Month: January 2023

TalkCommerce The Futurists A Look at the Shifting Landscape of the 1960s

The Futurists: Online Shopping will fail

TIME pontificated that remote shopping, while possible, would never become popular because “women like to get out of the house like to handle the merchandise like to be able to change their minds.”

TalkCommerce Why Your Collaboration Must Have A Clear Objective

Why Your Collaboration Must Have A Clear Objective

Collaboration is a great way to accomplish more complex tasks, especially when working in teams. By pooling resources and coordinating efforts, teams can reach success much faster and with greater ease.

Talk-Commerce-Alejandra Santos

Looking Forward in Finance with Alejandra Santos

Have you ever wondered what the difference is between an accountant and a finance person?

An accountant looks backward, and a finance person looks forward.

Alejandro Santos helps us to understand the complexities and the simplicities in accounting, why you should be looking forward more than you should be looking backward, and how vital that finance person is in your organization.


[00:02:46] Brent: Welcome to this episode of Talk Commerce. Today I have Alejandra Santos. Alejandra is the c e o and founder of Startup Tandem. Alejandra, go ahead, do an introduction better than I just did. Maybe tell us your day-to-day role in one of your passions in life. 

[00:03:03] Alejandra: Oh, thank you so much Brent, for the introduction and for having me here.

[00:03:06] Alejandra: I am very excited for today’s episode. So my day-to-day means a lot of meetings, talking to clients and steering them into good practices with their financial. And with the finances in their business, and taking long walks along the beach with my dog and , trying, if I have the opportunity to take a meeting to the beach, I will absolutely do that as well.

[00:03:27] Alejandra: And a passion of mine. I just, I have so many, but I’m gonna say since we’re talking about dogs, passion is to rescue all the ducks from the streets and put them in beautiful homes. . 

[00:03:36] Brent: That’s a, that is a great, that’s a great venture to do. All right, so Alejandra, I did warn you that I’m going to do this free joke project.

[00:03:43] Brent: I’m gonna tell you a joke and you could just tell me if you feel as though the joke should be continue to be free, or if you feel like we could charge for the joke at some point. Okay. Here we go. Never date a tennis player. Love means nothing to.

[00:04:01] Alejandra: I think that one’s free. Okay, , 

[00:04:04] Brent: thanks. Thank you so much. All right, so Startup Tandem. Tell us a little bit about how you started Startup Tandem, and why you started it. 

[00:04:13] Alejandra: Yeah, so thank you for that brand. Startup tandem. I’ve been doing accounting and finance for 15 plus years. I actually bred into it after I gra I graduated college, I did the wealth management, and then I went into corporations, big companies, nonprofits, and it was when I moved to California that I went into entrepreneurship as an employee.

[00:04:32] Alejandra: Internal employee is an external consultant working for. One of the competitors, not what it is now, a competitor of mine. And it was there that I realized a big gap that existed between the services that were provided, two entrepreneurs when they were building their businesses to exactly what, the price was for those services.

[00:04:50] Alejandra: And it just didn’t make any sense to me. So that’s why I created Startup Tandem. A startup Tandem is a supportive partner of four entrepreneurs in when they’re in their. To start a business and as a startups and all the growth level, that maturity, some clients are making 80 million in revenue.

[00:05:07] Alejandra: Some other ones are making one $50,000 in gross revenue. It just, it really doesn’t matter where you are in your journey. We are committed to become that partner that can set you up at least with a good infrastructure and take you all the way until you scale or until you’re ready to hire internally. So that’s exactly what we do.

[00:05:23] Alejandra: We set up entrepreneurs with the tools and the resources. to help them in their finance journey and not just, give them whatever service. It’s not a one size fits all. It’s customized to its company’s growth. 

[00:05:35] Brent: When you start with an entrepreneur or a new business, do you see them making common mistakes in, in, in their accounting practices or bookkeeping, things like 

[00:05:44] Alejandra: that?

[00:05:45] Alejandra: A hundred percent. So one of the biggest pitfalls that I see is that they’re not on top of, Just general bookkeeping. And they don’t have really good policies in place. By that means that there’s no AR policy or AP PO policy approval policies in place. There’s a lot of personal expenses go flowing through the company.

[00:06:03] Alejandra: And, They do their taxation, their taxes according to their bank statements rather than a financial statement. And it’s not really until they have the urge to bring an external investor, an external partner, or they’re trying to get into a very big line of credit or some kind of debt financing that actually puts them urgency.

[00:06:22] Alejandra: To, wow, I gotta clean my financials now because we’re gonna look at that. And at that time, at that moment, you’re really 10 years into the business or five years into the business, and you’re looking at a high cost. Just to go there backwards and then forward to clean those financials is a big mess and it takes a lot of money out of your pocket.

[00:06:42] Brent: Do you find that a lot of entrepreneurs aren’t necessarily versed in accounting and maybe they don’t underst. what payables are and what receivables are and even the sense that, hey, I’m suddenly, I’m amount of money, but I have a whole bunch of inventory to you. Help them with some of those 

[00:06:58] Alejandra: pieces.

[00:06:59] Alejandra: Oh, 100%. And yes, what we do, a big portion of what we do with our marketing and resources that we offer is education. Just because that is a thing that we do see in the industry. There is no urgency in. in financials, in financial management, in accounting, and knowing what your numbers are. So a lot of it goes with educational videos, educational resources, why you should do it, why it works, why you should, this is a big component of your business.

[00:07:27] Alejandra: We. Definitely focus on that as an early stage company. Even though you cannot afford, if you cannot afford a full service yourself, we definitely wanna set you up with the tools and infrastructure, the policies to help you get into a good regimen. And, if you wanna do it yourself, you can, do it yourself, but at least you have something to go buy.

[00:07:47] Alejandra: And then when it comes to inventory, that’s a big pitfall that I see, especially for e-commerce companies, startups, and businesses, is. They don’t have just with the basics, they don’t have a really good skew numbing clutcher. Which that means it’s like products. Some products don’t even have a skew, so it’s really hard to even track down what the levels of that skew is or that inventory product is if you don’t even have a good traceability on it.

[00:08:11] Alejandra: So yeah, there is a lot of things that I see pitfalls, but there is a lot of things that also systems and very low budget resources and tools can. Entrepreneurs gear to the right position. 

[00:08:24] Brent: You see a lot of entrepreneurs doing books or doing their bookkeeping as the last thing they wanna worry about, they just get it done.

[00:08:32] Brent: And I, you had mentioned that they just go off bank statements for reconciling they’re not doing cash flow reports and there’s so many more things that are involved in there. How do you educate ’em on some of those? . 

[00:08:42] Alejandra: So yeah, it’s really interesting. I get a lot of clients at the end of the year because they’re getting ready for tax season, and one of the big things that I get is, oh my God, my books are a mess.

[00:08:52] Alejandra: I don’t even have a set of accounts. Can you please help me out? Cuz the tax season is coming. And it’s great. Yes, we can definitely do that. However, When I asked them those questions that you just did, okay, so what is your cash burn? What is the biggest driver of your cash burn? What, those are the things that you have to know in order to make the right strategic decisions in your business.

[00:09:11] Alejandra: You gotta know all those drivers. You gotta know all those KPIs. So when I make those questions to them, it’s it goes like an. in the brain. Oof. Okay. I don’t know those things. Maybe I should know them. Yes, abso a hundred percent. And I try to get because in numbers it’s not for everybody, and especially when you are a business owner and you’re creating this amazing product, you’re very creative. You probably don’t wanna talk numbers. So when you’re very creative, I try to talk, in the level. Whoever is in front of me to educate them, okay, maybe you do need to know what’s causing that burn, because if you know that you can control that, you could probably put that money into this instead.

[00:09:50] Alejandra: Product development or a marketing expense, something that’s gonna drive revenue up, and that’s when they realize, okay, I do need to be more diligent with my financials. 

[00:10:02] Brent: are some, are there some basic from an educational standpoint that you help them with and say just in reporting balance sheet, p and l, cash flow statement, are there some just basics that every entrepreneur should know before they even start?

[00:10:15] Alejandra: Before they even start? Yeah, that’s a good one. . I even have friends that entrepreneurs, and I tell them all the time, get your stuff together before, please don’t give it to me like that. The first thing I say is try treat your business as a business. And your personal is your personal business.

[00:10:28] Alejandra: A business is basic. Don’t run your. Personal expenses through the business is just at the end of the day, you gotta look at the big picture. And if the big picture is, I’m gonna sell my company in five, six years, guess what? They’re gonna be looking at those ebitda. They’re gonna look at operational income and they’re gonna see what’s flowing down there.

[00:10:46] Alejandra: And if you put all their personal expenses flowing, it’s gonna destroy the valuation of your company. So I try, just keep the big picture, even if you don’t understand the technicality of it, just keep the big picture in mind as soon as you have a business. Go with the, goal. I’m gonna sell my business.

[00:11:01] Alejandra: I’m gonna go an I P O, and then work towards that since the beginning, from the beginning. And just that will give you a clear sense of what you should or should not do. And if you have a hesitation, then ask questions to someone that does. No 

[00:11:14] Brent: I think you mentioned how the banking system works and how they wanna look at your books.

[00:11:20] Brent: If you are gonna start, if you’re gonna try to get a loan it would also apply to, if you wanna sell your business or get investors how do you recommend somebody that maybe they’ve been in business for five, six years and suddenly they’re, they want to start making their books, is it a process to weed through the mess that a person may have made and then they, you need to get ’em on the, in the right.

[00:11:43] Alejandra: Yeah. So there is definitely a process, especially if you have been in business for a few years and you have done taxes according to your bank statements rather than what’s sitting on that, on those financials. There is definitely a process, especially because those years are already closed.

[00:11:57] Alejandra: I called them closed because. Taxes have been already filed. So it’s really how can I say? You have to talk to the person that file your taxes to, to see what kind of adjustments you have to put in those financials to match exactly what you did in your taxes. And let’s just say that most of the time, your taxes, the taxes that are done are show less revenue.

[00:12:15] Alejandra: Then what’s in the financials? And it’s just because it’s cash basis and there’s a lot more things that are happening on the financials that are happening in, the bank statements. Let’s just say that it’s, you have to go retroactively. So what we do is basically Reno talk to the tax attorney or tax prison that did those books and say, okay, this is where we are.

[00:12:35] Alejandra: this is a trial balance. Now what can we do to get it there and then go forward cleaning up the whole, financial set and make sure that everything that’s flushed out personal, from business is flushed out and there’s a differentiation on it. Because what happens is the banks will look at least two to three years, depending on the financial institution.

[00:12:55] Alejandra: To see, what, how much your gross revenue is. You’re gonna look at those numbers. So if we can make the financials as accurate as possible, and related to what was posted on the taxes and then moving forward as well, we can show some growth, then that can put in a better place, and that goes with investors as well.

[00:13:14] Alejandra: The same, they’re gonna ask for your, your financials. Most you don’t, you probably don’t wanna even share your tax return if it’s flowing through you with an investor it’s uncomfortable situation. So we would have to go back, clean it up, match it to that, and then go forward and show some kind of forecasting, increase in revenue.

[00:13:33] Brent: Yeah, I think that you brought up a really good point about how the tax how the bank statements won’t reflect your ar They won’t reflect your inventory, they wouldn’t reflect any depreciable assets that you have and how important those are for a business owner to know. And even for when you’re going to get a loan, the banker’s gonna want to know what your assets are outside of what the bank balance.

[00:13:56] Brent: maybe talk about some of those pitfalls that entrepreneurs fall into when they, maybe they’re not as educated around accounting as they should be. 

[00:14:05] Alejandra: Yeah, so that’s actually a good point, Brent. So there’s a lot of asset based financing and it’s very important to know that, especially if you are in e-commerce and you have inventory on the books So there is definitely platforms.

[00:14:18] Alejandra: I’m just gonna speak very, a few of them. I don’t endorse any of them by the way. There is a Shopify, there is PayPal capital there is Clear Bank. Those right there will finance against your cashflow revenue stream. But what some asset based institutions do, and you can do the traditional or the non-traditional way, which.

[00:14:37] Alejandra: Do you prefer the non-traditional way for small companies or startups because they’re a little bit riskier? They basically look at your inventory and see what the inventory turnover is and see exactly what the valuation on that in turnover is to finance against it. And what happens there is that if you don’t have.

[00:14:54] Alejandra: If you don’t have a clear, a clean inventory balance, meaning they’re gonna ask for warehouse reports, they’re gonna ask for, what’s sitting on the balance sheet ties into the warehouse and evaluation that’s sitting in the warehouse. Actually the same as in the books. And if you don’t have that really button up, you’re missing on a lot of money.

[00:15:12] Alejandra: And if you do get an untraditional institution, they, you’re probably missing on not right now, cuz there’s inflation. In the future you probably will be missing on lower, in a low cost of capital financing rather than going to a traditional institution. When they give you a term loan, which is gonna be really high with really bad.

[00:15:29] Alejandra: Payment terms. So there is a lot to unpack when it comes to the balance sheet financing. There’s your ar like if you have some really good contracts and clients and they’re valued at, let’s just put a number, 500,000. You can get some really good financing against that if you find a good institution that can give you good factor for that.

[00:15:47] Brent: On your website you list that you do services like bookkeeping and fractional cfo. Maybe explain to our listeners some of the differences, and if we started with the bookkeeper, you have a comptroller, there’s a fractional cfo, there’s a cpa. How there’s a lot of different roles that that a in financials that play.

[00:16:06] Brent: Tell us if you could just explain some of those differences and then maybe tell us what, how you help. Yeah, 

[00:16:13] Alejandra: no, thank you. So yeah, so bookkeeping is your, I’m gonna call like the very low level service. Very basic, can somebody coming in, making sure that your bills are there, your invoices are there, your payments are matching, your invoices very low level.

[00:16:28] Alejandra: I don’t like to really just offer that because I think the company does deserve a little bit more. Than just bookkeeping. I like the accounting, the whole accounting service for anybody honest. It doesn’t matter what your business growth is. And it’s because it not only makes sure that your books ar and AP are really up to par, but it’s also gives a little bit more insight on what your margins are and where you know, your, where your biggest drivers of expenses are.

[00:16:56] Alejandra: If it’s marketing or you. Probations or whichever one it is. So I like that one more. And each level, for us at least, we do have a CPA person and management, that manages the accounts and make sure that everything is up to par. We do have also staff and senior accountants that take care of the very.

[00:17:16] Alejandra: Low, low, the low budget task as well. And then when it comes to fractional, CFO is going forward, right? So one of the things that people need to understand is that accounting is, keeping the financials accurate to what’s going on right now. But cfo, f o means going forward. But in order to have a good forward overlook, you are gonna need accurate financials like the forward.

[00:17:40] Alejandra: journey is based on the actuality right now. A CFO person is somebody that will do those analysis for you, is gonna do an f p, and a analysis is gonna do a weekly cash flow. It’s gonna do some variance analysis, which is like budgets, forecast versus actuals, right? Where are you standing according to your forecast or your budget?

[00:17:59] Alejandra: And if we have to readjust the forecast to meet those numbers this person will help you navigate. What kind of KPIs you’re gonna need to reach, or what kind of KPIs you need in order to meet certain metrics or something like revenue goals. This person can identify, like I said, cash burn.

[00:18:16] Alejandra: Where is that cash burn coming from? If you are a company that’s bringing product from China or bringing, product from another country, what are your shipping costs? Is that like the main driver of your cash burn? What can we. To mitigate that cash burn. And it’s somebody that, when it comes to financial institutions, goes ahead and assess the risk of each loan or line of credit or any, o other kind of tool that you wanna get into.

[00:18:40] Alejandra: This is a person that will analyze and assess that risk that comes with it. And it’s a true apr, right? What exactly are the fees that my company’s gonna face on a yearly basis? Divide business with this company. It’s just, for all, anything that you need. There is, like I said, accounting is actual.

[00:18:55] Alejandra: So you need somebody that can make sure that every number in that book is actually, has a backup. If there’s traceability, there’s an a report. If somebody comes looking for answers, there’s something there. And then you, a fractional CFO is somebody going forward. How do we get to the next level?

[00:19:11] Brent: If somebody’s just starting let’s and they want, they, A year’s worth of books or two years worth of books, they’ve just done it on their own. How long would you expect somebody, like one of your team members to get them up to speed where it’s ready to. Start forecasting revenue, start for forecasting cash flow, things like 

[00:19:30] Alejandra: that.

[00:19:30] Alejandra: So it really depends. Let’s see, one year, two years, and they’ve done it all on their own. We would have to go and look at those books, make sure that, if there are any changes that we need to make. We do them in the current year. Talk to the tax accountant, like I said. And just honestly it takes a month or so to get the, to get us up to speed on like the accounting side.

[00:19:50] Alejandra: And then after that, because we need actual information, we need some really good, reliable information to do the forecasting. And then I would say like a few weeks after that, three weeks, we could probably have a model ready. We do models. Very differently than a lot of companies that I’ve worked for before.

[00:20:06] Alejandra: We don’t have a one size fits all kind of issue because everybody has, different business models and not also a different business growth as well. So there’s a lot of things that small companies don’t need and they probably find overwhelming. So we basically have standardized models already.

[00:20:23] Alejandra: We have a small model and we have a more complex model, and we adjust those models accordingly to the business. The, The business and the business model that we have. So with that being said, it doesn’t take as long to, to create something. But it does what could be that time delay would be the cleaning of the accounting and make sure that everything is reliable.

[00:20:45] Brent: What do you see from a mistake standpoint that entrepreneurs or business owners make when they are hiring somebody like you? and they want to try to cut costs at the same time. Is there places where you see people being cheap and maybe they should just spend the extra money on services to make sure that their books are right?

[00:21:07] Alejandra: Yeah, so I’ve seen different cases, so I’ve seen people. Hire full staff of marketing internal team, and overhead is one of those things that is the biggest driver of cost, especially for a small business. It’s one of the things that I look at. The first things that I look at are, do you have an office?

[00:21:26] Alejandra: How much are you paying for that? And how much people do you have in staff? Because you will be surprised. Fractional goes a long way when it comes to building a business. You just have to find the right partner. That’s what it goes with, everything, right? You just have to talk to people. getting a conversation.

[00:21:42] Alejandra: Go have coffee, vet them out, talk to their clients, talk to their partners, see how they’re reacting. But that would be one of the biggest pitfalls that I see is that these companies are spending a lot of money on employees, internal employees. With that comes and I don’t. Know if a lot of people are listening are in California, but if you are in California’s one of the worst states to have employees.

[00:22:04] Alejandra: It’s like the state is against you as an employer. There’s so many policies that you have to follow. It’s insane. So you could. , you could reduce that level of stress if you just go, find some agency or someone that does those services on the side and can be a good partner to you. The other one that I see is, like I said, if you are in e-commerce and you’re doing inventory is inventory wow.

[00:22:27] Alejandra: There is a, if you’ve. Find the wrong three PL company. Oh my goodness. There’s so much cost that goes with that. It’s just, and it’s a lot of cost to get out of it through PL and to get into another one. So research on the right three PL company is one of the biggest ones that I would suggest to do as well.

[00:22:44] Brent: As a business owner, do you recommend like a payroll service or do you recommend that the entrepreneur or business owner do their own? . 

[00:22:52] Alejandra: Oh, that’s a good one. So definitely a service, a payroll service. I honestly, I like everything. I’m not very techy. I like everything that’s very user friendly, user interface friendly to me.

[00:23:03] Alejandra: And I like the ones that are targeting startups because, they basically provide a lot of support and that companies do need and they’re not very bureaucratic, like older. Payroll software providers are but I’m not, I’m not here to recommend anything. But one of the big, one of the ones that we use is Gusto is very user-friendly.

[00:23:22] Alejandra: It connects with different softwares. And then I also hear that ADPs going and. Connecting, doing a thing with QuickBooks coming up soon. So that’s, that could be a good one as well. I just think that when you’re starting a company, you wanna be very e easy, make your life easy with a lot of techno technology tools, cuz it gets really complicated when you have so many at the same time.

[00:23:42] Brent: Is there a, is there an alternative to QuickBooks 

[00:23:44] Alejandra: as a small business? Oh my God, there is. There is, but is, you’ll be surprised how many people use QuickBooks. I think 90% of the population, I use QuickBooks, so there is, but QuickBooks is just makes it easy for small business owners because it’s very cost efficient, and for example, there’s NetSuite, NetID is a really good platform. , but it’s expensive. And that’s what I am saying, and they do have an in inventory management already capability in it, which makes it a fully RRP system. However, it is very costly, and this is when as a business owner, you have to make those decisions.

[00:24:21] Alejandra: It’s What is the value added for the software that I will be buying is if I’m spending $30,000 a year for the software, what is the value that I’m getting out of it? How many employees do I have that are you gonna be using it? And then from there determine if this is worth the investment or not.

[00:24:37] Alejandra: So that’s where we go with the companies that’s. Probably use QuickBooks online because it’s very cost efficient. You can connect it with other tools, but there’s ma As you grow your business, I, if it makes sense, go for it. If it doesn’t make sense to put those 20, 30 grand in a system, then don’t go for it.

[00:24:55] Alejandra: Just continue, using tools that work for you. 

[00:24:59] Brent: Is there, can you highlight challenges? So you mentioned e-commerce in selling a product. Is there challenges in selling a service as a, as a. . 

[00:25:08] Alejandra: Oh, always. There’s always challenges. . Oh my goodness. There’s so many challenges. Yes. One of the biggest challenges, it is credibility.

[00:25:15] Alejandra: Making sure, obviously when you’re, when I see it from a small business owner point of view, when you is your baby, Especially the finances. This is go to finances. Oh wow, somebody’s gonna handle my finances. You wanna make sure this person is really vetted and wonder what they’re speaking to.

[00:25:31] Alejandra: And I a hundred percent agree with that. Also marketing service is another one. That is, there’s presents a lot of challenges because marketing’s all about results. It’s not about the process. While the finance and the accounting is all about the process. , about the results.

[00:25:43] Alejandra: So you just have to, it is always, there’s always a challenge no matter what you sell. For me, the biggest challenge is people like me, they talk to me, they meet me, they’re like, oh she’s very pleasant. But I look very young. I’m not gonna lie. You’re looking at me right now.

[00:25:56] Alejandra: I look very young and people are like, oh my gosh. She has that much experience. How old was she when she graduated high school? And when they look at my experie, My experience will talk for itself. So if you do feel like there is a way to vet more of your service, providers, you can always ask for references for clients, for partners, for, just to see what they’re doing for other people.

[00:26:18] Alejandra: And, at the end of the day is, find a partner that has flexibility as well. on a contract. If you don’t like them, goodbye, there’s no oh my God, you, I have to pay this. I have to do that. I have no, it has to be somebody that’s easy because at the end of the day, you’re is your business and you wanna make sure you have the right partners in place.

[00:26:36] Brent: If you had a piece of advice going into this fourth quarter in these high interest rate times to a business owner, what would that be? 

[00:26:44] Alejandra: Start looking to cut costs. Right Now, look at the areas of like I, we just talked a few about overhead costs, right? Unfortunately there is a lot of people being laid off right now because of that reason.

[00:26:55] Alejandra: But. It shouldn’t be that way if you were vetting your costs at an early, earlier time this year, right? Because inflation has been coming for a long time already. So just be proactive look ahead. That would be my first advice. Look ahead, look at your cash burn. Start looking into those weekly cash flow models that I always, you know, monthly cash flow models will tell you so much, but if you look at a weekly standpoint and see exactly what’s driving the number in, you will see there is a lot of areas that you can, lower down those costs.

[00:27:23] Alejandra: The other one is, it was probably better back a few months ago to get into a line of credit, Kind of use that money now, the interest rate are so high, I don’t even recommend it. Just start initiating those conversations with a lot of financial institutions to see what they offer in the near future.

[00:27:42] Alejandra: Because the, the interest rates will come down. It’s, as the government continues to push, they will come down at some point. So the cost of capital will, will become cheaper. Just start initiating those conversations now and be, prepare, be proactive in this time. 

[00:27:56] Brent: Yeah, I’ve always heard that the best time to ask for cash from a bank is when you don’t need it at all.

[00:28:02] Brent: Exactly. , when you absolutely need it, that’s when they don’t want to give it to you. . Yeah. You, you mentioned weekly and monthly cash flow models and that’s how you can help cut expenses. Do you, so you recommend looking at the detail within that cash flow to help you see where that money’s going?

[00:28:15] Alejandra: Yeah. So this is the thing with the monthly one. So the monthly is a very undirect cash flow model. It takes the activity of the balance. Just to see what’s happening. But on a weekly basis, it is very direct. And you can monitor that on a weekly basis. Just to assess where you standing and when is It tells you by week when your cash is running out.

[00:28:34] Alejandra: If you’re running out of cash on January 3rd, that’s when you’re running out of cash with everything else that you’re being forecast, you’re meeting those forecast numbers and it helps you be proactive in your budget If you say, okay, I’m running out of cash on January 3rd. , that’s not a lot of runway.

[00:28:49] Alejandra: We don’t have, external capital coming. Let’s cut down what are the budget areas that we can minimize to bring it to February, at least one more month. That it helps you be really proactive in identifying those areas of opportunity. And then if you need to ask, do a fundraising round, then it gives you at least that lag time.

[00:29:08] Alejandra: Okay, two more months to get really out there and ask for. 

[00:29:13] Brent: Perfect. Alejandra, as we close up the podcast, I give the guests a chance to do a shameless plug about anything you’d like. What would you like to plug today? 

[00:29:20] Alejandra: It is Black Friday coming up, so make sure that you have your inventory.

[00:29:27] Alejandra: If you’re using something like Shopify or e-commerce, make sure your inventories are set up correctly cuz that way you don’t have a future headaches in the, once everything is done, make sure that you have your follow ups correct, coming out to all those new customers, make sure that you have some retained strategy for the new customers coming in and purchasing your product.

[00:29:46] Alejandra: So I would just say there’s actually a blog from OK Kendo I can share it with you and I just head over. There is a few tips of coming from different experts on how to prepare for Black Friday, cyber Monday for you to make a lot of money and cut a lot of headaches. . 

[00:30:01] Brent: That’s awesome. Yeah, I appreciate that.

[00:30:03] Brent: We don’t often get different types of industries that you’re giving advice for. Thank you so much for that. Alejandro Sandro, Santo, sorry. is the CEO and founder of Startup Tandem. Thank you so much for being here today. 

[00:30:17] Alejandra: Thank you brand. This was so much fun. Mutual Gusto, .

Thank you for making it to the end of this episode of Talk Commerce. Please rate this episode wherever you download your podcast. We are actively looking for people to participate in the Free Joke Project. Go to talk hyphen and sign up for your free spot on the Free Joke Project. If you are a business, I will do a 32nd elevator.

In the spot to help promote your business. That’s talk hyphen

core-web-vitals-Content with Largest Contentful Paint

Unlock a Faster, Smoother Website: Discover The Biggest Piece of Content with Largest Contentful Paint!

Make sure your website loads quickly and efficiently, web developers must pay attention to the performance of the most significant piece of content that is displayed on the page. This is referred to as the Largest Contentful Paint (LCP)

Talk-Commerce-Alex Teller

An Entrepreneurial Journey in Comic Books and Toilets with Alex Teller

Magento’s life as an ecommerce solution has been a roller coaster ride.

Alex Teller is more excited about the future of the platform than ever. Alex talks about the flexibility of Magento and how it powered his business for over a decade. He dives into marketing and social media topics and more.


[00:03:00] Brent: Welcome to this magenta edition of Talk Commerce. Today I have Alex Teller. Alex is the CEO O of home. Perfect. Alex, go ahead, introduce yourself. Tell us your day-to-day role and maybe one of your passions in 

[00:03:13] Alex: life. Yep. My name is Alex Teller. I am the CEO O of Home. Perfect. We sell faucets and sinks brand name, luxury products.

[00:03:21] Alex: We’ve been in business for about 10. Business is on Magenta. I’ve been a magenta enthusiast for quite some time. And when I’m not in front of the computer breaking my head, trying to fix stuff, I like to collect old comic books. 

[00:03:36] Brent: Yeah. And I, we both met at Meet Magenta, New York and that was fascinating cuz my first experience in mag.

[00:03:43] Brent: With a client was on a comic book site and I can’t even remember the name now, but it’s been like 12 years. , you don’t remember the name? I know it’s not terrible. Yeah, that’s terrible. Anyways. did. I will look for it after the show and if I can find it, I’ll even put a link on the episode notes.

[00:03:58] Brent: So before we get into this what we’re gonna talk about, I do have an important project called the Free Joke Project. It’s hashtag free joke project. And I was, I’m gonna tell a joke to Alex. All I would like is just a reaction. The idea is, should these jokes be open source or are they like paywall?

[00:04:17] Brent: Okay, so they’re very short. Here we go. 

[00:04:20] Brent: Dude. I know. Geez. Yeah. Maybe we should open source. 

[00:04:23] Alex: This should be open source and patched and fixed for a decade. Before it’s stable, 

[00:04:27] Brent: we’re gonna have to do two.

[00:04:28] Brent: Now I’m gonna re, I’m gonna start, I’m gonna do my second joke. Ready. A ghost walks into a bar. The bartender says, sorry, we don’t serve spirits.

[00:04:40] Alex: That’s so 

[00:04:40] Brent: stupid. Yes. Very stupid

[00:04:45] Brent: All right. All right,

[00:04:50] Brent: I appreciate that. You gotta pay for a joke. That good? Yes. All right. So redo on the first one. The adjective from metal is metallic, but not so for iron, which is ironic.

[00:05:02] Brent: Yeah, I don’t know about that one. Yeah. Good thing I screwed it up to start with, but I feel 

[00:05:05] Alex: bad cuz it’s cuz the, I don’t know about that is like saying, oh, that should be open source. But I love 

[00:05:10] Brent: open source. Yeah. All right, good. I apologize. I could get a 

[00:05:13] Alex: tattoo. I would get the canoe public license across my back.

[00:05:17] Brent: There you go. Perfect. Yeah. Open source license 3.0. So yeah. Yeah. Alex, tell us a little bit about your journey. Commerce and how you started home. Perfect. 

[00:05:29] Alex: Yeah. I was always buying and selling on eBay. I would say eBay is my favorite to this day, still my favorite website ever. Because I do enjoy a, I do always have a collectible sort of nature to me.

[00:05:40] Alex: So I was buying, selling on eBay, and back then it might have been, I think I was like selling package software or DVDs. It, it was a while ago. It I’ve been buying and selling on eBay for so long that I was getting checks in the mail and I wasn’t even old enough to get a bank account. My parents needed to go in and sign me up so I could go deposit the checks and then PayPal came out and it was a game changer for me as I, I started to, just get the money straight to.

[00:06:07] Alex: So I was buying and selling on eBay, and then I knew I wanted to get into more e-commerce. And my father’s an architect and he put me in touch with some people that had access to some faucets and some sinks, and we hit the ground running and we’ve been in business ever since. . That’s 

[00:06:23] Brent: awesome.

[00:06:23] Brent: And so you got, you went from eBay to e-commerce? I know my wife had a business on eBay for a long time and a different type of business. So what, tell, just tell a little bit about what were you selling on eBay and how 

[00:06:34] Alex: to I’m still on eBay. My eBay username is comic pu. , ah, so 

[00:06:39] Brent: I understand what you’re selling.

[00:06:40] Brent: It’s not 

[00:06:40] Alex: Home Furniture. 89.8% positive feedback. One guy gave me negative 

[00:06:45] Brent: feedback. Oh, that’s frustrating. I’ll 

[00:06:47] Alex: say that I, it was for a heat sink that I forgot to include. It was a heat sink and fan that I forgot to include the backplate for, and it got shipped internationally. So the dude within I don’t know why this guy bought it from me, but I ripped it out of an old computer.

[00:06:59] Alex: I upgraded and I got 15 bucks. And the 15 bucks was not worth that one negative feedback to this 

[00:07:05] Brent: day. Yeah, no kidding. My, my experience, so I all, I had a, I used to have a retail computer store. I sold it. I ended up with a ton of inventory that everybody said was bad. I sold it all in eBay. It was amazing.

[00:07:17] Brent: And nothing came back. So anyways let’s keep moving. So e you sold it all on. I sold 

[00:07:23] Alex: everything. This is, you guys made more money on it for some of it. Yeah. This is a, you never 

[00:07:26] Brent: sold it for in the store. It was crazy. Yeah. This was in the nineties, but yeah, some of the 

[00:07:30] Alex: stuff, if you held onto it, it’s probably worth 10 times the amount, if it was like boxed computer games that are, like boxed Sierra games or something.

[00:07:36] Brent: I wish I, I also had a retail store called CD Rom City, so I’m dating myself now. 

[00:07:42] Alex: I update yourself. It’s all good, man. I was there, I was clipping the coupon for Comp U USA on Saturdays going on my gosh, Sundays getting the mail-in. I love that I paid 90 bucks for EDOs, 16 gigs of Ram, and I loved it,

[00:07:55] Brent: So we won’t go into let’s keep moving forward instead. thought it was the best deal. I was so excited. So tell us a little bit about your current Your current store and what you’re doing and is it a hundred percent commerce, e-commerce, I should 

[00:08:07] Alex: say? Yep. It’s a hundred percent e-commerce.

[00:08:10] Alex: Home Perfect is b2c. We have a large database. We have about 250,000 s skews and we have so many different product attributes cuz we have so many different product types. If it’s something like a toilet has a one piece toilet and a two piece toilet, and they might have required accessories that are different.

[00:08:29] Alex: One might chip LTL freight, one might chip X ground. There’s so many different elongated toilets, round toilets. There’s so many different product attributes and attribute sets that cuz of just the breadth of product mix. I felt like I almost had no choice to, to be on Magento. I think Magento has been a good fit for me because of that.

[00:08:49] Brent: Yep. When you were evaluating platforms, did you look at other ones to try to do your store on? 

[00:08:55] Alex: Yeah, so back in 2012, we were on something called the Venda platform. It was software as a service before it was cool, right? Back when it just sucked when it didn’t work. Now Venda was okay, but it got acquired by NetSuite, I think.

[00:09:11] Alex: And at the time we we knew we needed to move to Magenta, so we did. And Magenta one worked very well for us for many years. When it came time to migrating to two, I did debate on whether or not I should move to another option. I had a layout, right? I was like, maybe I’ll go to Shopify, or maybe WooCommerce were the two that I was bouncing around on.

[00:09:33] Alex: But I felt the number of SKUs and the attributes would’ve been an issue on Shopify for me and commerce. I just, as much as I like geeking out I was familiar enough with Magenta that, I have a business to run, at the end of the. I’m the ceo, right? Not cto, right? So as much as I love technology, I need to sell faucets on the internet and toilets, right?

[00:09:51] Alex: How can I just keep the business running while, upgrading the software? I took the plunge to two. It was a little bit rocky at first. I would say the performance for large databases wasn’t there until maybe for me personally, I saw the improvements at two 40 or maybe two 40.

[00:10:08] Alex: But now it is very stable for me. I’m very happy being on it and I’m really finally getting to enjoy all the new technology and new benefits I have of being on it. And I’m having fun with it. So I’m glad now that I made that switch 

[00:10:20] Brent: and I think you’re in a particular market space that has a lot of, like you had mentioned attributes and those are just parts of a product that can ide be identified.

[00:10:30] Brent: And in Magento’s case, they worked also to make configurables and child products. So if you think about on Amazon that left. When you’re navigating, that’s your attributes. Just for our listeners who aren’t under don’t understand the concept the, your particular market is very attuned to having very complicated products that can balloon your skew count.

[00:10:55] Brent: Maybe talk about the challenges of having so many SKUs and. How you’ve worked as a merchant to make customers be able to find the right product when they need to. Yeah. 

[00:11:06] Alex: In short Brent, it sucks. Let’s take for example, the lighting industry. The lighting industry will create, new products and they’ll already have a skew count of 2000 codes, and then they’ll just discontinue on a whim the next year.

[00:11:17] Alex: They might not have even produced some of these things. They just keep throwing stuff out there and put it on. And sometimes the information is so bare from the vendor, but at the same time, we have the information when we when we go on their website. So at the end of the day, I think our customers know what they want.

[00:11:36] Alex: We’re not really looking for the customer who is oh I wanna redo my bathroom or kitchen, but I don’t know what I want. We’re very much looking for people that come into us, the Brandon part. . And when they do, we wanna at least be able to have that brand at part number, that image and offer, ideally a compelling price for them.

[00:11:51] Alex: And we really want them to come to us, not just for one item, but for a whole list. Because we have salespeople that will walk them through a quote and make sure it’s compelling enough. Or we have a members only price club that uses the magenta cart rules to, if they log in a lot of the prices might be heavily discounted and make it compelling for them to use us.

[00:12:08] Alex: So that’s where. We want you to go to a maybe showroom first or maybe discover the product that you want somewhere else, but then come to us for the best deal. Yeah. You mentioned 

[00:12:18] Brent: price rules. Do you have ways to get your average cart value up in, in terms of when they’re navigating through your site, you wanna recommend other products, things like 

[00:12:27] Alex: that?

[00:12:28] Alex: I would say that’s 1000000% credit is given where credit is due to our recommendations, our AI-driven recomme. We analyzed years of sales history and we started with maybe maybe a more dumb AI, if you would call it, right? Just saying, which products were most often purchased with these products.

[00:12:44] Alex: But now that we’ve gotten more information and every sale makes trains that and gets that smarter, we’re now able to maybe use the category data to boost and optimize which related products we show. . It really helps, it, sometimes a customer might come in and say, oh, I, I didn’t know I needed this in-wall tank carrier for this toilet.

[00:13:02] Alex: I don’t know if we personally want that customer, but at least we show it or we show the seat that goes with the toilet or we show maybe a sink and faucet that other customer had purchased. So it’s definitely very detail oriented for us. It needs to be exact and. And we’re not selling a pair of sneakers.

[00:13:19] Alex: Somebody’s not just swapping out their faucet cuz they like a black one one day and a gold one tomorrow. They’re making that investment for a while. 

[00:13:27] Brent: Yeah. And I think recommendations is something that really scales especially as you grow your traffic and as more people, as you start collecting that information for what other customers are doing, that’s where it really comes into play.

[00:13:40] Brent: Do you mind telling us which recommendation engineer you’re using for, you mentioned ai, so are you using a outbound Outbranded one. 

[00:13:49] Alex: Oh, yeah. I’m. I really value the close relationship I have with my host and provider cloud I think they specialize in large databases and and large catalogs.

[00:13:59] Alex: And I think in particular they developed the they developed a software called computer ai, which is like product information management and also AI recommendations. I think I was like an alpha partner and now they’re going to market pretty soon.

[00:14:14] Alex: And adding some new clients. So I’m really excited about what they’ve done with me and for them to be able to offer that to other customers. 

[00:14:22] Brent: What would, if you, if somebody were to come to you and say, I’m so afraid of machine learning how would you get, how would you encourage another merchant to embrace the idea of machine learning?

[00:14:33] Alex: I can really say it comes down to cost for us merchants, some solutions are just too costly and I personally can’t sign a contract. I, I. Spend crazy amounts on budget. I have to allocate a certain amount towards ads and I have to stay profitable. I’m not a company that’s looking for I, I looked into you, Brent you said something about how, like you had loss of leaders at your software store, but we’re looking to make money on every order.

[00:15:01] Alex: And, I’m not saying we’re gouging our customers. We’re we’re delivering a competitive price, but we can’t give away these items. We need to we need to make. And if we start spending a lot on very expensive features, we could just kill our whole budget. If somebody is scared about the concept of ai, me personally, if I were to, as somebody who’s probably more computer geek than most business path sorts of people, I would just show them the price and tell them that they have nothing to lose if it’s priced well enough and if it if there’s really no.

[00:15:32] Brent: Yeah, I think I’ve talked to a number of different, say, fraud providers and they use AI to help help with the transactions to make sure, hey, is this a fraudulent transaction, non fraudulent? And always give the example of a client that we had in Mexico who had a call center that would call every single merchant to make sure that it’s the right merchant, right?

[00:15:52] Brent: And at some point that just doesn’t scale anymore. , like you want to fulfill that item. And I think anything that has to do where machine learning can help you as a merchant scale your business, that’s where it works. And Adobe has a sensei, which it’s, it sounds is very similar to what you had in, in your competitor.

[00:16:13] Brent: Do ai. There are so many computer AI or competing to win computers already. . Yes. Computer . Sorry about that computer. Yeah, there’s just so many different places where you can get wins and I think people need to embrace it more. And the other thing is that it has to learn, like it needs to be there.

[00:16:29] Brent: It has to start collecting data, and it has to learn from it, but it 

[00:16:32] Alex: needs, but cost is so prohibitive. Just to use your example of fraud, there’s so many and I see the I see the potential and I see why there’s fraud, fraud companies out there. But me personally, just to, shed some light on what I use for fraud.

[00:16:44] Alex: I have max mine filters, right? And I pay them a very nominal fee per transaction to, allocate thresholds that I’ll then review. And I’ll am I self-insured? Yes. But if I, went with a company that insures me on those frauds too, the cost would just be completely not make sense.

[00:17:01] Alex: So that’s the solution that I did and I put a lot of faith in MaxMind to, to machine learning and catch the frauds for me. But I’ve been very fortunate and very observant and and I like the software and I think that it does work for me, so I was able to keep costs down by doing that.

[00:17:16] Brent: As a medium sized merchant how do you find competing against the big stores like Home Depot or Lowe’s or something like that? Do you find that because you’re so targeted in what you’re doing, that you’re getting, you’re offering a much better value for what the clients are getting, getting?

[00:17:30] Brent: think Home Depot, 

[00:17:30] Alex: Maybe is better for a lot of things. If you came to me and you were like, Hey, I want a new toilet, Alex, and I’m in California. And I’m like, okay, Brent, what toilet do you want? And you’re like, oh, I saw this one at Home Depot. It’s 150 bucks. I would say, go to Home Depot, definitely go to Home Depot and while you’re there, pick off Faucet because that toilet for me to ship to you.

[00:17:50] Alex: If I wasn’t, shipping directly from a west coast fulfillment center, which I can do with Magenta with msi, it’s so expensive to ship something like. I almost don’t even want the sale. It might get damaged and it’s not really a luxury toilet. If you take, for example, the total nere, which is really cool, and it has a integrated heated Bday seat, and I tell everyone, you’re aple.

[00:18:09] Alex: If you don’t have a bday, you gotta have one. That $150 boy doesn’t have that. And it doesn’t have an autoclose lid promised air de odor. It doesn’t have a concealed connection, so you don’t even see the wires. But that total nearest toilet costs 3000 bucks, so it’s different customers and for us, we’re trying to give them the best possible product at a good price.

[00:18:31] Brent: So the niche part of it or the specific market segment that you’re serving serves you well because you’re working on being a targeted, you’re targeting certain types of clients and what you’re doing, and that’s been successful as that’s a good representation. 

[00:18:46] Alex: Yeah. I, all the time and even my father will be like I gotta, I need a new light fixture for a rental place in Brooklyn, and I’ll be like, , let’s go to Home Depot,

[00:18:55] Alex: Let’s go do it, man, this is 150 bucks. They do a great job with lighting, so everyone and or let’s go on Amazon and let’s, let’s find something that, whatever it is, there’s just different customers, like different things, and there’s enough of a market that what we offer is really more granted, luxury.

[00:19:13] Brent: What do you think is the most exciting thing right now in the e-commerce space? What’s getting you 

[00:19:18] Alex: excited about it? I would say personally the amount of ai in terms of recommendations and ways to retarget customers. But I think the costs have finally gotten to the point where it makes sense for someone like me a couple years ago, even something like email marketing platforms.

[00:19:34] Alex: They were so expensive for what you got. And then, value added services of recommendations. It just put me, it’s gonna rock in a hard place cause I value software and I truly understand why it costs that. But I personally, if I just started, buying the best I wouldn’t be able to stay in business how I do it.

[00:19:53] Alex: So I think we’re at like an exciting stage. . Certain things have gotten more complex to pull off, but certain things are also more possible to pull off for less money. So I’m excited to delve deep into that and make it work for me.

[00:20:04] Brent: So you’d mentioned you mentioned email marketing. I’m in a business group and our topic, one of the topics that came up on Tuesday was, people think that social media is gonna be your savior as a merchant. How do you determine how much I should do on Google ads, on, on social media, on, on just an email or a blog post or whatever?

[00:20:24] Brent: How do you break out 

[00:20:25] Alex: different that like a good buddy of mine has silver age, a site that we helped make on. It’s still on Magenta one, but it works for. And he does a lot of sales on Instagram. We’re selling vintage comics on Instagram and we’ll go live and we’ll have a couple drinks and sell.

[00:20:39] Alex: We sold like a $25,000 low grade copy of the first appearance of the flash on Instagram, which is crazy, and we’ll sell a ton of a hundred dollars books and $50 books, but you get a $25,000 sale on Instagram is nuts. And for him something like social is more important for. , A lot of our customers aren’t really on it that much.

[00:20:58] Alex: They’ll be like, they don’t even really know how to use a computer that well sometimes, or they don’t care, like they just, they know what they want and they want a good price and they know they’re gonna get a tracking number in an email and, so while for this particular business, certain things aren’t embraced in terms of allocating marketing budgets, I would say yeah, there’s more budgeted on Google, right?

[00:21:18] Alex: Or. , but but on other businesses it could be everything.

[00:21:25] Brent: Yeah. Yeah you took the answer out of my mouth. It is specific to businesses and I think as you’re even getting into B2B more, the social aspect of it isn’t as important as. Some of the other channels you have to help market your business. I think that one thing I know Gary Vi always says is, if it’s there, try it.

[00:21:44] Brent: Don’t and test it. Don’t, please don’t. I, 

[00:21:46] Alex: what do you do for testing some? I was talking to ca at the meet magenta after party right before I talked to you, and he was like, Hey man you know who you remind me of, dude? Like you remind me of. And I was like, bro, like I, I please, I’m not, like I’m my own person.

[00:22:01] Alex: And he’s nah, but you probably go to the flea markets and stuff. I’m like yeah. I go to the flea markets and you probably buy a bunch of things. I’m like yeah, I do that. But I just I don’t know. I’m not really the, I very much get a thrill from a from an actual sale, but I’m not gonna like say something more broad.

[00:22:15] Alex: I’m very specific and maybe that just comes. Having more of a technical background as well, 

[00:22:19] Brent: yeah, no I, so what I was gonna say is that testing things and trying things out are always important and I guess going back to social media, how much do you test on those social platforms to see if it’s gonna. Cr if it’s going to bring you some business from those, are they gonna convert to a sale if you did 

[00:22:38] Alex: videos on?

[00:22:39] Alex: Yeah. Probably not for the $4,000 toilet, but maybe for the $300 washlet seat. The thing is you never want to get too comfortable just doing one thing, and you always want to try everything. But sometimes that fear of missing out You get grounded when it’s a grounding feeling when before you know it, you have no more money left than your bank account.

[00:22:57] Alex: So it’s it’s a humbling feeling to be like I have no money to do this. Or and I’m not saying we don’t have the money to do it, I’m just saying, you always need to think from the perspective of maintaining, a profit line. 

[00:23:09] Brent: Yeah. So fear of missing out is a great, it’s a great example.

[00:23:13] Brent: And then also the capacity and the bandwidth to do all those different things you’d like to try. That’s 

[00:23:16] Alex: amazing too, Brent. It’s amazing to not get off the, just to say social media is incredible. The fact that we could go on Instagram at midnight from my friend’s com shop in Queens and get, 200 people in a stream, a hundred people in a stream and have people just buy is such an amazing sort.

[00:23:33] Alex: Feeling like it’s so empowering to be like we just made our own home shopping network, like feeling it with our own, we’re, we’re probably a little bit, we’re cracking jokes and we’re being a little bit Wayne’s worldy, but it’s but the customer likes it too, and that creates like a personal relationship, like I ran into a guy after we did that show, and he was like, yo, man, like you’re the guy.

[00:23:50] Alex: Drinking, like your cup was like it looked like you were drinking a cup of pee, bro. And I’m like, what are you talking about, dude? It was like I think it was like Gatorade , but it’s but the guy was watching, like you had a captive audience and he remembered and he came up to you and it’s and that didn’t cost anything, it was free and it was sincere and it was memorable.

[00:24:06] Alex: So it, depending on what you’re doing, it could be the most important thing. 

[00:24:12] Brent: Do you think as we’re going into the future for content and conversational content the content that’s wrapped around each piece of your products like is if you have a skew that’s one of that $3,000 five toilet writing, $5,000 toilet, sorry.

[00:24:27] Brent: Are, is that content around that? Say you’re writing blog posts or social or whatever, or, yeah, maybe more blog posts that, that’s pointing to that content. Educating people on why that, what’s about that and the features and breaking that content into larger content. It’s totally important. Is that more important now, 

[00:24:43] Alex: what’d you say?

[00:24:44] Alex: It’s totally important. Is that more? Yeah. Yeah. It’s also not our own brand, right? If I had my own private label Washlet, I would be doing even more, at the end of the day, at the end of the day, I have thousands of codes and I get information from vendors and then I can use like a software like computer to get more information from vendors.

[00:25:05] Alex: But I can’t, like I, there’s only so many hours in a day and I can keep going and I can keep adding. And maybe some good reviews help, but I’m a B2C and I’m selling something that people can get in a lot of different places. I think what’s compelling about me is they’re getting a great deal.

[00:25:19] Brent: You mentioned you mentioned having you mentioned b2c. You and you mentioned having the email earlier. And we always hear email is dying or email is dead. Your email list, are they still bringing in good Yes. Returns and do you see email going into the future? 

[00:25:36] Alex: Yes, they’re bringing traffic.

[00:25:38] Alex: I think, you get so many emails every day that they all board together to be like nothing. But you do see traffic and you see like an interesting, sometimes I’ll look at Google Analytics and I’ll be like, man, I sent this email like three months ago. This guy just bought this and it if the more you do, the more you get.

[00:25:54] Alex: Are our emails a little bit spammy? We’re throwing a lot of coupon codes, and are they targeted to an extent? Somebody renovates their house once every few years, ideally you’re trying to get some contractors maybe, or some architects or designers and give them, some sort of incentive to to work with you directly in bulk.

[00:26:09] Alex: But I don’t think it’s going away. . Do you think it’s going away, 

[00:26:12] Brent: Brent? No. I think email’s gonna remain strong. I saw a tweet the other day that we need a spam folder for texting though. And I would say that texting can get super annoying. And I’ve signed up for a couple of different brands for, they say, we’ll text you every once in a while to send you a coupon and then all of a sudden I’m getting a text twice a week.

[00:26:30] Alex: Yeah, I get a text from a gun range. Me and my wife she’s from Texas. We go to near her house’s, like a, there’s an archery range on the second floor and a gun range on the first floor. And we just did archery there like once, and they send me texts. They’re like come to Valentine’s Day at Saddle River Range.

[00:26:46] Alex: Like extra ammo is half price. And I’m like, I like it, but it’s, it’s lost on me. I’m in Brooklyn. Yeah. I’m not going to Saddle River Ranch for 

[00:26:53] Brent: Valentine’s Day. . Maybe that’d be something that you should try this year. 

[00:26:58] Alex: I would definitely do it if I was there. Just shout out to Saddle River Rage guys.

[00:27:02] Alex: The texting’s working guys 

[00:27:03] Brent: keep texting me. Yeah, I read it. I guess the point on the points I’m trying to make is that there is a tipping point email. We don’t want texting to turn, like people say, my texting inbox is something that I, everybody reads the text at some point. 

[00:27:16] Alex: Yeah. Unless it’s five or eight prints from high school.

[00:27:19] Alex: Yeah. . 

[00:27:19] Brent: There you go. The text group that goes around and around. Yeah. I hear ya. Yeah. If you had some kind of nugget to tell a merchant that in it that they should be doing, maybe what they could still do for Black Friday, but then what’s, what they should be doing as they’re planning into quarter one of next year, what would that be?

[00:27:38] Alex: Yeah, so I never do any code upgrades. Right around now I just because, especially with Magento, I’m just like, oh God, I might not realize something else went wrong, for another month. And then it’s a trickle down effect. And then I’m breaking my head on, who knows where, Christmas dinner or Thanksgiving dinner, right?

[00:27:54] Alex: Like just fixing something, which has happened. But like I, I think. , for Black Friday, you just want to get organized and say, what are you doing? What am I gonna do? What are my sales gonna be? Am I offering coupon codes? Make sure the, for us Google promotions are really important.

[00:28:07] Alex: Google ads are really important. Submitting, leaking the coupons and just making sure you know you’re ready because there’s so many things to switch. Weeding up to Black Friday only to then switch it all. , right? Like you’re like, man, I have coupon codes and I’m lowering prices and then I’m activating this and it’s only for this day and then this day and then like once Black Friday’s over, oh my god, cyber Monday.

[00:28:28] Alex: And then, everyone should know Cyber Monday is gonna be extended to Cyber Tuesday, but come that Wednesday, you’re stuck reverting a lot of stuff back. And if you don’t, all your marketing efforts might get mixed up and might cause a trickle down effect of a headache. Just be organized.

[00:28:41] Alex: Yeah. It’s 

[00:28:42] Brent: a plan. Organized, make sure I like that. I I think a lot of people don’t think about the fact that maybe they didn’t turn off their coupon codes after a certain time. And certainly magenta, it’s easy to just make the coupon codes stop working on the day after Cyber Monday or whatever, whenever you want to stop it.

[00:28:56] Brent: Yeah, it 

[00:28:57] Alex: is. But if you don’t do it right it’s like somebody’s adding that extra 5% on something where you only had or it’s just like, oh no and then it’s like, what do you do, as the years go on, it becomes more difficult to like, reach out to the customer and explain to them what you 

[00:29:07] Brent: did.

[00:29:07] Brent: Right. Alex, as I close out, as we finish out the podcast, to give everybody an opportunity to do a shameless plug about anything you’d like to plug. It could be your business or any, anything, your school or something a anything you’d like to plug. What would you like to plug today? 

[00:29:22] Alex: Sure. If you happened to acquired any comic books that’s say 10 cent or 12 cents on the cover price.

[00:29:28] Alex: Maybe some 15. None of that new stuff. Don’t, hit me up and be like, oh, I got these, nineties books. I don’t want ’em one or two of them, but not all of them hit me up. You could even email Alex home, Instagram Web seven nyc. I’m born and raised in Manhattan or on eBay at comment palooza.

[00:29:46] Alex: I’m always buying, I’m paying cash for your collectibles. And in particular 1960s Marvel books. I can give you a good deal and I’d love to buy bulk and I buy collections. I buy inheritances. I’ll go anywhere and I’ll come to you. And let’s just, let’s buy these books. I like to keep some of them for myself.

[00:30:02] Alex: I am a collector too, but I do also sell. 

[00:30:05] Brent: Awesome. It sounds like you should also have a online comic. . 

[00:30:11] Alex: Maybe I do. . 

[00:30:13] Brent: That’s awesome. . Alex, thanks so much for being here today. It’s been an enjoyable conversation and I wish you all the best on your your B F C M as they like to say nowadays. 

[00:30:22] Alex: Yeah, but it’s B F C M ct.

[00:30:25] Alex: What is the ct? Black Friday? Cyber Monday. Cyber Tuesday. Extended. 

[00:30:30] Brent: Extended. There you go. And then we’ll call it Christmas in July soon. Yeah. 

[00:30:36] Alex: God. I don’t, I think it’ll just be year round. Honestly, with us it’s always year round. If you join our perfect Members only Price Club and you sign into your account, all the prices are cut in half.

[00:30:44] Alex: So every day is Black Friday at home. Perfect. We’re just trying to get you the best possible deal on your full renovation. 

[00:30:50] Brent: Awesome. I will put all these links into the show notes and I appreciate you being here today. Thank you, Alex. 

[00:30:56] Alex: Thank you, Brent.

Talk-Commerce-Ben Knegendorf

The Drop-Ship Breakthrough with Ben Knegendorf

Ben Knegendorf is the co-founder of, where he teaches people to start an e-commerce business in the next 30 days for $500 or less.


[00:02:40] Brent: Welcome to this episode of Talk Commerce. Today I have Ben Korf. He’s a co-founder of drop Ship breakthrough. But I’m gonna let Ben introduce himself. Tell us what your day-to-day role is, and maybe one of your passions.

[00:02:56] Ben: Yeah. Of the co-founder of drop ship, where we teach people just like you to start an e-commerce business in the next 30 days, usually for around $500 or less. That that’s a big, bold statement. I hope to back up here. But to our passion, I saw the Minnesota on your wall.

[00:03:08] Ben: I am just over the border and I’m the absolute Minnesota twins junkie. Baseball runs through my blades for sure, runs through my veins. 

[00:03:17] Brent: That’s awesome. I just interviewed somebody who helped with, she was a teacher in the seventies, and she had a bunch of the early twins in her class. And it was, not early twins.

[00:03:29] Brent: The twins kids in their class before baseball got big money and people stuck around. So Tony Oliva still lives in the Twin Cities. Anybody’s baseball fans would know that. Rod crew, we might be back. I don’t know. Anyways Ben I know I warned you before we get started that I’m just gonna tell you a joke and you’re gonna tell me if that joke should be free or if we should charge for it.

[00:03:50] Brent: So here we go. Losing my hair made me sad. So I bought a cheap wig. It was a small price to.

[00:03:59] Ben: I think you should not charge for that one. . Okay. 

[00:04:03] Brent: I agree. That was a stretchy. All right. I’ll agree with you. Okay. So can I throw one back 


[00:04:07] Ben: you then since we’re here? Yeah, go. Let’s do it. Tell me, how do mermaids wash their fins?

[00:04:12] Ben: How tied ? 

[00:04:14] Brent: Let’s see. That’s a good one. I like that. I’ll, I might reuse it. , actually, we’ll publish that one. Good. All right. Nice. Yeah. Free joke project. All right. Alright, so today we’re gonna drop, we’re gonna talk about drop shipping. We in our green room, I mentioned that, we’re a magenta partner and for 13 years now and all of our clients have done drop shipping, but I think you have some ways to get people into the business.

[00:04:36] Brent: So tell us a little bit about your story and why you decided to do that or this. 

[00:04:41] Ben: Yeah, I mean it all started quite a few years back, right? I was working at a Walmart distribution center and the holy grail, there was first shift, like your whole goal was to just get the first shift. It took me seven years to get there in this building, and I got there and I remember walking in and just everyone looked dead inside and I was like, oh my God, I’m 29.

[00:04:57] Ben: I’ve. Quote unquote made it at this job. Maybe I’ll become a coach again, cuz we’re all a team. Give me a w. But there’s, this was it. And I was very disappointed with what I saw. I was disappointed in how everyone looked around me and I knew there had to be a better way. And so that’s when I started looking for.

[00:05:11] Ben: A way to get outta there. And honestly, at the time I was working at a warehouse. My wife was a cna. My dad worked at a warehouse and my mom was a cna and like that, that, that’s all I knew, right? And so I had lived up to the box that was built around me and it took a little effort to look around at other ideas and start experimenting.

[00:05:27] Ben: Some of those were like going to clearance aisles. and flipping that stuff on eBay or Amazon, going to garage sales, things like that. Just trying to understand how to, make money while you sleep if you will or make money on the side. I just, I didn’t know anything other than go work at a warehouse.

[00:05:39] Ben: And my first pure a into this was flipping things or finding the arbitrage between clearance aisles and Amazon or fba or eBay. And then eventually I stumbled on the term drop shipping, which I’m sure many of the listeners have seen. The latest guru talking about drop shipping. I immediately was turned off by the low ticket stuff shipped from China.

[00:05:56] Ben: Stuff that really wasn’t big back then. But I did hear about high ticket drop shipping, which is basically how Wayfair got started. They had hundreds of different stores that they were selling, niche, high ticket, e-commerce, drop shipping stores that they brought together into Wayfair.

[00:06:09] Ben: And when I understood that, I was like, oh, this is, you’re building a real business here. You’re becoming a retailer. You’re selling brands people have heard of from companies within your country. And at that moment I realized, all right, this is what I want to do. This makes too much. . Yeah. 

[00:06:22] Brent: Do you think you had a little bit of that entrepreneurial spirit in you to drive you to do that?

[00:06:27] Brent: Or was it just you’re so sick of working at Walmart that you wanted to just get out of there? 

[00:06:32] Ben: Yeah, I think in hindsight I did, but I didn’t have anyone around me to spot that. So if I look back at my childhood I didn’t do, I didn’t pay attention in class, but I knew all the answers. Math was a good one.

[00:06:41] Ben: Like they would, here’s how you do complicated math. I’d have the answer in my head, and then they’d be like, you didn’t do the work this way. And I, I don’t understand why we need to do the work your way. I got the answer for you. And I was told I w wasn’t quote unquote normal. And I got told a lot of things as a kid that I think were just signs of, I’m an entrepreneur and I’m constantly questioning things and I’m unsatiable curious around everything.

[00:06:59] Ben: And I think in school they try to fit you into this little box. So in hindsight I think I saw the signs, but I don’t really think I noticed it until my mid twenties. I was big UFC fan and Joe Rogan, when somebody would get knocked out, he’d be like, oh, he got hit right on the button. So I started on the button fi gear.

[00:07:13] Ben: That was my first business I ever. Don’t ever, don’t sell clothing. People, whoever’s listening to this, don’t start a clothing line. It didn’t go super, super well, but that was, that, that was fun. Even though it sucked, it was fun. And then, realizing it didn’t work was a big l and that kind of, pushed me back down for a little bit.

[00:07:27] Ben: But look, that was my first adventure in entrepreneurship and it was fun. Like being able to solve my own problems choose my own path was fun. Yeah. 

[00:07:35] Brent: And I think, so I just wanna make a distinguish because my wife had a eBay business back. Nineties, early two thousands, and she actually had a warehouse, and I think what you’re talking about is not having an manage a large warehouse full of stuff.

[00:07:48] Brent: She did Wayfair, like every, there’s all those returns, right? There’s such a huge market for that return business. And she would get truckloads of. Stuff from where Wayfair and Fingerhut and put it onto eBay. You’re, it sounds like, just explain a little bit more about your, the model that you’re proposing and how that differs from what I just described.

[00:08:08] Ben: I actually had a buddy who did the exact same thing you just described, but did it for Golf Galaxy. And so he would go get all the trade-ins and then he would pay, pennies on the dollar and then he would flip them as well. So that’s interesting. The model I’m speaking of. So I’m sitting down currently, but I’m sitting at an Apex standing desk and so I was part of a company called Standing, which is a good example of what we teach.

[00:08:26] Ben: And we would sell these apex desks and we would. I can work through this whole process, but essentially we’d work out an agreement with Apex to become a retailer for their brand. We would go run Google, we would go acquire the customer, sell the product, then go to Apex and say, we need you to drop ship this product to our customer.

[00:08:41] Ben: And then they would charge our credit card and we would keep the arbitrage in between basically high ticket drop shipping. In a nutshell, it’s a marketing, it’s a customer acquisition and customer service business at the end of the day. Okay. Yeah. So 

[00:08:51] Brent: you’re Handl. So you’re working in effect, like a salesperson for that manufacturer and you’re, they’re, you’re arranging the sales and they’re doing the drop 

[00:09:00] Ben: shipping, correct?

[00:09:01] Ben: Yeah. But in the meantime, you’re building a real business. So I’ve referenced Wayfair. I’ll reference another one. That’s hopefully nationwide. I know it’s local to us here. Re e I is a good example. They’re very niche focused on outdoors people. And so that’s what we’re trying to build to.

[00:09:12] Ben: We’re trying to build a focused. Retail store on the internet that is not only just being a salesman for the other brands, but being a destination for anyone who’s interested in that type of product. So if you go to a standing destination, there’s articles on standing desk benefits there’s all sorts of content around the benefits of standing desk and around the brands and reviewing the brands.

[00:09:31] Ben: a destination on the internet for you to look at standing desk products versus just us being out there trying to be salesman for the brand. . 

[00:09:39] Brent: And so you’ve mentioned high ticket. How do you get started or why would you start on high ticket rather than just commodity items or lower ticket items?

[00:09:50] Ben: Yeah, I think this is what turned me on most to this business model was simple math, right? I also have a a brand myself, a pet supplements. And so I understand like the low end market, but if I want to make let’s just use $30,000 in revenue next month, and I’m selling a $30 product, I need to sell a thousand items versus if I’m selling a high ticket product that is $3,000, I need to sell 10.

[00:10:10] Ben: And you can imagine with 10 orders versus a thousand, you’re gonna need much less employees. You’re gonna have less damages in returns, you’re gonna have less overhead in general. The business model seemed to make a lot more sense for me. You could, we’ve, I have, and I have students who have grown a business as a solo operation to a seven figure business without needing the help of VAs or team members.

[00:10:29] Ben: And to me that was intriguing, especially when I was first starting out and wondering I, I didn’t know what I was doing as far as hiring a team or really doing anything. And the idea that I could work by myself and not be overwhelmed with orders or inventory or things like that was very intriguing.

[00:10:44] Brent: how do you differentiate then? Like the pluses versus having your own warehouse? I guess setting aside the fact that you don’t have to own it all. , do you have to, do you have to take back returns or do the re I’m assuming the returns go right back to the place 


[00:10:58] Ben: were shipped from. Yeah, so that can vary, right?

[00:11:01] Ben: That’s gonna depend on the relationship you have with each brand that you are associated with. Everyone has their own rules. Some of ’em. Wildly creative restocking fees, we’ll just call it that. Others are like more generous than others. They’re happy to take it back. Other brands, there’s nothing you can do about it.

[00:11:16] Ben: Like it’s going back to you and you’re gonna eat that cost. And certainly I would say the, that is one part of this business model that’s a little bit out of your control. It’s like having a three pl, right? When you have a three pl, you hope they do good by you. They charge you all sorts of fees.

[00:11:27] Ben: You don’t really know what’s going on with your product. You hope it’s getting packaged well. And the only way you find out it wasn’t packaged well is when the customer complains to you. And It is a, I don’t wanna call it a downside but it’s certainly something that isn’t always fun when you’re dealing with this because it’s out of 

[00:11:40] Brent: your hands.

[00:11:41] Brent: And what about price point to get started? What do you recommend a user has or a person that wants to get started in this sort of thing? What does the pricing . 

[00:11:50] Ben: So again, I think that is one of the most appealing parts of this business model. Let’s imagine you wanted to open a franchise Taco Bell would fit right in, in your area.

[00:11:58] Ben: That’s gonna cost you hundreds of thousands of dollars to get set up and running on a Taco Bell. Or if you wanna launch your own brand, likely it’s gonna cost you thousands of dollars as well. To do the research, get the samples, place a big money. Order launch Hope people enjoy your product. I prefer cash flow, and that’s why starting this model for less than 500, which I’m happy to outline here.

[00:12:14] Ben: And also everything is cash flow in the beginning makes so much sense to me. So you’re gonna need a domain, right? That’s $12. I’d like to use name chief, you can use whatever you. , you’re gonna need Shopify. I know you’re a Magiano guy, Brent, but I’m gonna say Shopify’s the way to go here for sure. $29 a month for that.

[00:12:29] Ben: You might want a paid theme. You might want to, have something customized. You definitely don’t need one. But if you do, it’s 180 to, I think they’re up to $400 now. We give Superstore from out of the sandbox. We give that to every student of our course because we do believe a paid theme is important.

[00:12:42] Ben: You’re gonna need Google Workspace so that you have Brent at your new e-commerce Not Brent Brents Commerce store a Gmail. That’s just not super professional. You’re gonna need an 800 phone number, so I would recommend Grasshopper. That’s $40. You might need a little branding. So fiber’s a pretty easy place to go get a logo done and get some homepage images and branding and things like that for your website.

[00:13:03] Ben: And then the biggest expense you’re going to have is Google Ads. That’s where we’re gonna acquire most of our customers. Google likes to give you a coupon. Spend one 50, get one 50 or spend 500. Get 500. Definitely look for the ladder if you’re gonna start this model. And within that first, Thousand dollars of ad spend on Google.

[00:13:19] Ben: You should have acquired one customer or multiple customers where you can then roll that cash flow back into, get the snowball moving and acquire more customers. outside of that, your biggest expense is time. Like you’re gonna have to put in the sweat equity. You’re gonna have to understand how to build your site, upload products, contact the brands.

[00:13:36] Ben: In the process you’re gonna learn Google ads, a little seo, a little conversion rate optimization, a little copywriting a little how to code a little bit in the back end of shop. But hopefully you’re doing all of this while making sales, while getting paid, rather than, paying a college a hundred thousand dollars to go learn something and hope you get a job.

[00:13:51] Brent: There’s a step before that though. It’s choosing what is the product that you want to sell. And there must be, I think getting the website is a big investment and certainly even Doing the theming part is even, is gonna be more time consuming. How? How do you choose which product 

[00:14:06] Ben: you wanna sell?

[00:14:07] Ben: So this is interesting. I think too often the world of e-commerce is focused on the product. . And the reality is you should be focused on the human behind the screen. So a good thing we always talk about like 2% is the average conversion rate. What about those other 98 people? Those were 98 people raising their hands saying, I’m interested in your product and you didn’t serve them, and you’re just letting ’em leave your website.

[00:14:27] Ben: That’s wild to me. So John and I, John’s my co-founder here we try to get you to focus on the human. Who is the human that you want to market to every day that you want to deal with in customer service? Ideally it’s you, right? If you have a passion ideal. Whatever you’re passionate about has products that are $800 and above, and you are going to be able to sell to that person better than anyone because it’s you.

[00:14:47] Ben: So we like to focus on the who first and then find the products that they buy. And if you get the who wrong, it can be a nightmare. I bought one of my consulting clients businesses, saw the opportunity, enjoyed the marketing, but the who behind it was an older. Less fortunate human being and they were awful to deal, literally awful to deal with.

[00:15:04] Ben: I got more chargebacks in the first three months of that business than I have anywhere else. And I ate my own dog food there of Hey, focus on the who rather than the products and the marketing. Who do I want to serve every day? Whereas I, the biggest company I was part of that we went 1 million to 11 million in two years that was serving the golf industry.

[00:15:18] Ben: I’m a golfer. I knew the pain the customer behind the screen had. I knew. How to speak to them. I knew the language they used, I knew the places they hung out online. I knew exactly how to write a headline that would hook them in because all they cared about was getting one more stroke. That was much, much easier than talking to a different who that I didn’t have any relation with.

[00:15:33] Brent: And I’m just gonna put a plug in here for Big Commerce. They have the exact same plans as Shopify. Nice. I’ll just do that my, cuz we’re a big commerce partner as well. and I, there’s no differentiator. Your checkout if you ever wanted to do, to customize your checkout. Big commerce is open source where Shopify’s lockdown anyways, so that’s beside the point.

[00:15:56] Brent: So I think, you’ve chosen something, you’ve built out a store. Google ads can be a money suck if you don’t do it right in your course. You give some sort of. Help around that. Even if you’re, and $500 goes nowhere, especially like if you’re gonna compete against I would imagine that you’re going to some, sometimes compete against the actual manufacturers that you drop shipping for at times in Google Ads.

[00:16:20] Brent: Yeah. I think 

[00:16:21] Ben: this is where we are different than anyone else who’s. Teaching something similar or really anywhere you go for Google ads. Once Google bought the Chinese Go AI and brought it into their system and started doing smart everything that’s where everything fell apart in Google.

[00:16:35] Ben: My ads back in the day. You’d have to build everything and do everything yourself, and there was a very specific way that you should do this. We still teach that, so rather than doing performance, or smart shopping or whatever you’re on currently we do use like smart list that makes sense. But most of the, like Google do it for you is a very bad idea, especially for high ticket products.

[00:16:52] Ben: And I’ll say that because again, I sell glucosamine for dogs. If somebody’s searching glucosamine for dogs, they actually might buy this, right? That’s generic. But also like they’re willing to probably spend 30 bucks and see if their dog can stop limping. If somebody’s searching infrared sauna, they are so far from buying, it’s not even funny.

[00:17:08] Ben: And so if Google. Buy all that traffic for you and show you tiny price clicks cuz they’re serving you for infrared sauna. No one’s gonna buy from you, right? And you’re just gonna burn all your cash. So there’s a way to set up a manual shopping campaign and choose your priority. And anyone listening to this might understand that you can choose high, medium, or low priority.

[00:17:27] Ben: And if you set everything up as a high and seg segment, the brands by ed groups. Duplicate that and set it up as medium. The only thing that can go to medium priority is when you put a negative keyword in high, so all your junk, everything will go to high, right? And then you can pull out your semi-important keywords and move them to medium, and then you can segment your most valuable keywords and segment them to low.

[00:17:46] Ben: So now all your junk’s flowing into high where you’re bidding 10 cents, 25 cents, something like that, your branded terms likely your middle of the funnel terms, you’re paying a little bit more in medium. And then those exact match bottom of the funnel, people looking for this exact product terms you can pay more for and low and you’re not getting you’re not getting si, your cash isn’t getting siphoned away, which is what, Google’s very good at that, if I’m honest with you.

[00:18:04] Ben: I’m not a huge fan of everything they’re moving to do. I understand they’re trying to hit the bell curve, right? That, 80% of people just want this. But I’m not in that 80%. I’m, I’m at the other end of the bell curve. I wanna be optimized. I wanna be bringing the right traffic to my business, to the right pages.

[00:18:17] Ben: And so I, we definitely teach a method that I don’t think has taught much anymore out in the universe. 

[00:18:22] Brent: And you mentioned high ticket and. So I’m assuming no high ticket items like high ticket clothing or shoes or something like that. 

[00:18:31] Ben: Cowboy boots. Yeah, I definitely wouldn’t recommend apparel. That’s a return nightmare.

[00:18:35] Ben: But I’ve sold everything from 3D printers to tiny house products, to standing desk products to golf products. I’ve literally been all over the place and I’ve coached hundreds of students and whatever the first thoughts come into your mind. If you’re thinking about doing this, don’t do those.

[00:18:47] Ben: Those are the ones everyone thinks of. Spend some time writing in a notebook, gathering some ideas, and once you like point your reticular activation system at looking for things above a thousand bucks, you’ll start seeing them everywhere. And it honestly the list is endless. And there’s just so many things that you can build a business around and the Internet’s made it even more possible to really niche down and still find all of that audience looking for what you.

[00:19:08] Ben: How 

[00:19:08] Brent: about doing FBA fulfilled by Amazon? Is that the same type of model that you’re talking about? 

[00:19:14] Ben: Yeah, with fba. My pet supplements here on fba. I wouldn’t recommend selling someone else’s products. Via fba. I don’t If you have your own FBA brand, I’m sure they’ve been you’ve had people reach out to you that said we wanna ride your listing just in case Amazon cancels you.

[00:19:26] Ben: I’m not a big fan of that, and I don’t think selling high ticket products is a good idea. So again, I sell pet supplements on there every single day. I open my email and it says, refund initiated for this refund, initiated for that. Amazon is in total control. And I can eat that on these 20, 30, $40 products.

[00:19:41] Ben: But if that’s gonna happen on 800 to $10,000 products, the I’m in for a world of hurt because Amazon’s always gonna side with the customer. 

[00:19:49] Brent: Yeah. So you talked about you talked about Amazon and the price points. Is there a highest price point that you would recommend? You’re not gonna do a car, right?

[00:20:00] Ben: I think where you’ll run into issues is actually with Shopify itself, with the payment processor itself they’ll start wondering, who are you making these big sales? I knew some people that were selling 15 to $20,000 things and quickly Shopify payments shut them down. They went around the backside, just went to Stripe, who Shopify’s using and Stripe had no issue.

[00:20:18] Ben: But that’s where you’re gonna run into issues is. That’s a lot of money to be moving around without being questioned, why you’re moving that kind of money around. So I tend to stick in the two to eight range. I think that’s the sweet spot. The lower you get, the more you’re just eating your margins with shipping.

[00:20:31] Ben: So if you’re selling an $800 product where you have 25% margins rough math, that’s 200 bucks. You have to acquire the customer. You have to pay the 3% credit card fees when you take their credit card and you have to pay for shipping. And oh, by the way, you’re a business, you’re trying to make profit on the back end.

[00:20:43] Ben: So really anything below 800 doesn’t make a lot of sense. But if you’re selling a $5,000 product with 25% margins and it costs you $250 to ship, now you have a thousand dollars in arbitrage there that you can go acquire the customer. That seems to make a little more sense the higher you get. Got 

[00:20:58] Brent: it.

[00:20:58] Brent: You had mention. Alley Express no nonsense, no Alley Express nine. Explain that. What does that mean? 

[00:21:05] Ben: So that’s been the hot thing for drop shipping over the last, I don’t know, three to five years. And it is simply go find the hottest trending product. Go find it on Alley Express. Set up your store.

[00:21:16] Ben: It’s a turn and burn website, right? You’re gonna drive traffic and hopes you can convert a ton of people. On your website selling a, honestly, it’s gonna be a terrible product. It’s gonna ship from China, show up 40 days later in a heavily tape box. And you’re gonna have a bunch of disappointed customers who aren’t gonna reach you to tell you they’re disappointed cuz you’ve already turned and burned that website.

[00:21:31] Ben: So if you’re out there for a cash grab, maybe this makes sense, but I don’t know, my ethics and my integrity aren’t going to allow me to sell a terrible product with a terrible experience attached to that person. . 

[00:21:43] Brent: So that would be a, an example of that would be can 95 masks when the, when they got all sucked up in the pandemic and all of a sudden people got ahold of them.

[00:21:50] Brent: They’re gonna sell ’em on a quickly made up website, and then by the time they, they land in your doorstep, you’re they may not, it might be PA post pandemic. 

[00:22:00] Ben: The one I think of is there was I was flicking through TikTok. It’s like a girl on a beach and then he zooms out and it’s supposed to be this like monocle that can zoom, thousands of yards away.

[00:22:11] Ben: I can imagine who they’re trying to target. I’m a dude, so I understand why they were targeting dudes with that. I actually bought that cause I wanted to see the experience, so I bought it again 40 days later, heavily tape box the thing. You can’t see anything out of it. It does not work. And so it, yeah, you’re just setting yourself up for disappointment.

[00:22:24] Ben: Now, on the other hand, if you’re using this to judge demand, and go sell, I dunno, 50 of something, and see if your audience is into that. And then you’re gonna turn it around and actually make the product better and serve it to your audience as part of your brand. Maybe that makes sense. But the folks who were out there teaching turn and burn websites and just, destroying all customer trust, I, I can’t get behind that.

[00:22:43] Brent: Tell us a little bit about your course. You’ve mentioned that a few times that you’re teaching, you have a course on this te tell us a little bit about. 

[00:22:49] Ben: Yeah, so the beginning part of the course is, and we just did a podcast on this, so I might have the numbers actually. Yeah. So the beginning part is like 68 videos long.

[00:22:55] Ben: And that is simply how to get started, right? This is gonna help you choose your market. This is gonna help you identify the suppliers inside, upload products, build out your website, and actually have an over the shoulder look of John building all of this stuff in real time so that you can follow along.

[00:23:09] Ben: And then the backside of that. Something we’re continuing to grow. It has 150 plus videos currently, and that’s everything John and I have learned over the last eight years of doing this personally. And both John and I have taken stores to eight figures. And so there’s a lot of learnings in there that we wanted to put inside the course.

[00:23:23] Ben: And so that half of the course continues to grow as we continue to learn more as we continue to network with other experts who we can bring in and create some videos for us. And . Yeah. It’s an over the shoulder look like this model isn’t that difficult to understand. To me, it’s pretty simple.

[00:23:35] Ben: The work is hard. You have to do like hard work. That’s business. But the model of, it’s pretty simple. So we give that all away on our podcast, drop ship podcast. And if you want someone to hold your hand and walk you through it, that’s what our course is for. 

[00:23:47] Brent: What is your biggest win in terms of a product in the.

[00:23:51] Ben: The biggest one, I have two months left on a non-disclosure agreement, so I will say it’s in the Gulf industry. But we, yeah I coached two gentlemen. They brought me on as a consultant. I coached ’em to a quarter million in the first three months. We remained friends for the rest of the year as they were in Wisconsin.

[00:24:04] Ben: We would just rib each other on slack basically. And then they asked me to come on board and we went, they did 1 million in revenue in their first year. Two, two years later we did 11 million. And by far that was the biggest business I was part of growth wise and just big. And they bought me out about a week before the world shut down for Covid.

[00:24:18] Ben: And I can only imagine what they went on to do after that with everything shut down. Yeah, it was a good time. 

[00:24:23] Brent: And what was the biggest lose? . 

[00:24:26] Ben: Yeah, that one. Like I said, it was serving an older demographic. It would be like mobility products. The sales came in, but again, the chargebacks came in.

[00:24:33] Ben: There’s just, that’s not an audience of people I want, without bashing that type of audience. They’re just, they’re very difficult to deal with from a customer service front. A lot of handholding, a lot of walking them through the buttons to click on the website, like there’s just. It’s not a group of people I would like to serve personally.

[00:24:51] Ben: Whereas I would say middle-aged men who are trying or who are passionate about something, is the ideal audience. If that’s who you wanna serve and you have products that fit that is the ideal audience. Cuz men just lay in bed and will buy it on the phone. They won’t think twice about it.

[00:25:04] Ben: Whereas, women take a little longer in the buying cycle to make decisions. They also buy differently. They wanna see things on sale. Where men, I don’t think really care. They just, if they want something, they’re gonna buy it. And yeah. More on the, who there it’s the definitely.

[00:25:15] Ben: Middle-aged affluent men that are wonderful to serve. 

[00:25:19] Brent: You’ve mentioned a who quite a few times. Tell us how you as a business owner determine who is the best, who for you. 

[00:25:28] Ben: Trial and error, I think. But I’ll go back to what I said, like if it’s you, that’s gonna be the best. Like whatever you are passionate about, if you can build a business around that.

[00:25:37] Ben: you are going to wake up and wanna work on that business more than I’m gonna wanna work on the business I’m not passionate about, right? So every day work needs to be done. If you’re not moving forward, you’re moving backward. That statement is definitely true. And so if you’re passionate about it and you’re consuming content late at night about it, and then you wake up and you get to work on your business that is driving more content into the world or driving more people into the passion you’re just gonna work way harder than me.

[00:25:57] Ben: And so that, that’s what I recommend. Go find whatever you are into and build a business. 

[00:26:01] Brent: If you have a one kind of nugget of advice for somebody that’s wanting to start on this besides taking your course, what would you say to them? 

[00:26:10] Ben: Yeah, and just the kind of, I don’t think you need to take our, if you want to, great.

[00:26:13] Ben: We’d love to have you, but I think we have quite a few students in our Facebook group who have only listened to our podcast and they’ve built a real business that’s making decent money and That’s amazing. My goal is to. Help people change their life through e-commerce. The same way e-commerce changed my life.

[00:26:26] Ben: And so my advice would be just start you’re gonna learn. So I don’t understand why people are afraid to get going. If Brent, if you’ve never golfed in your entire life and you decided you’re gonna, you’re gonna go be a golfer, would you sit like months on end going, oh, what if I suck at this?

[00:26:40] Ben: What if I fail a call? Think no. You just go out there and you’d shank the ball around and it wouldn’t be fun, but you’d have a good time and you’d slowly get better. This is the same way you should treat business. So stop. Think. You are a failure. If it doesn’t work, first off, the business can be a failure, and the entrepreneur itself is not a failure, right?

[00:26:53] Ben: And so go in there, set up a Shopify store, start screwing around, run some ads, maybe make some sales, and then you might understand, oh, I, I kinda like serving this person versus this person. I kinda like selling these products versus these products. I kinda like working on big commerce over Shopify or whatever it is.

[00:27:06] Ben: Like you’re gonna learn a lot by doing. And if, yeah, my only advice would be just start, just get moving and iterate. 

[00:27:13] Brent: Yeah. And I just want to point out that my golf score and my bowling score are identical. You guys can take which one is good or bad. . Yeah. From a learning standpoint, I know that doing it for me there’s all kinds of different ways of learning, but I’m a big, I’m a big advocate of learning and doing at the same time, and I think that, You’ve hit it right on the nail right on the head, where that type of learning helps you to really see how it’s gonna ha what, what’s gonna happen in that, how you’re gonna get it done and how it’s gonna come out in the end.

[00:27:44] Brent: Last question in terms of this was I know that we, in the magenta world, we work a lot on say, firearms. Products that that aren’t like Google ads can’t serve up. Is there any model where that would work? Cbd, those type of products that say Google won’t work with or even sometimes PayPal won’t work with.

[00:28:05] Brent: Do you have any recommendations on those or just you’re clear 

[00:28:08] Ben: of them? Yeah, I think with what specifically I’m teaching, I would tell you to steer clear. On the other hand, the biggest revenue driver in any business is not gonna be your ads. So what we teach ads are definitely gonna get you started.

[00:28:20] Ben: You have to go acquire that customer first off. But if you aren’t like building SEO from day one, you’re doing yourself a disservice. And so whether you’re in CBD or firearms or wherever else which God only knows if Google suppresses that stuff too you have to get out there and create content.

[00:28:34] Ben: Now, I’m a big fan of seo. I think you should do it on your website. In this like retail environment when we’re, when we become a retailer, I take a drop show. You’re a retailer of brands. Creating collections that rank for a brand name is quite easy. You have a cluster built for you. The brand is the collection page, the products are the cluster content around it.

[00:28:49] Ben: And so it’s actually quite easy to do good SEO in an e-commerce store. Above and beyond that, you’re gonna want to also be someone who’s putting out best articles cuz you’re selling all the brands. So if you can put out the best standing desks of 2022, that’s gonna rank really well too. And then. Just loads of supporting content, right?

[00:29:05] Ben: Go to answer the, put in your generic word standing desk and go look at all the questions everyone’s asking. Now. Go answer those on your blog. Go build content around that. Once that ball is rolling, it really turns into something amazing over time. But again, maybe you’re not a writer.

[00:29:20] Ben: Maybe you prefer like me to be behind a microphone or on camera, right? Gary V says, this salon, this is a world of content and so whether you want to. Or speak or be on camera, you’re gonna have to do one of those things to grow your business, in my opinion, or hire someone to do one of those things.

[00:29:33] Ben: And I don’t think it matters what in industry you’re in, that’s gonna be the biggest driver of traffic in your business versus ads. And so you should get started immediately. 

[00:29:41] Brent: Yeah. And I’ll just, I’ll second that, that we at Woto started a content Around magenta at the time, but Adobe Commerce now, five years ago and it, within the first year it took about a year to, for our SEO to start catching up.

[00:29:55] Brent: And it is a very competitive space. And, but that does work. And I know in WordPress they called Cornerstone content and HubSpot, they call it pillar content. But I think what you’re saying is that you have your product, then you start writing about that product and pointing all that content to that product.

[00:30:13] Brent: and I can test that. Yes. That, that SEO works. And we, one of our longtime clients was a gun seller down in South Carolina. The, if you are in that space, you’re all, nobody else can be using Google Ads. And so you are in, if you can do better at writing those articles, , you are gonna win it writing that.

[00:30:32] Brent: So that’s great advice. I 

[00:30:34] Ben: just pulled up a really good example of it if you don’t mind me sharing, so yeah, go for it. One business I was part of that, we worked on this the first year. The site got 7% of its traffic, 7,000 users via SEL for $0 revenue. In year number two, 27% of the users, 76,000 people came for $854,000 in revenue.

[00:30:55] Ben: Year three. As we continue to compound here, 43% of the users now came from seo, which was almost a quarter million people that resulted in 2.27 million in revenue. And so it just continues to grow and grow as you put the time in and do things right. Don’t do things crappy. Don’t go buy bad links, put out really good content and play the long game here and I promise you it’ll pay dividends.

[00:31:17] Brent: Yeah, and I think you, I think earlier you also mentioned just testing it, making sure that your con what whatever you have on that page, your product display. Maybe doing some eBay AB testing on that. And even in Google you could do AB testing on those things. There’s so many things that you as a user, that as you dig in and especially if it turns into your for full-time job, like you said if you’re not moving forward you’re moving backwards.

[00:31:41] Brent: That’s a good good advice there. Ben, as we close out the podcast, I give everybody a chance to do a shameless plug. What would you like to plug? 

[00:31:49] Ben: Yeah, I think if you’re listening to this, you’re a podcast junkie, as am I. So just go check out our podcast. Like I I think you’ll enjoy the banter between myself and my Australian partner, John.

[00:31:57] Ben: I like to make fun of the words. He says he likes to make fun of the big orange guy in this country. And maybe you’ll enjoy that, but we literally give away the entire business model. You started episode one. It’s what is drop shipping? What is high ticket drop shipping, high ticket versus low ticket?

[00:32:07] Ben: If you start at episode one, you’re gonna learn this entire business model from us. And then if you decide. Work with us further. Obviously the information’s in there, but I would just say start with the podcast. It’s called Drop Shit Podcast and you can find it on any of your favorite players.

[00:32:19] Brent: Great. Now, we’ll put all those links in the show notes today. Ben, thanks for being here. It’s been a great conversation. Yeah, thanks for having me. 

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