn't have to actually get Apple approval. So it took a lot more money to get that going. But the return is also there. That product has made a lot of money. It's died off now. But last Christmas, it was doing $15,000 to $20,000 a day last December, that one product. 00:08:13 Okay. Yeah, but I had to sink six figures in to develop it with molding costs being like 40 gram prototypes, you know, so it was a high risk. I would probably do it differently now. And if I were starting, I probably wouldn't, there's nothing wrong with, I have another product where I spent $8,000 in molds and that's a little bit more reasonable and spreads the risk. I probably wouldn’t do it again where I’d spend that much up front. So I had a little bit to go into, but. But that doesn't solve the problem. That gets you started. But if you have a successful product, I mean, you can just do the numbers. Let's say you order 1,000 units and you're making a 20% end-of-the-day bottom line. 00:08:50 Well, if those start to sell pretty well, before you've sold out of those 1,000, you’ve got to get the next 1,000 in. And so depending on the product, if it's going to come by air or by sea, it can be anywhere from a month to three months to get those in. So you've got to start spending money up front to get those in. If you're trying to live off of this or take money out, it becomes almost impossible. If you're making a 20% margin, you've got to flip that inventory five times before you can actually start using your profits to actually sustain it. It takes some time. You absolutely know your stuff. That's so true. You can't take money from it. It's like a baby. 00:09:34 And you need to let it mature. You need five times over. That's interesting. Okay. I mean, that's on those margins. I mean, if you have a better margin, you know, that can be different. Then you could turn it over a lot faster. So right now, you know, my bottom line on a million and a half is, yeah, on paper, I've made, you know, $300,000 or $400,000 profit off of Amazon. But I haven't put that much in my pocket. And I've actually got loans. I've had to go out, you know, that wasn't enough. So I've had to use creative financing and some of that's, You can go to friends and family and whoever, use your own money, use credit cards. 00:10:08 But then in some cases, like last Christmas, this product that was selling hot, I needed more fast, and nobody's going to give me $50,000 or $100,000 really quick. So I had to go out to one of these MCA, Merchant Cash Advance people, where they charge you through the freaking nose. They'll give you $50,000, but you've got to pay back $75,000 in 70 days with daily deposits. So I just built that into the cost of goods sold. So you have to look at everything on this. So it's a cash-intensive business. Yeah, yeah. A lot of podcasts I've listened to do not touch on this subject, on the capital, the amount of money required. And I've seen, like, I've had people on the show who said they started almost from nothing. 00:10:53 And no one really wants to reveal. You know how much they've put into their business, so I just wanted to touch base on that okay. So prior to this call, we were talking about it's great timing, we're talking about this new rule from Amazon which talks about the fact that we can no longer provide incentivized reviews; what are your thoughts on it? And this, I want to kind of, I'd like you to paint two pictures. One from like entrepreneurs with capital, serious entrepreneurs with capital looking to make something serious out of a product business with Amazon as a springboard potentially. And with those of us who are already in Amazon, what is the next step from your perspective? Well, I think, I mean, there's a lot of people in all the Facebook groups and everything, you know, saying the sky is falling. 00:11:52 You know, it's time to move on. They're pissed off at Amazon, whatever. But I'm applauding this move. I love it because it's going to create a bigger barrier to entry for the new people and the me-too's. And it's going to force people to actually have decent products. There's been a lot of people that have been entering the Amazon field and they're opportunists. There's two types of people in Amazon. There's opportunists. Who are after the next shiny object, and they're the ones buying these $5,000 courses and hoping that they can retire in three months and quit their day job and go sail around the Caribbean and make money while they're doing it. Those are the people that it's going to kick a lot of those people out because the shortcuts are being cut from making it on Amazon. 00:12:33 The people that got in in 2012, 2013, 2014 doing the private label, a lot of them don't know what the hell they're doing. I mean, they fell into it and they were right place, right time, and they bought the right lottery ticket. And some of those guys are, if you take away that product, they wouldn't know what to do right now. They're not business people. Then you have the people that are real entrepreneurs that are trying to build a real business, a real brand. And they're using Amazon as a launching pad and there's no better place in the world than Amazon to use as a launching pad to get the feedback to fine-tune your product, to get some initial sales, to get some initial customers that you can then create Facebook audiences on, and all that kind of stuff. 00:13:11 So, real entrepreneurs are loving this, and so like myself. And I think it's a good thing. I think it's a really, really good thing. Now, have I used reviews? Yeah, I've used these review groups in the past, sometimes with success, sometimes without. So because I've been selling on Amazon for over a year and a half and five brands, I already have a good customer list on all these brands. So I have ways to take those and create custom audiences on Facebook to get their demographic information and see. And sometimes you'll get surprised. You think it's all, you know, it's 50% men. I have a dog product. You know, I thought it was mostly guys buying this product. I uploaded, I downloaded all my data from Amazon and uploaded it into Facebook to create custom audiences. 00:13:55 I discovered that 85% of my buyers were women and they're, you know, over 40 years old. So I'm like, holy cow, my pictures and the way I've written my Amazon listing is not aimed at those people. They've been buying. So I need to readjust everything on Amazon to really target that audience. So you can do a lot of stuff like that. And then I'm also gone out to Amazon. I just signed, I just started literally yesterday on walmart. com. I mean, I got approved and my products just went live on walmart. com, which actually has a big barrier to entry too. They're not just, you can't just go sign up like you can on, on Amazon. They, they screen you. They look at your seller feedback. They look at your product lines on Amazon. 00:14:34 They look at a lot of stuff and then to input, input stuff in their system right now. It's not easy. You only can use data feeds, so it's a little more technical. Do they have an FBA program, Walmart. com, or do you need to fulfill yourself as a merchant fulfilled? You have to fulfill yourself right now. They probably will introduce one because they desperately want to compete with Amazon. They have to be. Yeah, so I think that's going to improve. They're being very selective on who they take now. There's an event of Walmart here in the UK called Tesco. They're everywhere, right? And Tesco's have a similar sort of program. And yeah, it's quite difficult to get in as a merchant. Sorry, please carry on. 00:15:26 So, yeah, so then I'm also on eBay, you know, I have my own e-commerce sites. Those don't contribute right now a whole lot of sales, but I do get, you know, they add, you know, between three and ten grand a month to the bottom line. You know, it's free, easy money. There are people that find me that way. There are people that want to use their PayPal account. They don't like Amazon for whatever reason. So I've done some of that, and I'm going to be ramping that up a lot more and just diversifying because it makes me nervous to have all my eggs in one basket with Amazon. But you can't ignore them either because here in the U. S., at least, they're 60% to 70% of all e-commerce sales for physical products are on Amazon. 00:16:07 Uh, and the UK and Germany are similar. And some of the other I'm branching out into Canada right now, Amazon Canada, and then I'm coming to... I've already set up my bat and everything, and my important stuff for the UK and Germany. Those are the next two. And by putting getting to those other markets, you can pretty much, you know, come close to doubling your sales if you do it right, just just on the Amazon platform alone. So I'm projecting, you know, next year I might hit four to five million once I'm fully launched in all these different marketplaces. Through various channels, exactly. That is the way to go. You touched up on a lot of things in terms of your reaction to the changes on Amazon. 00:16:46 One was great products, and the other is Facebook, as in getting audiences or your audience via Facebook. Let's talk about great products. What's your philosophy on building out great products? And now with these changes where there are going to be less Me Too products on Amazon, how should entrepreneurs really build out really good products? What's the foundation? Well, that's the thing that's happening. A lot of these people that are taking these courses and stuff, they've been taught to all sorts of the same kind of thing. Small, light, fits in a shoebox, doesn't weigh much, doesn't cost too much. Can fly over, blah, blah, blah. And like you said, there's a ton of 'Me Too' products, and they're not differentiating the products at all. 00:17:34 And a lot of them are inflating their sales by using these review services to get what I call fake reviews. I mean, you and I know it. I mean, when you're giving away your product for free or for $1 or $2, Those reviews aren't real, and you can tell it by reading most of them. Most of them are garbage reviews. Take some of the reviews that I've done from giveaways and compare them. Now, if it's a top 1,000 review on Amazon, you might get a good review, but the vast majority suck. Compare those to ones that were written by customers that paid full price, and you'll notice a huge difference in your reviews. 00:18:06 I think that's good, but The me too products that you can fake your way and has shitty products and and still sell by giving away and getting inflated reviews. Now the game has changed where you're gonna have to have a really good product and a good product You don't have to beg for reviews. You don't have to do giveaways. You've never been one that you need a thousand reviews. There's people that teach look and see how much you know, you're picking a product. How many reviews does your do your competitors have? Oh, there's five of them that have a thousand reviews. No, that's not true. If the market size is big enough, you know, the sales justify it, you can enter that market and take a piece. Your product will speak for itself. 00:18:45 I mean, I have a product right now. I did some reviews or giveaways in the beginning, you know, like 25 or 30. And because that product is good, if people are passionate about your product and they love your product and you create a brand around it, they're going to want to talk about it. I mean, I've got people now that are doing testimonial videos for me; that some of my customers, and they love to do it. They're doing them for free. I sent an email to them and said, hey, I'm looking for some testimonials. And they're like, oh, we'll do it. We love your product. They'll do anything. So you've got to create good products, provide good customer service. You've got to under-promise and over-deliver. 00:19:20 And if you do that, that's not the shortcut way to success. That's the long-term way to success, so that five years from now, you're selling your company or you are selling on that boat around the Caribbean. It's not going to happen tomorrow. And so that's what people need to focus on is developing those products. And there's a lot of opportunities. People say, well, the gold rush on Amazon is over. Yeah, the gold rush is over for garlic presses and silicone barbecue gloves and face masks and that kind of stuff. But there's a ton of opportunity out there, especially even outside the U. S. that hasn't been exploited yet. And if you're developing new products, find something where there's good demand. I mean, don't try to reinvent the wheel. 00:20:00 Find something where there's good demand and there's not enough people serving that demand or a product that's selling well but there's a lot of negative complaints on it. Look through the reviews and see what you can improve or what you can change. That's the first thing I do when I'm looking at a new product is I go and see the top three to five sellers and I read their reviews. If they got 300 of them, I scroll through every page making notes. Now, not only does it help me write my own review because I see what people are saying and how to market it, I see patterns. And I do that the same on my current products. On my current products, every couple months, I will go through and read all my reviews. 00:20:32 Even the ones I read six months ago, I'll reread them again. Because the customers can describe your product better than you can. They're the ones using it. You think you know your product. It's your little baby. But other people can tell you, you think your baby's cute.' But other people will say, 'No, that's a damn ugly baby.' And so you've got to go and I take out those product reviews, and I see what they're saying, and I take their language. Sometimes the way they write it, they say it a lot better than I could. I'll go change my bullet points or my description or whatever based on what they say, and it gives me a lift. So this is not an hour or two a day business. 00:21:09 I work 16, 18 hours a day sometimes on most days. So do you think you're going to go back or go down the route of, actually developing product you know how you you had a mold for a product and you you know you spent eight grand you know on on a mold you know do you think that's a direction of um developing you know really good products you know perhaps like 50 of the time to what are your thoughts on you know that detail you know where so one thing i just picked up from what you just said was listening to your customers both from a product development standpoint and also from from a copy standpoint you know knowing how to sort of structure your copy to to to sound very customer centric so from that perspective how do you think um how do you think yeah how do you think production or product development is going to evolve with these changes? 00:22:14 I think product development is important. I mean, I don't have a problem with hijackers because nobody has that mold. I mean, my Chinese factory may be selling out the back door somewhere in China that I don't know, but I don't have problems with hijackers, and the product is truly different. Does it take a little bit more time and take a little bit more money and a little bit more creativity? Yes. Go on Jungle Scout, find a product, go on Alibaba, find some sellers, send over your stupid logo that you had done for $5 on Fiverr that sucks, and put it in a polybag and sell it. Those days are going to be behind us. There's still opportunity there. I mean, the other thing is you don't need a home run. 00:22:53 Everybody thinks they pay attention to BSR. I don't care what my BSR is. I really don't. And people, they use these tracking services to see how their competitors are ranking. I don't care what my competitors are doing. I'm focused on me. How can I make my product the best, serve my customers, and deliver? And so most of my products are in the BSR range of $4,000. I have a lot: $4,000 to $10,000, $15,000. And that's a nice area to be because you're not a big target. And you can develop new products. And I think that's a big thing that needs to happen. And more people need to do it because I think that's where the opportunity is. But at the same time, there's more risk. 00:23:31 I mean, you've got to spend money on a mold. And what if it doesn't sell? You can't go buy 100 of them off of Alibaba and test it and see if there's – you're going to have to do your homework and look at the numbers and look at the opportunity. So it takes more work, and that's real entrepreneurship. And that's what I think it needs to shift more to, and I think you'll start seeing a little bit more of that on these platforms. Well, a consolidation of what lots of people are doing in Kickstarter and crowdfunding with Amazon because a lot of innovation is happening on Kickstarter now. And what better place to launch your product post-campaign than Amazon after you've seen some success on Kickstarter? They're already doing it anyway. 00:24:22 But do you think another way entrepreneurs can mitigate their risk, although you still need a prototype to launch on Kickstarter? You're not going to show them images and sketches, are you? Yeah, Indiegogo lets you just show sketches, and so Indiegogo is a little more lax, but Kickstarter, you have to have real photos of the real product, so you're going to have to spend money doing the prototyping, getting it up to, I mean, I just did it. I just did a Kickstarter project. It was going to be a second generation of one of my current products, and I i spent about $20,000, you know, having the initial prototypes made, getting the pictures made, doing some Facebook advertising and all that kind of stuff. 00:25:02 And at the end of the day, it didn't fund on Kickstarter; it didn't make it. Um, and so however you could take your learnings from there and still try Amazon, yeah, I could uh, but I decided to not do that product, wow, because i So I decided to scrap it and just move on. The demand was not there, because my goal is, yeah, I might have been able to sell some on Amazon, but I want to have products that are beyond Amazon. And if I can't sell it outside of Amazon, it's not wise for me to spend a bunch more money throwing at it if it's a very tight little niche that's a small niche. So, yeah, but there is a lot of innovation going on at Kickstarter. 00:25:42 And even Amazon has a little bit in the U.S. At least, they have a – uh some sort of integration now with Kickstarter Labs I forget the exact name of it where they actually will start selling your stuff. And I've seen you know guys that have done Kickstarter campaigns and launched. You know there's a good example a product I looked at, private labeling. And I met the guys at a trade show at ASD Trade Show. It's a beauty product; they did a Kickstarter campaign about a year ago and raised – I don't know, 40-50 grand to get it done, to make it, and now it's just sitting on Amazon languishing. It's not selling; you know, they said they're selling like five a month or something. So they don't necessarily go hand in hand. 00:26:18 It's two different types of buyers. Just like in the old direct mail business, when you're trying to get subscriptions to a printed magazine, we had here these types of buyers called, it's a service called Publishers Clearing House. It's a big marketing company where they would give away a million bucks at someone's door, but their whole premise was selling magazine subscriptions. And those customers that entered, you know they would they had their mailing list that you could rent to send your own offers to, but you had to send a specific type of offer to those customers; it's not the same as if you've got a another magazine's mailing list and send an offer to them. It's the same thing with Kickstarter, Amazon – you get very distinct markets. 00:26:51 I mean, eBay buyers are completely different than Amazon buyers, and so so are Kickstarter buyers. So, there is some crossover; there's no doubt. But if you can get it to fund on Kickstarter and get the money to develop it and get it, and you're not losing money, and then take it to Amazon and get some additional sales, that's great. But yeah, there's always going to be innovation; there's always going to be some new platform coming up. I mean, the latest big trend in the crowdfunding is crowdfunding inventory. I mean, there's sites popping up right now, and even in the Amazon space, that specialize in crowdfunding. uh inventory uh instead of having to go to 00:27:31 a bank or something individual people can put in 100 bucks up to five grand and help you get your inventory and then you give them a return you don't actually give them the product links or any platforms to to to to to the crowdfunding inventory sites here uh yeah i've participated in a couple of them i try almost everything out there um but yeah there's there's one called kick further and there's one called bonolo um that are both good for that. And they bet you. You can't be a new seller just starting out saying, 'Hey, I need 10 grand. I want to launch my barbecue glove.' But if you're already on Amazon and you've got a good track record and a good seller rating and stuff, then those can be good places to go. 00:28:12 But there's a whole other cottage industry. There's hundreds of them out there that do these specialized loans. DealStruck out of San Diego specializes in Amazon lines of credit. Uh, for big vendors and stuff, but like you said at the beginning, nobody ever talks about they always talk about the fun stuff; they never talk about behind-the-scenes, behind-the-scenes of what you've got to do to keep this business exactly the engine and the fuel that it takes if you really want to grow it. Now, if you just want to make some side money and you can keep your regular job and and you want some vacation money or some college education money for your kids, You know, you can do a small time and make good money. 00:28:51 I mean, to be honest, if you do it that way, if you do that approach, there's no better investment out there, really, than Amazon. Because you can take, I think I saw someone do this recently on a podcast where they demonstrated that if you take $10,000, invest $10,000 in Amazon in a product, you don't take a dime of it out. And you're able to turn that inventory four times a year. So you're basically having to do reorders four times a year. You can turn that. Yeah, you can turn that $10,000 in three years into $200,000 if you do it right. I'm seeing more people that are treating this business not as an investment. 00:29:30 I think you're going to see more of that happen down the way here where people are going to start treating it more as an investment. You can only have $250,000 of walking capital. You can then sell the business with the walking capital on the side. And you know, have a significant lump sum of cash right; but the key to selling the business is: a lot of people aren't going to buy your Amazon business-some suckers will, but most people aren't going to come in and buy an Amazon business; they want to that's too much, too many eggs in one basket. They want a well-rounded thing. So if your goal is to get into this and build a brand, and sell it: You've got to do something off Amazon. 00:30:07 Use Amazon as your launchpad; it may contribute most of your money in the beginning. But you've got to develop stuff off of that so that if Amazon crashed down or Amazon kicked you off, or 20 other people started knocking you off on Amazon, you're still okay. And people will invest in that business. They will buy that business. But you're not going to find too many people that will buy an Amazon-only business. An Amazon-only business. Yeah, any savvy business person would see it's too risky. Okay, let's move on to the second point you made, which is about you finding your Facebook audiences. And I was like, so obviously you need two things to build out a Facebook audience. One of two things. One is either the email address. 00:30:50 Where you upload it to Facebook and you start to see the audience, you know demographics or you're driving them to a website and you're just tracking their visits and you're saving every single visitor to that website in your audience what are you doing I do both I mean the first thing you should do right now if you have your own website uh even if it's just sitting there and it you need to go put a pixel on it Go sign up for Facebook and get the pixel code It's a little bit of HTML that you stick in the header of your pages Even if you have no idea what the hell you're going to do with it, do that right now Stop, pause the podcast, go do that, and then come back and listen to the rest Because that's the most, you need to know who those customers are There's no better way The future is in retargeting. 00:31:37 The future of marketing right now is in Facebook and other places that are doing the retargeting. Facebook, I've looked at Instagram, Pinterest, Facebook, Twitter, Snapchat, all the different marketing platforms. And I tried to learn a little bit about each. And I said, you know what? I'm not going to waste my time with any of these others. There are people that are successful with Pinterest or successful with Instagram. But I'm like, look, Facebook is where the people are. It's where the data is. And I've been in direct marketing for 25 years. And to be honest, it blows my mind what you can do on Facebook. How much you can target people and what you can do. Now, you can't just go in and start running ads on Facebook. 00:32:13 and think you're going to start making money, you're going to lose your ass. I mean, there are ways you've got to do it, and you've got to target it properly. But to do that, Amazon is a great, to answer your question, Amazon is a great launching pad to do that. And so you can X their software out there, like Hello Profit and Managed by Stats, and there's several others, Celex, that will actually download your data from Amazon. So you can, I do it every month. I download all my orders from Amazon. It breaks it up by who ordered which product and so forth. And then I create Facebook audiences with that. So I will import those into Facebook. And you don't have the email. Sorry, but Amazon doesn't give you email addresses. 00:32:51 How do you? No, there's three ways you can do it on Facebook. The three easiest ways to create an audience on Facebook. One is by phone number. And so Amazon, I haven't checked my last file at the end of this month, but someone told me they quit giving phone numbers because people were, Amazon sellers were calling and. and spamming people on the phone, trying to get reviews and stuff. So Amazon was, I have to double-check if they're still doing it, providing phone numbers. And so I would go into those phone numbers, and you have to do some massaging, because at least here in the States, they don't always put the country code in the beginning. So I would have to massage the data a little bit and put the 1, or if it's the UK, put the 44, or whatever. 00:33:29 Then I import that into a Facebook audience. And it'll hit about a 50% to 70% match rate. And then I use a service like Managed by Stats, and they have what's called reverse append. And what you do is you send them these orders, and they use the people's street address. And there's big data companies here that have these massive databases. If you ever enter in a giveaway or you ever bought something from a catalog or whatever, they pool this data, and they match you up. And so I can get about 40% to 45% of my customers' real email addresses by doing this. It costs me about $0. 10 a name. I get it back in like two days. So then I import those real email addresses of about 40% to 50% of the list into Facebook. 00:34:12 So that gets my number up a little bit higher. It matches a few people who had a different phone number or whatever. And then you can also import the actual first name, last name. address and zip code, I think, are four of the fields you can import into Facebook, too. So you import those, and that gets you a little bit more people. So at the end of the day, if you've got 1,000 customers on Amazon, you might be able to match 700 to 800 of them on Facebook. And so then what you do, I do it taking it a step further. I have those audiences by brand. I have them by product. So within a brand, so there's a separate audience. 00:34:47 And then, multi-buyers, like with my dog treats that I have, I want to know who's over and over that's the real good customers because they keep buying them over and over, so I have another audience of multi-buyers. And you can use your data from that, which you download, to do all that. Then, you create what's up; do you incentivize them with like offers on Facebook to yeah, to your Amazon listing or to your website? What would you do? Um, well, right now I'm sending them to Amazon when I incentivize them with offers because I'm trying to grow the Amazon side. I mean, you could switch it to your own website and you might make a little extra money there, you know, because you don't have to give Amazon all the fees. 00:35:29 But I'm of the thought that I'd rather send them right now to Amazon until I'm consistently ranked, you know, number three on page one for my keywords. I need that little boost. So it's boosting your sales velocity. Amazon gives you a little bit of love. I have noticed when I quit a Facebook ad, A few days to a week later, I might drop a couple spots in the rankings. Even if my sales stay the same. As soon as I start sending traffic in, I go up a couple more spots. So there's some sort of juice in their algorithm that gives you some sort of little love for sending outside traffic. So I do that, and then I create look-alike audiences. 00:36:09 You can take your audience as big as the more you have, the better, but then you create what's called a look-alike audience. And those people, it matches all their demographics, their buying patterns. And those are like, out of the U. S., a 1% lookalike audience is like 2 million people. So you can take your 1,000 people and say, find me 2 million more people like these 1,000. And they'll use all their sophisticated algorithms to say, okay, here's 2 million more people that are very similar in all kinds of traits and demographics and buying patterns and likes and whatever to your people. And then you use those two million and you refine those down based on several other filters to get maybe half a million of them that are prime customers for your product. 00:36:49 And then you do certain things the way, I can't tell you everything because we teach this in Illuminati Mastermind, but you do certain things. Because this is all ninja stuff, really. And then you teach, you do certain ways to advertise on Facebook. Where I can advertise and reach people for half a penny apiece, and I can get clicks to Amazon for five to ten cents apiece. And there's ways to track it without using affiliate codes or without doing things. There's a whole series of things you can do. And I get on some products between a 6% and 10% to 15% conversion rate on the clicks over to Amazon. So in one way, that's pretty good. It's profitable. It's just like spending money on sponsored ads. The thing I like about Facebook is it's push versus pull. 00:37:37 On Amazon or Google keywords, you have to pull the people in. They have to come and find you. Exactly. If I know you like dogs, I have to wait for you to decide, hey, I want a new dog bowl. Let me go to type it in Google, type it in Amazon, and then I got however many other people I'm competing with to try to make my dog bowl stand out. And there's nothing wrong with that. It's a great thing. But on Facebook, I can say, hey, I know you like dogs. Do you know what? I got this kick-ass dog ball that you should check out. And you're not looking for a dog ball right now. But I put up a customer testimonial or I put up a good ad or I do whatever. 00:38:18 And you see it and you're like, you know what? That is pretty damn cool. I'm going to go check this out on Amazon. And the other reason to send it on Amazon, especially if this is cold traffic that don't know you from Adam, you're not – Purina or one of these big dog brands. They don't know. Your name's Tom's Dog Store. They don't know who Tom's Dog Store is. So if you send them to your own website, some of these people are like, eh, I don't know. But if they convert to Amazon, they already got their credit card in there. They know Amazon. They trust it. Most people don't understand how Amazon works like we do. We know we're FBA and we're third-party sellers and this and that. 00:38:56 Most people, they'll go on Amazon and they're like, it's Amazon. I trust them. So you're piggybacking off of that credibility that Amazon spent billions to build. So that's another reason I sent it there. But it can work very well. And there's lots of ways to test. And you don't got to spend a lot of money. You can spend $100 testing several different ads, see which picture works best, which copy works best. And I even do that for some of my Amazon stuff. I mean, I will run ads. If I can't decide what my main picture is going to be, I mean, there's software like Splitly. Several that do this now and then run these split tests out there on your Amazon listings, but you can do it on Facebook faster and easier. 00:39:32 You can go and you can actually see um run 10 different pictures-10 different pictures you're considering for your main page-and even if you're not trying to make sales, even if you're like 'I don't care', use it for market research and see which of those 10 pictures gets the most clicks; right is in the highest conversion, and that's the picture you need to move over onto Amazon. So there's all kinds of stuff you can do um with it, and I mean, eventually, some of that traffic I'll redirect to other places. And it's easy to switch it. I mean, I set them all up. I send them through a redirect so that I can pixel them. There's a lot of people that use these squeeze pages. 00:40:10 We're like, 'If I'm going to go from Facebook, I'm going to send them to the squeeze page', offer them a coupon, get their email address, then send them to Amazon. And the theory behind most of those people is, one, they want the email address. Which most of those people, if you're giving them a heavy discount, 50%, 80%, that email address, it goes back to what I said earlier about the publisher's clearinghouse example. Those aren't your customers. The people paying, if you're giving a 10% or 20% discount, those are good. But it's a barrier. It's an extra step. They've got to stop. They've got to enter their name and email address. They've got to wait for the email to come back. Then go to Amazon. 00:40:43 You're killing all the impulse. And so I'm like. Screw that. I send them straight. And people are like, oh, that's going to kill my conversion rates. That's going to kill my conversion rate. It doesn't matter. It doesn’t matter if you have a, your overall conversion rate isn’t very important on Amazon. People always say, oh, I’m looking in the back. I got 5% or 20%. That’s great. But it’s relative. So I can have a product that has a 5%, a 3% conversion rate overall. And on Amazon, you know, everybody else in my category has a 10%. Prime keywords I’m going after, I’m on page one because I convert on those keywords at 30%. Amazon doesn’t give you this data, but I’m on page one. 00:41:26 Why is that? Because I convert on those keywords. They don’t care about your overall so much as they do about what is relative to me and the customer that’s searching. And so I don’t worry about that conversion right there. And some of those people, if you send them through an affiliate link, then they're You might make money, you know, they buy some underwear or they buy a book or they buy something else and you make money off of that too. And that can help cover the cost of your advertising. There's all kinds of things you can do. I could go on to this in a lot of detail, but I can't tell you everything. 00:41:57 But there's a lot of opportunity out there that you just got to think outside the box and don't just follow the – Don't get in line behind the drummer boy that's telling you this is what you gotta do. I mean, you gotta be a real entrepreneur and think. An experiment. It's all about experimentation. I mean, I've lost probably 50. I mean, the way I look at it, we talked about money earlier. I haven't made a dime. I mean, I've done a million and a half plus on Amazon. And we said, you know, it's about $300,000 profit. But I haven't made any money. I'm actually negative right now, you know, when you count in what I've invested and stuff. But the way I've looked at it, is this first year, year and a half, is all for learning. 00:42:37 And the next year, year and a half, is all for earning. So I'm looking at it as an investment. Learning, earning. I listen to every podcast I can. I'm on freaking webinars five times a day. Because sometimes it's the same old bullshit over and over and over. But occasionally, I was on one yesterday. I was like, oh my God, I can't hear this again. But the one guy, he said one little nugget of thing. I'm like, you know what? That's actually pretty cool. So I took that nugget. So it was worth my time of having that in the background while I'm doing some other work to get that one little nugget. And I've experimented, like you said. I've tried different kinds of ads, different kinds of things, different images, doing all kinds of things to see what works and what doesn't. 00:43:18 So I've not put my listing up and forget it. I mean, I've changed my listings. One, I've had my first listing I put up in August of last year. I've probably changed that listing 300 times. Amazon is probably looking like, God damn, this guy is changing the thing all the time. Because I'm constantly trying to fine-tune it and figure out what works. And now I've gotten to the point where I kind of know. So going forward, new products, I'm like, okay, I need to do this. That doesn't mean I'll set it and forget it. Things are always evolving and changing. The algorithm changes. New software comes out that might give you an edge on something, on misspellings or whatever it may be. So you go and mark some modifications. 00:43:54 But this is a real business, and it takes real work to develop it. Some people have bought a winning lottery ticket, and they're not doing anything, and they get the right place at the right time. But those days are pretty much gone. And now if you're an entrepreneur and you want to grow something, there's no better place. Yeah. Kevin, I'm going to invite you again to the show, or we're going to do something, perhaps a webinar, a show. We need to get deeper into this Facebook thing. But prior to that, let's do the lightning round. I don't set any questions for my interviews, but I have a set of evergreen questions I ask over the lightning round. And I just want you to take just a sentence, just answer them with a sentence, if you will. 00:44:42 So I'm going to start out with about five, six questions. Are you ready to go? Sure. All right. I hope so. What are your future plans? My future plans are I'm getting married next year. And so I'm working my ass off right now to get everything lined up so that I can spend time with my lovely new bride and not have to work 16, 18 hours a day. Fantastic. Okay. I know you have no employees, but you certainly hire freelancers. So how do you hire people? I use for my freelance stuff is off Upwork. So I made designers and any kind of stuff like that. I use Upwork primarily. I'm about to hire a 00:45:19 VA. uh using probably online va or online ph or whatever it's called um to help do some of my social media stuff and some of my research um and that's i mean i look for good people that are motivated and like doing what they do no it's phenomenal what you've been able to do with just vas you know 1 . 5 million you know I have no i have no vas right now it's all me exactly no no staff fantastic okay what are your three indispensable tools for managing your business? For managing my business, my Amazon business specifically, Hello Profit would be number one. Yeah. That would be number one. Number two tool would be some, I mean, as far as the research tool, some of the keyword tools. 00:46:03 There's several of them out there. I use about six of them and pool all the data together. So those would be very important tools. And the third tool would be, what would the third tool be? Third tool would be using my head and thinking logically. And not getting too emotionally tied in any one product. It's a business. What all did you talk about with regards to exporting Facebook, sorry, not email addresses, phone numbers from Amazon? Was it Hello Profits you said? Hello Profits does it and so does Manage by Stats. Those are two of the bigger ones. There's also several others, but those are two of the bigger ones. Okay. What's been your best mistake to date? By that I mean the setback that's giving you the biggest feedback. 00:46:53 The setback that's giving me the biggest feedback? In business, you mean? Since I've been in business? Yes. Probably declaring bankruptcy in 1998. Well, that must have been tough, yeah. I had a business that was going well and we We didn't pay what we owed to the government, so we were using that money as cash flow to grow, and that caught up to me. And so digging myself out of that took a little while. I did fine and grew another multimillion-dollar business, but that was always there in my past. That's gone now off my record and everything, but that teaches you a lot. Feedback, good feedback, awesome. What's your one piece of advice you can give to Amazoners? Actually physical product business entrepreneurs to 2x, 3x, and even 10x in their businesses? 00:47:49 Think like the customer. Don't think like yourself. Put yourself in the shoes of the customer and look at everything through their glasses and their eyes, not through your eyes. And be willing to take a loss for a long-term gain. It's a very, very, very, very good point. You're a very wise man, sir. Okay, and any single book or resource you could recommend to help growing a business? There are several that I've used in the past. Guerrilla marketing is a good one if you're looking for ideas and tactics. Jay Levinson, I think is his name, has done a series of them. Some of those will get you thinking outside the box and not just following the crowd. Follow the crowd. I like to think for myself. That's a good one. 00:48:37 I mean, copywriting like Herschel Gordon Lewis, direct sales letters or something is really good for like copywriting. I'm not one of these big read books, you know, foo-foo books to, you know, be enlightened or whatever, like a lot of people are. So I can't really recommend any of those, how to find your inner peace. Exploit your friends, or whatever the hell they are, I'm more of a nuts-and-bolts scientific type of guy rather than an uh-happy-feely-everybody-hug-each-other type of guy. You roll your sleeves up-it's been an absolute pleasure having you on the show, Kevin. Um, before you go, um, you have a Mastermind program not for newbies but for Amazon entrepreneurs looking to well, not necessarily just Amazon physical product entrepreneurs looking to move to the next level. 00:49:29 Could you expand more about it and give us more details? And I'll also add links to the show notes, yeah. We're like, it's not launched yet, I'm partners with a couple other guys on it, but we've noticed that there's a void in the market-there's a lot of people out there teaching how to start on Amazon specifically or teaching Click Funnels or teaching Facebook advertising or teaching Fulfillment by Amazon, or whatever you know, the hottest new trend is. But there's nobody really bringing it all together, and so we're going to be bringing a lot of these different disciplines Together to show you how you can multiply extra business by combining different disciplines and showing you different techniques. And there's a lot of people that are on Amazon. 00:50:07 I mean, it's going to focus more towards the Amazon seller who's already started. He's doing five or she's doing five, 10, 20 grand a month