Join us and thank you for reading.
- If Jason would start a new e-commerce business today, he would “rent space” on Amazon (instead of building his own website), and use competitor’s negative product reviews to differentiate his product.
- “The barrier to entry for the trust of the product now lives on product reviews. Whereas before, they would just hammer you with TV ads constantly until you felt like it was a comfortable brand.”
- It’s the benefits that sell, not the features. If you’re writing a product description, focus on what the customer will get. Don’t sell a drill driver, sell holes in the wall.
- “This notion that you have to work for Procter&Gamble or Unilever or Johnson&Johnson to have success is just not true. You can bootstrap a company if you’re smart and you’re dedicated to your story and brand. If you focus on those customers and never lose focus on them, you can be a $1-billion brand too without having funding.”
Do you mind sharing with the audience how you got started with e-commerce in general?
I was leaving the Marine Corps and my brother had this idea to start a company and he said, “We’re going to sell basketball hoops online.” This was 2002, and he goes, “I’ve already got the name” and the name was superduperhoops.com. And I thought, “That’s brilliant! I get out of the Marine Corps in 45 days. I’ll have my last check. Let’s do it.” And that’s how we started.
We started a dropshipping business. We started cold-calling all the manufacturers of basketball hoops in the United States. Ari had met a friend who found out how to drive traffic with a company called Overture. So here’s our history lesson for the day: Overture was one of the inventors of pay-per-click advertising. [At the time] they had a tiny office in Pasadena. We used to go there every other month, and we were driving traffic to our website that my little brother who was in high school built after school. He was a programmer, a sophomore in high school.
We worked with Overture and we were paying a nickel a click with this brand new technology called pay-per-click. Later on, Overture got bought by Yahoo, which was still a huge eCommerce engine at the time, a search engine. Uh, and then later that technology was licensed by Google.
Google perfected it and turned it into Ad Words. So that’s how we got started. We were dropshipping. We built a website. And my brother’s girlfriend – now his wife– did the first design. It was a really good time. And then, you know, fast forward a year later, we’re above the fold on almost all of the search engines at the time because of our connections with friends Overture. Amazon called us.
They literally picked up the telephone and said, “Hey, Jason, um, we saw that you guys have good search results and we want you to sell your basketball hoops on our website.” And I said, “What are you talking about? You guys sell books? What do you mean?” So the guy’s like, “No, I’ve spun up a team” – and there was no team. It was just him. He had a couple of engineers that built up the functionality for the sports and outdoors category.
And then, you know, within a couple of months we were selling on Amazon. And life was good. We were doubling in revenue every year for four or five years.
Wow, that’s such a great story. And if you were launching Dazadi.com today, what are some of the things you’d do differently?
Well, you know, ironically, I would start as my own eCommerce website. We had to build everything from scratch back then, Sergey. There are so many SaaS software systems out there now that are incredible. I would start a Shopify site, I would plug in as many apps as I need to, I would plug into Sellerscale for my visibility, right? To be able to manage my sales and profitability. We had to build all that functionality ourselves.
I would start on social media and I would do a monthly giveaway of one product to get emails. I would send out emails and build my email list and email sequences in order to drive sales and customers and the initial group of customers right to my website.
If I had the bandwidth, I would also launch on Amazon. This is why Amazon, I believe, is still the greatest way to find out whether your product is any good or not, because they have the biggest review product review network out, certainly in the United States and the EU.
You can get a lot of honest feedback about whether your product is good.
Additionally, on Amazon, if you have an idea for a product, there’s a lot of software tools out there that you can use and you can look at your competitors or who will be your competitors and find out an estimate of how much they’re doing in sales, how much they’re selling every, every month. And whether they’re any good at it by reading their product reviews.
Anytime you use some of their pain points and you can use them to differentiate 100% I used to do that all the time. We were in the home rec space. We expanded from basketball hoops into the home rec space and we’d read before we launched a new product, we’d read every single review.
We’d only read the bad reviews of all of our competitors. And then we would take that to the product design team and we’d say, “We’ve got to do better than these guys.” And then we would work with the factories and the engineers build a better mousetrap. And then when we did the listing, we would tell them why ours is better.
Then write in our bullet points in our infographics. We’d be telling everyone why our product doesn’t have the same product as everybody else’s from those.
And the rest, as they say, is history.
Join Sellerscale for a FREE 14-day trial (no credit card required) and grow your Amazon FBA business with ease
And since you mentioned that you’d sell on Amazon, in the platform-driven world that we live in today, does it even make sense to invest in building your own site, or should you “rent” space on platforms like Amazon?
You should absolutely rent space right now. It’s so cost-effective. Take it from me – a guy who had a big design development software team for almost 20 years. It’s really hard, right?
You look at a problem and say, “Hey, I could hire an engineer to develop my own software to do X.”
Okay, great. Then you build it and then you put it out and you start using it in the real world and you realize all the things that you forgot. So then you have to do almost three times more development time to get it right. Then once you get it right, and you start to scale your business, more resources are being asked of this software system.
You have to manage that software in addition to that. So it’s not so simple as I have an idea, and this is what the user interface will look like.
The stuff that’s under the hood of the user interface takes a lot of time and a lot of energy, and I’m telling you, we built our own software. We built their own ERP system, warehouse management system, channel manager.
I would never do that again.
Thanks. Now – you have your e-commerce business. It’s doing great. At what point did you decide to stop being a business operator and focus on helping other sellers instead?
My brothers and I founded the business. There were three of us, and we’d been working together for 17 years, and we sat around at the table and we looked at each other and we said, “I love you guys, but I’m sick of working with you. Let’s sell this.” It was as easy as that.
Before that, I had been lucky enough to be asked to speak at events like the Prosper Show for Amazon sellers and on panels. The Internet Retailer Show asked me to speak about certain topics and I really loved doing it. And I realized that I loved sharing the knowledge that I had learned both in e-commerce and on Amazon, the hard way with others. And you know how it is at those shows after you’re done speaking. A flock of people will come up and start asking questions, and I just love the questions. And I loved being able to help those folks who were struggling in the same ways that I had previously. So I learned something about myself even before I sold my first business, which was, “You should do this!”
And, and so I began helping just, you know, for free. Then ultimately as a side gig, as a consultant, helping advise other friends that I’d met at these various trade shows. And then when we sold the business, it was a no brainer for me to spin up, you know, “Avenue7Media and to do this full time.” And I, I tell you, I love what I’m doing. I just love helping others. It’s a lot of fun.
So inspiring. Thanks, Jason. I went through your website and it says, “The next billion-dollar brand will start as an Amazon or Instagram seller”, this quote is attributed to you. Could you expand on that a little bit?
Let’s start with the way things were 25 years ago. If you were a product company, you would spend millions of dollars developing a product and then you would spend another million dollars on a focus group that didn’t work because no one in that focus group had paid their real money to buy it, right?
So they were giving a lot of fluff just to get their $100 or $50 check and move on, and then you would put it out into the wild. A retail chain store and you had a relationship with buyers and you would pay for endcap, retail space, and then you would spin up a $50 million TV ad campaign. So it was possible and there were no product reviews, right? There was just TV and there was end cap space and there was great visibility of your brand on Amazon and your product, and so it didn’t have to be that good. A mediocre product could succeed 25-30 years ago. Not so anymore.
And why is that? Go to Amazon and what’s the first thing you do when you’re searching for a product? You look at the reviews. If you’re like me, I read the bad reviews because I want to know what was upsetting to this customer, because it is going to upset me [as a potential user of the product].
When I am building a brand on Amazon, I try to find a product that has a lot of reviews, 20-100 or more. And I like to find the one that’s more than four stars. The barrier to entry for the trust of the product now lives on product reviews. Whereas before, they would just hammer you with TV ads constantly until you felt like it was a comfortable brand on Amazon. That’s why you try building a brand on Amazon.
What you get is a direct one on one relationship between you, your product. And the end-user who actually paid real money to buy it and is using this thing. That didn’t happen before. You’d have, you know, you’d have a sales rep and you’d have a buyer, and neither one of those people were users of the products.
This is part of the reason why you think brick and mortar retail chains are such bad buyers. They’re not interacting with the product there. They’re telling the seller to do things and amend the product based on what knowledge, none their own opinion and that brand opinions don’t work. If you’re selling on Instagram or you’re selling on your own site, or you’re selling on Amazon, you’re going to get real customer feedback. And if you’re smart, you won’t take that feedback personally. You’ll listen. You’ll try to pay attention, put yourself in the shoes of your customer and say, yes, this is a problem and I’m going to do my best to fix it. And as soon as you do fix it and reintroduce that product with version 1.1 or 1.2, you’re going to see this thing take off.
How do brick and mortar stores use this new technology to their advantage?
I stopped selling to retail buyers a long time ago because our sales were smaller when we were selling directly, but my profits were bigger. Plus, the interaction between the customer and our product was really valuable. That’s how you make great products.
So – I fired a lot of [brick and mortar] buyers. We sold the regional sporting goods stores. We sold a Walmart. And then at one point we just fired them all because I was trying to make adjustments to products that the buyer wanted and the buyer didn’t really know.
The enormous amount of customer-driven feedback that’s driving customer-driven innovation. And if you’re not doing that, you just can’t build a better mousetrap. It’s just not possible. And it seems that for brick and mortar, the only option available is to create, not stores, but Sheryl rooms where you can touch and feel the product. Because that’s one thing that e-commerce lacks. You cannot touch the physical products.
You know who’s gonna use going to solve the brick and mortar problem? Tech companies. Amazon. Amazon built a shopping mall in Los Angeles. Beyond the Go, they built a real grocery store, a legitimate grocery store. You walk in, you put your stuff in your cart, and you walk out. And they’ll help you find where it’s you need, right.
I remember going to a Macy’s store – this was the last time I stepped foot in a Macy’s store. This was three years ago. I went in, I had a very specific thing. I’m looking for your brand. I approach a sales rep and say, “I want a package of T-shirts. Where are they?” And they’re like, “Geez, I don’t know.” I’m sorry, what? You don’t know where they are. This is like a 10,000 square foot store. You can’t point me in the right direction. You can’t walk me there. And I said to the lady, I said, “Look, I know this isn’t your fault. You got bad management, but I’m never going to step foot in another Macy’s store.” And I haven’t to this day.
It’s the convenience in one of the things that Amazon does so well, they remove every barrier or speed bump or roadblock on the journey to purchase your product. And that’s what brick and mortar stores don’t get.
Speaking of your agency, what’s the approach that you use to help your clients – sellers – succeed at Amazon?
We go through this process where we do our research and we do our homework. If you’re building a brand on amazon and you come to me say, “Hey Jason, I want to sell an Amazon, what do you think about this product?” we’ll do our homework. We’ll take a look at it, we’ll find out if there’s a market, if there’s a market for it, we’ll take a look at the competition. Then we’ll go into the next phase of our research and start identifying the highest volume, the most relevant keywords.
In the next phase, we’ll start to create that copy and placement of the SEO portion of it, but here’s where it’s different.
And I have to credit my good friend Rick, who’s a marketing legend, launched billion- dollar brands like the GoPro cameras. He and I both lived in Seattle at the same time, and we used to have Friday coffee and he taught me this. The key is to answer the question, “What’s in it for the customer? What’s the benefit that this customer is going to receive?” And Rick says this all the time, benefits sell.
It was like such an aha moment because we were selling air hockey tables, and we were talking about how strong the blower motor was. That’s not the point. Nobody cares about that. You know what? Our conversion rate quadrupled when we started to say, “Bring friends and family together.” That’s the benefit.
I’m selling the experience and I’m telling them what the experience they’re going to get when they buy this product.
I skipped a couple of steps, but the most important part is launch, listen and learn. After we do all that homework, and after we identify what’s great about the product, we tell everyone about what’s great about the product and what they’ll get. That’s when we sit and we listen. And when the customers come in, they tell us what they like or they don’t like. We make adjustments when the customer tells us what they don’t like about the product. We collect all that information in a nice digestible format.
Your e-commerce business Facebook page was enormous – it had more than 11,000 likes. In what ways did you grow a company account to that size? And to what extent did it contribute to overall sales?
I couldn’t track it back then. Now you can track it. You know, if you drive traffic from social media to your Amazon brand page, now you can know where that traffic came from. I never had that ability before I sold the company. And this is why it was not so easy building a brand on Amazon back then.
This is the best thing that we’ve ever done, um, on, on social. Instagram aside, if you’re a skincare company or your supplements company, or you have a clothing line company, I think you can really have success selling products on Instagram.
I think those are the categories that really lend themselves well. If you do a good job, you can get sales through social channels. But with our categories, we were in “home rec”, we were in “home fitness”, we were in “sporting goods”, we had a lot of trouble converting sales on Facebook. But so we, at one point in our history, we switched strategies and this is the best strategy that worked for us.
It was the best place to add to our customer email list. And so we would do every month a monthly giveaway of an air hockey table or a football table, and then we would sign up for a viral launch. You can really drive 25-35-40% of your sales through email.
We’ve been doing email forever, so we do email sequences for some of our clients. And Facebook messenger, for us, it’s kind of like the next frontier, it’s like email on steroids.
Have you tried influencer marketing to drive sales to your Amazons listings when you are building a brand on Amazon?
We used to dabble my old business with it. We would get a nice bump here or there, but, um, it’s not sustainable. I think the prices now compared to what it was when we were dabbling with it are exponentially higher. It really depends on your product line and your, your profit margins. For some people, it works great. I was never good at it. And you know.
If you want to get into influencer marketing, do you have to have your social media community in place? Again, I think the answer is it depends. I don’t think you have to have those. And in some cases, you can use influencer marketing to build up your own channels as well.
When you are building a brand on Amazon and you have so many different sales channels in place, how do you keep track of sales? Is it one tool, or is it a combination of tools?
It’s a combination of different tools. Most of my clients have their own sets of tools. You know, I make recommendations, when I had my own business, as I mentioned, we were so old and started so early, there was no such thing as SaaS software. So we built our own tools. But whoever figures out how to keep track of all of your Amazon selling figures will definitely make a lot of money.
I have one last question for you – what truth do very few people agree with you on?
You mentioned my quote at the beginning of the show, about building a brand on Amazon. And there are billion-dollar brands out there, as Amazon companies. They take every opportunity to build their brand on Amazon and then they take it offline. I just think there are going to be more and more examples of this. And so this notion that you have to work for Procter&Gamble or Unilever or Johnson&Johnson to have success is just not true. You can bootstrap a company if you’re smart and you’re dedicated to your story and building a brand on Amazon. If you focus on those customers and never lose focus on them, you can be a $1-billion brand too without having their funding.
Maybe that’s a story for another podcast, but I don’t always agree with everything that Amazon does and I hate them as much as I love them, but you know. There’s a way to be successful, and the way to be successful is by building your own brand on Amazon, be authentic to yourself, and be authentic to your customers and you can win there. Amazon provides this opportunity better than anyone.
Thank you for having me.