The Growth Booth

#4: Make 2022 Your Best Year with ECom

January 27, 2022 Aidan Booth Season 1 Episode 4
The Growth Booth
#4: Make 2022 Your Best Year with ECom
Show Notes Transcript
Not everyone's e-commerce journey is going to be the same. Learn about which methods & approaches in this episode will make 2022 your best year yet! 

Welcome to the fourth episode of The Growth Booth Podcast, a show focused on supporting budding entrepreneurs and established business owners alike, towards achieving lifestyle freedom through building successful online businesses. 

In this episode, we talk about Ecommerce and how it can make 2022 your best year yet! There are a couple of common approaches when it comes to Ecommerce, and we discuss those methods in-depth with a step-by-step process of how each one works, and its pros and cons. 

Towards the end of the episode, I share my thoughts on which approach is the easiest and best to tackle, depending on what level you’re at with Ecommerce. It’s different for everyone, so one approach may stand out better compared to another.  

Whether you're looking for step-by-step strategies to start building an online business, simple game plans to grow your business or proven lifestyle freedom frameworks, you’re in the right place. 

Stay tuned and be sure to join the thousands of listeners already in growth mode! 

 

Timestamps:

00:00 - Intro

01:16 - The Different Models of Ecommerce

04:41 - The Generalist Approach

06:16 - Scaling Your Products With the Generalist Approach

08:31 - Finding More Winning Products

09:24 - Look for Higher Conversion

10:40 - Optimising Your Ads

10:53 - The Generalist Approach Overview

12:06 - The Niche Approach

13:38 - Researching Products

15:44 - Suppliers, Manufacturers & Samples

19:10 - Selling & Scaling Your Products With a Niche Approach

21:22 - Which Model of eCommerce is the Best?

24:22 - Outro



About Our Host:

Aidan Booth is passionate about lifestyle freedom and has focused on building online businesses to achieve this since 2005. From affiliate marketing to eCommerce, small business marketing to SAAS (software as a service), online education to speaking at seminars, the journey has been a rollercoaster ride with plenty of thrills along the way. Aidan is proud to have helped thousands of entrepreneurs earn their first dollar online, and coached many people to build million-dollar businesses. Aidan and his business partner (Steven Clayton) are the #1 ranked vendors on Clickbank.com, and sell their products in over 100 countries globally, as well as in 20,000+ stores across the USA, to generate 8-figures annually.

Away from the online world, Aidan is a proud Dad of two young kids, an avid investor, a swimming enthusiast, and a nomadic traveler.


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Today we are talking about e-commerce and how you can make e-commerce really turn 2022 into your best year yet. Now, in e-commerce there are a couple of common approaches, a couple of ways to attack e-commerce, and we'll talk about those in this episode here. Towards the end of the episode, I'll give you my thoughts on what I think is the easier approach and the best approach for most people. I‘ll give you some more context around that as well because it is different for everyone. 

The Different Models of Ecommerce

So what are the different models I'm talking about when it comes to e-commerce? Well, I like to call them the niche approach and the generalist approach. 

The niche approach is where you build out a store and it's specific to a specific niche. When I was getting started out with e-commerce stores of my own over a decade ago, I had one e-commerce store which was a niche store, which sold barber chairs. These are the big, heavy, monstrous chairs that I would sell to barbers. They're expensive, they're heavy, so they might not fit the criteria for the perfect e-commerce product, but I did pretty well with them because I could make a lot of money on each item that was sold. So that's an example of a niche store. 

Another example of a niche store is one that we have around the train horns where we go into the store and all it sells are train horns. If you don’t know what train horns are, these are these obnoxious horns that you can add on to your car. I don't know why people want them, but they make one hell of a noise and you can go down the street and scare people with them. Anyway, we did pretty well out of that niche store. Two examples of different niche stores, that niche e-commerce. 

 Now the generalist approach is to build a store that sells any number of different items. You could have 100 different niches that that one store, and that's the second approach. We've made millions of dollars from both approaches to e-commerce. In the niche approach, currently we've got three different niches that we really focus on. We do millions of dollars every single year from those where we got our products featured on tens of thousands of stores all over the United States. We built a pretty big business around niche stores, and when I say niches store, it’s not so much a store where you're selling all of your items through one store. It's just that website that store maybe the hub of your operations. 

That's not to say that you wouldn't be selling your items in lots of different places. You could be selling them on Amazon or Walmart or offline, online, all over the place, as well as on your store. So when I say a niche store, I'm not specifically talking about just selling in that one place. 

We've done really well with niche style e-commerce and now I'll talk about the approach that we go through to get started in that in just a moment. We've also done really well with the general store approach. If you're familiar with some of the projects that both me and my business partner Steve Clayton do online, then you've probably heard about the Kibo Code which is a training program where we have taken people through and really taught them how to build these generalist e-commerce stores that could have hundreds of different products from hundreds of different niches and do very well from them and essentially. 

Two very different approaches both work really, really well and what I like to do now was just dive down a little bit more into each one of these and give you a bit of a framework for how I think you could approach them in 2022 and absolutely stack the odds of success in your favor. 

The Generalist Approach

We'll talk about generalist or the general kind of e-commerce store approach first. This is really a numbers game. You want to have a high number of products published on your store. This means that the high number of products tested as well, and there are a lot of different ways that you can do this. 

 You can do testing with paid ads from the likes of Google and Microsoft. You can do testing by putting products in free marketplaces like Facebook, Facebook Marketplace. You can sell brand new products in those marketplaces. Ultimately what you want to do is find winners. Your funnel, if you like, is the products that you're putting onto your website. The more products you put on your website, the more tests you run, the more winners you're going to find. Each one is hopefully going to make you a lot of money. It varies, but a winner could make you $100, $200 a day or $1000, $2,000 a day depending on what that product is. The way you make money is by scaling, and you do that by continually testing more products in a range of different niches. 

You may end up sort of focusing on one sort of a broader niche as an example. You might find that you start selling some piece of outdoor furniture and that's going really well for you. Then you might test other related items. So you can sort of by default, work your way into being more of a niche seller without deliberately intending on doing that. 

Scaling Your Products With the Generalist Approach

Let's say you take this approach, you find maybe one or two products that become winners, and they start to make you a lot of money. How do you go about scaling? There’s only a couple of levers when it comes to scale, but scaling is a function of either getting more traffic or more conversions, and you cannot do all the things like optimizations and reduce costs and stuff as well, but for the most part, you want to be looking at how can you get more traffic or more conversions. 

In the world of a general store, one way you can do this, one way to get more traffic, is by looking at marketplace expansion. There are different marketplaces that we use. I'll give you a few examples. There are the shopping platforms: Google Shopping, Microsoft Shopping, and these are these product ads that you see when you do a search for an item inside of Google. Like if you go to Google and you type in “iPhone case” as an example, you'll probably find at the top of Google images and prices related to different points for different iPhone cases. This might refer to as Google Shopping. 

Microsoft does the same thing. Microsoft ads are going to appear on Bing, and other places as well. These are what we call the shopping platform ads. If you're just selling on Google, you could expand to selling on Microsoft. You're not going to double your traffic by doing that, but you could get another 30% traffic so you've expanded your traffic. You can also expand that to other marketplaces like the Facebook Marketplace, another sales channel, Pinterest, eBay, Walmart, and so on and so on. There are lots of different channels out there these days and they're more and more that are sort of coming online all the time. 

That's one way that you can get more traffic is by getting your products in more marketplaces. You still only have one generalist website or store, I should say, but this store can sort of seamlessly integrate with lots of different platforms so you could have your products being sold on all kinds of different platforms. The orders may or may not still be processed through your store, but you're getting more traffic because you're out there in more places essentially. 

Finding More Winning Products

Another way that you can do this approach this is to find more winning products, so more winning products will essentially mean more traffic that converts into sales. I've spoken about getting more traffic by going out to more marketplaces. The other way is getting more traffic by having more products. If you've got 50 products in your store and you ramp it up and got 100 products in your store and you’re continuing to run the same kind of ads, or if you weren't running ads, the same kind of marketing that actually brings that traffic in, then you can expect to get double the traffic because you've gone from 50 products to 100 products. If you've gone from 50 products to 100 products, then hopefully the number of winners that you've got would have doubled as well. So you're getting more of this converting traffic, and so the way that you find more winning products is by doing more testing and so on. 

Look for Higher Conversion

Another thing that you can do is look for higher conversions. Conversions or conversion optimization, there's another lever that you've got at your disposal. One of them is traffic. We've spoken a bit about how you can get more traffic for going into different marketplaces or by getting more products out there. Conversions, you can do a better job of conversions by split testing. 

There are a lot of tools and software that's out there these days. Google has got some free split testing software. Visual Website Optimizer is one that we use a lot over the years. That’s VWO.com. You can get some really interesting split testing. If you take a product and able to increase the conversions by 20%, that's huge. That's like increasing the revenue by 20%. It’s oftentimes easier to actually improve your bottom line by boosting the conversions. The thing that I like about when you boost conversions as you get more sales but you’re not necessarily paying more to get those sales. This is assuming that you're using paid advertising, so you are really optimizing your store at that point. You're optimizing your sales; you're getting sales for lower cost. 

Optimizing Your Ads

The other thing that you can do is look at lower cost traffic or trying to optimize any ads that you might be running so that they cost you less. Obviously, that's going to give you a bit of bottom line. This is sort of an overview of how to approach the generalist store or selling in a wide range of different niches. I really like it because you're not limited to selling different one type of product in one specific industry or one specific niche. You're very, very agile. It's something where you don't have to worry so much about branding or positioning your product. You’re like a mega store, an online version of a mega store. 

In fact, that's how this whole model sort of came about. In our businesses, we saw this amazing model that was used in Japan, Don Quixote stores in Japan, and these store sells everything under the sun in there done incredibly well. That's kind of what we wanted to replicate in the online space and that's how we do this. These generic stores that I’ve mentioned, I think at the beginning, we do have some training around how to do this as part of our Kibo Code program, which is not very often available to the public, but we have done a few openings over the past few years. You can find out if that's open or when they might be open, or get on a waiting list at thekibocodecom. 

The Niche Approach

Now the other type of approach to e-commerce is a niche approach. Now a niche approach, as I said at the beginning, is where you specialize in one specific niche. For a long period of time, this was my preferred approach to e-commerce, because I guess I just understood it a bit more. It sort of made sense to me. I'm not saying that it's the best approach necessarily. I'll give you some thoughts on that in just a moment, but that was something that I can easily get my head around and was how I started out online. My business partner Steve Clayton, he started out with niche e-commerce as well. 

It's still a numbers game but the approach is different. With niche e-commerce we find that easier to start by thinking about leveraging an existing marketplace where there's an existing ecosystem of traffic and buyers. A couple of the best examples of these right now are Amazon and Walmart. You don't even have to have your own store to begin with. I think it's always good to have your own website if you're going down that niche path because it allows you to show more credibility and some people will inevitably go to your niche store anyway, so you may as well have products that people can buy, but you don't actually need that to start with. You can just get started by selling as a third-party seller on the likes of Amazon, Walmart and other marketplaces. 

Researching Products

We start a niche e-commerce income stream, building that income stream, by researching products. What you want to look for here to find something that is unique, something that solves a problem and something that really has a clear point of difference in the marketplace. This is one thing that is getting a little bit harder to do because there are so many people telling me different products these days that a lot of people think that all good ideas are taken. Obviously, there's always something that you can do. But when I'm thinking about how to approach a new product for one of my brands or a new brand entirely, first I want to think about what problems can I solve that are out there. In this one I’ve spent quite a bit of time diving into and what I'll then do is come up with a shortlist of products, not so much a shortlist, but a list. That list of products may have 30, 40, 50 different products on it, and these are products that we'll be selling at the moment. 

I'll be able to go to amazon.com, I'll be able to use different tools to analyze how many products are being sold on a daily basis on Amazon. We use that to make some good estimates about what I would be able to do if I were to launch a product in the same place because I can see what the search volume is, I can see how many sales my potential competitors are making, and I can use that to make an informed decision about whether or not that particular product and that particular niche is something that I want to get into. 

If I started out with a list of 30 or 40 products, by the time I go down and figured out the demand, how many potential sales I could get, the competitiveness, the profitability, and so on of each product, I'm probably going to come up with a shortlist of five products. The approach that we use is to sort of whittle it down from a large number to a group of maybe four or five products that we want to get some quotes for and get some samples for, and that would be the next thing that we do. 

Suppliers, Manufacturers & Samples

We would look for suppliers, we would ask them, “What's your manufacturing product price for 500 of these products and what's your lead time?” and that's how long it's going to take them to finish manufacturing them and so on and so forth. We would also get samples. We'll get samples sent to us so that we can touch, we can you have a look at, we can play around with, we can use to come up with other ideas and then eventually we'll go back to the supplier and say “Okay, this is one that we want to go with,” or maybe there's two we want to go with. 

Now, one of the downsides I guess of if you're creating your own brand of products is you do need to buy a whole bunch of products upfront, and this is not something that we do with the generalist approach. The generalist approach is dropshipping. You're using existing products, other people's products, and you're only buying that product after you've sold it. Someone comes in, you get that traffic, you get an order, then once you get those orders, you will then be able to buy the product and send it off to the end customer. If you're building your own brand, then you will need to buy products upfront, might be 100, maybe 1000, that depends on what are those different niches, different industries, different manufacturers, they've got different minimum order quantities. This is one of the things that you have to take into consideration when you're launching your own brand. 

One of the roadblocks for some people because some people are not willing to put $1,000 or $2,000 or $500 whatever it might be down to do a production run of whatever product it is that they wanted to sell. Of course at this point, although you can stack the odds of success in your favor, there's no 100% guarantee that you are going to succeed with that. There's no 100% guarantee that the market is going to like it. You do get better at that and I think you really can eliminate a lot of the risk especially when you look how you’re going to price that product because if you can buy a product for $10 and feel like you can sell it for $40, you have probably a lot of wiggle room there. 

If in the worst case scenario that product is not selling like hotcakes, when you launch it on amazon.com, then you can do a massive price reduction, sell at $20 instead of $40. You'll probably breakeven, but you'll be able to sell the product. I don't think it's high-risk, it’s just different to the generalist dropship approach. What we would typically do is we would finally get to a point where we've had back and forth negotiation, we've touched the product, we've felt a product from the sample that we've received, and we will place an order. In our case after we place an order, we've got an office in a warehouse in Guangzhou, China. We've got our team there, and our team will inspect the product, and there are third-party services that you can use to do this and it's not essential. Some people don't do it. I just think it's a best practice to inspect the product to make sure that you're only sending 100% good products from China where they're normally manufactured to the warehouse. 

For example, amazon.com, we are selling a product. So you're doing an inspection of some kind, or maybe we'll just skip that step and you'll get it to Amazon and you'll hopefully start selling. The way that we started selling on Amazon for the most part is we will turn on paid ads and that will help generate some momentum, so you will then get people coming in buying through paid ads but also just organically searching for something. If you were selling like an iPhone case, some people will be typing an iPhone case and finding you through the ads, but some people will also be typing an iPhone case and finding you through the organic listings. You'll start to get rankings, you'll start to get more traffic, and you'll start to make more sales. 

Selling & Scaling Your Products With a Niche Approach

In the question of how do you scale that particular type of E-commerce business, it’s the same way that we would scale any online business for the most part. There's more traffic and better conversions. So how do you get more traffic? Well, you could start selling your products in more marketplaces, so amazon.com is just one. You can sell in amazon.co.uk and all the Amazon stores across Europe, and just that alone, without developing any new products, will probably boost your bottom line by about 30%.

You could sell in other marketplaces that are not Amazon, so Walmart, and you could have a look at all these other marketplaces. You could sell on your own store. You could build out their brand selling your own store by using paid ads or organic optimization to get some free traffic coming into your own website, so you can take sales that way and you can launch more products. By virtue of launching a new product, you would expect to get more traffic and more sales. 

The other thing that I love about the niche store or the branded approach to e-commerce is that you can also start selling offline. I mentioned at the very beginning, our niche products, our brands that we've developed over and over 10,000 stores across the United States as well as online. I think offline probably represents as much in terms of revenue as online potentially now. That's something that you can do when you've got your own branded products. 

Which Model of eCommerce is the Best?

Which should you focus on? Which is best for you? It really depends on your objectives. Are you looking for fast cash? Have you got a passion or this long-term idea? Maybe you've always want to build a brand? Do you have a specific hobby? Like maybe you're really really good at swimming and you've got some ideas about swimming products that you would like to bring out under your own name or an own brand that you've got. That might sway your decision one way or another. 

In terms of what’s easier, I think undoubtedly, the approach that we use, the generalist or the general store approach is easier because you're not locked in. You're very, very agile. You're not paying for the inventory upfront and you've got a lot of flexibility there. The downside is that it may take longer to build a multi-million dollar brand if that’s something that you want to do, but who’s to say that it's the best thing to do anyway. You can still build out a store that sells all kinds of products, that makes multiple millions of dollars in a year, and if you want to sell that and then you'd have a real asset that you can sell. 

There are pros and cons to both. I think that ideally you would have one foot in each side of E-commerce, but if I were starting from scratch, I think I'll take the generalist approach in 2022 – and this might change! A few years ago, it's probably easier to take the niche approach because there was so much of this low-hanging fruit, this opportunity that existed on the likes of amazon.com, but it is a little bit more competitive now. I think that the generic approach is much much more developed. Supply chains are more developed, meaning you can take your pick from tens of thousands of different products that are already in the United States. You don’t have to worry about importing, branding, or any of that stuff. You can cut all that out and go direct to quickly get these products up online, get traffic to them, start selling and scale. I think for most people, that general approach is probably better, and as I mentioned, you can find out about where to find more training about this at thekibocode.com. 

You can also check out the Blueprint Academy. Blueprint Academy is a mastermind group that we’ve been running for a long period of time now. I think this is our eighth or ninth year that we've been doing it. This is where we provide more coaching and training, access to our infrastructure as well, so access to being able to use our office and warehouse in China to inspect products, being able to use our team in China to be able to negotiate product prices and shipment and so on and so forth. So if you've got access to all that infrastructure, then maybe things are a little bit different. I would say look, okay, there's a case to be made for taking a niche approach, but the reality is most people don't have access to that. Without that, I think the generic approach is absolutely the way to go. 

I hope you found this useful. I will have more episodes in the very near future about e-commerce and particularly about the anatomy of an e-commerce store that converts like gangbusters. Watch out for an update about that very soon. Thanks for listening. I'll see you on the next episode.