The E-commerce Leader

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[00:00:00] JM: there’s two sides of the coin. Obviously. There’s be more efficient and more frugal or whatever, or make more money.
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[00:01:06] MV: Recently in the London version of the Mastermind, the 10 K Collector Mastermind, one of our, uh, members was coming up with, uh, a very classic scenario that Jason and I are gonna. Talk through. So Jason, I’m really looking forward to your thoughts on this. So, um, one of the members that I know listens to the show regularly, so this could be really helpful, and it’s a real world example, and that is this, they’ve discovered that their supplier is selling the exact same products with slightly different branding, of course, to a competitor who’s also selling on Amazon.
[00:01:36] So now they have the classic problem. They’re selling the exact same product as a competitor. Can they keep their market share? Can they keep their pricing? Should they even stay in the product? So that is basically the challenge today. 12 ways to beat the competitor who’s selling the exact same product.
[00:01:53] Jason, really looking forward to your thoughts on this. A very practical
[00:01:56] JM: problem. Yeah, I love this topic. This is a great one cuz it’s real world of competitive marketing. Absolutely. So when you mentioned this scenario to me, I just said yes, yes, yes. Let’s talk about this. And then I said, let’s have it be 12 ways to be a competitor who’s selling the exact same product.
[00:02:13] I didn’t have the 12 ways in my mind exactly, but I knew we could come up with 12 ways. And to be honest, in any creative brainstorming session, you could probably come up with 20 or 30 ways to beat a competitor who’s selling the exact same product. So we’ll just give you the highlights here of our. Our top 12 that came to mind.
[00:02:29] Um, I think as the listeners kind of hear our reflections on this, they’ll probably come up with their own, uh, additional ideas. The sparks of creativity will fly off this podcast maybe. Um, and I, I think it is powerful and it meaningful because many of us find ourselves in this situation. We don’t have an exclusive.
[00:02:47] We don’t have our own proprietary product. We don’t have, you know, a, a, an item that we have designed, made, and have patented that we can protect. We’ve gotta be out there, uh, you know, s log in the goods, uh, alongside of people who maybe have the resources or the access to the exact same stuff that we do.
[00:03:05] And so how do you play in that space? Uh, so anyway, this is, this is gonna be a fun one. I think we’ll rattle through these fairly quickly. I don’t think we need to belabor the point on any of the 12 ideas, but it’ll give people certainly lots of, uh, grist for the mill. So, yeah, let’s jump into it, man.
[00:03:20] MV: Let’s do this where the first one involves Dan Kennedy, the Diane, the granddaddy of, of a lot of internet marketing these days.
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[00:03:26] so what’s the first
[00:03:27] JM: one? Yeah, I, I love this quote from Dan Kennedy. I think a lot of, I hear people quoting him saying that, he says this, so I assume it’s in one of his books, and he says that whoever can spend the most money to acquire a cu, the customer will win. And so, um, you know, if you’re selling head to head against somebody who has the exact same product as you, um, if you can sell, um, you know, to a hundred thousand of those people and your competitor can only afford to sell the 10 of them you win.
[00:04:01] Now, you know, that begs the question, well, how can you. Forward to spend more on a customer if you’re selling the same thing? Well, there are lots of ways. Uh, you can have a slimmer margin, just operate with less profit. Uh, you can, um, you can be more efficient in your system. Um, you can have investors that come alongside you that have a long time horizon, you know, that give you money and say, Hey, build this business.
[00:04:22] Um, you can borrow a ton of money knowing that you’re gonna build, uh, you know, a, a brand in a, a customer base. That you can then, you know, grow from there and on and on and on. I mean, there’s a million ways you could figure out how to spend more money to acquire a customer, but that’s the first thing that came outta my mind.
[00:04:39] MV: Yeah, I like that a lot. And by the way, um, I think the exact quote was something like, ultimately the business that can spend the most to acquire a customer wins, which is. It’s also endorsed by someone like Perry Marshall as well. I, I think it’s really important to know that you can afford to do this if you start down this kind of route.
[00:04:57] Um, another classic, uh, thing that I’ve taken for that Dan Kennedy quote is, uh, what he calls a bigger back end. So if you’re upselling down selling, cross selling, which if you are an Amazon based sellers as most of the guys in the group, including the people who came up with this, um, situation are, that’s harder to do.
[00:05:11] You can do it, but you’ve gotta work really, really hard at it. If you’ve got your own direct to consumer side, I guess, then that’s, you know, it’s all about that, I guess. Right? Yeah. Well now
[00:05:19] JM: you’re jumping on the list.
[00:05:19] MV: I am, yes. That’s the implication. The implication of that statement, I guess is you can afford to spend the money, so you gotta make it back somewhere else.
[00:05:23] But anyway,
[00:05:24] JM: there’s two sides of the coin. Obviously. There’s be more efficient and more frugal or whatever, or make more money. Right. So I mean, yeah. So to your point, and we’ll talk about how to make more money. Yeah.
[00:05:35] MV: Okay, good. Number two, then. What’s this
[00:05:38] JM: next win? Yeah, I think let’s just use Dan’s uh, sort of, uh, phraseology here.
[00:05:42] He who does whatever wins. Uh, so let’s just continue that thread. So the second one would be he who has a better brand wins. Um, and you have a better brand in many, many ways. Technically, you’re never selling the exact same product because you’re selling it under a name of your Amazon account at a minimum.
[00:06:02] But if it’s a, you know, if you’ve got a brand registry, then you’ve got your, your name brand, you’ve got your logo. Um, a, a brand can have deep meaning. It can imply things to people. Um, it can be in, uh, in better alignment with the who the customer is, what their desires are, their hopes, their fears. You know, you can, you can align your branding to better to an ideal, you know, prospect, I guess is the idea.
[00:06:28] You can have higher quality execution on, and this is branding still, but higher execution on things like your photography, your graphic art, your copywriting. And then the biggest kicker I would say of all of these on the branding side, is on any place, Amazon, eBay, Etsy, Walmart, your own Shopify site. The biggest kicker for branding is you could have better packaging and the packaging by itself.
[00:06:53] Can be a differentiator that draws your ideal customer to the product. Um, this classic example where you like to talk about in Omni, at Omni Rockett is my business partner. Kyle has a, um, a product. In fact, if you’re watching us by, by video right now, I have an example of it I’ll show on the video and they, um, the product itself is skateboard bearings and they got a design patent on the packaging.
[00:07:21] Uh, and the packaging is a very, very different and unique, um, uh, way to present the product. And it’s beautiful. It’s the, it’s cool. I’ll just, for those of you who, um, are just listing, I’ll just base basically say, uh, roller skate bearings usually come in a, uh, a, a package that’s sort of like a, a roll of coins.
[00:07:41] You know, like, or a battery, like a, like a, a set of AA batteries. How those are usually just shrink wrapped. Um, but the packaging that, um, Kyle and his business partner Gary came up with for this brand, it made it that more like a plastic, um, pyramid and you can see the product inside and it, so it gave them a, whatever a pyramid is, 1, 2, 3, like four dimensional.
[00:08:04] Package space. But it’s pla it’s, it’s clear plastic. And this packaging is so cool by itself. It really stands out incredibly well, um, by next to the, uh, the competitor’s product. And so, yeah, all that to say, you’re never selling the exact same thing, you know.
[00:08:25] MV: Brand is, it’s true. And if you’re selling packaging that cool, particularly it’s giftable, then you’re selling something, uh, that is physically different.
[00:08:32] And I guess that that’s a, a fairly cheap and sustainable way of creating a point of difference that that can be very profitable. Mm-hmm.
[00:08:39] JM: For a minute, oh, sorry. Didn’t, go ahead,
[00:08:39] MV: please. I was gonna say, um, do play the math out. I think it’s good. Good to do.
[00:08:42] JM: Yeah, let’s say you’re buying your, your, your cost of goods, the same exact thing your competitors buying.
[00:08:47] Let’s say it costs a dollar a unit and you’re selling it for like $7 a unit. I wouldn’t recommend you do that business on Amazon, but nonetheless, let’s say people do. Um, but let’s say you can spend an extra dollar on packaging, so you literally have a dollar of cost in the item itself and a dollar of cost in the packaging.
[00:09:08] So now you’ve got [00:09:10] $2. You know, really cost of goods, but let’s say you can sell it for 1799 because it’s so super differentiated. Who wouldn’t take that? Who wouldn’t take that approach? You know, you would definitely want to at least test that to say, is there a high-end customer that will take a high-end price point because the high-end packaging sells the deal.
[00:09:32] Uh, so there you go. That’s the idea.
[00:09:35] MV: Yeah, I like that a lot. And, and I think that I see people do that well sometimes I think Kyle’s one on the higher end of people doing it, and I, it’s definitely worth putting a lot of thought and energy. Into it and, and all can also talk to specialist packaging suppliers.
[00:09:49] I’ve, I’ve put clients before onto specialist packaging suppliers. Mm-hmm. And I think that was part of their success for sure. Um, couple of caveats and I think the name and logo, the sort of graphics you choose. Photography needs to be great in the eyes of your consumer. I think it can be used to fall in love with your own brand.
[00:10:03] So you’ve gotta build on an understanding of hopes, fears, customer desires, all that stuff you mentioned. Mm-hmm. And build from that. Into the visible band brand elements. And I think that’s the only thing that I would put a caveat around. Just putting a logo on per se, doesn’t add value. Putting a logo on that resonates with your bus.
[00:10:20] Your customers. Mm-hmm. Is where the value gets added, I think. Yeah, totally. Okay. Onto number three.
[00:10:26] JM: Number three, who, who has a better operating system and efficiency wins? You know, a lot of businesses are structured very differently in terms of how you behave. Um, You know, from the very inception of your relationship with the manufacturer, the order quantity, the deal you get with them, which we’ll talk about separately in a moment, but even the standard operating process and procedures with them or with any other, uh, you know, link in the chain.
[00:10:54] Things like your third party logistics warehouse, uh, even the import customs duty process, payment process, the business, who has the most lean and efficient system. Is gonna have a marked competitive advantage over somebody who’s, you know, doing stuff back of the envelope, having, you know, stuff imported into, uh, random ways, different places, different speeds, different cost structures for import.
[00:11:23] Um, another example from Kyle’s business that I remember he told me one time was he had a system where he couldn’t do a whole, uh, whole container full of product. And it was costing him a ton. And then he found a system where you can actually go in with other sellers and have a co pack, a Cota, uh, like a co shipped container where you get the pricing benefits of a full container load.
[00:11:52] But, um, you’ve done it with the collaboration of two or three, you know, other sellers. And he said it saved them an insane amount of money. And that, and it, that went to the bottom line profitability. Yeah. Um,
[00:12:01] MV: so just consolidation, I think they coin, isn’t it? Yeah. That’s, mm-hmm. Mm-hmm. That’s really big, that, that makes a huge difference.
[00:12:04] JM: Absolutely. Yeah. So if you’re competing with somebody who doesn’t know that, and you know that you’re making a lot more money, therefore you can spend more money to acquire the customer, therefore you win. Yeah.
[00:12:13] MV: And I think this comes down to knowing as well. There are 12 possibilities here and it’s great to work on all of them, but the, the reality is probably gonna be a, gonna be super, super good.
[00:12:22] That’s very American, very good at a couple of them. And your competitors may be better at others. So it’s really important not to compete in a jujitsu tournament. If you’re a karate specialist, you’re gonna lose, that’s not well put. But if you are not very good at being efficient, like some of the Chinese factors can pump out goods incredibly cheaply if you’re competing directly with them.
[00:12:41] And your branding isn’t on point, then you are losing out big time. So you better make sure Yeah. Play to your strengths one of these. So yeah, absolutely. Right. And I think all the quantity management, by the way, is absolutely huge. It’s kind of obvious, but I think it’s worth really deep diving into getting good at this.
[00:12:54] Um, if you have too little stock, then you’ve got a stock and you lose a huge amount of profits. And one of the revelations to a couple of the mastermind members who’ve been around. Decades of business is recently struck them again as a whole new revelation. Duh, if I don’t go outta stock on my best sellers, I’m gonna make a, an, an awful lot more money.
[00:13:11] Like hundreds and hundreds of thousands of dollars more in profit, nevermind sales. Mm-hmm. And the opposite side is if you ca tie your cash up in slow moving stock, Then you can slow growth hugely, or even just grind to a halt while you wait to sell through this overstock. So I think, um, being obsessive about getting all the quantities right as possible and making any deal you can with your supplier that works on that number is, is really, really critical.
[00:13:35] And, uh, I know some people are really obsessed about that and get really good at it. And those others who order 12 months worth of stock. All the time, and that’s really bad. Don’t do
[00:13:43] JM: that. Yeah. Yeah. I would say that a twist to this that we didn’t really put on the list, but um, I’d also say there’s, you know, sort of a incremental idea on this is whoever can have better pricing management also wins.
[00:13:55] So let’s call that a subset or a 13th idea. But you know, if, for example, you’ve got a head-to-head competitor and, um, they’re playing, um, a mark down, down game with you. And, and they mark down markdown, markdown, and they, they’re always wanting to sell underneath you. Um, you know, you can let them, you can drive them low, let them sell through, and then when they’re outta stock, you control price.
[00:14:18] And, you know, you, you gotta play this cat and mouse game sometimes with competitors to find out on, on Amazon anyway, uh, what their ability to control pricing is and their stock quantities. And basically you’ll find out who you’re dealing with. And if you’re dealing with somebody who’s just dabbling in your product line, then you’ll know.
[00:14:37] Or if you’re dealing with somebody who’s got super deep pockets and is, you know, you know, has other ways to make money and they’re gonna drive you down on price and they don’t care. Hmm. And we’ll never go out of stock, then you’ll know. I mean, so yeah. Part of the experimentation of the better process is it’s a real world competition process.
[00:14:57] It is like, Boxing or, you know, um, m m A or something where you’ve gotta see what the competitor’s gonna do and then you’ve gotta have a better process in them to beat them.
[00:15:08] MV: I agree. I, I think you can do a little bit of research for a cpo, your opponent. I, if you’re going up against a Chinese, uh, factory, just bear in mind that most of ’em don’t even need to make a profit.
[00:15:15] It’s a weird mm-hmm. Thing to say, but they’ll get a bit of a reimbursement from the state. Um, a lot of businesses. State or partly state owned. I think that trend has gone up over the last few years. Mm-hmm. So, uh, you gotta be very aware of the fact that you have to make a profit because you’re in that kind of business in uk, usa, Europe.
[00:15:31] Yeah. And your competitors may not be, in which case I would say that you wanna be very careful about going to fight with those guys cuz they got. Nothing to use in the first place. So, and those guys pump out stock. That’s what a factory does in China particularly. So yes, you gotta be very, very careful to compete with, well,
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[00:16:36] JM: i, I would say you compete with them differently than, you know, you, you play to your strengths differently than theirs.
[00:16:41] Play to the strength that we’re, uh, we’re, uh, you know, from Louisville, Kentucky, and we will talk to you on the phone anytime you want. And our hometown brand is really vitally important to us, da, da da. You know, so you, you play to your strengths. Yeah. I, I love
[00:16:54] MV: the, the choice of Louisville, Kentucky. I guess that’s somewhere with this, the reputation for having, it sounds American down at Home Canada, folks.
[00:16:54] I can’t do the accent. I shouldn’t even try. Let’s move swiftly onto number four. What’s the fourth way to beat your competitor when you’re selling pretty much the same product? Yeah.
[00:17:00] JM: It follows onto that line of thinking that we were just on a moment ago, and that is he who has. The better financial management wins.
[00:17:09] And I’ll just tell you one of our clients that is, I would say one of our best clients, most successful clients used to be a cpa Pricewater House Coopers, or like a big six accounting firm. I think it was that one. But, um, he’s like a CPA level operator on the finances. He crushes it. I mean, this is like, cuz he just knows what he’s doing and, um, it all, it goes.
[00:17:32] And this one, from all the way from the supplier terms, like, how long will they give you? Um, you know, uh, basically free stock. Without needing to be paid. Is it net 60? Is it net 30? Is it net 90? Um, is it, you know, some other deal that’s even better than that. Um, and then how do you pay them? Is it with a credit card?
[00:17:49] So you get 2% cash back? Um, and then how do you pay that credit card off? Do you use a line of credit from a bank that allows you to have a longer term financial runway so that you can sell through all of your inventory before you really have to pay it back? Um, all of those systems for financial, you know, savviness.
[00:18:08] Are things to learn about, understand, and, um, and implement into your business so that you’re absolutely as wise financially as you possibly can be [00:18:20] in terms of how to manage cash flow and, uh, you know, your, your, uh, cost of goods and all that.
[00:18:27] MV: I get weirdly excited. So he gets to show different people, like different things, right?
[00:18:32] I just know the power of this. I mean, in a mastermind, one of the guys, uh, who’s importing from China, just the, the previous meeting in March, 2023, um, I just said, go back and talk to, he said, I need about another, I don’t know. We, he had a 50,000 pound, or, you know, $70,000 shortfall in his finances at a particular time of year.
[00:18:51] And I said, go make it the suppliers problem, particularly if your suppliers are in China, because we’re talking about the Chinese can compete. And a weird way with Westerners because they don’t have to make a profit. But one of the reasons they can do that is cuz they’ll also get loans from the Chinese government who also give loans that don’t seem to care about really having much security or, or getting repaid necessarily.
[00:19:10] And it’s a funny business, uh, buddy, you can take advantage of that because your suppliers can pass on that pre-credit to you and the diploma of supply credit, which is obviously interest free. And, um, that can really make a difference, uh, if you can, if you’ve got some hit. With them, and if you put in a big order, but you don’t have to pay for it all at once.
[00:19:27] And they can put that on a purchase order and, and show the boss. I’ve got a, you know, a hundred thousand dollars order. You don’t have to pay for it. You can break it into pieces over the course of a year and then you can really get some credits, uh, in return for not so much a lower price, which is harder to get in China below a certain floor because they aren’t gonna make much profits.
[00:19:43] So there’s not much to give away in terms of price, you know, per unit. But the terms, my goodness, they’re negotiable. So it’s always, always worth renegotiating those, particularly if you have some history. And, um, that particular person saved themselves several months worth of, of, uh, stuff. I think that the next meeting you’d come back, you’ve got about $70,000 worth of credit just from a conversation with one supplier.
[00:20:04] And, and that happens all the time. So it’s always worth a conversation with your su supplier, particularly if they’re in China, not only.
[00:20:11] JM: Yeah. Yeah. I mean, this is the, this is a huge way to win. And, um, I mean this is the, this is the, this is the probably the biggest idea of how to win at the Great Game of eCommerce just broadly.
[00:20:23] You know, let alone against a head-to-head competitor selling the same thing as, as you have, um, this is how you build a, real fine operating e-commerce business. Yeah. Is we get really, really good at financial management. Yeah.
[00:20:38] MV: Agree. Now the, the next one’s a bit more down at home. You mentioned the, the folks over in Leeville, Kentucky.
[00:20:43] I can’t do the accent. So this presumably comes into this one a little bit more.
[00:20:48] JM: Yeah. Number five is, see who has better customer service wins. So we pride ourselves in hometown, you know, relationships in Louisville, Kentucky. I’m, I’m from California. What do I know about Louisville, Kentucky Accent. I did one thing
[00:21:02] MV: about the choice.
[00:21:02] Yeah,
[00:21:03] JM: you get the idea. Uh, you could do the, you know, the idea in any accent you like. The idea is people buy from people and people really appreciate the opportunity to chat. Email, get on the phone. I mean, we have customers who have phone numbers prominently on the top of their Shopify site, top right corner.
[00:21:25] You do that and you’re making a statement about your willingness to talk to people and walk ’em through the questions that they have in their mind. You, you don’t have any of that. You don’t have any way for people to get ahold of you. You’re making a statement. About your commitment to their satisfaction and happiness.
[00:21:44] And so, you know, on Shopify in particular, all things being equal, you’re infinitely better off having a phone number slathered up on the top right of your site prominently there so people know, oh, I, if I need to, I could just call ’em and talk to ’em. And you need to be able to. You know, have the process behind that.
[00:22:01] But that’s a really powerful thing. Um, you know, having somebody’s, uh, a hundred percent commitment to your, your personal guarantee to your customers, and having that be stated out there, like, we promise your satisfaction or your money back. I mean, the, all versions of that are great. Any, any version of that that’s even, you know, above and beyond.
[00:22:18] I, you know, a customer has 110% money back guarantee. Um, you know, stuff like that is powerful. And you do that and your com competitor doesn’t do that, you’re definitely gonna have an edge. Totally agree with
[00:22:31] MV: this one. I, I just wanna say a couple of things. I mean, first of all, had a couple of clients, again, they were, it’s not my usual bag, but a couple of Shopify business owners.
[00:22:39] And by talking to customers a lot, they actually gained huge insight, particularly in the early days. It’s really, really important to understand who’s buying and why, and. What the NIS are. And so you can talk about refining your systems and processes. Mm-hmm. You need to know what problems you’re solving for in the first place, and you don’t always know them unless somebody tells you.
[00:22:57] So that, that was very instinct. How much, uh, value comes out of good customer service, much more than just customer service. The other one, I would say, and this is more of a consumer than expert, um, creator of the sites. I would please with anyone not to have a NAF chat bot. That’s really annoying. We’ve all experienced it.
[00:23:13] Mm-hmm. Uh, sometimes the biggest companies in the world seem to have the worst customer service. Um, I, I just think that builds great answer to the opposite of goodwill. And, um, what you need is one of those things when in the early days, frankly, you need to be willing to be disturbed at dinner occasionally, and have a chat bott that pings up and you can actually answer it.
[00:23:28] In real time as a real human and then later on consider obviously getting somebody else to do that. But I think you have to be very, very careful if you do use automation that the experience is not terrible. Yeah. I’m sure that will be changing, by the way, with the way AI is changing right now in 12 months time from recording.
[00:23:43] That could be very different. Yeah. But the quality right out now, now out there is pretty low, I would
[00:23:48] JM: say. Yeah. Well, I mean, I think the question is what. What do you, what do you think your personal time and energy is worth? And if you’re a small time operator, kitchen table entrepreneur, and you really wanna make a commitment to your business, talk to your customers.
[00:24:02] Have an 800 number that rings on your phone differently than your normal phone line, you know? Um, and you’ll know when your customers are calling. Um, And if you’re a big deal, don’t hire somebody. Do this in your business. Yeah. Have, have a phone rep. It’s not that complicated if you don’t.
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