Archive for the ‘Outsourcing’ Category

Q4 2015 Review, Yearly Roundup, Vision for 2016

Posted on January 4th, 2016 in Amazon, Business Development, Cave Tools, Consulting, My Story, Outsourcing, Reflection, Self Improvement | No Comments »

3 Months! Once again it’s been way too long between blog posts. Normally when I go this long without writing, it’s because I’ve gotten way too caught up in the hustle bustle of business and life. However, this time I think it’s just because I have gotten lazy. All of my morning routines have completely broken down, I’m sleeping in most days until after 8am and I’m working significantly less hours than I used to. Part of this is due to me delegating my managerial responsibilities to my new manager so I need to find new things to work on. Most of it is definitely due to experiencing so much success over the holidays. Doing huge sales numbers each day is actually having an inverse effect on my work ethic because the sales are just coming in anyways so why wake up at 6am every day. Either way, I need a reset so I can get on top of my game. With this said, I am utterly amazed at how much progress I’ve actually made in this last quarter. It’s a constant reminder of how important this blog is and how short my memory can be if I don’t take the time to reflect on my accomplishments.

Breaking Up With Jarod

Just like the news, let’s get the bad shit out of the way first so we can end on some high notes. This is one section that I’m actually glad I didn’t write about while I was in the middle of it because I would have just dragged on for pages about all of the ridiculous details of what happened.

As you will recall in one of my previous posts, I decided that after ASM 5 I was going to slowly pull away from Jarod. Keep the relationship intact, but no longer work with him because of differences in core values. In September/October, ASM decided to launch again for the 6th time. After the ASM 5 shenanigans, Jarod and I had both decided that we were no longer going to promote to course anymore.

A few weeks before the course launched, Jarod reached out to me and mentioned that he was not going to publicly promote the course, but he had a few close friends and family that wanted to get in. He asked me if it was cool if he brought them in under our affiliate membership so they could access all of the trainings. I had built all of the training in our membership myself, but I also knew that I had no hand in curating these leads so I didn’t think a 50/50 split on the commission would be fair to Jarod. Instead, I offered to take only a 20% commission split for the privilege of them going through all of my training videos and guides. Jarod agreed with me that 20% was fair compensation and everything was good.

Everything was quite on the home front until the ASM pre-launch videos start. All of the sudden, I’m receiving emails from Jarod from ASM Elite promoting the course. He’s using the email list of a couple thousand people that we created together over the past few launches to promote the course to the public. This is way different than asking a few friends and family because now he is using a shared asset that we both built. I called him up and kindly explained that 20% on friends and family was cool, but if he was planning on a full public promotion using our list and the bonuses that I put together, then I would certainly want to split 50-50 on those new members.

Jarod’s response to me was that he talked things over with his wife and he thought giving me 20% was now too much and that he was going to promote the course using our bonus package. So to recap, Jarod now wanted to use the list we built together to drive traffic to the bonus package I built to sell the course and then dictate how much he wanted to pay me.

Without tooting my own horn too much, Jarod didn’t have the intellectual capacity or the business acumen to create his own trainings to match what I had built, but he needed that level of content to sell the course. As we went back and forth, it became clear that Jarod was making a move to steal my content and use it to sell the course without paying me for it.

I had backups of everything on my computer because I had created it all, so I went into the website and youtube accounts and deleted everything I had personally created. I left all of Jarod’s stuff alone, but made sure that there was no way he could swipe all of my content. I forget the exact time frame of events at this point, but we agreed at this point to split up and leave everything else intact. I was happy that my trainings couldn’t be swiped and for the sake of the members of our group we would keep everything else we co-created available for them.

Jarod planned on starting his own Facebook group and I made a post in our joint group that we would be shutting down on a set date in the future and that everything would be migrating over to Jarod’s new group. We agreed on this together and I fully endorsed everyone moving over to his new group. Everything settled down, but after about a week went by, Jarod must have reconsidered things and he decided to boot me from access to everything and he made a move to take over control of the main facebook group. Lucky for me, I was the one that originally created the facebook group, so I had trump power over him. After he booted me from everything else, I ended up kicking him out of the Facebook group. Even though he once again struck first after we came to an amicable solution, he now resorted to his all too familiar pattern of threatening legal action and trying to trap me in a libel scenario.

At this point I was extremely fed up with all of his bull shit. I normally have much more tact than this, but I decided to make this post in the Facebook group to let everyone know what had been going on:

I’ve removed Jarod from the group. We agreed to have a smooth transition, but then he went ahead and changed all the passwords on me.

There’s a reason why Shane stopped working with Jarod and there’s a reason why I have also stopped working with him.

For me, the decision actually came after the ASM5 launch. As you may remember, we ran into some affiliate policy violations during the ASM5 launch.
We didn’t intentionally break the rules, but it happened and for short periods of time our affiliate account was suspended. In business and in life bad things happen. It’s inevitable. Most rational people realize this. What truly matters at the end of the day is how you handle yourself in the face
of diversity.

Jarod took the short term view of making threats and trying to trap people in potential law suits while I tried my best to settle things like men and have real conversations with people to work things out. Unfortunately, since we were a team, my reputation suffered as a result of his actions. It took me
a while to rebuild my reputation, but I did.

I decided from then on that I wouldn’t be working with Jarod anymore because he didn’t share the same values as I do. We were still completely cool and  there were no burned bridges.

The reason we are in the situation we are in now is because Jarod decided he was going to promote ASM6, use all of the bonuses that I put together, and dictate to me what he was going to pay me.

The fact is, the listing optimization blueprint, the launch formula, outsourcing training, all the operating procedures, The 100K per month business infrastructure, costing spreadsheet, manufacturer batch analysis spreadsheet, product research training, the sales letter, our entire affiliate marketing strategy, and a bunch of other stuff I’m probably forgetting about, were all created by me.

Outside of the software and some very Google-able info about patents, almost the entire bonus package was the product of my mind.

I’m sure he has backups of most of it and will repackage it as his own. I can’t do anything about that and I’m ok with it because business grows and changes over time.
At the end of the day, he’s not capable of creating that level of new training on his own. He still has a full time job and his business is nowhere near as advanced as I’m sure he has led you to believe.

I don’t care about allegiances or any of that stuff. It can only benefit you to join his new group as well if that’s what you want to do. He’s much more hands on than I am anyways.

He wants to build a community that he can sell software services to in the future. I run a physical products business and don’t have any “plans” for what this group will “bring me” in the future. I enjoy all the posts in this group, sharing updates of my own, and watching you guys grow in your businesses.

So I’ve decided to keep this group open.

It’s a shame that things had to end this way between us. I really wish my original plan of slowly pulling away and keeping the relationship in tact would have worked out. Unfortunately even an amicable solution wasn’t in the cards for this one.

Let’s move on to some more rapid fire updates and big wins for the quarter

File Sharing Transferred Over To Sync.com

As our team has grown and we have added more processes in place, so has the amount of data storage we need. My free dropbox account was reaching maximum capacity, so I start researching all of the best enterprise level cloud file sharing solutions. I tested quite a few, but ended up going with Sync.com as our new solution.

Here are a couple of the main features that I really liked:

  • 500gb of storage
  • Synchronizes across all devices
  • Company is based in Canada so it is outside the reach of the NSA
  • HIPPA compliant data privacy and encryption
  • Access control and user levels for who gets to see what

Sync has been an absolutely phenomenal software so far and it was an easy transition for everyone on the team to make. With the extra space and extremely high level of encryption/security, I’ve been able to take the majority of my important data off my laptop and into the sync cloud.

My laptop was backed up by carbonite, but now I have redundancy between both carbonite and sync as well as the ability to access any important files from any computer in the world versus needing my specific laptop. To put things into perspective, we went from using 16.5gb on Dropbox to now using 205.2gb on sync.

Building Out The Foundation For Traffic Data Analytics Company Wide

That sub title is probably a little too flashy for describing data analytics, but essentially that’s what I’ve done.

My problem arose when tracking events across multiple platforms. It’s hard to link up traffic data when you go from an Ad to LeadPages, then Leadpages to Amazon or Email to Amazon and try to accurately attribute conversions and cost per acquisition data. Let alone when you add another wrinkle in there of different ad copy on different platforms, generating the initial traffic. It’s just a mess when you are comparing the analytics on multiple platforms and none of the data matches up.

So I signed up with a software called ClickMeter, that essentially allows you to create tracking links and attribute them to various campaigns. The cool part about these tracking links is that from just the link itself, you can inject retargeting, conversion codes, utm parameters, and a whole bunch of other really cool tricks that can keep all your data from each platform contained in one single analytics area.

So after setting up ClickMeter, I had to go and switch out all of the links everywhere so we could start accurately tracking everything. As of right now, we have 76 tracking links across 10 different campaigns and over the last 30 days they have been clicked on 4,340 times. I didn’t have time to properly manage all of our paid advertising campaigns, so outside of Amazon ppc all paid traffic is now paused. That means across our organic content we are generating 4,340 visitors per month. That’s pretty damn good.

To be clear, I have not yet built the automated reports that will break everything down for me and pull all the data together into a strategic spreadsheet that I can make decisions on. But at least the infrastructure is there so when I have the time to tackle this bear of a project, I can pull it all together.

Here are a list of the current campaigns we have in there:

  • Barbecue Recipe Book: Tracks all traffic specifically coming from our free pdf giveaway of the recipe book as well as our new hardcopy version. Info about the hard copy version is later in this post
  • Bonus Pages: How many people follow the links on the insert cards in our packaging to land on our bonus pages. Can compare this to orders per month per product to figure out the exact conversion rates of our insert cards
  • Email Funnels: All the analytics from the email funnels we have. I’ll go into our new email automations later. This data is going to be invaluable when I give context to what we are doing email wise now.
  • Advertising Channels: As discussed above, will pull the advertising statistics from FB, Pinterest, Youtube, Google Adwords, etc into one analytics dashboard so we can measure effectiveness
  • Iris Isaguirre: All the traffic generated from the 300+ Youtube Videos and overlaying ads we have. Iris has a personal set of links she uses to promote everything so I can track sales and traffic data directly attributable to her
  • Janna Estrada: Janna is our new social media manager. Again, she has her own set of tracking links so I can measure effectiveness of all organic social media traffic.
  • Pinterest: Measures all organic traffic coming into our funnels from Pinterest images we post
  • Review Clubs: We are building our own list of Reviewers by directing them over to us from AMZ Tracker. This is against their TOS obviously, but I have structured it in a way that we have plausible deniability if they catch us so we won’t be shut down. Building a list of $1 reviewers is a huge asset.
  • Vanity Funnel: All traffic from each stage in our vanity funnels. This will make more sense when I review our marketing strategy overview later in the post

As I said, right now we are just accumulating data in here. When I get the chance to tackle the spreadsheet that will crunch this data, I expect to be able to take one look and have the ability to make strategic decisions on every area of our marketing strategy in a few minutes each month.

Cost of Goods Sold Analytics

I mentioned in one of my previous posts about how I now have the ability to see analytics on all of my manufacturing data. This data however was isolated on its own tab in my financial spreadsheet, which meant that I always needed to manually update my COGs on my pricing tab to make sure it was up to date.

The reason it worked this way was because sometimes you may have inventory in stock from 2 different manufacturing batches and I needed to manually update so I could use the most accurate costs. For example, say I purchased 1,000 units at $5 apiece and then purchased 2,000 units at $4 each. My inventory in stock is 2,500 units, so until I sell 500 more units, I need to use the $5 figure in my calculations. Now, all I need to do is flip a switch to say which batch is the active number and it will automatically update over to my pricing models.

This switch removes the human error that occurs with manually updating everything and it makes a huge difference in the ease of calculating pricing strategies. Especially as I add more and more product lines to the mix, this spreadsheet update will give me the ability to quickly scale

Producing a Print Version of The Recipe Book

Over the past few years, I’ve looked into publishing the recipe book as a physical book multiple times. Each time I attempted to tackle the project, I backed down because reformatting the pdf version was such a pain in the ass to do.

Well, I finally took a couple days of dedicated work and made it happen. It took a bunch of time to retype and format everything, but we are now selling the recipe book in physical form as well as a pdf download. As you will see in the marketing strategy overview video, the recipe book is now the most crucial point that all of our marketing efforts revolve around because it funnels traffic into all of our product funnel (highly underutilized asset that will be maximized once I get a dedicated ppc person on board).

I looked at a bunch of books in my library when I was designing the cover graphics and decided that I needed to have testimonials on the back cover to provide credibility for the book. Instead of collecting testimonials from our customers, I decided it would be a cool idea to acknowledge some of the friends and family who have really supported me the most with Cave Tools over the years. On the back, I put testimonials I collected from my Aunt Eileen, Uncle Jack, Matt Budenstein, Aunt Peggy, Tina Ahn, Justin Lee, and Zach Hirsch. As soon as the book was finalized, I sent each of them a free copy of the book as a way of saying thank you for their support.

My favorite part of the entire recipe book publishing process was the idea I had for a dedication page. The way the book laid out on paper originally was that the table of contents was on the right hand side of the book. Usually you start the table of contents on the left side, so I needed one extra page before it so I could push it over to the left.

I started out writing a typical dedication along the lines of thanking my friends and family for all of their support. As I was writing it, it just sounded too canned and insincere. I purchased the rights to these recipes and formatted them in a nicely designed book. This wasn’t really something I poured my heart and soul in to create. So I deleted the entire dedication and decided to have fun with it.

This is what I came up with:

This Recipe Book is dedicated to every steak that’s ever been cooked well done. They didn’t deserve to go out that way. With the recipes in this book I entrust to you great power and great responsibility. May the memories of those poor steak souls live on and guide you towards that perfect medium rare every time you take over the grill. 

This dedication is in line with the whole “Medium Rare” nickname joke and we actually get emails all the time from people about how funny they thought the dedication was!

Building a New Training Resource Center

I’ve posted a lot about the power of my training resource center on this blog before. Up until now, I had always been using Igloo Software to run it on Hyacinth Connect. The only issue with Hyacinth Connect was that nobody but myself knew how to really modify and update procedures on there. As our team keeps growing and the number of processes and procedures keeps growing, it was apparent to me that we were outgrowing the capabilities of Igloo Software.

It took me about a full day to migrate everything over, but I ended up building an entirely new training resource center located at training.mycavetools.com. This new training area runs on WordPress, so every member of our team has the ability to update it without learning new coding skills or anything like that. I’m also running it on the WishList membership plugin, which means that I have full access control to each area of the site so nobody has access to every piece of the puzzle.

With the new wordpress layout, it’s also much more organized and easy to see which procedures are active and which ones are no longer being used in the current strategy.

I also built a team page so everybody can see the roles of each team member. We also centralized our human resources/on boarding procedures here so it is very easy for new team members to get acclimated to their position in the company.

training center

 

Developing a 60-90 Day Perpetual Autoresponder Sequence to Monetize Our List

Building an email list and then never emailing them is something that I would be willing to bet 90% of internet marketers are guilty of. The problem is constantly keeping up with new emails each week. There’s just too much will power involved to do it the right way and be consistent unless you have a dedicated email marketing person on your team.

The idea of building out an entire autoresponder sequence is daunting and in my mind, I thought it would take months to develop. So I just never developed anything. In late September, I decided to sit down and crank it out. To my surprise, it only took about 2 full days of dedicated work to build out.

Here’s how it works:

  1. People primarily enter our list in 1 of 4 ways: Website Purchase, Recipe Book Download, Vanity Funnel Opt In (Product Coupon), or VIP List Opt In
  2. They automatically get tagged so we know what products they have purchased and where the lead originated from
  3. The receive a couple days worth of emails that are relevant to what they signed up for. Ex: A few follow up emails about the product they purchased
  4. After finishing that autoresponder they are sent to our Offers Sequence, which is made up of Offer Packets
    1. Offer Packets: These are short email automation sequences that span about 1 week each. If we are trying to sell the kabob set for instance, the person will receive an initial email earlier in the week with “pre-content” to sell the kabob set. Pre Content is usually a youtube video from our channel that deals with the subject matter. In this case, it’s a purely informational email talking about how delicious kabobs are and an instructional video showing how to cook kabobs. Then, a few days later, they receive the “Sell” email which gives them the opportunity to purchase the kabob set at 20% by going through our Kabob Set Vanity Funnel.
    2. The Offer Packets include product offers and affiliate offers. Using this technique, we actually earned a commission when somebody purchased over $250 of Omaha Steaks through our Affiliate Link.
    3. Each time somebody goes through an Offer Packet, they are tagged so we know exactly what emails and offers they have received
  5. The Offer Sequence is a collection of all of the Offer Packets paired with if/else statements so nobody ever receives the same offers or emails twice. So if somebody came into the list by purchasing the kabob set, they would skip over that offer packet and only see the offer packets and pre content for our other products.
  6. The Offer Sequence currently goes for almost 90 days of 2 emails per week per person. Once somebody finishes the entire sequence, they are sent right back to the beginning. Since everything is tagged, they will skip over all of the old emails they already saw, unless we have added new products to the mix. This ensures that everyone on our email list will at some point be exposed to an offer for every single product line we own as long as they stay on the list.
  7. As mentioned in the Click Meter section above, every single link in this sequence is tracked. Once I build my click meter analytics spreadsheet, I’ll know exactly what offer packets convert the best and can logically position them in the Offer Sequence to make sure we maximize the lifetime value from every single person on our email list.

This entire strategy took only about 2 days to build and it is going to be an invaluable asset to the company that will automatically generate thousands of dollars extra per year and ensure that we are keeping in constant communication and top of mind awareness for all of our customers!

automations

General Marketing Strategy Overview

My core competency is on the marketing side of things, so I have a tendency of gravitating towards adding in new marketing strategies all of the time. As good as it is to have all of this marketing going on, the downside is that it adds complexity to the business. Every time we add new products, everything across the board needs to be updated so it all integrates together properly.

In order to continue scaling the company, I need to standardize and simplify the marketing so we can grow fast. Each time I add new marketing strategies, it creates confusion among the team because they are constantly learning new things. I need my team to all be on the same page so they can act as one cohesive unit. For this reason, I’ve decided that we have plenty of marketing strategies in place and it is a more valuable use of time to start maximizing the results of the current strategies instead of continually adding new layers of complexity.

Once that decision was made, it became essential for me to have a broad overview training that explained our marketing strategy in easy to understand terms. Here it is:

 

New Hires and Role Changes

Janna Estrada

Social Media has always been an area of the business we have been lacking in. Up until now, I could never justify having a social media person on the team. There was just no way that they would generate enough additional profit through social media to even pay for their own salary. With that said, we finally reached the point where it made sense to hire a dedicated social media manager, even if that means she is costing us money each month.

The reason for this is because we have such an outrageously ridiculous amount of content. Over 344 Youtube Videos, Almost 100 blog posts, over 185 review posts on independent blogs, Hundreds of custom product pictures from our customers. All of this content was basically just sitting there after creation without ever getting promoted.

I interviewed about 10 people for the position and Janna was the clear winner. She’s actually the most articulate and intelligent person I have ever hired out of the Philippines. Her core values were in line with what I was looking for and she is a total go getter. During the day she works for a music startup (Focusing on bringing Records back into style) in the Philippines and then she works for me at night.

As good as Janna is, I did make a few mistakes when hiring her. For starters, I was looking for someone in the $4-5 range per hour for salary. On the jobs website, her posted salary was within that range. After I told her she was hired, I sent her a message on Skype asking what her desired salary was. She responded that she wanted $15 per hour. I was incredibly busy, so without double checking her posted salary on the website, I just fired back and said that $15 was outside the range for this job and that I was looking for someone more in the $7-9 range.

Of course she accepted the $9 immediately as it was double what her requested salary was. After this all went down, I double checked my notes and couldn’t believe that I just hired her at twice the amount I originally intended to pay her. Writing this down is making me feel even dumber for messing up like this, but I guess I was just juggling too many things at once and she caught me in a moment of vulnerability.

Anyways, the next day I followed up with her and mentioned the price discrepancy. Her requested salary on the website I hired her from was in Monthly numbers, so she said she was confused and thought the amount was in weekly numbers, which is why she wanted such a high hourly rate. I’m a man of my word, so I told her I would still pay her $9 per hour since that’s what I agreed to. However, I made it clear that at $9 per hour she was going to be compared to her American counterparts and that we were going to set a very high bar for her to make her earn that salary.

Typically around $5 per hour is a very nice wage in the Philippines, so at $9 per hour on a part time job at nights, Janna is killing it right now.

Janna has been on board for almost 2 months now and she is doing an absolutely fantastic job managing our social media. To the point where I don’t think I could get an American to do this good of a job even at $30 per hour. She posts the perfect mix of funny stuff, articles, promotional stuff, etc.

I also went out and purchased a seasoned Reddit Account for her to use from some dude in Bangladesh. Last year during Christmas time, somebody posted a Cave Tools link on Reddit and it drove over 15,000 visitors to our website. The traffic potential from Reddit is enormous. The problem though is that Reddit users are crazy and will turn on you in a second if they think you are trying to promote your own stuff on the site.

The seasoned account we are using has been around for over 3 years and has a bunch of “Karma” on it. Karma is essentially like the internal grading system on Reddit to determine how authoritative you are.  By using a seasoned account, we are able to show a history of activity on Reddit of non promotional posts so whenever somebody checks us out we look like a regular user instead of a new account promoting the same company over and over again.

Purchasing and using a seasoned account can be tricky. To make it work, I purchased a dedicated IP address out of Seattle that is used every time we log into the account. That way when Janna logs in from the Philippines, it looks like she is logging in from the same computer in Seattle every time.

Within 48 hours of purchasing the seasoned account from the Bangladesh guy, the account we received was immediately banned from Reddit. They have advanced algorithms to detect these types of things and I’m pretty sure the only thing we messed up on was copy and pasting the username and password during the transfer instead of manually typing it in. That’s how sensitive the process is to get the account under our control. Luckily for me, the guy I purchased the account from replaced it with a new account for free. So far the new account is going well.

Each day Janna logs in to the account and posts random comments in various sub forums and shares links to funny stuff like Cat Pictures. This type of activity helps generate a lot of Karma for us and keeps the ratio of postings looking natural so when we do post our own stuff it looks like just another find on the internet.

Here’s the list of current tasks that Janna does on a daily and weekly basis:

Pinterest:

  • Pin Sources: Amazon Customer Pictures, Blogger Reviews, Articles around the Internet, Original Pictures in Social Media Dropbox folder
  • Pin all images from blogger reviews and optimize with CTA Links
  • Invite Bloggers to collaborate on boards
  • Set up alliance jobs for all blogger pins
  • Pin images from other websites to our general boards (Use AllTop to find articles)
  • Search by Hashtag and follow people who are posting
  • Invite new followers to become contributors to our general boards
  • RePin images from top trending hashtags and optimize description with keywords and CTA Links

Facebook:

  • Respond to any messages sent to us
  • Post in open communities using Cave Tools page as profile
  • Comment on and engage with anybody who took an action on one of our posts
  • Use facebook as Cave Tools and like the pages of each blogger. Use their email address or website name to find them
  • Post in the I Love Barbecue page to help share some of our content

Twitter:

  • Search based on hashtags and follow people
  • Retweet and like posts from the top hashtags
  • Research automation robot to assist with these tasks
  • Follow all new bloggers

Instagram:

Reddit:

  • We will purchase a seasoned account for you to use and assign a specific IP address to use each time you log in
  • Daily activity of 10 minutes per account of regular reddit voting and posting in sub forums
  • Never interact from one profile to another so they do not get linked in any way
  • Once per month per profile mix in one of our links to good content. Good content is engaging so we are talking about videos, blogger reviews (potentially), images (on our site or maybe pinterest), blog posts. Not using Reddit to send people into the product or recipe book funnels because that is obviously sales and the post will get deleted

 

  • Each Friday create the content calendar for what will be posted on each account and when for the next week. Use Hootsuite for facebook and twitter. Instagram and Pinterest can be done daily on the fly

 

Jessica Walker

I spoke in a recent blog post about how my friend Jess hired an Online Business Manager (OBM) to essentially be her COO. To continue growing at the rate I want to, I needed to have another thinker on my team that could keep the wheels on the train. So I followed Jess’s advice and went through Tina Forsyth’s OBM community to hire my own.

Hiring for this type of position was something I have never done before. Usually I build out the framework and training for the person and then it is very easy for them to follow my directions. For this position to work, the person needed to build their own job and have free rein to take work off my plate.

Before posting my job listing, I made sure to read through Cameron Herold’s book Double Double. He gave me a free copy at Camp Maverick and it was incredibly valuable because he covers a lot of information on hiring and provides tons of good interviewing questions.

I designed the first interview to be heavy on the values side of things. I knew that whoever I hired was going to have good prior experience and the aptitude to do the job, so I really wanted to make sure they would be a good fit personality wise with me.

I did 7 total first round interviews, each lasting about an hour long. I then chose 3 people to do a 2nd round interview with. The 2nd round interview was set up where I actually let them interview me. I gave them a full hour to ask me as many questions as they wanted about any area of the business and I screen shared to show them all of the different processes and infrastructure we had in place. This was essentially their chance to sell themselves to me and to see where they would jump in and provide value if hired.

After the 2nd round interview, each candidate then had to prepare a proposal and a blueprint for what they would do and where they would provide impact over the first 60 days of working together.

I had a really difficult decision to make because both Jess and Shannon were very good candidates. In my mind they were essentially a tie. Over the weekend before I made my decision I ended up going to Ontario to watch McGill compete in the lacrosse playoffs. I helped scout the opposing teams with Coach Steinwald and prepare the scouting reports that helped McGill win their 2nd national championship!

Instead of going home, I decided to shoot over to Montreal to hang out with Ben and catch up. Ben is killing it these days and recently bought his own studio where they are now producing high quality tv commercials. We dissected each other’s businesses from an outsider’s point of view and really learned a lot from each other.

Ben is currently going through Dan Sullivan’s Strategic Coach program, which goes into detail about analyzing the Kolbe A personality test. Ben analyzed the Kolbe tests for both Jess and Shannon for me and without a doubt said that Jess was going to be the better choice. Both Jess and Shannon had similar Kolbe scores, but he said that Shannon was going to slow me down because her quick start scores were not where he would want for this type of position. Tie broken.

So far Jess has been doing a pretty good job. I’ve limited her to a maximum of 20 hours per month, which means that she doesn’t have a lot of time to do labor type of tasks. At $60 per hour, I only want her being a manager/point person for my team. Each week she does all of the KPI scorecard grading and also holds all of the team meetings with everyone. That way I only need to have 1 meeting per week with her to make sure everything is running smoothly. She’s also been able to build and update our operating procedures which has been very helpful.

As good as she has been, we’re rounding out our 2nd month working together and I’m still not completely sold that she is the right person for the job. In the beginning, I tried to put her in charge of hiring a new PPC person to bring on. Instead of taking control, she created a bunch more work for me by sending me all of the resumes instead of actually interviewing and widdling down the candidate pool. In other areas as well, instead of taking control she was hesitant and ended up making much more work for me. I had a talk with her where I basically told her that she needed to start owning her job instead of asking for permission on everything.

That kind of stuff is expected for the first couple weeks when you are feeling each other out, so I don’t hold it against her. We still don’t have a PPC person on board, so I’m going to make that my project for January. I think my main problem why I’m not sold on Jess is because it’s hard for me to gauge her performance. In a labor position there are key metrics, but for management it’s not like I’m sitting in on the meetings to see how well she is doing.

This week she is taking off for Christmas vacation so I am going to hold all of the team meetings. This will be my first live conversation (outside of chatting in slack) with each of the team members in over a month so it will be interesting to catch up and see how they are doing.

In January I’m going to have a 2016 planning meeting with Jess and follow the structure provided in the book Traction. This meeting is going to set the stage for next year and I’m interested to see what she brings to the table now that she is fully acclimated into how the company runs. In addition to planning out the entire year, we are each going to set our Quarterly Rocks. These are the 3-4 big things that we want to accomplish in Q1.

My goal is to launch 20 products next year, which means I need to do at least 5 per quarter. I also want to hire and onboard a PPC person and build the systems for Jess to effectively manage them. This PPC person is going to play a vital role in achieving my year end goal of building our email subscriber list to over 10,000 people.

For Jess, I want her working primarily on managing the entire team, working with me to build out the SOPs for standardizing our launch procedure, and keeping up on integrating all of the new products into our current systems.

I’m also going to do a full review on her work over November and December and probably have another conversation with her about being more aggressive and assertive. My goal is to mold her into acting and thinking like Cave Tools is her company so when she makes decisions she makes them with conviction.

Marian Concepcion Alba

Marian has been doing an ok job, but she still is not performing at the level I want her to be at. I set her primary KPI at 15 blogger reviews posted per week and she has yet to hit that mark. Right now she is generating around 7 to 8 per week and has yet to receive a monthly bonus. I think 15 reviews might be a little too ambitious of a goal, so I’m going to bring the KPI down to 7 per week so it is more attainable for her.

In addition to blogger reviews, I’m going to add some more metrics for her to hit. One of my goals is to get 1 review posted to Amazon per day per product, so I built a new drip campaign tool that will allow her to give away 1 of every product every day in exchange for a review.

Each week after the meeting, myself or Jess updates the target keyword we are going after for each product and sets it to active or inactive depending on what products we are giving units away for. Marian checks Amazon for the current ranking of the product on that keyword and enters in the current selling price. The screen is frozen so as she scrolls left the other products appear and the proper list of coupon codes is automatically highlighted green so she knows what to grab.

Instead of just giving the product away to the reviewer, we make them do a search and buy first. That means that they actually go to Amazon and search for our main keyword and then buy the product for $1. The search and buy technique has a massive rankings increase because they have to scroll through the pages to find our product. That raises our relevancy for the target keyword. This is what the reviewer prompt looks like:

*Please disclose in your review that you received this product at a discounted price in exchange for an honest review

**Use Coupon Code Immediately upon receiving this email. This promotion ends in 48 hours and your code will become invalid

****Purchase Instructions****

Go to http://www.amazon.com and enter “Target Keyword” in the main search box at the top of the screen. Click Go

Scroll down the page until you see the product picture in the main search results. I just tried it and it showed up on PAGE 1 for me.

If you see the product on the right column of the screen or at the bottom where it says “Sponsored” please DO NOT click on it. That is an advertisement and it will cost us extra money.

Once you find the product you can add it to your cart and checkout like normal using the one time use coupon code provided above.

Please remember that this promotion ends in 48 hours, at which point the code will become invalid. Unfortunately we can not provide an extra coupon code after the promotion expires. If you find yourself in this situation, then don’t worry. You can join our giveaway promotion notifications list so you don’t miss out on the next opportunity http://cavetools.com/PromoReviews

She’s also going to be tapping into Youtube influencers using a service called Content Boulevard so we can start getting video content produced for each product on a regular basis.

Between these 3 jobs, I want her to start consistently hitting her goals so she can get regular bonuses each month and be accountable to our performance based system like everyone else.

Iris Isaguirre

Iris has been doing a fantastic job building out our Youtube channel using Creative Commons cooking videos. We’re now at over 340 videos on our channel, generating over 10,000 views per month, and using Call to Action ads to drive traffic away from Youtube into our product coupon funnels.

Now that we have such a large base of Youtube content, I’ve transitioned Iris over to blogging. Her new goal is to produce 1 blog post per day and embed one of the Youtube videos in each one so we can have all of that same content on our website as well.

I also have her posting weekly on Epicurious and Chowhound so we can start tapping into those audiences and driving traffic. So far this process hasn’t being going super well. I checked up on one of her posts and it had 8 comments on it, all of which were negative because she posted a picture of Pork to go with a Steak recipe. This was something Jess should have caught and fixed but didn’t.

Once she gets the hang of blogging, I plan on scraping a huge list of bbq and cooking websites for her to start reaching out to for guest blog posts. I’ll set her up with her own highrise account so she can manage all of the leads just like Marian does with the Product Review Bloggers.

Product Line Updates

Grill Set:

When we originally designed the Grill Sets, the packaging was over the 18inch mark on the longest side, which classified them as an oversized product. In July, I spoke with Tracy about resizing the tools and the package so we could make them 18 inches maximum and get the product classified as Standard Size units. We placed an order for 3,000 grill sets in July and when they arrived I found out that they were still the 18 inch + size as before. Apparently she spoke with the engineer and decided not to resize them and never told me. This mess up cost me over $11,000 dollar in profit because of the increased shipping fees associated with Oversized Products. This was a huge mess up! I had a conversation with her in July to discuss the importance of communication on these things and made sure that on our next order they absolutely needed to be resized.

In the end, all we had to do was make the spatula 0.5cm shorter and cut out a few cms in the packaging design. We ordered 5,000 grill sets for Christmas and successfully had the product line reclassified as Standard Size. On those 5,000 units we are now going to make an additional $18,750 in profit by making that one little change

Temp and Smoke Magnets:

On my last blog post I talked about the major quality issues we were having with our magnets delaminating and falling apart on people. I came down hard on my US magnet manufacturer and basically told Tina that she better get her shit together or she was done. I’m one of her biggest accounts so I scared the shit out of her. I’m happy to say that she rose to the occasion and the new magnets are fantastic. Instead of having the design laminated to the magnet itself, we now use the same material as car magnets and screen print the design directly onto the magnets so there is no way for it to fall apart.

The new magnets are larger than before and actually cheaper to manufacture as well. Instead of selling the magnets at break even, they are now generating a profit for me because of the reduced cost of goods sold.

Unfortunately we had to abandon the old magnet listings because they were decimated by negative 1 star reviews. However, we have very little competition in that space so the new listings were incredibly easy to rank and we are already building up tons of new 5 star reviews on the new designs.

New BBQ Brush:

This year our grill brush product line was cannibalized by newer better models. Demand dropped significantly and I’m sitting on over 2,000 units of very slow moving grill brushes. This summer we are going to take back control over the grill brush space with our new design.

I took the same new design that everybody else has and tweaked it by making the twisted wires (Not the Bristles) out of Stainless Steel instead of cast iron. The cast iron is cheaper, but it always ends up rusting if people leave it outside. With the new stainless steel wires, I’m going to have the only rust proof design on the market. The original grill brush model was also an oversized product line, so I made sure that this design was Standard Size like the rest of my stuff.

I tested my samples out by leaving one outside under the grill, one completely exposed outside, and one in a tub of water for a couple weeks. The outside models stood up to the weather and the one that sat in water had very minor rusting. For me that’s good enough to make the rust proof claim for standard use.

BBQ Tongs:

In December we launched the Spatula as an individual product line. Now we are also manufacturing the Tongs as individual units that will be available in February. We also did the same thing by selling our kabob skewers in individual 10 packs without the rack. Between the grill sets and the kabob sets, this is an awesome way to create new product lines from already developed products.

Having individual units also goes a long way in reducing the costs of replacement products. In the past if someone received a damaged grill set we would ship out an entire grill set to replace it for them. Now, we can figure out which tool had an issue and just ship that one out to them.

We’re also able to hit more price points with the individual units. If someone doesn’t want to fork out 30 bucks for the whole set, they can buy an individual unit for 11 or 12 bucks.

Grill Light:

When I was in Aruba in March, I talked to a fairly new seller that only sold Grill Lights. With that product alone he was generating over 100K per month during the summer! This summer, we’re going to have our own grill light and it’s the newest model on the market. Just like my grill brush and thermometer were cannibalized last summer, the grill light market is going to experience a similar shake up with these new models.

The grill light is one of those electronic products where it is very difficult to customize and everyone essentially sells the same item under their own brands. Sure, I’ll have the edge in the beginning, but eventually this market will devolve into a price war because there is no differentiation.

To preempt this from happening, I’m designing really high end gift box packaging. All the grill light manufactures sell the lights in a standard color cardboard box. Instead of going with the color box, we are using a Sky & Earth box design and we created a custom foam mold so it looks really classy when you open the box. Here’s an example of what the box will look like:

IMG_19122015_002209

Burger Press:

The burger press market is another market that is filled with patents. There are only a few designs of the standard burger press that can be freely manufactured and they are all inferior to the patented designs.

There’s a lot of money on the table in this market so I really wanted to get in there. I came across this very unique design one day while searching around on Amazon http://www.amazon.com/Shape-Store-Innovative-Freezer-Container/dp/B00XHI1AGA

Nobody sells anything similar to this product and because it’s made out of silicone there are no utility patents out there. I looked up the company and they launched using kickstarter to raise money and they have tons of press pickup because it is truly a unique product.

As a side note, all of their marketing says they source their silicone in the USA and manufacture in Canada. I found their exact manufacturer in China so they are blatantly lying and will most likely get caught and fined very soon for the deception.

Before I found this out, I actually tried sourcing manufacturing in the US. I contacted a bunch of silicone manufacturing plants across the US and was able to receive a quote from one that had the ability to make it for me. To make it in the US, I would have had to hire someone to create the CAD designs for me and then the mold would have cost me upwards of $40,000 with a unit cost in the $10-12 range. Absolutely fucking ridiculous! No wonder American manufacturing is dying.

By going through the manufacturer in China, I was able to get them to product my 3D CAD models and develop the mold for a grand total of $2,480. My unit cost is still in the $10-12 range so we are currently working on redesigning the CAD models to bring it down to a more reasonable price range.

Instead of doing 8 quarter pound burgers, our design is going to make 6 third pound square burgers. Yes, I’m going to be making square burgers like Wendys haha I think it will add another level of uniqueness to the product because you never see square burgers and there are no square burger products out there on the market.

When you make homemade burgers you are supposed to put a thumb print in the middle of the burger so it doesn’t puff up into a ball when you cook it. Our design is going to have little dimples already pre built into the mold to do this for you. This is going to be my most unique product yet and I think if we can get the pricing down to where it needs to be, it will be a major success!

When my manufacturer sent me the original 3D designs, the side of the tray said “Patent Pending.” I did a little research because I knew this wasn’t something I was planning on patenting and I found that if you haven’t yet filed a patent and you are using Patent Pending, then you can be fined up to $500 per unit. So if I made 2,000 units with Patent Pending on them, then my total liability would be up to $1 million dollars! The manufacturer told me that it was ok and all of her clients put Patent Pending on their products even if they haven’t filed for a patent. I told her she was bat shit crazy and all it takes is for one customer to get curious and start looking for my fake patent. We removed patent pending from the design…

 

Meat Claw Shipping Woes

Almost every blog post I have ever written since starting Cave Tools always involves some sort of fucked up shipping incident that costs me tons of money. Why would this post be any different?

Ever since my epic fail on the Meat Claws infomercial and appearance on The View, I’ve had about 15,000 Meat Claws stashed in my parent’s garage. This caused major cashflow problems throughout the year and severely limited my ability to develop new product lines. Sure it wasn’t costing me anything to keep the inventory at my parent’s house, but it was about $40,000 worth of inventory sitting there all year generating no money. My only hope was that I could somehow sell through them all at Christmas Time.

In November I started the process of shipping out all of the boxed so they could be available in the fulfillment centers for sale. Like usual, I shipped the boxes out of my local parcel place. After a couple trips of shipping out 30 to 40 boxes, the employees there started asking me all sorts of personal questions about my business. I’ve known these guys for years and we always joke around with each other and have a great relationship, so it wasn’t super out of the ordinary.

One day as I was leaving, I went to pay for printing about 25 shipping labels and they charged me about $1 per print compared to the usual 5 cents. When I questioned him on the pricing he replied with a sly remark that it’s a business expense I could write off and that of course I could afford it because my business was obviously doing so well. I was really pissed off at his asshole comments, but decided to pay anyways and then never print there again.

Later that week I printed my shipping labels at home and went down to ship out a couple thousand units. He saw that I printed my own labels and made a comment about me not printing there, to which I replied that at $1 per print I couldn’t afford it and the only reason I printed there in the first place was so I could toss them a couple extra bucks each time. I went about my business preparing the boxes and didn’t engage in any conversation with them at all.

As I was preparing the shipment, I overheard him talking to the woman employee in the back under his breath and he said something along the lines of “I’m sure he probably has insurance to cover his inventory anyways.”

I’ve never felt so uncomfortable before in my life when I left. To the point where I recorded an audio file on my phone on the drive home explaining the entire situation because I was certain they were going to steal all my inventory instead of shipping it out. The retail value of that single shipment was probably in the $30,000 range so I was terrified and almost went as far as driving directly to the police station so I could get something on record ahead of time if something happened.

In the end, I decided to calm down and just keep checking the tracking numbers to make sure it all shipped out the next day. It did and nothing ever happened, but I will never go back there again.

Instead of putting myself in that situation again, I ordered a bunch of packing slips from UPS and scheduled a pickup at my parent’s house for the remaining couple 100 boxes. The UPS guy that picked it up was actually my cousin Andy, so it was cool catching up with him and loading the truck together.

I definitely learned a bunch of lessons from this encounter that will stick with me forever. For starters, people treat you way differently when they know or think you have money. Even if you think they you have a good relationship with them, money changes perceptions pretty quickly. Especially when the people you are dealing with are probably earning minimum wage. I’ll also never again put that amount of inventory at risk without my oversight.

Missing the 7 Figure Mark Because of Shipping Screw Ups

I’m going to finish the year at around 930K in revenue between Medium Rare Industries and Hyacinth Marketing. About 870K being generated by MRI/Cave Tools and 55-60K by Hyacinth Marketing. This is a significant improvement over last year. I haven’t looked at all the final numbers yet to compare, but it will be about 400% growth over the past year. As awesome as that is, 7+ figures was easily within my grasp and I screwed it up because of shipping.

After experiencing shipping delays last year around Christmas time, I told myself that this year I would have everything in stock by October at the latest so there was plenty of room for error. In order to get everything in stock by October, I needed to place all of my inventory orders in August. However, I essentially took the entire month of August off this year while I was traveling around in Europe. All I needed to do was sit for about 4 hours to make my projections and place my orders and I would have easily made 7 figures. Instead, I procrastinated and never placed my inventory orders until about the 2nd week of September.

My plan was to launch the 10pc Skewers and Spatulas by the end of October or early November so they could be in full swing by the holiday rush. However, since I delayed on the manufacturing side of things, the skewers never launched until the 3rd week of November and the Spatulas never arrived until the 2nd week of December. The skewers ended up doing alright for the holidays, but the Spatulas missed the mark almost completely.

Normally when I bring inventory in, I send it to an intermediary warehouse in San Francisco and then ship to the fulfillment centers using Amazon’s UPS account. However, since I was late on placing my orders, I decided to ship everything direct from China to Amazon. This was the first time we ever did this before and we ran into a bunch of unforeseen obstacles.

When the skewers arrived, the trucker went to the designated fulfillment center and waited in line for 4 or 5 hours before they could get to the front of the line. When they got there, they were rejected because we never made an appointment. Apparently when you are shipping to the fulfillment centers using your own trucking instead of the Amazon UPS account, you need to make a delivery appointment. Amazon doesn’t mention this anywhere on the shipment creation screen, so there really was no way to plan for it.

The trucker was pissed because he was never able to drop the inventory off and he had to go back to wherever he was dispatched from. While this is going on, my freight forwarder was calling me on my cell phone trying to figure out how to set an appointment. I was somewhere up in the mountains on my way to Montreal so I had no service. I ended up pulling over to a gas station in the middle of some run down little mountain town so I could get wifi and figure everything out. I sat on my laptop in this little gas station convenience store for about an hour going back and forth and trying to get instructions from Amazon on how to set an appointment.

We finally figured it out, but the next available appointment date wasn’t for another 3 or 4 days. That means I had to pay for the 1st full day of the trucker and for a couple days worth of storage until they could drop the inventory off. When they got there on the appointment date, the trucker waited a full 8 hours in line and never made it to the front of the line. He had to turn around and go back again. Luckily, we were able to set another appointment for the next day. This time, the trucker made it to the front of the line, but because of the wait time he arrived about 2 hours after the allotted appointment time. Amazon has a rule that you have to deliver the goods within 1 hour of your appointment time, so they automatically canceled our appointment and once again the trucker was turned away.

At this point, I was furious because all the extra storage and trucking fees were murdering me on my margins. All the trucker needed to do was check in to let them know he was waiting in line and they wouldn’t have canceled the appointment. Finally, on the 4th attempt we were able to deliver the skewers. Even with all of those delays, we were still able to get them in by the 3rd week of November.

Those two were new products, so I wasn’t banking on the additional revenue from them putting me over the 7 figure mark. What really killed me was stocking out of the Smoker Boxes for about 3 weeks over the holidays. Even though I was late on ordering, I still would have had enough time to replenish the inventory if it wasn’t for my freight forwarder completely dropping the ball on me.

We had already gone through all of the issues with delivering the skewers, so we were prepared for the appointments to deliver the smoker boxes. I had been in constant communication with them about the importance of speedy delivery on the Smoker boxes because they were one of my best selling products and I was running low on inventory. Everything was set to be delivered on the Tuesday before Thanksgiving and if all went as planned, I never would have stocked out.

Each month, I get charged a little over a thousand dollars in interest on my loans I took to finance the year. Since I had a bunch of money in my account, I decided to pay off about $10,000 worth of the loans so I could reduce my interest payment. What I didn’t realize, was that my magnet manufacturer sat on their check for a few extra days instead of cashing it right away. Between the loan payment and them finally cashing their check, my account didn’t have enough money in it when my freight forwarder went to cash their check for the smoker box delivery and it bounced.

On Tuesday morning, I woke up to an email from them saying that the check bounced and they immediately canceled my delivery until the money was paid. Within an hour from them sending that email, I wired the money directly into their account. However the damage was done and they never made the delivery on Tuesday. Everybody was off over Thanksgiving and there were no open appointments the week after, so because of that one little mistake, we never got the smoker boxes back in stock until the 2nd or 3rd week of December. This mistake alone probably cost me about 80K in sales.

I was absolutely furious with my freight forwarder! I have been a customer of theirs for over a year and a half and have always paid on time. Yes, it was my fault that I didn’t have enough money in the account for them and the check bounced. But the least you can do is pick up the fucking phone and give me a call. Especially when it was clearly communicated how important this inventory was because we were in the busiest time of the year. They had their money within one hour of sending that email, but because they didn’t take 5 minutes to call me, they cost me about 80 thousand dollars. From a customer service standpoint, that’s absolutely pitiful.

Of course afterwards, they were apologetic and did their best to smooth things over. What else could they do? They totally fucked up. I’ve been through the gamut of shitty freight forwarders so I’m not going to fire them, but that large of a mistake is really difficult to swallow.

Christmas Season Sales Review and Projections mess up

I discussed my Q4 sales projections and methodology in my last blog post. Well…I was way off! Last year my sales inflection point was on October 31, so I expected it to be the same for this year. Instead, the sales inflection never came until around November 18th. That’s 18 extra days of regular sales numbers when I was expecting about 2x to 3x the demand. Those 18 days were incredibly stressful and full of doubt. I had ordered a shit ton of extra inventory and all I could think of was how I was going to get stuck with it all and have to pay a major tax bill that I probably couldn’t afford at the end of the year. I also had a garage full of around 15,000 meat claws that I was sure were never going to sell.

During this time period, I went back and inspected the logic behind my projections. The logic seemed sound at the time, but I realized that it was all based on relative increases in demand instead of fixed increases. For example, I expected grill brush sales to at least double because they doubled the previous year. The problem with that logic is that my average daily sales this year on that product line were higher than the previous year. I don’t remember the exact numbers, but if I went from 10 a day to 20 a day last year, then instead of going from 15 a day to 30 a day this year, I should have projected to go from 15 a day to around 20 per day.

Using fixed numbers would have given me a much more accurate projection of demand than the relative increase. When multiplied across 11 different product lines, the margin of error on my projections was huge. According to my projections, the absolute lowest revenue I should have done was $500,000 between November and December, but I was expecting to realistically do around $600,000 or $700,000.

Next year, I’ll be sure to use a more conservative estimation process by going with fixed demand numbers. Of course, we still did extremely well over the holidays, so I can’t be too upset. My biggest day came on November 26 when we ran 2 lightning deals and did $26,502.11 in one day!

Lightning deals are invitation only by Amazon where they feature your products on the first page of Amazon at a significant discount. I submitted applications for all of my products, but only the Grill Brush and the Grill Sets were included. On November 26, we sold 719 grill brushes at $11.99 and 322 Grill Sets which accounted for about $22,000 of the sales that day.

Selling 719 grill brushes in one day boosted my Best Sellers Ranking up to number 6 in all of PAtio Lawn and Garden!

After Lightning Deal - Grill Brush

Cyber Monday was just a few days later and gave us an additional $16,542.89 in sales to really kick off the holiday season. After Cyber Monday, I really saw our sales skyrocket on a day to day basis and as we got closer to Christmas we strung together multiple 10K plus days and then even a 3 or 4 day period where we were consistently doing over 15K per day. I took screen shots along the way to show the ridiculous progression. I was literally checking my cell phone every hour of the day during the holidays just watching the sales come in.

December 2:

December 10

December 14

December 15

December 16

December 18

December 23

These numbers were all fueled primarily by the fact that the Meat Claws ended up being ranked in the #3 and #4 position for “Gifts for Dad” on Amazon through the month of December. I don’t track the rankings for all the other similar variations like “Gifts for my uncle” or “Gifts for Brother,” but we were up there on the first page for almost all of those as well!

I think the Meat Claws lend themselves as really good gift ideas, but I also promo’d out about 100 units to target “Gifts for Dad” and I jacked up my advertising bids to help them reach those rankings. At one point we were selling over 700 meat claws per day and I had to jack the price up to lower the demand. I went from being terrified that I would even make a dent in my inventory in November, to being afraid of stocking out of the Meat Claws in December! By the end of the year, I was selling the Meat Claws for $19.99 while my competitors were all fighting over sales of essentially the same product at $9.99.

Currently, I’m left with about 550 units to carry me through January and February until my next batch of 10,000 units comes in to cover the summer.

Between November and December this year, we did $426,323.66 in sales across 28,088 units. November and December accounted for about 49% of our yearly total, which came out to be 56,604 units for $871,497.44. If it wasn’t for the shipping delays, I totally could have knocked off the 7 figure mark, but again, with numbers like these there is no room for me to complain. We killed it this year! Last year we did 11,157 units for a total of $203,329.62 in sales. That’s 429% growth in one year!

With the plan I have in place for next year, I’m hoping to hit over 600% growth in 2016. Yes, that’s about $6 million in sales! I’ll talk more on that in a bit, but for now, let’s look at my year over year growth since starting out on my own.

2011 – $1,000: I picked up the Millevoi Bros contract in October and was still working for Simplex Grinnel

2012 – $20,935: I partnered with Ben in Montreal starting in May, but September was our last month working together so the end of the year had no substantial income

2013 – $89,003.89: Living at home and seriously struggling to get the marketing company back on it’s feet. Almost quit and got a job because the majority of this income came towards the end of the year. The beginning of the year was brutal partnering with Wayne trying to get the National Alliance for Student debt Awareness off the ground. Towards the end of the year I started Cave Tools and we did $51,949.65 in sales from May to December with just the grill brush.

2014 – $263,001: First summer where I really put my full effort into Cave Tools. Hyacinth also generated about 60K. With 263K in sales, I still only ended up with a profit of $9,822 that year because I was self funding and everything was getting reinvested into Cave Tools.

2015 – $900,000+: I don’t have my final year end numbers yet

Looking at the numbers this way really puts things into perspective. It wasn’t until mid way 2015 that I really got my feet under myself and could start taking a regular salary. It took me 3 years of serious struggles to lay the groundwork for our success this year. I can remember so many times when I was at the absolute breaking point and ready to throw in the towel, but there always seemed to be one more opportunity on the horizon that if I could just hit, I would be able to sustain myself.

Taking Over Exclusive Amazon Sales Privileges for Amara Baby Food

Bobby’s friend Jess started a company called Amara Baby Food a few years ago after winning a Start Up Chile contest. They have an strong Angel backer and have been doing pretty well on the retail side of things by getting into Whole Food and a bunch of other super markets in the US.

Jess reached out to me for some help in September because they weren’t making any sales online. I didn’t have the time to help her out, so I put together a couple of listing optimization videos for her so she could manage Amazon herself and start making sales. I had already done an hour long consulting call with her the previous year, so I figured that between that call and the new trainings, she could handle it.

Even after all of the free training I gave her, she still wasn’t making sales. The online world was completely new for her, so she didn’t have the ability to really implement things the way they needed to be. In November, Jess came to Philly to have a few meetings with VCs so she could raise more money. We went out to lunch together and she explained to me that even though they were doing well on the retail side, cashflow was extremely tight. It takes a long time to turn inventory in retail and if they didn’t raise more money by the end of the year, they were probably going to go under.

I was in the middle of preparing for my Q4 so I didn’t have any available time to help her out. I tried pushing her off until January, but I took a step back and realized that I had the opportunity to help save her business. If I didn’t do something quick to help her out, her business was going under. As a friend, I would feel horrible if her business failed and instead of helping her out, I spent my weekends drinking in the bar with friends.

I know It’s not my responsibility to help everyone and I definitely need my down time so I can rejuvenate, but if there was a way to make it work I at least wanted to give it a shot. I consulted with one of my Amazon Masterminds and I studied some old material I had from Dan Collins, who primarily does Amazon Consulting for other businesses instead of his own brand.

About a week or two after I met with Jess, I presented a solution to her. The plan was that I would get an exclusive for all Amara sales on Amazon in exchange for 25% of her net payouts. She would be responsible for all financial and inventory matters and all I needed to do was make her products sell.

My presentation was definitely met with resistance because the typical exclusive deal in retail was usually around 5% and that’s for a major brand like Whole Foods. She tried to negotiate, but I stood my ground. Anything less than 25% was not worth it for me because I would be working for cash instead of building my own asset and I used the exact same contract that Dan uses for the 6 or 7 brands he manages, so I knew that was the going rate for this type of work.

There was also a line in the contract that states that if her company is sold, my contract must remain intact in its entirety unless the acquiring company wants to buy me out of the contract. Their goal is to sell to a big company in the next few years, so they didn’t want to be locked into anything that would hurt their chances of selling. I understood where she was coming from, but also explained that if I get her Amazon account up to say 20 or $30,000 per month in sales, then I am building the asset for her that will be largely responsible for them hitting the numbers they need to hit to sell the company.

We each went back and forth and I made some concessions, such as having a trial period where they can cancel the contract if I don’t hit certain numbers in the first few months. We are now set to fully launch tomorrow, January 4th and I’m really looking forward to seeing what I can do for her brand.

To me, this is a win-win situation. They will go from $0 in sales each month to most likely around $10,000 per month within the first few months and continue to grow as I work my magic. For me, the only expense is going to be my time. I will have to front load a lot of time in the beginning, but once they are up and running, my team should be able to handle the majority of the work. If I can get them up to around $10,000 in pay out each month, that’s an extra $2,500 in profit for me every month. Hyacinth Marketing currently does maybe $1,000 in profit per month across multiple clients (I fired a bunch of clients so I could focus on Cave Tools this year), so this one client will make a huge difference for me. At the end of the day, it’s also going to feel great to help them out with their cashflow problems so they can stabilize the business and continue growing their retail side.

Landing Interviews and PR

The other day my buddy Perry reached out to me because they are launching a podcast called www.cashflowstartup.com and he wanted to talk about my success in ecommerce. In the entrepreneurial world there are typically 2 main types of businesses. Venture backed business are the most well known kinds of businesses where you raise a bunch of capital and try to launch something that is disruptive and has a high chance for acquisition. These types of businesses are normally all or nothing. You either hit big or you fail. The other type of business is a cashflow business where you usually bootstrap it and build a company that generates cash and helps you achieve a certain lifestyle. Cave Tools definitely falls under the cash flow category.

In my opinion, most new entrepreneurs should start out with a cash flow business before going the venture backed route because it helps you learn the ropes of business and also helps you achieve a certain level of financial security where you can target a disruptive business idea without worrying about how to pay the bills. I’m actually very amazed that nobody owned the cashflowstartup domain already because I’m sure it gets a ton of organic searches.

The interview went very well and we discussed a lot of the lessons I have learned and advice I would give to new entrepreneurs who are just starting out. Right now they are building up their interviews, so it hasn’t gone public yet, but I expect it to be live in the next few months.

In November somebody also reached out to me from the www.profitwithpassionsummit.com. I was surprised from this phone call because the entire summit is focused on Christian Entrepreneurs and I am not religious at all. Somebody apparently recommended that they interview me for the virtual summit.

I explained to the guy that I wanted to be very clear that I was raised Catholic, but no longer consider myself a Catholic or Christian. I told him that I do however have very strong core values that closely align with Christian values. My answer was either exactly what they were looking for or they were desperate to fill up the speaking spots. Either way, I was in.

The sent me over some sample questions before the interview so I could get an idea of what we would be talking about. It was kind of funny because all the questions were phrased like “As a Christian Entrepreneur…” to basically try to get me to say I was a Christian. I have no intentions of pretending to be somebody I’m not and I clearly told them multiple times that I was not a Christian, so I just ignored the Christian part and responded “As an Entrepreneur…”

The Summit goes live on January 29 to 31 and they have an entire marketing team promoting it, so I’m looking forward to seeing what type of exposure I will get.

Consulting on how to Outsource Properly

Lately a lot of my friends in Maverick Next and Sovereign Academy have been reaching out to me for help on how to outsource properly. I always love helping out my fellow entrepreneurs and I’m flattered that a lot of people view me as an expert in this area. It reminds me how much I learned when partnering with Ben in Montreal and how much I’ve built on that foundation in the last few years. Especially in this past year, my approach to outsourcing has evolved dramatically.

I still have all of my Outsourcing material I put together for ASM Elite, which goes into granular detail about how I hire and manage my team members. In the last 2 months, I’ve sent these videos to my friend Ben to help him with his info marketing business and my friend Isaac to help him with his Amazon business. The videos are great because I can just send it over and then have a quick follow up call to go over any questions they may have. I also did a hour long consulting call with my friend Nesh in Australia to help him integrate some VA’s into his business which is a meal service for people on the Paleo diet.

Final Year End Review

2015 was easily the most successful, fulfilling, adventurous, and fun year of my life so far. In the beginning of the year I was still living at home. My business was growing, but financially I was struggling to make ends meet. I remember telling myself in the beginning of the year that this had to be my year. After living at home for almost 3 years since returning from Montreal, there was no way I was going to continue being a dependent “Struggling Entrepreneur” by the time I turned 26 in October.

My first big decision was to leverage debt to grow the company. Taking on almost $100,000 in debt from the bank was one of the scariest decisions I ever made. That decision was a major game changer for me and set the stage for the success that followed throughout the rest of year.

In February I attended the ASM conference in Vegas. I had recently made about $15,000 in profit from the affiliate launch and planned on using that money to sustain myself so I could finally move out on my own. However, at the event I was offered the opportunity to join a high level Amazon mastermind in Aruba that cost $15,000. Instead of taking the money and moving out, I decided to invest it in myself by going to the mastermind.

That single decision resulted in:

  • Me getting accepted into Maverick Next and building a ton of new relationships with extremely motivated entrepreneurs
  • Getting the chance to meet Ramit Sethi and get his advice on whether or not I should start a new brand in Europe or not
  • Going to Camp Maverick and hanging out with tons of 7 and 8 figure business owners
  • The inspiration for my KPI scorecard system
  • My entire youtube marketing strategy
  • In depth analysis and understanding of my personality type as it relates to business
  • My weekly Amazon mastermind group which keeps me on top of everything going on in the industry
  • My ecommerce mastermind group
  • My scaling to 7 figures mastermind group

 

I took a huge risk by allocating about $40,000 to the meat claws infomercial and it failed miserably. I learned a ton of lessons from that failure and was able to successfully use the other $60,000 or so dollars to launch 8 new product lines throughout the rest of the year. I also built tons of new scalable processes into my business and hired 4 new team members in Marian, Iris, Janna, and Jess.

Instead of becoming tight with money after the $15,000 mastermind, I decided to double down and invest in myself as much as possible this year between masterminds, courses, and voraciously reading new business books. I’m not sure what the exact dollar amount is, but I estimate that I spent close to $25,000 this year on self-improvement. The value I gained from this investment is incomprehensible when you consider that the same dollar amount could barely afford me 1 year of college tuition.

At the same time as I was quadrupling my business, I was also making a point to travel more than I ever have in my life. This year I went to Las Vegas twice (ASM event, Fantasy Draft with College Friends), Chicago (National Housewares Tradeshow), Aruba, Ireland, France, Lithuania (Sovereign Man), Latvia, Estonia, Sweden, and Connecticut (Camp Maverick).

While traveling, I also came to the realization that I finally achieved the geographic and financial independence I have been working towards since starting out on my own. Of course I’m not truly financially independent, but I have more than enough to live the lifestyle I want to live in 2016. To me that’s freedom and it feels incredibly liberating.

Setting my Sights on 2016

This year was an amazing year, but I’m determined to make 2016 even better.

Personal Goals:

  • Move Abroad: I leave tomorrow for a 10 day “Scouting” trip of Panama and might jump over to Medellin in Columbia for a few days as well. Assuming I like Panama, I intend to make it my home base for the next year
  • Become Fluent in a new language: I’m going to apply the same techniques I used to become conversationally proficient in French on Spanish. I’ll also most likely take Spanish classes so I can become completely fluent and work on my accent.
  • Live Without a TV: I really enjoyed not having a television when I lived in Montreal. It forces you to read and get out more. I’ve watched entirely too much TV over the last 3 months so I intend to cut the habit by purposely not having a TV in my new apartment
  • Travel Extensively: Exploring new countries has always been one of my passions. Next year, I intend to hit most of South America and hopefully make a trip to Hong Kong to visit my brother.
  • Meditation: I worked meditation into my daily ritual for a good 3 or 4 months this year before I broke the habit. My meditation practice worked absolute wonders on my mental health and business growth this year. Next year I will make sure I stick with it and meditate daily
  • Body Sculpting: I haven’t been to a gym in well over a year. I do pushups and sit ups daily to keep in shape, but next year will be different. After I move I will make going to the gym a priority and focus on building muscle mass instead of just staying in shape
  • Pick Up a New Hobby: Outside of my lacrosse team, I never truly got involved in the Philadelphia community. I was too busy with my business and probably a little too lazy as well to get my ass off the couch on week nights. I’ll figure out what my hobby is after I move, but right now I am considering at least one of the following: learning salsa, scuba diving, kite surfing, surfing, and possibly bungee jumping in the various destinations I travel to.

Business Goals:

  • This year we launched 8 new products, 2 of which came in December so they don’t really count. Next year my goal is to launch at least 20 new products. If we could quadruple with 6 new products, think of what 20 new products can do.
  • Scale my business from 900K to 5 or 6 million in revenue so by the end of the year I am ready or close to being ready to put Cave Tools up for sale. 5 or 6 million is largely dependent on how well the new products do and how quickly I can get them out. At the very least, I expect to do $3 million.
  • Increase our email list from about 2,000 subscribers to over 10,000 subscribers
  • Maintain a 40-50 hour work schedule with minimal work on weekends
  • Learn as much as I can about investing and start getting skin in the game

4th Quarter Madness – Michael O’Donnell

Posted on December 22nd, 2014 in Amazon, Banking, Business Development, Cave Tools, Coaching, Goal Setting, Management, Outsourcing, Sales, Shipping, Training | No Comments »

4th Quarter Madness – Michael O’Donnell

I just outlined the topics for this blog post and holy shit a lot has happened since my last post on November 2. Last year I didn’t get to fully experience what a Q4 was for ecommerce because I only had a grill brush and our grill set had just recently launched and had no traction whatsoever. The last month and a half has been absolutely crazy for the Cave Tools business and just for life in general.

The craziness is what I love about being an Entrepreneur though. Whenever you ask somebody “What’s New?” you normally get the standard response of “Same old, same old.” The fact is, when you have a regular job, you pretty much repeat the same things every day and nothing ever changes. I on the other hand don’t know where to start half the time because once I get talking, I could go on for hours. This blog post only covers the last month and a half, but it might be my longest blog post ever.

Books I’m Reading

Before getting into the meat of things, I want to talk about the books I have been reading. I really feel like the books I’m currently reading have a major impact on my thought processes and how that manifests into results for my business.

Recently, I finished the book Cashvertising by Drew Eric Whitman. This book was recommended to me by my good friend Clayton Bradshaw and his description was that the book was his “Bible” when it comes to advertising. I can honestly say this was one of the best marketing books I ever read. It reminded me a lot of Influence by Robert Cialdini, but thinner, more current, and much more direct.

This book has done wonders for me when it comes to writing ad copy and positioning my products and brand. Drew is from the Philadelphia area as well which is pretty cool because he references things in the book that I can relate to. He also used a local ad agency as one of his examples. I had the opportunity to meet the owner of this company last year when we brought him in to speak to the MDM group.

I knew right away that he was legit and I spent a ton of time talking to him and asking about his influencers. He was a big Glazer Kennedy (GKIC) guy back in the day and I could tell when I read through all of his materials. To see this guy used as an example in “The Bible” on advertising about a year later was really awesome.

Currently, I’m about 75% of the way through “Introducing NLP,” a book that was recommended to me by hypnotist and master internet marketing mentor from Sovereign Man in Lithuania, Cliff Mee. I rarely quit on a book once I get started on it. I like to power through even if it’s not a book I am enjoying. The first 30 or so pages of this book were very dry when they were discussing the Neuro side of Neuro Linguistic Programming. However, I powered through that part and the rest of the book has been fantastic. I’m loving the linguistics side of thing and how they break down true meanings behind words and how people say them.

I have no intentions of putting in the time and effort to become an NLP master right now, but the book has been incredibly insightful. From a psychology standpoint, it’s been a wonderful book.

The next book up on my list is Spin Selling by Neil Rackham. I learned a ton from J Massey in Lithuania and his system for sales was very impressive. This book apparently provides the core foundation on how he structures all of his sales calls so I’m really looking forward to it.

After Spin Selling, I have “The Moral Case For Fossil Fuels” written by Alex Epstein. He was a speaker I helped bring in from the Ayn Rand center back was I was up at Penn State. We really hit it off and I’ve done a below average job of keeping in touch with him since. We exchange emails maybe once per year. Anyways, he has been doing an excellent job building the Center for Industrial Progress and is really starting to make a name for himself so I’m looking forward to reading his book. I also have “Confessions of an Economic Hitman” and “Fluent Forever: How to Learn Any Language and Never Forget It” coming up in my queue. Very excited for both of these books as well.

Cave Tools Featured on The View?

Shortly after I posted my 3 month follow-up blog post on November 2, I received an email from an Advertising Agency that works with Television stations. Normally when I receive these types of emails they are spammed out, but they were claiming to be able to get me on some big name TV shows so I responded to see what was up. Before she could disclose any information to me, I had to sign an NDA.

I did a little research on the company and they looked legit. The NDA wasn’t crazy, just pretty much saying I can’t disclose who they were because they were a behind the scenes agency and they don’t want random people contacting them. They prefer to reach out to brands that they have already researched. I returned the signed NDA and then a couple days later we jumped on a phone call.

She didn’t really give me too much information at all. It was more of an on the spot interview about my company, our brand values, what separates us, how much inventory we hold in stock, etc. For not really knowing what to expect on the phone call, I thought I did a really good job. She loved the meat claws in particular, but because they only sell for around $12-13 she said she would want to bundle the claws with the digital thermometer and market them on TV shows geared towards women and moms.

Before she could discuss any further with me, I had to sign more documents. They sent me a blank IRS W9 form that I had to fill out and a 9 page contract with crazy regulations in it. I read through the entire contract a few times and wrote down all of my notes. I also sent the contract to my dad and asked him to do the same. Later that night we compared our notes so we could be absolutely certain of every term in the contract. Basically the contract amounted to if anything got messed up in any way, they would take my first born child haha

Some of the terms in the contract included:

  • They determine the price they sell my products for on the TV show (Basically would be doing a flash sale similar to QVC but on different networks).
  • They won’t pay me until after they have all my inventory and the flash sale is over
  • They can return products with no penalty or charges at my expense
  • I can’t display any logos or anything showing that Cave Tools appeared on certain TV shows (Basically they own all IP related to the promotion)
  • If there are any delays in shipping, I get charged 3% of the total purchase per day late (this was huge considering I needed to front everything and not get paid until the end). In addition, I would get charged a $10 per unit fee that was not delivered on time. When you’re talking 4,000 products, I consider that taking my first born child and destroying my company
  • I needed to up my business liability insurance from $1 million to $2 million dollars. This sounds like a lot, but it would only have cost me about another $200 to up the insurance.
  • When we shipped them the products there were lots of specifications as to what needed to be shown on the outside of each carton. Missing 1 single element would result in multiple other penalties. FBA warehouses would not be able to do this for me, so I would need to place a certain amount of inventory in a storage facility and have them custom prepare my products for shipment to the Warehouses of this Ad Agency.

After reading through all the regulations and with the understanding they would be purchasing 2,000 units of thermometers and 2,000 units of meat claws, we decided we would do it. My only concern was that I wasn’t going to have enough inventory on the back end to support all of the extra promotion and sales.

I returned the signed documents and was asked to provide my Best Price that I would sell to them for. With wholesale, I normally sell at around a 30% ish profit margin. However, with all of the additional risk associated with this contract, I discussed with my dad and we decided to give them pricing that would secure me a 50% profit margin on the sale.

I was worried that my pricing would be too high for them because their model really is to do a flash sale at deeply discounted prices. It also said multiple times throughout the contract that this is not something we should be expecting to make a lot of money on and that it was more of a chance to get mass exposure for the brand. I gave them the pricing anyways and figured that if they rejected we could always negotiate and see where things went from there.

She got back to me and said that my pricing was a little high, but they could still feature me on The View! The only problem I saw with it was that I literally had about 10 business days to get all of the inventory prepared and shipped to their warehouses.

At the time (and still currently) the longshoreman union in Los Angeles was kicking up a lot of shit because they knew it was the holiday season and they had leverage. Even though the average salary is somewhere in the 150-200K range per man, they wanted more money and were randomly stopping work and congesting up the ports to cause a big stink. I had a shipment of Meat Claws that waited at the port for over 12 days before they even unloaded the carton. I also had a shipment of thermometers on the way which should have been in on time, but as of the time I’m writing this now Dec 14, it still has not been unloaded at the port. The ports were also adding an extra $1,000 fee on top of all containers to account for the congestion.

This extra fee by the way was illegal, but they were trying to force it through anyways the bastards! Eventually the lawyers settled the extra fee dispute and they weren’t able to charge the extra fee on containers that had already been waiting at the port. I did however have to spend an extra $450 out of budget as a proportional fee on my thermometers container.

In the end, I had to back away from the opportunity. I asked if we could follow up and do the promotion in February for a Valentine’s Day style promotion, but have not yet heard back. I’ll follow up again with her in January so I have plenty of time to prepare this time around.

I still think the opportunity will be available and I’m happy I didn’t chase the money/exposure because I never would have been able to handle it. We’ll talk about that later on in the post.

Boston Coaching Gig Falls Apart

In November I talked about an opportunity I had to become an ecommerce coach with a wholesale company based up in Boston. At the point, I knew that something had to give because I was going to be taking on more work than I could handle. The payment they were offering me was only $40 per phone call, but the upside was that I’d have the opportunity to do 3 events before the end of the year and make about $2,000 per event.

Shortly after hiring me, Chris went on his honeymoon and was out of the picture. While he was gone, his brother Alex was running the operations of the company. My $40 per half hour phone call really turned out to be per 1 hour phone call. They also had absolutely no structure and I was pretty much learning on the fly.  The students they brought into the program were all very suspicious of the company as well and thought the whole thing was a scam. It wasn’t a scam, but they were just growing too quickly to keep everything running smoothly.

I started out doing the coaching calls and was also putting in a lot of extra effort problem solving and doing non coaching call types of things. Then when it came time to do the first event, I spoke to Adam about my flight and he told me they were trying to cut costs so they wouldn’t be bringing me to the event. I explained how that was a condition of my hire, but he really didn’t give a shit and said Chris wasn’t here so he was making the decision.

Alex also got me on an hour phone call and was trying to get me to show him my entire business model and advertising funnels so he could copy it and create a course on my business model that he could sell to his students. He wanted me to pretty much do all of this for free and was pissed off when I told him I wasn’t going to just turn over my entire business for $40 per hour in coaching calls.

The writing was on the wall for me, so after about 1.5 weeks I told him I wasn’t going to work with them anymore. It’s taken me until yesterday to actually get paid for the coaching calls I did. I’m still getting emails from their students now who they took over $10,000 in fees from and haven’t delivered on any of their promises. When I spoke to Justin about it he agreed with me that it was ridiculous and said he thinks they are the kind of guys that bill first and worry about delivering later. Definitely not stand up guys or the type of people I would have any interest in working for.

I guess I’ll chalk this one up to a learning experience. My biggest motivation for doing the coaching was so I could learn the wholesaling business model. I didn’t even get that out of it. I downloaded all of their material before I quit and when I went through it, it was all pretty much bullshit. Their whole company is really built just on a fantastic sales pitch, but there is no substance behind it when it comes time to teaching what they preach. I feel horrible for all of the suckers they get to sign up for their programs.

Developing Marketing Automation Tools and Partnership

Not a ton to report on the development of our Ecommerce Marketing automation tools. We have all been very busy, but Jarod has been managing our Indian programmer and we have so far completed  2 of the tools. A couple more are on the way still and the website itself is starting to look pretty nice.

I created our product listing blueprint and the product launch guide based on all of the strategies Shane, Jarod, and myself use on a regular basis. They came out really nice and we have added those guides and all of our webinar recordings to the website for our students.

We started talking the other day about how January is the time when we will need to finally turn this thing into a legal business structure and give it a name. Right now everything is on a handshake basis so we definitely need to protect ourselves. There’s also a little bit of tension going on between Shane and Jarod because Jarod and myself have been doing more of the work, Jarod especially. I’m hoping it all blows over because even though Shane isn’t a major asset when it comes to marketing and operations side of things, he has all of the personal connections and relationships we need to get our product into the hands of mass customers with little effort.

I think a lot of the tension also has to do with the fact that Shane and I are making a killing over the Christmas holiday with our Amazon businesses and Jarod’s is lagging behind. In the end, I think it just has to do with the seasonality of our products, but anytime you see your partners making 4 times as much as you, there is going to be the fear of missing out.

Shane’s brother Jason, the founder of ASM, is also in the market to purchase tools from people. Lately it seems like all of the successful people in ASM are creating their own tools. It’s a race to the finish line for who can create the best tools and take them to market the fastest because there is the opportunity of a buy out on the table. It would be really cool if we could get this entire business set up and then cash out only 3 months later. That is actually very likely right now!

Black Friday, Cyber Monday, Christmas Explosion – Tis the Season for Cave Tools

It seems like every time I get some success and start to get ahead of the game I get a bunch of shit dropped on my lap. I think it was the great Sir Isaac Newton who said for every force there is an equal and opposite force. This time around the negative force wasn’t anywhere near equal to the amount of success we had, but we definitely have a lot of shit to deal with as a result of our holiday success. For now though, let’s focus on the positives.

This year I wanted to do things big for the holidays. In September and October I did a lot of research and built a list of big time product review and mommy bloggers that I wanted to review my products. Some of these websites get around 30,000 views a month on regular months of the year and way more during the holidays.

Out of my list of about 50, only about 20 got back to me and said they would do reviews for me. I shipped out free products to every one of them and also requested to be listed in their Holiday Shopping Guides that they put out for their readers every year. One of the ladies got back to me and said she landed a big time advertising spot for free for her blog and wasn’t going to charge me at all. She loved my Meat Claws so she featured the post at the top of her blog. Throughout the entire holidays, her blog was featured as a banner wrap on double decker buses throughout San Diego and Los Angeles and I was the first thing people saw when they went to her website!

From an inventory standpoint, I started preparing back in August and I pretty much doubled all of my inventory for each product. When I ran my projections, I was expecting probably about a 50-80% boost in sales so doubling up would have left me with plenty of extra after the holidays were over. The worst thing I could possibly do was stock out during the biggest shopping month of the year!

Looking back, I probably should have 7 X’d my inventory because sales went absolutely crazy for Black Friday and Cyber Monday and I didn’t even discount my products. After those two days I started scrambling to get more inventory on planes as soon as possible because I knew I was going to stock out at Christmas.

At around the same time, the Port Unions started kicking up a lot of stink in Oakland because they wanted to be paid more. Those guys all make around 180K per year plus benefits, but they knew everybody was trying to get shipments in for the holidays so they had leverage.

They all pretty much just stopped working and allowed the ports to get extremely backlogged. One of my Meat Claw shipments sat on the boat for 2 weeks before they even took the container off and processed the inventory. After they finally processed my boxes, they needed to be shipped to my warehouse in California and then shipped out again to go on to Amazon warehouses, so this delay was major.

The Ports then (illegally) tried to impose a congestion fee of $1,000 on every container because of the backlog. Lawyers got involved and ultimately they weren’t able to charge me for my meat claws because they had already been sitting there waiting before the fee was announced. My thermometer shipment however did get knocked and I ended up paying an extra $450 because of the damn unions.

The thermometer shipment left China in October and as of today (12/21) they still haven’t reached my warehouse in California. That shipment in itself has been an absolute nightmare. Normally I ship the thermometers by air. You need extra documentation and testing that costs about $5,000 per shipment for the batteries to be approved for air shipping. What I do is allow my manufacturer to coordinate the shipment because they send them to Hong Kong first and then to the US and get around this ridiculous fee. What I didn’t know was that I can ship them via ocean with no problem and use my own guys. So my manufacturer coordinated the ocean shipment and about 2 days before they left port I realized they only did the shipment, not delivery to my warehouse or customs clearance or anything else.

Basically the thermometers were just going to be dropped off in Oakland and nobody would know what to do with them. I started scrambling to get the back end shipping figured out and my manufacturer said to simplify things they would just let me use their freight forwarder. So now I’m dealing with a Chinese freight forwarder (Dolphin Logistics) and signing power of attorney and other documents for a company I know nothing about. Dolphin was making me incredibly nervous because they were so unorganized and they kept asking me dumb questions like is my warehouse on a military base? They were probably just checking off boxes on the forms and making sure, but come on!

Instead of paying the Chinese freight forwarder, my manufacturer paid them directly and then refunded me the excess money I sent them (about $1,200). The freight forwarder won’t give me an invoice for this shipment because obviously the manufacturer took their own spread on the deal, but I’m just happy they were able to figure it out for me.

So all of this shit is going on and at the same time the holidays are here and people are buying like crazy. At one point, I was selling over 100 Meat Claws per day! (UPDATE: 12/29/14 reviewing sales reports. Before stocking out I had 3 days in a row of 300+ Meat Claw sales) To offset the demand I was increasing my prices like crazy. My grill set normally sells for around $29 and at one point I had it up over $40 and they were still flying off the shelves. I literally stocked out of everything except my grill brushes and now I won’t be back in stock for at least a couple more weeks.

Sales were skyrocketing overnight. I went from my best ever of around $1,500 in one day to stringing along multiple 6-$7,000 days in a row!

 

November 22 2014

November 22 2014

November 28 2014

November 28 2014

December 2 2014 - 50K

December 2 2014 – 50K

December 9 2014 - 80K

December 9 2014 – 80K

December 11 2014 - 85K

December 11 2014 – 85K

Up until this point I have been completely self funded so there is no way I would have been able to prepare for the holidays the way I actually needed to. Next year I’ll have a line of credit from the bank so I should be in really good shape.  I think I could have probably done a good quarter million dollars in a month if I was fully stocked up. And that’s with only 4 product lines! Next year I’m going to be super aggressive with my bank funding so I’m hoping to have at least 8-10 by that point. For the record…I also received my ASM Affiliate check this month and had Hyacinth Marketing revenue of a couple grand. Can you say first 6 figure month? Boom Baby!

Of course, with every two step forwards I take, I take one big step backwards. We had a customer service nightmare on our hands I ended up over selling the Meat Claws by over 1,000 orders before we realized what was happening and could shut down the listing. We had to cancel all of the orders on Dec 18 and then inform everyone they weren’t getting their products by Christmas time and they weren’t getting them until Jan or Feb now either.

This whole issue was actually Amazon’s fault and they accepted responsibility for it. But at the end of the day, we took the brunt of the hit and people were justifiably extremely pissed off. I had to sit and write a letter to send to everyone explaining the situation. In the span of about 3 days, Caecilia and I probably fielded over 4,000 emails. Just day and night doing email all day long. It was brutal, but the letter helped soften the blow and I don’t think we are going to get a ton of negative press and feedback online as a result. Amazon is set up so you can’t bulk email customers, but Caecilia found an intricate work around to do it so we were at least able to bulk email the letters. She gets paid hourly, so I gave her a bonus of 10 hours worth of money because of the amount of time she saved us!

Sometimes shit just happens that’s out of your control. Here is what I wrote:

Dear Customer,

I’m writing this letter to express how deeply sorry I am that you will not be receiving your Meat Claws order.

Over the past two weeks, both Caecilia and I have been reaching out to provide updates on the delayed shipping situation. We gave you our word that no matter what, we would get your order to you before Christmas.

Today is now December 18th and unfortunately we are spending our day cancelling/refunding orders instead of shipping them out. This is not a situation we are taking lightly. We pride ourselves on going above and beyond with our customer service and always providing fast shipping for our customers. Today we let you down.

For some of you, this letter will seem unnecessary. For many of you, this letter won’t be enough.

I understand that many of you are angry and if I was in your situation I would be to. I’m not writing this letter to point the finger at Amazon or attempt to justify the actions that were taken. There are always 2 sides to every story.

At Cave Tools, we believe in full transparency. For those of you interested in an explanation, I have laid out all of the facts on page 2 of this letter.

They say that somewhere between 20 and 80 percent of customers will do business with a company once and never again. We sincerely hope that you will give us another chance to earn your business in the future.

Next time you shop for Cave Tools on Amazon, use coupon code QQZJQ3VZ at checkout for a 30% off discount. This coupon code will apply to our Grill Brush, BBQ Tools Set, Meat Claws, Digital Thermometer, and our Meat Tenderizing Hammer (available in February).

Caecilia and I will be working around the clock to make sure we answer any and all questions you may have. You can direct your inquiries to orders@mycavetools.com  and we will do our best to answer as soon as possible.

For the next week, I have redirected our customer service phone line to go directly to my cell phone. If you call (267) 282-1009 you can speak with me personally.

 

Sincerely,

Michael “Medium Rare” O’Donnell

Signature for Story

Cave Tools – Owner

How Fulfillment by Amazon Works: Cave Tools (the seller) sends inventory to Amazon warehouses. The warehouses receive the inventory and typically within 48 hours that inventory is available for shipping out to customers. When an order is placed on Amazon, a message is automatically sent to the warehouse and order is shipped to the customer immediately.

Timeline:

  • November 24: We stocked out of Meat Claws
  • November 26: New Meat Claw inventory shipped to Amazon Warehouse. We set the restock date on Amazon to December 8th and started accepting pre-orders with the understanding that all orders would be shipped no later than the 8th
  • December 1: Meat Claws received at Amazon warehouse and expected to be processed within 48 hours. Even with holiday delays, we have plenty of time because we set our ship date to December 8
  • December 3: We receive notification from Amazon that 100 units have been lost. We shipped the Meat Claws in boxes of 40 each, which means they would have had to lose 2.5 boxes. Investigation ensues. There is still plenty of inventory to satisfy our commitments even if they can’t recover the lost units.
  • December 6 – 8: Inventory still showing in “Receiving” status. Phone calls to support every day notifying them of December 8 shipping commitments. We are told that our inventory is being expedited and that it will appear by “The end of the day today”.
  • December 9 – 12: Phone calls every day explaining that we are now late on our orders. Amazon assures us they are accepting responsibility and explains that for some unknown reason their computer system decided to ship all of the inventory to another warehouse across the country.
  • December 13: Amazon support notifies us that our inventory is now expected to be available on December 17 and we will be able to make delivery in time for Christmas
  • December 14-16: Phone calls to support checking on status. No new information
  • December 17: Inventory still showing as 0 units. Support launches another investigation. At 7:30pm we are notified that our new inventory, which was supposed to be reserved for customers like yourself, was actually sold and that is why inventory is showing as 0. Amazon accepts responsibility for the error and support does not know why we were previously told that our inventory would be available by December 17.

 

The news we received yesterday came as a complete shock. How could we possibly have sold the inventory without knowing about it? Why were we continually told that our inventory would be available to ship to customers before Christmas?

 

 

 

There are many unanswered questions right now and we are still reviewing all of the information with Amazon to see how we can get to the bottom of this. More importantly, how we can avoid something like this happening again to us and other Amazon Sellers in the future.

While I don’t want to speculate about why we were told certain things about expected delivery dates, I can offer my best explanation as to how I think the inventory was sold without our knowledge.

When inventory is received and processed at Amazon warehouses, we are normally notified that the entire shipment is now available for shipping. For example, if we sent 100 units, after they were processed, 100 units would show as available inventory on our dashboard.

According to my conversations with Amazon Support, this didn’t happen. Instead, small spurts of Meat Claws became available at a time. Using the above example of 100 units, this means that throughout the day 10 units would become available, then 5, then 7, etc.

Before our Seller’s dashboard could update the inventory numbers, those incremental units were being sold already. As far as we knew, Amazon support had been telling us that it would all be received on December 17 and our inventory stayed at 0 on the dashboard.

The next logical question would be how did we not notice the additional sales revenue coming in since these units were in fact being sold? Even though the inventory stayed at 0, our Seller’s dashboard would still be reporting the additional income.

Amazon shows us total sales on a day to day basis. However, this sales number is a top level number that includes all of our product lines together. The specific data, such as how many Meat Claw sales were sold on a given day typically lags behind a good 2-3 days.

Since the Meat Claw sales were coming in incrementally and both us and every Amazon support person we spoke with was under the impression that our inventory was still being transferred from one warehouse to another, we were unable to determine what happened until yesterday.

To Amazon’s credit, their support staff spent a good 3 hours yesterday sorting through all of the information before they could come to this conclusion and let us know what happened.

 

As mentioned previously, we are not trying to point fingers or justify the events that happened. We truly believe that at every step of the way both Cave Tools and Amazon took actions and communicated with customers using the best knowledge that was available at the time.

We are sincerely sorry that you did not receive your order and we hope that the above explanation provides some clarity as to why.

We are continuing to review all of these events in detail to see how we can learn and grow as a company. You are a valued customer and we will do our best to earn back your trust.

Trouble in Wire City

At the same time all of this was going on, I was having some serious wire transfer issues.

Chinese New Year is coming up soon and the entire country pretty much shuts down for a full month. Nobody works or does anything. The problem with this is that if you want to stock up for summer time, you need to place your orders before the holiday and hopefully ship out as soon as they get back to work so you can be ready in time.

After what happened to me last summer with my grill brush stock out, I wanted to load up like crazy. For my first time ever, I’m actually filling an entire ocean container with Cave Tools products. It will be a split between 3,000 grill sets and 3,500 grill brushes. So I spoke with Tracy and just like normal I sent my 30% deposit so we could start manufacturing. About 15 hours later Tracy Skype’s me and she’s upset.

She forgot to tell me that they changed their banking information since my last wire and they couldn’t receive the money I sent them, about $5,000 worth. Not only that, but the company name changed, the bank changed, and the account numbers all changed. Can you imagine the look on my banker’s face when I went down to work out the recall?

I’m not sure how true this is, but this is my understanding of the way it works over in China. Non Chinese people are not allowed to own manufacturing facilities. So they get a Chinese guy to own the place and then a bunch of foreign corporations own various percentages of his company. Throughout the year, they change the banking and business names around so they effectively distribute their income to the various accounts of the actually businesses that own the manufacturing facilities. This is obviously very shady and probably not legal from a tax standpoint in China, but that’s on them. I’m just a paying customer 🙂

The recall took about 7 business days and somewhere along the line intermediary banks took about $150 out in fees. I got my money back and then re-wired the full 100% to Tracy and everything worked out. They even started manufacturing before they received the money so I wouldn’t get hit with any delays. It was an honest mistake and Tracy helps me out so much throughout the year anyways so I wasn’t angry with her. I let her save face and we moved on.

While this wire was under investigation, I had another wire I sent for an order of Meat Claws that my manufacturer claimed they never received. The money had left my account already and we double checked that all the banking info was correct. What the fuck!

So now we started a 2nd wire investigation to see what happened and determine if the Chinese bank was trying to screw me. Meanwhile, my manufacturer was storing my products in their warehouse and wouldn’t release for shipping until the balance was paid. They ended up storing my products for almost a month before they finally said I needed to pay and get rid of them because they didn’t have room to store them. Now I had to float another $4,000ish so we could move forward with shipping before I received my original money back.

The Chinese bank kept telling my manufacturer and me that we needed to produce what’s called the swift 103 bank copy. I drove down to my bank 2 days in a row asking for the documentation, but the banker I was working with had no clue what it was. She called the wire department a few times, but wasn’t asking the right questions and I was getting pissed off and arguing with her. Basically as soon as she heard the first no she just told me nobody knew what the swift 103 was. Even though this is a universal bank form for wires.

I was being really short with her so finally she just gave me the phone number to the wire department and said call yourself because nobody knows what you are talking about. I was on the phone with them for less than 7 minutes and I was able to get to a manager that knew what they were talking about and they sent the 103 swift to the Chinese bank.

After the investigation was complete, they said the reason the bank didn’t accept the money was because on the beneficiary company’s name we left out the Co, LTD. at the end. What a fucking joke! Of course the intermediaries took out some fees again along the way, but in the end I got most of my money back and the Claws are on the way now.

New Website Finally Launches

About 5 months ago I purchased cavetools.com so I could eventually move away from mycavetools.com. When it comes to web development, I have worked almost exclusively with WordPress throughout my career. WordPress is great, but the platform itself is meant for informational websites, not ecommerce.

I had a pretty damn good ecommerce set up on WordPress, but it was buggy and often times I was getting calls from customers because they couldn’t place orders. I get around 3,000 visitors per month to my website, but at the end of the day it just wasn’t converting into the sales numbers I would expect. I was literally only doing a couple orders per month using that website even with all of that organic traffic.

For my new website, I wanted to use an ecommerce platform that would convert my visitors into buying customers. I did my research and chose Shopify as the platform I was going to go with. I then went through a bunch of ecommerce training materials and started analyzing big ecommerce websites like Amazon and Zappos to see what kind of marketing features I wanted to pull in to my website so I could maximize conversions.

I then took my whiteboard and drew up the website design and wrote up a word document explaining all of the features on the site.

Home Page

Product Page Design

I then contacted my shopify development programmer in India, Nalini. We discussed all of the features and the intricacies of the design. From a coding standpoint it wasn’t going to be easy to do what I wanted to do. I understood that, but I also wasn’t happy with the development time and final price she gave me.

So I started contacting Shopify development agencies in the U.S. to get a comparable rate and see what they could do. In the end, I found an agency up in New York that’s run by 2 brothers that used to be big time ecommerce guys back in the day before starting their agency. It was only going to cost me about $500 more than using Nalini and I would be able to call them and speak with them since they were in New York. Part of me was also interested in how they handled the entire web dev process since I do a lot of that stuff in my marketing agency.

I got a quote from them and also documented all of our conversations so I could use similar processes on future websites we build in Hyacinth Marketing. He also gave me a 2 week turnaround time which was great.

In the end, the website turned out fantastic and I couldn’t be happier with it. In the last 7 days we’ve already done over $1,000 in sales and I have inquiries for 4 rotisserie grills. They were the toughest thing to sell on my old site and now people want to buy them all the time from me. Here’s a screen shot of the new site:

website home page

The day after we launched the site (Dec 9) I had an awesome idea. I wanted to see if my graphics guy Ibrahim could photoshop in my tongs on a kickass banner image I found. So I brought out my product light box and took like 30 pictures of the tongs at all sorts of angles and sent it over to him. It only took him about an hour’s worth of work, but he did a fantastic job. Far exceeded my expectations on what the result was going to be. I gave him a 3 hour bonus payment on top because I was so happy.

Before After

The new website has all sorts of really cool features such has product zoom when people hover over an image (same as Amazon) and 2-step opt in processes all over the place for lead gen. Instead of normal email capturing like you see for our VIP member’s area In the footer, I have buttons all over the place to give away the free recipe book. When people click on the button, they think they are getting it for free so they mentally commit to it. After they click the button a pop up appears and asks them for their email.

Since they already mentally committed to it, they are way more likely to give their email address. The system I’m using also pre populates their email address in the field if they’ve been cookied on other websites before that also use this system. The result is that they mentally commit and then their email is already typed in so they only have to accept and they get it. Really awesome technology!

I also created semi-automated funnels for retailers who want to carry our products and bloggers that want to do reviews. In the past we did everything on a person by person basis, but now I’m able to build email lists of each type of person. In the future I’ll be able to contact them all at once and provide consistent messaging. I can see us running liquidation deals and things like that for wholesalers when we want to move a lot of inventory at once.

I already received a call from Cigars International because they want to carry our products on their website. Normally wholesalers order like 5-10 units at a time, but they want to purchase an initial order of 500 meat claws. Only problem is I don’t have any left in stock after Christmas, so we’ll follow up in January with them.

On all of our packaging we advertise free recipe book with the purchase. When you offer it for free with the purchase, people get pissed if you then ask them for their email address because technically it’s not free now. So what we do is we insert a business card into every package telling them where on the website they can go to download the book and people don’t have to give their email address.

This insert strategy is great because I can sell products anywhere, including in retail stores, and people still have to come back to our website. On that bonus page, I wanted to devise a special offer that I could give people so I could capture their information. The problem with Amazon is I don’t get people’s email addresses so I can’t build my own customer list. The list is a major asset for the company so I created what’s called a self liquidating offer.

A self liquidating offer is simply an offer that you break even on, but still acquire a customer. I wanted to find something valuable I could give away for extremely cheap that would help me acquire customers and be enticing enough for people to buy.

The two big things people in my industry are always looking for are internal meat temperatures and wood smoking flavors/temps. So I found a guide for each online and told Ibrahim to recreate them exactly but with my branding on it. Then I just went in and changed the suggestions and wording around so we weren’t stealing anything and nobody was going to try and sue for copyright infringement.

I then had both guides turned into magnets. The internal meat temperature guide is for the refrigerator and the meat smoking guide is an outdoor magnet for the grill. The beauty of this all is I’m acquiring customers for break even AND I’m getting branding in their households. Every time they have a party or people over, they see Cave Tools front and center. Brilliant!

I actually thought up this strategy randomly about 6 months ago as I was driving into Philly for a lacrosse game. I was so excited and knew I was going to forget it so I made an audio recording on my phone and just talked for 30 minutes straight about all the details so I had it down. I also spoke with Justin about it and he helped me finalize my strategy. I think originally I was going to give the magnets away for free, but he mentioned that would kill me from a cash flow standpoint and that I’d much rather break even instead of taking a loss.

Just like everything else I do in my business, the magnets had to be scalable. I wasn’t going to be manually shipping all of these things out to each customer. That would take forever! I did a little bit of searching and found a local mailing fulfillment center that could print and ship all of the magnets for me. To keep the costs down on the offer, we only ship them once at the end of the month and use USPS.

I just got all of this together and finalized 2 days ago. Just in time for everyone to open their Christmas presents and go download their recipe books. I also shot a video of me personally thanking every customer for their purchase and put that on the bonus page and also ask for people to leave a review right there on the spot.

This is perfect because we are getting them right when they are the happiest and just opened their product. We are giving them a free recipe book and some other really valuable and cool offers. They can’t possibly be unhappy because we have given them what I like to call a Customer Experience.

bonus

Corporate Structuring and Taxes

We’re coming up on the end of the year. While it’s great that we made a huge chunk of cash here at the end of the year, I need to watch out for the tax man. Since I started Hyacinth Marketing in 2012, I’ve been using my Dad’s accountant Bobby Trauffer for all of my stuff. Bob is good, but at the end of the day I have no relationship with him and he has messed up a couple times on me before.

Over the past 2 years I have been a part of a local business group in Doylestown and had the opportunity to meet and become very close with an awesome accountant. So starting January 1, I’m going to be moving everything over to Doug. I’m also hoping he can help me out with tax planning next year because this year I am screwed.

I decided to reinvest almost all of the money into new inventory and product lines. If I could do this much money with 4 product lines, imagine how much I could do when I add more. So In the past month I’ve spent probably about $60,000 ish between inventory, fulfillment, new product samples, paying off my loan to my dad, etc. Then I come to find out that when you reinvest money in inventory, it doesn’t count as an expense on the books. What that means is that even though I no longer have that money and I did the right thing and invested in my company, it will all be taxed as a profit to the business.

I haven’t gone through everything to prepare for taxes yet, but I’m not looking forward to it. I have a feeling Uncle Sam is going to put me through the ringer.

Currently Hyacinth Marketing is an LLC and is the only business I have. Cave Tools is just a brand name that Hyacinth Marketing owns. Eventually down the road I’d like to sell Cave Tools so I need to have separate books and corporate structures for each company.

I met with my attorney Ron last week and starting January 1, we are going to do a downstream merger and asset purchase. Basically that’s a legal way of saying I’m starting another company and it’s going to buy all the Cave Tools stuff off Hyacinth for free.

We’re also going to change Hyacinth Marketing into an S-Corp so I can pay as little as possible in taxes. The new company is also going to be an S-Corp as well. The way I understand it is that as the owner of an S-Corp I have to pay myself a “Reasonable” salary. Reasonable is not defined by the IRS, but if we made 100K I would probably have to pay myself 50 or something like that to pass through without any flags. That first 50 would be taxable, but then I could do a shareholder distribution for the other 50K and that wouldn’t be taxed. I like the sound of that 🙂

The new company is going to need a name and I don’t want to call it Cave Tools. The reason for that is because people can do an importer record lookup and figure out exactly where I source my products if the name was Cave Tools. Nobody is ever going to know the name of the company because Cave Tools will be the DBA name, so I’ve decided to have fun with it. We’re going to call the new company Medium Rare Industries!

One of the other really cool things with having 2 companies now is that I can bill Cave Tools from Hyacinth Marketing. Basically throughout the year I can allocate expenses to certain books and that way I can keep them both under certain tax brackets.

We’re also going to be adding a 3rd company in there for the partnership with Shane and Jarod, so Doug is definitely going to have his hands full with me for accounting.

Hiring a Full Time Marketing Employee

Remember Karen? The full time marketing girl I hired and was really excited about? Well she strung me along for about a month with excuse after excuse and I finally had to fire her. I tried giving her the benefit of the doubt so many times, but at the end of the day she really set me back.

So now we have Dorothy on board and she is doing awesome so far! She costs more money, but she also has way more experience and she can think for herself on a lot of things which is good. She’s a single mother of two and I have her working my hours, which is her night shift. Hopefully once she is fully trained we can work out a better arrangement for her so she can work regular hours and still have enough communication with me.

Right now I have her trained on Blogging, Press Release writing and Social Media. This week we will be adding in Video Marketing and then some other specific marketing strategies. My plan is to just keep teaching her stuff until I can fill a full 40 work week for her of just straight marketing. After that, I’ll hire another person and cross train them. With all the different strategies I have in my head from over the years, I think I could easily have 2 people working 40 hours a week just on marketing Cave Tools.

The thing I love the most about having Dorothy on board is that it is forcing me to create operating procedures for every aspect of the business. I read and learn so many strategies every year that I never have a chance to implement. When I train Dorothy, I create a detailed word document explaining all of the instructions. Then I shoot a video of me following the instructions to a T and demonstrating the strategy.

I probably have about 20 operating procedures right now. My goal is to build out operating procedures for everything in marketing and then start doing operating procedures for operational tasks as well. This is exactly what I did for Caecilia too. She has a 15 page Customer Service Representative manual with instructions and videos on how to do everything she ever needs to do.

When I’m done, I’ll pretty much just have like a monster book on how to run my company. I’ve talked before about my online resource training center I set up called Hyacinth Connect. Each employee gets their own area they have access to and then inside the area is all of their training materials. Instead of just giving them pdf operating procedures, I added in a wiki so everything is editable.

Whenever the wiki is edited I actually get an email about the updates. So at this point I know for a fact they haven’t been using it the way I want them to. But my goal is to start to train them to update operating procedures and add new operating procedures on their own when they discover new ways of doing things. I’ll work more on this aspect once Dorothy is fully trained and can manage her own work week. Since I get email notifications when the wiki is updated, I plan to start giving small bonuses to incentivize the behavior.

Considering Credit Cards

Up until now, I always just used my bank credit card for the business. However, my dad suggested I start getting airline credit cards and rewards cards. I spend a lot of money every year for business expenses, so I might as well start getting free flights from it all!

Looking into the various cards now, but hoping to rack up some serious points in 2015

Mentoring Matt Greenwood

I met my friend Matt Greenwood while I was in Lithuania. At the time he was developing an app and running a nightlife company in Madrid. The company was still pretty young, but it seemed like they were on the right track.

We were speaking the other day on Skype and Matt told me about how his company went under and he moved back home and had to get a job. Shitty situation, but something almost every entrepreneur has to face. I’ve been speaking with Matt pretty regularly now and helping to mentor and coach him along.

He has a job now, but he’s working on a couple different ventures on the side. I’m teaching him a good bit about outsourcing and really just being there for advice when he needs it. It feels great to be able to give back to people in the Lithuania group.

Meeting up with Tim Murdoch

Tim Murdoch (Head Coach for Montreal Lacrosse Team) was in town the other day and I got to meet up with him and grab a couple beers. His son Max had a lacrosse tournament in Feasterville, which is only about 20 minutes away from me. Unfortunately 2 teams canceled last minute, so the tournament was over after only a couple games. A lot of the parents were pissed off because they traveled from 9 different states to get there and their kids only played 2 games.

We dropped Max off at the hotel and went out for a two hours to catch up on life, business, and lacrosse. I don’t know how much I’ve talked about Tim on here in the past, but he’s a beast when it comes to business. He makes a very good living doing consulting for large companies. He only has about 5 clients and tries to work a maximum of a couple hours per day. The rest of his time he uses to coach lacrosse and enjoy life.

It was about a year ago he told me how he knew the founder of this new company and the guy was giving him an equity stake in it. The company pretty much hired Oxford Linguistics experts and developed an algorithm that aggregates public tweets and based on public sentiment they can very accurately predict what will happen with certain stock prices.

Tim went to Princeton and Harvard and sits on the US and Canada businesses board, so he knows everybody. I pretty much just look at him like The Great Connector. He was telling me how in after only a year already, the company is growing like mad. They expect it to be worth around 600 Million in about 2-3 years. Pretty much everybody in the financial sector is trying to license their software from them. They launched  with Bloomberg as their big whale and now they are almost at the point where they could fully stand on their own without Bloomberg just because everybody wants in now.

This was about 2 weeks ago so my raw facts might be a little off, but out of say 14 of the big wall street investors in the company, Tim has introduced the founder to 6 or 7 of them.

It’s always great speaking with Tim because he gives some outside advice on how I’m doing in my company. Somewhere down the line I can totally see him recommending a big client or important person to me. Definitely one of my best personal relationships that I try to keep warm and check in with every couple of months.

Webinars with Ricky

Last week my friend Ricky from Lithuania reached out to me with an idea. It had been a little while since we last talked, but he wanted to run a partnership idea by me and also catch up on life. We haven’t had a chance to speak yet in detail, but here is a synopsis of what’s going on.

I kind of forget Ricky’s entire background, but I’m pretty sure he worked at Goldman for a while and then quit to start his internet business. He’s a year or two older than me and has lived all over the place. He also hates digital footprints so he has almost no public presence on the internet. In 2015 he finally wants to come out of the shadows and stop being a behind the scenes guy.

Ricky is big on info products and webinars. Between his businesses they did about 2 Million last year in webinar sales. He’s also a workaholic similar to myself but on a different level. If you take everything at face value, it seems like he works about 12 hours a day 7 days a week all year round. I don’t think necessarily because he has to, but he wants to. Just like me, but on a more extreme level, he really enjoys everything he is learning and is passionate about his business.

So anyways, Ricky is a great guy and he was also the one who started our monthly Blacksmith webinar training series where we all teach each other different strategies we know. He tried launching an Amazon business last year in the adult niche (Aka Dildo Store haha) and completely failed and had to liquidate his inventory.

His idea is to partner with me on a webinar series that will teach people more about the physical products business model. He has all the webinar systems in place so he’s thinking that if I put in some up front work with him, he can probably do a good 5 figures with it and I would get a new passive income stream out of it.

If this was anyone else contacting me for this opportunity I probably wouldn’t do it. Ricky is such a smart guy though and in exchange for my knowledge he’ll pretty much teach me the entire ins and outs of the webinar business. Like I said, we haven’t had our full catch up conversation yet, but this could be a really good opportunity moving forward into next year.

I’m also thinking of eventually turning my outsource work into an online course. If this works well, Ricky would be my go to partner to help me launch it. When I’m done, I’ll pretty much have a turnkey content marketing outsourcing course that people can just hand off to outsourcers and blow up their businesses.

Objectives for new year

We’re already at 25 pages of content, so I’ll wrap this up quickly. Some of the work goals I’m setting for next year include:

  • Adding in digital cooking courses that I can upsell to all of my physical products customers. These would be almost 100% margin and my product sales already prequalify everyone so it’s the perfect money making storm. I have Chef Carmen lined up for some conversations in January. I’m not sure if I really need to bring him in on this though or if his credibility would be worth it. In the end, he has the expertise, but I’d be writing the course content anyways. He would just be the guy to cook it all up.
  • This is an entire blog post in itself, but Estonia just released a business E-Residency program where people from anywhere in the world can easily set up an Estonian corporation and take advantage of the tax breaks and be outside the reach of the US Government and US Dollar. I’m just going to say that for now this is on my radar and could be a real possibility a few years down the road
  • 2015 will be the year of email marketing for me. My people received probably 4 or 5 emails all year last year. That’s horrible! With my new expertise in funnels, I plan to start developing really intricate relationship building sequences and use email to generate a lot of additional revenue
  • Money Goals? I have no clue what I want to make in money. I just want to keep driving on because I love what I do and what I’m learning. The 4th quarter this year was fantastic. With the different businesses I have going on and the addition of a bank line of credit this year, I think there is a real chance that I can do $1 million next year. For all I know I can either far undershoot this goal or crush it. Regardless, it’s all about the ride

Mike O’Donnell Gives A Status Update

Posted on February 24th, 2014 in Business Development, Cave Tools, Goal Setting, Lessons, Management, Media Buying, My Story, Outsourcing | No Comments »

I have been horrible at writing lately, so I figured I would at least give a status update on what has been going on in my business life. I would love to write about each of these things in more detail, but I just don’t have the time. Or maybe I am just not prioritizing this blog enough, but it is what it is right now.

What’s Going On:

  • I have my first SEO intern working for me doing about 10-15 hours of work per week. I built a 12 week course on my own platform which will allow me to scale with multiple interns. Course is set up as Major project week 1, redo project week 2 with some tweaks. After every 2 weeks the intern must write reflection post on our interns blog to help solidify their learning. Week 3 starts a new major project and everything builds on itself as they go through the 12 week course. Students get College credit for completing the internship
  • About a month ago, I built my own software (I coded it myself:) which allows me to scrape the business owner name and contact information for companies in pretty much any area that don’t have a website yet. Today I am hiring a data entry person for dirt cheap to run the software all day and upload leads into a CRM system. I also started the process for hiring my first cold caller/ telemarketing employees. They will call all day to sell websites using my script. Anybody that bites will be set up with a phone meeting with me where I will close them. My website developer will take on all new projects and follow my detailed instructions for exactly how we are building every website. Basically I’m productising small business websites and scaling. Once the process is smooth we should be able to increase lead generation at the top of the funnel and increase throughput
  • I have a phone meeting later today with a Famous TV personality in the weight loss niche. She is a B-list celebrity, which for my purposes is perfect. We’ll be discussing building an apparel ecommerce website for her. She has already mentioned promoting Hyacinth Marketing and Cave Tools to her following. I plan to close the deal and over deliver the shit out of her. Then I’ll open the conversation for not just promoting Cave Tools, but becoming the face and celebrity endorsement for the company
  • My 3rd product line, digital cooking thermometers are finishing being manufactured this week and will be thrown on a boat so we can get them live selling. I also have samples on their way for a 4th product line which also sells more year round. Really working hard on leveling out the business to avoid the seasonality trap I got stuck in this winter
  • This week I will be receiving my sample for our first full size Cave Tools grill. It is a combination charcoal grill and vertical rotisserie. Absolutely bad ass and super high quality craftsmenship. Still working on finalizing the details of our agreement, but it will be a private label dropship deal with a welding company in NY to create the grills. The design itself is an award winning design, but they are welders not marketers. Best part is I never have to stock inventory or risk capital to get going. Once orders come in I parse them through and the grill is manufactured for the customer and sent directly to them. I’ll finally have some high ticket items to legitimatize the brand.

Cave Tools Lunchbox1 20140212_211604

  • I’m sending sample products out today to Restaurant Depot, which is like the Sams Club for all restaurant owners. Also working on getting samples out to MrBarBQ as they are very similar to Restaurant Depot, but primarily focus on BBQ niche
  • I did a 1 yr national advertising deal with the National Barbecue Association back in November. I spoke to my rep this past week and they said I am outperforming the industry average by over 200% and I’m getting tons of brand engagement and follow up searches. They were trying to sell me on an even larger advertising package, which sounded pretty fantastic from a value standpoint. However, I declined because I need to expand our product lines more first so once we do kick the advertising into high gear I can have better conversions through cross sales, upsells, etc.
  • I got invited to a major auction in Las Vegas in May that draws over 20,000 retailers and distributors. I’m not personally attending, but I will have trained sales reps selling my products to the attendees. They take a 20% commission, so I don’t intend to make money here. I intend to break even and get as much brand exposure and engagement as possible. I also get a full data list on everyone that showed interest in our products so I can remarket to them afterwards. The list itself is priceless
  • I took a different angle with FB. Instead of working on the Cave Tools brand page, I set up a general interest group called I Love Barbecue. The reason being that people are less likely to like a brand page because they feel the company is making money on them. With a general interest group it is very open and people easily like the page. I am currently getting likes for less than $.05 a piece. We are well over 1,000 likes and the page is getting all sorts of engagement from Barbecue Associations and Enthusiasts posting pictures. When the Thermometers are ready, I will have a huge and captive audience to run a deep discount deal to. The deal will be giving away 50 free products, but it will be viral in the sense that in order to qualify they need to share the deal on facebook to their friends. The additional exposure will be huge. I  know other people who have done this with amazing results.
  • Today I built out a full advertising campaign for a real estate investor. I am getting much much better at media buying and conversions. This REI is part of a group of close to 100 other REIs and he has been talking about me a lot. Best part is that his original campaign was worse than horrible so without even trying I will look like a genius. I also built this guys website and he has already passed on a solid lead for another person that wants something similar.
  • We’re almost finished the completion of the Penn State specific classified ads website. This is a cool project that is basically creating a CraigsList clone but only making it university specific by email address for posters. Once they build a following at PSU they will approach other universities and I’ll be the web dev for each new site.
  • Just finished a website for an author and will be helping him with his book launch when they are done being printed. Interesting book that targets Atheists market and was rejected by over 100 traditional publishers because it was too controversial.
  • Planning a full rebuild of Hyacinth Marketing website to showcase client success stories and focus on Web Dev, Media Buying, High Level Consulting, and SEO only.
  • Planning to migrate Cave Tools over to a more robust ecommerce platform so we can really build out the sales funnel and increase conversions on the site. I’ll write a recap post of the website as it is now before I get rid of it. I learned so much through the development of the current website that I never knew before and I have tons of cool shit going on on the website!

There is probably more stuff going on right now I can’t think about. My mind has been racing lately and it’s very difficult to keep on top of everything. I’m really working on getting out of the employee mindset and focusing more on C-level and scaling processes. Lots of stuff coming together and I can’t wait for the summer when Cave Tools picks up again and I start having more cash flow to play with.

 

Cheers,

 

Michael “Medium Rare” O’Donnell

Mike O’Donnell Runs Into More Delays

Posted on May 17th, 2013 in Banking, Business Development, Outsourcing, Shipping | No Comments »

If starting your own physical products business was easy, everyone would do it. Right?  Well, I’ve definitely run into my fair share of snags in the past few days.

Shipping Nightmares

Last Thursday night, Tracy messaged me telling me that DHL was at the factory and picking up the boxes. It was around midnight my time, so I had a quick chat with her and went to bed. I already knew that my deadlines were shortened when the brushes were finished 4 days early, so I was ready for the shipment to come in. I called DHL the next morning and was told to expect the brushes to reach my destination location in Newtown by Wednesday or Thursday of this week. Then, I would need to inspect the brushes and set up a UPS pickup to send the brushes out to various fulfillment centers across the states.

As I’ve stated here before, DHL has horrible communication and customer service. Each time I called to get tracking information and updates on the shipments, I was told that they would call me as soon as they received the information. When I finally got a hold of a different Rep on yesterday (Thursday) I was told that the brushes haven’t even left China yet. They don’t know why, but the brushes have been sitting there for over a week now without getting on a plane. Of course I was told that they would call me by the end of the day with an update, but do you think that ever happened? Nope! My worst case estimate when I initially started production was that I would be up and selling by the 18th at the latest. Now with all of these delays, I don’t even know when I’m going to be receiving my brushes. This is huge because grilling brushes are starting to sell LAST WEEK. I’m doing some marketing activities, but I’m very restricted until I actually have product in stock.

I still have no doubt that I’ll move all 1,000 brushes by the end of the summer, but now this is going to put a delay on my next shipment. Grill brushes still sell after the summer, but the demand cools off. That means I need to source another product to have up and running completely by September. The profit from this first batch of brushes was going to go a long way to funding my next product. So far, I haven’t accepted any outside investment like I originally thought I would need to. However, depending on how things go, I might need to raise some funds to get the next product off the ground.

PNC Bank Sucks

Snag number 2 has to do with my banking. When I first moved up to Penn State as a freshman, I set up my banking account with PNC because they were the most convenient bank. When I started my business, I decided to stay with PNC so I could link my personal and business accounts together and only have to deal with one point of contact.

Throughout the past 19 months or so of using PNC as my business bank, I’ve had quite a few issues with them.

I gave them the benefit of the doubt while I was living in Canada because I knew I was a unique case for them. Since I’ve been back however, it has been the same story over and over again.

My personal business banker is a regional V.P. so I think she just doesn’t give a shit about me because I am smaller than some of the larger businesses she deals with. About 2 months ago, I noticed that I was getting slapped with $30 fees every month on my bank account. This had gone on for a few months before I noticed, so I was pretty pissed. I did some research about the different bank accounts at PNC and noticed that Marge had placed me in the bank account that was best suited for retail establishments that do over 150 ish credit card transactions per month. With that account comes fines every time your cash in the account dips below a certain number.

I went through multiple meetings with Marge before setting up my business account with her, so she knew exactly what type of business I was. The reason she put me in this account was because as a bank they would make more money off of me. I was pissed, so I set up a meeting and sat her down for a nice heart to heart talk. The problem was fixed promptly, but I was still pissed because she wouldn’t acknowledge that she made a decision that was best for the bank and not the customer. There was no reason she ever should have placed me in that account, but she did it anyways because I was new to business and trusted her.

The final straw: I had to do 2 international wires this month to China so I could pay my manufacturer for the brushes. When I went into the branch to do the first wire transfer, I was told both verbally and written down on my wire slip that the fee was $75. I ran this by a banking manager I know at Citizens bank and their highest wire fee is $45, so I already knew PNC was skinning me. When I went in to do the second wire transfer, I was told once again that the fee was $75.

When I looked at my statement this month, I noticed that I was charged $110 for each wire transfer. Now I’m pissed! I have been on multiple emails with not only Marge, but the head of the branch as well and they refuse to refund me the additional $35 each! I have both a verbal and written agreement with them and they will now honor it because they said the fee was $110 the whole time and someone misinformed me. When that fee is broken down, there is a $50 branch assist fee in each wire. That means for the teller to take 5 minutes to do the wire, they charge me $50 and refuse to cut back on their fluff even when I have the $75 fee in writing! So in the midst of all this physical product shit, I’m also moving my personal and business banking over to Citizens Bank where my friend Melissa will take care of me.

(This is not over. I’m considering writing our local newspaper about this issue. There will be hell to pay!)

 

 

Mike O’Donnell Gives a Shipping Update

Posted on May 7th, 2013 in Amazon, Business Development, Outsourcing | No Comments »

I was sitting on my computer watching T.V. around 11-11:30pm on Sunday night and my manufacturer in China sent me a Skype message saying that they would be finishing up my order 4 days ahead of time. I was extremely excited at first, but then I started thinking of how my deadlines just got shortened and I had a ton of work to do in even less time now.

Building my marketing and business operations systems has been the easiest part so far for me because it is familiar. I know what I need to do and I know how to build the systems to automate it for me. The importing and shipping piece however is completely foreign to me and has been taking up a ton of my time throughout this whole process.

Of course while I was talking to Tracy (Chinese lady with fake American name), she informed me that the dimensions and weights of all the boxes were now different than what she originally told me. She then sent me a bunch of pictures to show me my order, and I noticed that now my shipping mark, which was printed on the boxes, had to be changed.

 

Ready To Go!

 

Wrong Information

 

Since all of the boxes were already made and the shipping marks were printed on, we decided to go with a small brown sticker to show the updated information. A nice cheap solution.

 

Fixed

 

 

That’s A Lot Of Brushes!

 

Now that all of the information was changed, I was starting back at square 1 with my shipping quotes. Since the deadlines were shortened, I needed to lock in my rates ASAP.

My 2 best options for the international transport were Fedex and DHL. Fedex has basically held my hand through this entire process and have gone above and beyond in terms of customer service. They even have what’s called the Great Rates Hotline where you can call in and get quotes on the spot with deep discounts on your shipments. DHL on the other hand has been absolutely horrible and it can take days to weeks to receive a quote.

Yesterday, I figured screw DHL (still hadn’t received a quote after a full week of phone calls with my rep), I’m going with Fedex. I was able to get a 67% discount on my shipping rate through them and the deal seemed unbeatable to me anyways. I locked in my rate and sent the information over to my manufacturer. About an hour later, they responded by telling me that the price they quoted me (and I paid for) was the unit price of the brushes and not FOB Shenzhen as I expected. This meant that I also needed to schedule a pick up at the manufacturing facility to take the boxes to the airport. I tried negotiating to get them to deliver for me, but there was no room to budge. I squeezed them pretty hard on my rates already and they said there wasn’t enough profit in the order for them to do the drop off for me.

A couple of phone calls later to Fedex International and I was able to schedule a pickup for Wednesday. All problems solved. Or so I thought…

Tracy was surprised that I went with Fedex because they are normally more expensive. As our conversation progressed, we decided to share rates. Low and behold, her Fedex China rate was a little less than half the price of mine. I was obviously taken in by the classic Kohls trick of always offering discounts to make people feel like they got a deal. To put the icing on the cake, at 5:30pm yesterday I finally received my quote from DHL. You guessed it…half the price of my Fedex quote. Rat Bastards!

I’ve always been one to reward companies with great customer service, but half the price is hard to swallow. Especially when I look at what that would do to my unit prices and margins. I just got off the phone with Fedex about a half hour ago and canceled everything. Now I’ll probably need to hound the shit out of my DHL rep so we can get a pickup in place and schedule everything. Regardless of the extra work and time that I now need to devote to DHL, using them for my shipment is going to be the best option. I just hope it doesn’t delay my shipment too much longer because the suspense is killing me!

Mike O’Donnell Working Hard On New Amazon Business

Posted on April 27th, 2013 in Amazon, Business Development, Efficiency, Goal Setting, My Story, Outsourcing, Reflection | No Comments »

I made a pretty bold claim in my last post. 20 days ago I said I was going to be building a new business and would be generating good cash flow by May 10th. Well, I’ve worked for 18 of those 20 days on weekends and at nights and I’m ready to give an update.

Once I decided on grill brushes, I started interviewing manufacturers and negotiating. I decided to go with a manufacturer in China because they were obviously more competitive than the domestic manufacturers. I did however receive sample products from my Chinese manufacturer and then ship them out to a domestic manufacturer out in Wisconsin. The manager there was very aggressive and wanted to win my business. She took the specs of the product and figured out her price, but she still wasn’t even close. It would be nice to be a made in the USA product, but that’s not going to happen.

This happened during one of my first Skype conversations with the Chinese manufacturer. Not the most professional verbiage, but she’s definitely a keeper!

[4/08/13 12:31:46 PM] Tracy: so.. do you still have any question about the order?

[4/08/13 12:32:29 PM] Michael O’Donnell: Not at the moment. I need to have a discussion with my partner and then I will get back in touch with you

[4/08/13 12:33:38 PM] Tracy: Ok .. then I am going to take a bath .. BTW.. you are so handsome on that pic .. 😉

[4/08/13 12:36:34 PM] Tracy: have a nice day .. bye !

[4/08/13 12:48:05 PM] Michael O’Donnell: haha Thank you

 

Another Chinese lady from a different manufacturing facility said this to me:

hello Michael

[4/22/13 9:25:42 AM] Ruby.Y: Do you see the series “the Vampire Diaries”?I see your pic,and think you and Stephen who in the series something look like 😛

 

I looked him up. I don’t see the resemblance, but I’ll take the compliment. All these Chinese ladies trying to woo me into working with them. Americans should take some notes 😉

 

Sourcing from China has been interesting because I knew absolutely nothing about shipping 20 days ago. I think I’ve shipped maybe 3 boxes in my lifetime and they were domestic, so I had a lot to learn. Luckily for me Bob’s job is to ship things all over the world, so I had him as a resource.

The first step was to figure out how all of my brushes would be packed and how many boxes I was shipping. We’re placing 40 brushes into each box with dimensions of 56X26X58 cms and each box weighs approximately 8 kilos. We’re shipping 25 boxes (do the math and I’m importing 1,000 brushes), so that translates into 2.1 CBMs.

Now that I had my dimensions all figured out, it was time to start speaking with shipping companies. Bob was a major help with all of this. I also introduced him as my logistics manager to the Chinese manager Tracy and he started speaking Chinese to her. She got super wet over that and I think if he was over there she would have invited him into the bath with her. But that’s beside the point.

We figured out the HTS code (still not sure what this is) and Bob hooked me up with his friend Michael O’Donnell (truth) who is an import broker. I paid Mike to set up my import bond so I could place it on my shipping mark and send to China so they could place on the boxes. Then came the confusing part. Once in America, I need to split up the boxes and send to 3 different fulfillment centers (East coast, Midwest, West coast). I kept changing my mind on where things were going and switching up the addresses, which caused a mess. Then I decided to ship them all directly to my house so I could inspect them and then ship out. That caused more issues because now I needed port to door service and since I’m residential it costs more than shipping to a commercial location. Such a mess!

When I shipped my sample brush out to Wisconsin, I noticed that the Parcel Place in Newtown counted as a commercial shipping location. Boom, problems solved! For 3 bucks a package I could have them all shipped there, inspect them, and then ship out to each fulfillment center that day!

Now that that’s figured out, I’m in the process of pinning DHL and Fedex sales reps against each other so I can negotiate the cheapest shipping price. We’re shipping these via air cargo instead of by boat so I can get up and running quicker. Next shipment will be by boat, but for now I’m stuck paying the more expensive air freight prices. We still don’t know what the actual shipping price is going to be because the rates change daily and our shipment date is May 10th (gonna push my cash flow deadline back a few days). I’m expecting it to be around $4,000 to ship them all in. On the surface, that’s a HOLY SHIT high number, but for 1,000 brushes that just adds $4 to my unit price for each. Considering I’m saving a ton of money going to China, that’s actually not that bad. This first shipment is all about getting the business up and running. If I tried to be perfect and maximize my profit at this stage I’d never get off the ground. I’m moving at a blazing speed right now and there is no time for me to be perfect. I’ll refine later.

Next step was to create a brand name. I decided to go with Cave Tools because I want to play on the whole Man Cave theme and eventually expand into other manly products. Being the cheap ass that I am, I hired a designer from Sri Lanka. The dude could barely speak English, so I had to do a lot of back and forth with revisions before the Hand Tag design as complete. In hindsight, I should have paid a few extra bucks to get someone I could communicate with. It would have saved me money in my time.

 

 

Looks pretty damn good though if I do say so myself! A whopping $22 out the door for this gem!

Next thing I had to do was get high quality pictures for my product listing. Online shopping is highly visual, so you need to have kickass pictures if you want to get attention. I originally was going to have a Photoshop master create a digital image for me. Basically, I was going to have him create my product from scratch in Photoshop so I could show more details than a picture would ever capture. This was going to run me around $100 and I didn’t really feel like paying that. I also didn’t want to hire a professional photographer to take pictures for me with their super high end cameras. What to do? What to do? Solution: take pictures with my regular camera and have them professionally retouched to enhance the details.

So that’s what I did, I enlisted my mother to be my camera person and we went out to our grill and started taking pictures. Problem was that our grill grates look like shit after years of poor cleaning and there was rust everywhere. Hardly the image I want to portray for my grill “cleaning” brush. Fran had the bright idea of going to Home Depot and taking pictures using their brand new grills. Perfect! People were giving us really weird looks, but we had no shame. Upwards and onwards!

Once I had my pictures, I needed to get someone to retouch them. I have been burned by Bangladeshis in the past, so as a rule I never hire anyone from Bangladesh anymore. This time however, I made an exception because my man Ibrahim had a hell of a portfolio and his rates were dirt cheap! Before I share some before and after pics, I have to share this message that he sent me because it’s hilarious. His profile picture makes it even more hilarious haha

 

hello boss
how are you ?
i hope you are well by the grace of almighty .
boss i have completed your other 5 images work.
please see the attachment and if you have any problem please inform me and i will be trying to overcome it.
thank to you.
regards
ibrahim

Here are 2 before after pictures to show how great he did:

 

Before:

 

After:

 

 

Before:

 

 

After:

 

As you can see in these pictures, Ibrahim is the Fucking Man! I had him retouch 8 pictures for me at a negotiated rate of………. $2 an image. Being the gentlemen that I am, I gave him a bonus and paid him $20 for all 8 images. I’ll be working with him again in the future for sure!

 

Ok, shipping taken care of (almost), packaging and branding complete (Need website to finish branding), High quality pictures finished, now I need some sales copy.

Sales copy was written by yours truly. Started off by doing deep keyword research on both Amazon and Google and then dove right in. Amazon only allows 2,000 characters including the html tags for formatting (bolding, italicizing, etc.) o that’s not a lot to work with. This stuff may change over time, so instead of linking to it I will show a picture:

 

 

So now that everything is set up, we need to start marketing the hell out of this thing. Of course, I don’t want to have to do everything myself. That would be silly!

Right now, I am in the process of hiring a writer that will provide me with press releases, articles, and blog posts on a weekly basis. I’m thinking we’ll do 1 of each per week and then I will turn them into videos as well. All of this will be templated out in the next week. For example, all articles will be 500 words (100 intro, 300 body, 100 conclusion), standard article resource box and contact box. I will generate a list of headlines and my writer will fill in the places to make them unique per each article. All articles will be focused on 1 keyword specifically with the ability to target other keywords in the list I provide. You get the point. When I’m ready, everything will be pretty much drag and drop for the writer and I will order content in bulk so I can clump their research time and get cheaper rates. Every piece of content will also be “Spun” into about 50 slightly different versions of the same piece of content. This is so we can avoid duplicate content all over the internet. Make sense?

Each type of content is going to have specific instructions as to where to post, what automated tools to run it through, and what to do with each piece of content on certain days of the week. We are literally going to be building thousands of links per month to my product page and my Cave Tools website to blast this thing to the top of the search engines. Since I’m leveraging Amazon’s authority, I can build a ton of links without getting in trouble. As you can imagine with 1000s of links per month, this can get out of control very quickly.

Well, on Thursday night I stayed up until 1am building a ridiculous excel dashboard that is going to track everything. Every single link I build will be tracked on a micro level down to the exact keywords that are used in every post. Then I have a clean macro dashboard sheet that will tell me with one glance, how many blog posts have been done (and on which platform: wordpress, tumblr, blogger), how many press releases, how many articles, videos, micro blog posts (twitter, etc.), etc. On top of that, I also have a pie chart that shows the percentage of times each keyword has been used so I can keep track of my keyword usage and add substract keywords as necessary.

What I have built (still designing parts of it) is a massively complex personal SEO system that I can manage with very little personal time of my own. Why you ask? Because I have templated everything out and I’m in the process of dumbing all tasks down into instructions that a robot can follow without messing up. However, instead of having a robot do it, I will have my personal assistant in the Philippines, Caecilia, run this system for $2.50 an hour.

I just stopped writing this blog post for 45 minutes because I remembered an article I read over a year ago. With a little bit of research, I just figured out how to build my own web scraper by modifying the code from other people’s scrapers. On top of that, I figured out how to set up an automated timed scrape that streams directly into a Google Docs. What does this mean?

Well, part of SEO is to promote links you have built, not just build new links all the time. When you send a press release out to 100 sites, you end up getting much more links because other news sites pick your release up. This normally within a week or two news websites will stop picking it up because it’s old news. If you do a search for your exact press release title a week later, you may see there are 500 links to it because of the additional pick up. On top of my current system, I am now going to build a timed Google scraper that automatically finds all of my extra press release links a week later, drops them into a spreadsheet, which I will then create a process for Caecilia to add to my URL booster. Remembering that article right now probably just tripled the effectiveness of what I am going to do.

In the last 20 days I have gone from knowing nothing about physical products to building the processes and systems to go into Beast Status all while running my marketing company. The anticipation for my first shipment to come in is literally killing me right now. Let’s get this show on the road! http://www.amazon.com/Grill-Brush-Stainless-Porcelain-Char-broil/dp/B00CATVET0

Mike O’Donnell Life Screenshot April 2013

Posted on April 7th, 2013 in Business Development, Goal Setting, My Story, Outsourcing, Reflection | No Comments »

Every now and then I like to do a complete brain dump and write down the different things are currently “in the mix” in my life. This helps me reflect on the opportunities in front of me and it also serves as a screen shot into my decision making. Typically, some opportunities will take off while others will fade away or never get off the ground. The opportunities that you never hear about actually have a major impact over your thoughts and actions in the present, so they are worth documenting.

* On April 28, 2012 I moved to Montreal to start my partnership with Ben. This was a milestone decision that has affected almost every single area of my life. We’re getting very close to my 1 year anniversary of this big life decision and the past year has been an absolute roller coaster of ups and downs, successes and failures. I’m very fortunate to have the opportunities in front of me that I do now and if all goes as planned I expect the next year to be even better than the last.

 

3D Printing

The first opportunity I would like to talk about has to do with my Marketing Business, Hyacinth Marketing. About 3 months ago I got back in touch with an old friend who informed me that he was starting a 3D printing business on the side. They were in the process of securing funding to purchase large 3D printers that could print in multiple different types of materials such as silver, gold, ceramic, plastic, etc. Basically, their business model is going to be Manufacturing as a Service. Designers will be able to upload CAD files of designs to their website and they would print the design in the material of choice and dropship to the customer. They spoke with a bunch of different companies, but in the end they decided to have my company build the website for them! This website is pretty much going to be an “eBay like” ecommerce site, so it’s a total WHALE of a project.

I’ve spent over a month so far just planning the website out and going back and forth with them before we start. There are so many moving parts and features that they want included, that we need to be absolutely crystal clear on the Statement of Work before we start. Right now we are just discussing phase 1 of the project, but my estimate is that when the website is finally done it will have cost them around 35-45K and take about 6-9 months to develop. This is great for my business because it’s going to be a big contract that provides stable cash flow for an extended period of time. However, I am a little bit concerned about how this will affect our friendship if anything doesn’t go exactly as planned.

 

Equity Partnership

The 2nd big opportunity on my plate right now is an equity deal with my former sales mentor, Mike Kruszewski. In March of last year I sourced a web development team in India to help design his website and code the back end software for www.reportsonlineplus.com. Around that same time last year I became a member of the Equity Investors Network and had a conversation with Mike telling him about how Ben and I were approaching companies to do equity deals with in exchange for a full suite of marketing services. We never did much with the equity investing stuff because we were focusing on building up Convernet, but my conversation with him in March planted the seed. A couple weeks ago he approached me and told me that the business is ready to go, but he needs my expertise to help get it off the ground. We’re meeting sometime this week so he can present my deal to me and we can discuss the details of the partnership.

I’m pretty excited about this opportunity for many reasons. First, Mike was the person that hired me out of college and served as my mentor while I was working at Simplex Grinnell. I just think that it’s really cool that just 2 years later we are now discussing being business partners together. He’s a hell of a salesman and a great guy personally so I think we will do very well working together.

The second big thing is the opportunity itself. The life safety industry is incredibly behind in terms of technology. Most of the big companies still use paper files for everything to this day. It’s an absolute nightmare. Reports Online Plus is basically a fully automated SalesForce.com geared specifically to the life safety inspections industry and is incredibly easy for businesses to get started. I already have a small mom and pop inspection company that I have spoken to that wants to do a test run of the software.

Finally, the third big reason I can’t wait to do this deal is because of the automation factor. This is a software as a service company, so there really aren’t too many moving parts to keep the business running. Once we get the user base up (I have a great marketing plan for this) we will be making money every month on a subscription basis.

 

Physical Products

If all else fails, physical products are going to be my primary business of the future. I’ve hinted at it on here before, but I’m looking to transition into a more stable business where I can build assets and also have the ability remove myself from the business without it falling apart. This is that opportunity!

I started out researching how to import products towards the end of February/early March. I was looking specifically at importing a batch of cell phone batteries for around $3 a pop that sell for around $25 each. Basically, I just wanted to do something small and spend about $1000 so I could learn the ropes of importing and make a couple bucks along the way.

That vision quickly changed a few weeks ago when I heard about what Matt Clark and Jason Katzenback were doing with their Amazon businesses. They each used to be big in the internet marketing community until they started focusing on Amazon and are each making over $100,000 per month selling their own physical products. “Their Own” is the key term here. When you sell other people’s products on Amazon you need to compete for the “Buy Box” but when you sell your own brand of products you get full control over all of the marketing copy and are the only person with the Buy Box.

What they do is they pick out product opportunities and then contact manufacturers to do a private label deal. You would be surprised at how many products are actually all made exactly the same in the same facility and then they just slap a different label on it and call it by a different name.

Being the awesome guys that they are, they broke their entire business down into an 8 week training course and were offering to train a group of people on how to build a business just like theirs. I heard about this course and sent a quick message over to Justin Lee to see what he knew about it. One thing led to another and Justin was able to get us both in for FREE, bypassing the hefty $3,500 ticket price.

We’re about to enter week 4 of the course and things are starting to heat up. My action steps for just this week alone were:

  1. Make my final decision on a product. I’ve spent easily around 30 hrs researching different product opportunities and my final list has come down to: Tealight Candles, Elongated Toilet Seats, Dry Erase Boards, Bird Feeders, and Grill Brushes. I’ll save the details behind how I came to these conclusions, but I have finally decided to go with Grill Brushes as my product.
  2. Compare domestic and foreign manufacturers and work out a private label deal. I’ve done all of my research and starting tomorrow morning I will be picking up the phone to call each of the suppliers on my list.
  3. Create a new Brand name and product name. Still working on this part. So many damn action steps to complete in only a 7 day time frame.
  4. Design product packaging and labels. This is dependent on figuring out what I’m going to call my brand and product. By Tuesday I will have all of the specifications and hire a designer to create all of this for me. I also need to figure out what kind of warning labels and certifications I may need since the brushes touch food.
  5. Order my initial batch of inventory. By Wednesday I need to have my first order placed and be ready to start selling my own brand of Grill Brushes!

To an outside person reading this, I’m sure this sounds absolutely ridiculous and impossible. It’s crazy, but I have complete confidence that I’ll have this entire business up and running and generating cash flow before May 10th. I just wrote it down so now I’m committed! I’ll make sure to write a post when I make my first sale. I’m siked!

 

Training Courses

Along with getting access Matt and Jason’s course, I also managed to get access to 2 of John Reese’s courses for free as well. The first course is called Money Mindset and it is basically just a ton of great mini workshops to rewire the way you think and act. From a pure informational standpoint, I have heard a lot of the same things that he teaches before. However, the fact that he links everything with actions and makes you do the mini workshops is great because it forces you to implement the ideas.

The second course I am in the middle of right now is Outsource Force. I’ve done a lot of outsourcing over the past year, but the stuff he teaches in this course goes way above and beyond in terms of opening my eyes to the different possibilities. He takes things to another level and actually builds teams of full time workers overseas to run his entire businesses. He also covers a lot of information on how to design business models and automate parts of your business which is great. He’s a really smart dude and an excellent teacher, so I have a lot to learn from him. To put things into perspective, he teaches how to hire very qualified people who will work 40 hours a week for only $300. You can’t beat that baby!

Mike O’Donnell Learns How to Utilize Outsourcing and Delegation to Build a Business Machine

Posted on July 23rd, 2012 in Business Development, Canada, Management, Outsourcing | No Comments »

One of the things I often hear success coaches and business mentors say is that you need to put yourself in the mindset and act like someone who makes the amount of money you desire to make. For instance, someone who makes a couple hundred thousand dollars a year does not spend their time doing $10 or even $30 an hour tasks. Their time is much more valuable and much better spent doing other more strategic things in their business. As someone who has yet to ever have considerable spending money, I have developed the personality traits of always trying to do things myself. Although this method saves me money and gives me the opportunity to learn many new things, lately I have been realizing just how powerful outsourcing and delegation can really be. It is good for me to learn and understand these new things, but when it comes to implementation I have been reminding myself of this valuable quote, “A Jack of all trades is a master of none.” My biggest strengths are in Marketing strategy and business management/development and that is where I need to focus the majority of my time.

Now that I have explained my current mindset, I would like to dedicate the rest of this post to the discussion of outsourcing and how it plays a vital role in the creation of a business machine. You see, I have actually known how to outsource for a few years now, but it wasn’t until I started working with Ben that I was really able to start shifting my mindset from relying on myself to utilizing other people’s expertise. Before coming to Canada, I actually did my own SEO and manually built citations every day because that way I didn’t have to pay anybody to do what I already knew how to do. Now, we have a team in India that we have trained to provide SEO the way we want them to and I can spend my time on other more strategic projects. The key lesson here is that if you want to make your business scalable, you need to remove yourself from the equation. You need to train people and build bulletproof systems so the business can run without you.

As far as the SEO team in India is concerned, that was in place before I got to Montreal. My personal experience with outsourcing has been from developing our system for posting reviews for businesses throughout Canada. Ben had developed a system before I got here, but as our reputation management client base has grown, I have been in charge of modifying the system and hiring, firing, and managing our outsourced work force.  So let me give you an overview of what this “system” really is.

We have almost 300 businesses throughout Canada that have the ability to send us anywhere from 12 to 120 reviews per year. These are real reviews from their customers and we are in charge of making sure they get distributed across the internet in a natural pattern over a certain period of time. We receive these written reviews either by pdf in an email or through a fax number which gets forwarded to an email. Some weeks we receive only a handful of submissions and other weeks we can receive over 100 review submissions. With only a few hours per week of management, our system allows us to have every review transcribed into a spreadsheet, posted on various business review sites, and double checked that the review goes live. At any point in time I can tell you both the macro and micro metrics of the system. For instance, how many reviews a certain business has submitted, how many have been posted, where each review has been posted, how many have been verified as live, and the percentage of plan usage that business has utilized so far.

To make this system work, I have been utilizing a Filipino work force. Before Montreal I never actually implemented outsourcing, so this alone has been a tremendous learning experience for me. Like most learning experiences I’ve had to make a couple of mistakes before I really got the hang of things. Originally we relied on 1 person to do the review transcriptions, a girl named Emmalyn. She was the first person I had the opportunity to manage and I learned a lot from her. The first lesson was how important communication really is even for a data entry position. When I was managing Emmalyn, I didn’t have any form of regular communication with her and I just accepted her work as is. I mean, how bad could she mess us data entry, right? Big mistake. One day, I noticed our queue starting to back up and when I checked in on Emmalyn I learned that she hadn’t worked in 2 weeks. She claimed a bad storm had been disrupting the internet for 2 weeks, but when the internet was available, she never notified me of the situation and that she wasn’t working. From then forward, I learned that I needed to have a standard daily communication from all of my workers and that I needed to encourage communication so I could plan ahead. I also learned that we needed to have redundancy in the system. Emmalyn not working became a single point of failure and the queue backed up. We needed to have multiple people trained to do this job so when something broke down we could react quickly.

My next big outsourcing lesson was a hiring mistake. Interviewing for a data entry position is tough because it is hard to distinguish between good and bad candidates. It took the hiring of a lady named Dennise to teach me how important my job was to frame the importance of her position and motivate her to want to work. I hired Dennise through a simple sms chat on Skype instead of speaking with her live on audio. This was a big mistake because I just took her word that she understood everything I had been saying. Dennise ended up not being a right fit for the job because of her lack of attention to detail and I eventually had to fire her. It was my fault that things had to end the way they did because I made a poor hiring decision. On all future hires, I have made it a point to really get to know the person before deciding to hire so that I know they will be a good fit.

Taking the lessons that I learned, my system now consists of two people who are both cross trained to do 2 separate jobs. They work on Mondays and Wednesdays and alternate jobs so 1 person is doing job A on Monday and the other is doing job B and vice versa for Wednesdays. At the end of every day, I get a detailed report from each of them letting me know exactly what they did so I can spot check for quality and also letting me know any questions or comments they have. All questions get added to an FAQ document which is available for all future hires for the position so I can speed up the learning curve. By having them work strictly on Mondays and Wednesdays, I can quality check on Tuesdays and Thursdays and also make modifications to the spreadsheets as needed. My current employees, Jonnel and Caecilia, are highly motivated and really enjoy working for me because of the open communication and level of respect that I give each of them.

When I say this system only takes a couple of hours per week to manage, that’s because I am still involved in the quality control process. While this is good because I have a certain level of comfortablity, the next phase is to remove myself all together and bring in another person to do quality control. For me this is a big step because I need to relinquish more control, but it will allow me to spend my time more wisely and help shift my activities away from operational and towards managerial.

When I talk about how we are focusing on building business systems, this is an example of just one system. Both Ben and I are spending the majority of our time building systems like this into the business so we can quite literally build a business machine that generates profit without our daily interaction in the operations.

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