The E-commerce Leader

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[00:00:00] JM: You know, there’s, there is a lot of nuance there that you wanna think through. But there’s opportunity there as well to have a sales channel that bolsters your business.
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[00:01:08] MV: Anyway, so that’s another one. Now the next one Yeah. Really starts to, to tie into the, the way that this client of mine was thinking about, uh, yeah, it’s quite a different one.
[00:01:20] JM: Yeah. Number four is a business model you should consider bolting on, if you don’t have it yet, is direct to consumer sales. If you’re selling currently as, uh, you know, a B2B seller or as like a wholesale. Through wholesale accounts. Um, and the, the idea here is pretty straightforward. Um, you know, having direct to consumer sales gives you customer contact and data and, you know, insights in terms of how to build your business.
[00:01:49] These, to me, go to, to go together and so to the question that was prompted by your client or your, your mastermind member, if you don’t have direct to consumer sales, Um, and you just sell b2b, you should absolutely bolt it on. The next thing that number five here on our list is the reverse of this. You should set up wholesale or uh, B2B sales if you are selling direct to consumer.
[00:02:13] And so I’ll just commingle these ideas cuz they’re so obviously close together. The, the thinking here is, and this is an interesting example, we had a client who, um, was uh, was trying to sell in a specialty food category. So, Direct to consumer and was spending a ton of money to acquire customers, and the products were relatively low val, low value monetarily, you know, the, uh, low price points and he just couldn’t make it work financially, uh, on, on a Shopify site.
[00:02:42] And then, Um, a restaurateur contacted him and said, could you get me six pallets of this certain product, or whatever it was. I, I’m, I’m fuzzy on those exact details, but it was some crazy thing like that. And so, um, he said to the restaurateur, um, yeah, I actually, I could get you that. And, and, uh, then what happened to the client was he kind of realized he was trying to sell to the wrong people.
[00:03:06] He was trying to sell direct to consumer through a Shopify site. But because that’s what he was successful at on Amazon, and this is really important, like if you’ve got, if you just are an Amazon seller, just think this through with me right now. Let’s say you’re selling a box of spaghetti or a bottle of goo of whatever variety.
[00:03:25] It doesn’t matter what it is on Amazon. You’re thinking, I’m selling this to an individual and it’s being shipped to their house on Shopify. You can set things up so that you can sell a pallet of that stuff. To a, you know, school district or to a restaurant or to a franchise manager of food sourcing for 25, you know, uh, fast food places or whatever.
[00:03:52] You get my point. You can sell it b2b, it at scale in all kinds of creative ways, and, and, and you might not be able to make it work on your Shopify site direct to consumer in the way that you are doing it on Amazon. This is really important because if you just bring to Shopify what you have on Amazon and say, does this work?
[00:04:14] The answer might be no, but it, but you can easily twi tweak it so that maybe it could work if you just modify the model a bit and look for the business to business, uh, selling opportunity. And that creates a whole different set of site presentation strategies, marketing messages. Email strategies, like it really can change the game for you if you start to think through, wait, I can sell this stuff differently to a whole different strata of the industry and, um, and, and bolt that onto my business, and it’s still ultimately the same products, you know?
[00:04:52] Yeah. It’s a different marketplace.
[00:04:54] MV: So you, you solved the backend product. So product development, product quality, shipping, mm-hmm. Logistics. Mm-hmm. And now you’re plugging the new front end. It makes a lot of sense. I mean, for, for the right business. I just wanna point something quick out and then I’ve got a question for you on this is probably cuts to the chase of.
[00:05:10] What I was trying to, uh, get at with the client. So the first thing I wanna say is you can often do the same on Amazon. So, so the super lazy version is you give a discount for bulk sales. I did this a lot with products I sold that would be used by orchestras or choirs and, and made a lot of mass sales.
[00:05:22] Yeah. I mean, yeah, more by luck than judgment. I’d had the, in my instincts. Yeah. Somehow as a, a conductor, I was very geared to big music groups. I hadn’t even thought about that until I got people ordering 50, 60, a hundred units at a time and you could just do a discount for box sales and make sure you still got a profit at the end, but, That can work out very well in terms of increasing revenue.
[00:05:39] The other one is you can, and depending on your client, your account and how you’ve been offered this by Amazon often sell cartons directly. So you ship cartons into Amazon and then you can fulfill them directly from Amazon to business consumers as well. So that can be a, a lazy person’s way of doing it.
[00:05:57] Which isn’t to say you shouldn’t set your own site up as well. I mean, this is just point out that you can get started with that idea and even just test it. Mm-hmm. Very quickly imagine.
[00:06:06] JM: Sorry. I was gonna say, imagine the difference to your business value, though. On the one hand, if you sell through Amazon, and let’s say you have, let’s say you have 10,000 customers, most of the customers buy one bottle of your stuff, or one, you know, one, one unit.
[00:06:26] But let’s say they’re 10 customers who buy. 15,000 units or whatever, you know, like those, those bulk ones, those, those biggies, those those B2B buyers, you let those people run through your Amazon account and you are giving away to Amazon all of the business value of that B2B relationship. But if you can have it run through your Shopify, you could literally have.
[00:06:58] A first person real relationship with somebody who could transfer you a hundred thousand dollars, $200,000, a million dollars of sales, you know, volume over time. I mean, think about the difference between those two out outcomes. I mean, you know, because, because to be blunt, if you, let’s just say you sold $2 million on Amazon.
[00:07:24] You come to me and I wanna look at your business. I’m like, okay, I know what that is. It’s $2 million. But if you come to me and say, Hey, I’ve got a B2B business model and I sell on Amazon as well, and I’ve got some clients, five or six of them that have given me over $50,000 and are faithful repeat buyers, and they’re cooked in, I know ’em.
[00:07:42] I serve them well, and I can just transition them to you as the new buyer of this business. That is a completely and totally different value proposition. You know, because what you’re saying is, you know, that you’ve got these whales, I guess you could say, of big buying power that you know and serve and work with.
[00:08:03] Uh, that creates, in my mind, a very, very different business valuation If I was gonna be the buyer of your business.
[00:08:11] MV: To that point, that is one of the things I suppose that, that I was sort of trying to get my clients to think about, like try project forward three to five years, whatever his horizon is, and think about.
[00:08:19] Who’s gonna buy the business and why? And that’s a seriously great reason to have faith again, because I guess there’s, people are, as one of the business brokers, I’ll put it I think Chris fil from Global Wide Advisors to give them a shout out. He said, people are buying the future when they buy your business.
[00:08:33] And if you have a lot of repeatability in a close network and, and probably hopefully signed hint that, uh, you, that that is a value con. Directly sell onto to somebody else. Mm-hmm. And then it’s the recovering revenue thing. Revenue thing again. Yeah. So my, my question then was about the website itself. Um, so if you have a site which is geared to direct to consumer, which has sort of mm-hmm.
[00:08:54] Come from selling on Amazon, direct to consumer, next stage is d c site. Mm-hmm. Can you, and should you create then, um, business to business sale on the same site, given that you’ve got different. Drivers and different messaging needed. How, how would you deal with
[00:09:09] JM: [00:09:10] that? Yeah, it’s very straightforward. It’s simple.
[00:09:13] You literally just have on your footer or you know, on your website and your marketing, uh, a shout out to, um, you know, retailers or business owners that wanna buy in bulk. And you just have messaging. It says, if you’re a, you know, if you’re a business owner that wants to buy and bulk, please contact us here, text us, whatever.
[00:09:32] You just have a funneling mechanism. That funneling mechanism is very straightforward. You can have products obviously, that are not, uh, publicly visible per se, that uh, you know, you would just send them to with maybe different pricing. You can have sub, you can have wholesale pricing, uh, apps that give them fully cooked B2B type pricing with, uh, you know, quantity discounts.
[00:09:59] All of that’s available in the backend. So there’s a lot of functionality on Shopify for that type of scenario. It’s not complicated at all. But, and the simplest thing would just be to have the, uh, the relationship componentry added to your messaging. So, You know, you could, I mean, and it’d be so simple. I mean, you literally just say, Hey, you know, if you’re a B2B customer or wanna buy in bulk, please email us at this address, goes to your help or whatever.
[00:10:23] And if people order over a hundred units or a thousand units or whatever is log your logical thing, you just give them a coupon code. Like, Hey, you know, here’s our pricing break. Uh, here’s a coupon code. You know, it is that simple. Um, just to, you know, discount their orders for the appropriateness of the sale.
[00:10:41] Uh, scale of the sale scale. Yeah.
[00:10:43] MV: I like it. Yeah, this is great. I, I really like it because as a way of scaling, Revenue and it’s a mentality shift, I think, isn’t it like one? Mm-hmm. Customer times 10,000 units is 10,000 people. You’ve gotta chase down on the Amazon universe. Yeah. Or even worse than Shopify.
[00:10:58] As you say, the economics can break down quite quickly. Well,
[00:11:01] JM: let me, um, let me, yeah, please. Yeah. Let me jump in on one other component of this one because we talked about. Direct to consumer. We talked about, uh, b2b. So basically the bulk selling, but there’s another twist there, and that’s the wholesale level.
[00:11:15] So there’s really three things here. There’s, there’s three things. There’s direct to individual consumer sales. There’s, uh, bulk sales to, you know, people who would want those types of things. And then there are, uh, wholesale selling to other retailers. And that is a, a, a different animal altogether. And it is absolutely of interest for, um, you know, a, a business model that could be bolted on as well.
[00:11:39] So in its own right, there’s a lot of merit there. If your product is sellable, uh, by retailers or even other e-commerce operators, um, you know, setting up a wholesale system where they get, you know, keystone pricing or what, whatever the pricing structure is, um, you know, that you wanna set up for them.
[00:11:58] It’s clear, it’s logical. They have a way to purchase. And, you know, then that item can be, you know, sold on by them. That makes sense. If you have a brand, um, it doesn’t make sense if you’re a reseller of other people’s brands, you know, so if you’re the, the origin originator of the brand, then, you know, setting that type of system up makes a ton of sense.
[00:12:19] Um, but people argue against it as well. People say, no, I wanna be the sole destination location on the internet for this item. Uh, there is complication. You know, you have to think, think through, through like, uh, minimum advertised pricing across all of the sales locations and, you know, things that are, uh, challenging as it relates to issuing terms.
[00:12:38] And what if they start discounting? What if they go rogue on you? You know, there’s, there is a lot of nuance there that you wanna think through. But there’s opportunity there as well to have a sales channel that bolsters your business. And
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[00:13:40] MV: one of the things that I’ve seen, uh, with some of my clients in caution retails around that, is that people that started off in the B2B world and transitioned into direct to consumer, mostly by Amazon, although they may have their own sites, but it’s not normally amongst most of the people I work with.
[00:13:52] Not a big percentage of revenue, but, um, There can be big challenge con challenges there. If you need to discount in order to sell, particularly if you want to discount to sell more volume on Amazon and to be competitive in what is often a lower price environment, then you know your retailers are gonna hate that.
[00:14:07] So you need to, I think that’s one of those ones that I would really urge you to think through and talk through somebody who’s done it. Um, yeah. A mastermind’s a perfect place for that as I’ve got two, three people that own their own production facilities, which means that the economics work, that you can sell it at a substantial discount on a wholesale basis, still make money.
[00:14:23] But then you need to be super clear about, um, do you want to compete with yourself effectively? Right? And, um, sometimes it can be wise to have some product lines up for wholesale, some for dtc. I know some businesses I work with, With maybe mixed success. They have a, a brand that is specifically their own brand and that they sell d dc and then they have other people that private label stuff.
[00:14:43] It can get tricky quite quickly. It’s all, I would say, you know, there’s great opportunity and, and great wisdom is needed to think it’s really is all I would say. Yeah. So the last one, another interesting one, and very coming of age was the sixth business model for bolt on. Yeah, I would
[00:14:59] JM: say the sixth business model you can add is affiliate sales.
[00:15:05] And really there’s two here. I’ll add a seventh, which is influencer, uh, marketing. So that, so let’s talk about both. We might as well just make the, those distinguished. Um, The affiliate sales idea is very, very simple. What else does your customer typically buy in the process of using your product? And if you don’t sell it to them directly, is there somebody else that sells it to them that you can be an affiliate for?
[00:15:34] And the real heart and soul of this idea is just helping your customer achieve their. Project, process, you know, outcome, whatever it is they’re doing. The affiliate, um, opportunities are all over the internet. I mean, it’s just incredible how many things you can add as an affiliate. And if you can bolt some of them on wisely, then why wouldn’t you?
[00:15:58] And it just takes the creative conversations and interest and looking into it. Um, you know, one, one easy example. Is, uh, several of our, um, clients, um, over the years have sold in the pet space, you know, pet, pet items. And one of the things I always said to them, which no one’s ever taken me up on the offer to even inquire, was go find out if there’s a pet insurance company that you could promote their, their insurance product.
[00:16:30] And, um, it’s such a logical, simple bolted on extension because you know, the people who are buying your item have a pet, and especially if they’re buying high-end fancy stuff from a website, you know, they have a pet date. Are ridiculously connected to and are spending unreasonable amounts of money on. Um, and so, you know, pet insurance is sort of like one of those things that’s like, that’s who would buy pet insurance is somebody who has a pet that they’ve spent a lot of money on.
[00:17:02] Uh, that’s a brilliant
[00:17:02] MV: idea. I, I love this. I, I mean, it’s so sad that people don’t do these more radical things and that people get very, very stuck in their lane and it’s good to be, and this is what I, I was trying to refer to earlier. This is even a more clean example. If you think you’re not gonna be getting, making books or even commissioning people to buy books, which make books, it’s very different.
[00:17:20] I don’t, I’ve never made physical widgets, but I’ve had thousands of them, tens of thousands made for me in China. They’re different things. Yes, there’s an art to getting a product made. That’s right. But this is an even lazier, I mean like just sell somebody else’s expertise. Done. All you do is connect somebody else to your target market.
[00:17:38] Again, I can only give a non clean example of this, but I’ve done a lot of, I’ve got about a hundred affiliate deals now through the podcast. It’s a bit ridiculous, uh, but, uh, every so often, and it doesn’t work that consistently for me. But I’ve sold on something that I literally had them on a podcast once, and this is a little bit different.
[00:17:54] If you sell on Amazon, you’re not an influencer, but if you have an email list, you’re an influencer that it’s as simple as that. Right? Yeah. And I’ve made, I remember at one point I just got a, I looked in my PayPal account one month, so I made $5,000 from, from this one guy that I’d, I’d sent a few emails and had ’em on the podcast once.
[00:18:09] If you don’t have a podcast, but you have a channel for your, your, um, you know, YouTube channel, an email list, anything. Honestly, it was kind of shockingly easy, and that’s the best yet. [00:18:20] I’ve not had anyone quite as amazing as that, but it trips along. Mm-hmm. It’s just, um, it’s a no-brainer for me to at least explore it.
[00:18:26] And obviously you are also, as long as you’re tasteful about who you work with, caveat, you are serving your customers really, really well. Like, if you care about dog insurance and you have a dog and you’ve got them insured, right? Somebody really good and you had a friend who made a claim and they dealt with it well, you don’t have to go that deep.
[00:18:42] You’re really serving people. So Yeah, I agree with you. It’s kind of like, why aren’t people taking you up on this? Yeah. Uh, I don’t know. It’s a comfort zone thing maybe, but it’s, it’s a super smart idea. Can’t say enough about,
[00:18:52] JM: yeah. You mentioned the word aff, affiliate influencer. Yeah. So it, to me, these are tied together being an affiliate marketer and being an influencer because in.
[00:19:02] In a way it’s the same. You’re acting in the same way If you’re, you know, influencing people, if you have a big Instagram account or YouTube channel or something like that, um, you know, you, one of the ways you, you know, survive in that world is being an affiliate. But if you’re a business owner and you’ve got to your point, a list and a social following and, uh, you know, set of customers and there are products that are super aligned, With what your customers are trying to accomplish, then you can be a defacto influencer for those other products and use affiliate links.
[00:19:37] Now, to me, the interesting part of all of this is the math. You know, let’s say you’re grinding and out to make a million dollars in sales on a physical product, and let’s just say it’s ugly on the profit and loss statement, and you barely make any money, you know, for, for the, the. Annualized net profit.
[00:20:01] Now adding affiliate sales is zero cost of goods. It’s just literally a check someone sends to you for, uh, you know, promoting their product. It’s the same concept to me as sort of like the digital goods and sort of like the v i p membership. I mean, if, if you’re really struggling with profitability, And you’ve got a physical product business and you don’t think through affiliate marketing, v i p programs and digital goods, you’re not really interested in solving the problem, I guess is, maybe that’s the strongest way I can say it.
[00:20:36] Um, yeah, because if you’re trying to solve the problem by telling your manufacturer you need to save 3 cents on every unit. You’re being way too myopic and not even thinking about all of the trees in the forest. You’re focused on one little toothpick of, you know, a splinter of the process. Yeah. And you’re not, and you’re right.
[00:20:56] How else can I make money in this business? You know,
[00:20:59] MV: you’re so right. And this is the difference between the c e o or even a business, um, owner or investor mindset versus an operator. Somebody should, somebody. Should be worrying about 3 cents o off your per unit. Sure. If, if all five or 50 or whatever. But I would really argue that once you get to a certain size of business, um, it really shouldn’t be you if you’re the business owner operator, cuz as you say, you cannot micromanage your way out of a lack of profit.
[00:21:24] Yeah. And, and that’s such a trap. Such a trap. And to the point of affiliate marketing, I just wanna bang the drum for this very hard because, um, I wanna point out. If you can’t do digital goods yourself, if you don’t think you can do membership, if you don’t think you’re only good at producing eBooks if you don’t happen to own an insurance company, like who listening owns insurance company, probably one person I could think of because she was a guest on the podcast, maybe she listens to it.
[00:21:47] Hello, had had an there. But other than that, you know, you don’t have to create anything is not only is it a hundred percent profit, you don’t have to make a membership site. You don’t have to write an ebook, you don’t have to get insurance. You don’t have to create a sales page. Mean, it’s, it’s just insane how efficient it is when it works.
[00:22:06] And so I would just say it’s such a low risk idea as long as you, your caveat, get good. People don’t sell rubbish. And that’s the only caveat I would say.
[00:22:14] JM: Yeah, sure. Of course. Yeah. You, you, you can get mercenary. In your mindset and sell junk, and that’s just stupid, right? You wanna sell something that’s highly valuable for your customer.
[00:22:26] And a lot of these models, I just will say, at the 30,000 foot levels, to sort of zoom out and talk about integrating six business models, a lot of these, um, really tied to the concept of long-term customer value. And if you spend the money to acquire a customer to sell them one thing, one time, then you’ve done the most expensive part of the business, you know, customer lifecycle.
[00:22:59] And the question to follow on is how can you bring along other business models to extend and enhance the long-term customer value to your business? That you know, how much will they over time, uh, be worth to you? And all things being equal, the better those numbers, the more you can spend to acquire more and the more net profit you have and on and on and on.
[00:23:24] I mean, the, the business value of that idea just cascades throughout the whole business. The more people you can hire to serve customers on and on and on. So it’s really the thinking of what is it that’s possible as it relates to long-term customer value. So, How many different angles can you, uh, build into your business that make that, uh, really successful for you, but also do it in a way that’s really helpful and thoughtful and, uh, beneficial to your customers so it doesn’t feel like you’re hitting them up with a million offers all the time.
[00:23:58] It feels like you’ve created a walled garden ecosystem that they step into and are very, very helped by. Um, and I think that’s the mature way to look at it.
[00:24:08] MV: Fantastic. Yeah, that’s a beautiful way of, of pulling those threads together. Um, just the mechanics, could you just summarize the six business models we’ve put together or you’ve put together and, and the lenses we should look through?
[00:24:18] Cause I think those are both really helpful. Sure,
[00:24:21] JM: yeah. With the assumption that you’re selling a physical product, then additional business models include, uh, digital products, uh, v i p programs or memberships, uh, subscription. Recurring subscription models, uh, uh, direct to consumer sales if you’re currently selling B2B or, uh, B2B sales, if you’re selling direct to consumer, of course wholesale in there as well, uh, in both of those questions.
[00:24:45] Uh, and then the sixth way is affiliate sales and the, I guess we could say a bonus seventh way is influencer marketing, where you’re the influencer, uh, and. Those models bolted together should give you a lot of different ways in which to add profit to your business with all different associated cost of goods or delivery expenses, uh, and really gives you a huge opportunity to build a business that has both healthy top line sales and healthy bottom line net profits.
[00:25:20] MV: Yeah. Love it. This has been great, man. I really like it and I think, um, The beautiful thing is some of these are really easy wins. So I think, um, anyone listening, I just urge you to go back through the list and don’t forget to check out the blog post at the e-commerce leader.com. Pick one that feels easy to you.
[00:25:36] Everyone has different comfort zones and, and get cracking with it because this is proper CEO thinking. I would say proper e-commerce leader thinking to coin a phrase. Well, Jason, it’s been a pleasure as ever. Thank you so much for taking us through that. It’s been fantastic. Thanks, man. Anyone listening who hasn’t done so yet, please don’t forget, subscribe, join the Growing Throngs.
[00:25:54] We’re getting more subscribers every month on Spotify particularly, we’re taking up for, don’t forget Apple Podcasts or Google Podcasts available there as well. Thanks for listening to the eCommerce Leader, folks.
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