E216: Plan of Action When Starting a Physical Products Business from Zero

We received this question from Brenna Olsen for our Under the Hood segment:

“My product is pre-launch so my biggest questions are what plan of action would somebody put into place if they were starting from zero? No email list, no following, first physical product.”

While this is Brenna's first time launching a physical product, she is not a stranger to entrepreneurship.

She started her entrepreneurial journey back in 2009 when she left corporate to start her own freelance graphic design business. From there, she created a subscription design service aimed at the restaurant industry.

She did all this while starting her family.

Born out of necessity

Like all moms, Brenna lives by the rule of thumb that kids should have an extra layer of clothing on them to keep them warm.

But on cold days, how do you keep a blanket on a squirming little kid? This dilemma gave birth to her patent-pending brainchild, the Chilly Child.

The Chilly Child is a special kind of blanket that keeps kids warm without restricting their movement. Kids can round around in the park and the Chilly Child would stay on.

Launching an original product

In this episode, Brenna and I address the issue of how to best sell a product that's original, that no one has ever sold before.

Here's a highlight of the key topics we discussed:

• How to build a following from zero
• Reaching out to influencers
• How to deal with very large MOQs
• Effectivity of Kickstarter campaigns
• Instagram ads
• Where to focus on, Shopify or Amazon?

We hope this episode will help you, especially if you are in the same situation as Brenna.

If you want to be featured in your own Under the Hood episode, sign up here.

Thanks for listening! Until the next one, happy selling.

Full Audio Transcript

Intro: This is Mike and welcome to episode number 216 of the EcomCrew Podcast. I got a little bit of a cold today recording this introduction, but I wanted to get this done because we recorded a EcomCrew Under the Hood episode with Brenna a few days ago and I want to get that episode out here. So, I sound okay in the in the Under the Hood segment, but the introductions usually get done in a different time. So I apologize for the nasally and raspy voice. But it was definitely good talking to Brenna.

Before getting into today's episode, I want to remind you guys, you can go over to EcomCrew.com/contest for your chance to enter in to win an annual EcomCrew Premium membership valued at almost $1,500. It's EcomCrew.com/contest. All right, let's get into this Under the Hood with Brenna.

Mike: Brenna, welcome to the EcomCrew Podcast.

Brenna: Thanks Mike, nice to be here.

Mike: No doubt. So just so people know, we've been doing these segments quite a bit now so most people are probably familiar with them by now. But we do a thing called Under the Hood where people come on that are podcast listeners or EcomCrew Premium members and we interview them for about an hour. The first five to 10 minutes of it is usually just getting some background, and then the rest of it is giving some advice to our listeners for whatever they need. So, I hope to be able to help you out quite a bit today. But before we get into all that, as I was mentioning let's get some background. I always love to ask first, how did you get into e-commerce?

Brenna: Well, I've been a freelance graphic designer for about — since like 2009 I went out on my own. Before that I was working for corporate companies and big branding firms and stuff like that so my background is in branding. And then within the last year and a half, I transitioned my graphic design brand into; I guess more of an e-commerce type situation where I'm offering a subscription model that you can purchase online. And then it's for bars and restaurants and then they can access unlimited graphic design for their bar or restaurant.

So that's kind of my first forte into e-commerce. And then I kind of came up with this idea about a year ago for a product, for a physical product and it's something I've never done before. And ecommerce is kind of the way to go it seems like. It's an apparel product and I've been hearing more and more about how retail is kind of dying, and e-commerce is the direction to go in.

Mike: Got you. So what made you come up with the idea for the apparel product and what is it?

Brenna: The apparel product is a children's product. I’m a mother of a three year old and a one year old. And there's kind of this, the rule of thumb for keeping a baby warm is that they should always have a plus one garment on. So if you're wearing a long sleeved shirt, that the baby should have a long sleeved shirt and a jacket, if you're wearing a jacket, then the baby should also have a blanket on or something like that. So, I was kind of struggling with how to keep a blanket on a squirmy little kid who is running around at the park or in a stroller kicking up blanket off and driving me crazy because every 10 seconds of having to stop and readjust the blanket and do all that.

And I came up with this idea for what is essentially a wearable baby's blanket but it's not binding. So their arms are free and not like a kind of a swaddle type thing, just more of like a [inaudible 00:04:14] and really a fashionable product for the baby as well.

Mike: Got you, very cool. Yeah, I think that a lot of really successful businesses are born out of necessity or ideas, people find a problem in the marketplace or whatever, and come up with something. So I love something like this. And we were just chatting for just a minute before we hit record here; you mentioned that it's actually patent pending. So that's pretty cool as well.

Brenna: Yeah, it's kind of silly really, because it's like to get a patent on something that is essentially a piece of fabric with some holes cut out of it and stuff, I mean, it's a little bit more technical than that when you get into all the meat of the production of it and everything to get a patent on something like that. But when I was looking to see if something like this existed and going into the-commerce field like I mentioned to you before we hit record was that it's kind of crazy because somebody can rip it off really easily, but you know you want to do whatever you can to protect your baby. So yeah, I did get a patent pending on it and hopefully it'll be issued here pretty soon.

Mike: Very cool, and so you're pre revenue at this point, right? Where exactly in that stage are you? Do you have actual samples in your hands, are you still kind of working through that, is it being manufactured already, where are you at on that?

Brenna: I have samples. They're still kind of just last weeks of going back and forth with me and the seamstress and everything right now. We haven't done our big order yet from China for the fabric. So once we do that, we have our manufacturing in place in the states. We're kind of just we're ready to hit go once all of these little last teeny tiny details are worked out with the actual fit and everything of the product. But yeah, pre launch, pre revenue very, very beginning of the story.

Mike: Got you. I love helping people at this stage because I can remember what it was like back at this time. And it's just overwhelming, right? You have all these questions and don't know quite how to go about it. And to me at this point, it's like just like breathing. When you first get started, it's much more difficult but once you've been breathing for years, it's easy to not even think about it anymore. So, I'm excited to go through some of the things that you are struggling with or might have some concerns with, and now is probably the best time to hit that since you're pre revenue and there's not a lot of other questions to ask I don't think so. Let's get into the things we can help you with.

Brenna: All right, great. So I mean, yeah, like I said, I’m just starting from the very beginning. I know that growing an email list is really important. What would be some tactics you would use to get your email list built when you don't even have a product to offer people?

Mike: That's a good one. I think that with something like you have here; I think that every product is going to be different at this stage. And you have something that has like this potential viral component to it, because people are very passionate about their kids and you have something that's different. If you were you making coffee or something or just like everyone, that's already been done before, I probably would approach it a lot differently than if I had something like you have. So, the first thing I would try to get to a point where you can get some additional samples made and get this into people's hands that are influencers, going to mommy bloggers or Instagram personalities, potentially even sending it into newspapers or media agencies and getting the word out that way.

And certainly people will talk about pre revenue companies and products, and ideas that have the potential to go viral, that have that component of why I think of this, or I certainly need this for my kid would be one angle I would be going after. I think that starting a blog or a YouTube channel or both right now working through the process of where you're at. So you're talking to camera, showing the samples, talking about the things that you're improving, how your patent is going, the manufacturing and that you're using quality materials, and a weekly update or something along those lines where you're starting to build an audience that way, that would be one of the first things I would do.

It's going to be tough to run Facebook ads or do some of the stuff that we've done in that regard because it's a single product, it doesn't physically exist yet. Things that we've done to build a list are a little bit different where I don't know that it would work as well in this case. I mean, it definitely is important to build an email list but it's just as important to build a following. So if you can build — I think I would be going after the social aspect more, going after, again, the YouTube channel, Instagram, your own blog and putting yourself if you're comfortable with it, like front and center of the brand and being the spokesperson for it. And then again, getting in front of influencers to start building a story and some traction and people talking about you out there, versus just trying to get people on an email list.

It's going to be difficult to accomplish that. I mean, you'd have to run Facebook ads for this particular product that doesn't exist yet. And you're like, what's the ad going to be like? When the thing becomes available, we'll let you know, give us your email address. Those types of things are difficult to do. And it's also a seasonal product that I think that once you kind of figure out how things are going with the ads, the end of the season will be here before you know it, and it'll be more difficult. So I think I would go that route.

Brenna: Okay. So just building a following, not necessarily getting a list as huge as you can.

Mike: I mean, I would definitely, you’ll have that email component there, but there has to be a driver. So the way that we've built our list, or I should say plurally, built our lists, you have to kind of begin with the end in mind. So, the end of mind is we're going to build a brand and we're going to build a brand that has multiple skews, we're going to be consumable, and we're going to have a good lifetime value of a customer and all these different types of things.

And we kind of have an idea of what our brand makeup is going to be from day one, and we kind of back that up and  take it one step at a time and say, okay, well if we can get people that are interested in coloring or people that are interested in tactical type stuff to join our email list, we can get them through that pipeline at some point to become a customer with maybe the free plus shipping offer or a really good value discount offer and then another upsell, and things of that nature. And we're going to make our money back on these endeavors in the long run because we know that we have that lifetime value of a customer component.

What I’ve heard so far, maybe you have other things that we haven't talked about yet, but if you have a product that it's a high quality baby blanket type thing, they only need one. A parent would only really need one of these, or maybe the kid grows up a little bit, and you need a second one for a different size. I don't know exactly how your sizing stuff will work. But you're going to have to be careful with the economics of what you're doing. If you're spending too much to build a list and ultimately you can't make enough money back off of, it could be a problem, right? So I mean, and you’re launching into a product that doesn't exist yet, which is another thing I think that's really important.

The other reason we build list and be able to have these people is to be able to send that traffic to Amazon. This is a part of our Amazon launch strategy course. And we'll send people to Amazon and try to rank for certain keywords. But I'm not really sure like wearable baby blanket, I'd have to look but because you're making something that's into a segment that doesn't exist yet, all that effort isn't really necessary because when someone starts looking for a wearable baby blanket or whatever you're going to call this thing, they're naturally going to find you anyway. So, does that make sense what I'm kind of trying to think through the thought process here?

Brenna: Right? Yeah, it's so specified.

Mike: Yeah. So I'm thinking like if you have influencers talking about it, naturally you're going to build a list that way but it's people that are interested in that one product, that they're talking about this baby blanket in the influencer sphere and you're building up a community, and you’re talking about this stuff. And I would bring your kids into it as well and just like maybe some parenthood struggles and things that you're — also things you're talking about this plus one layering thing is probably something other parents are searching for and talking about. And be going after that angle is a way to gain an audience rather than just like, I'm going to build this generic list of parents that eventually when I release this product, I hope they buy it, because kids change so quickly and grow so quickly.

Six months from now, the list that you build, the kid might have outgrown your product because I think that this plus one thing is — I'm not a parent, so I'm ignorant here. But I'm thinking that it's something that's just in early childhood, they're eventually going to go past that need. And you want to make sure that if you're building a list that it's going to be marketable for the foreseeable future, and not for a finite amount of time.

Brenna: Right. So how would you go about finding those influencers and what kind of offer would you make to them to make it an incentive enough for them to want to push your product?

Mike: Yeah, I guess let me just ask one question real quickly before I answer that. How difficult would it be for you to get 30 production samples sent here or made? It sounds like you're going to make the initial ones in the United States, would it be easy for you to be able to come up with some product to send influencers, or is that going to be too difficult at this point?

Brenna: Well, the only issue is that there's an MOQ for ordering. So, the samples that I have made now are not out of the fabric that the samples are actually going to be made out of. So, what I'll have to do is just kind of bite the bullet and make my initial order, like giant order in order to do that, which is scary because you don't have the product validation of making the giant order.

Mike: Yeah, I mean, that's definitely difficult. What are we talking about in terms of giant orders, 100 pieces, 1,000 10,000?

Brenna: It's 2,000 yards.

Mike: How many pieces that make?

Brenna: It will get me about 1,300.

Mike: 1300. Okay, I mean, and I definitely can understand how 1,300 seems like this massive number at this point because you have like no validation and stuff, but what you'll find is if the thing takes off that 1,300 is nothing. You'll sell that in a couple of days if things go well. And this is one of the biggest struggles that I continue to have with e-commerce because like we're still in the same boat, we're still launching new products and we're still having to deal with this exact calculation of like, okay, are we going to order 1,000 of these or 5,000 of these 10,000, what's the number that we're going to order as our initial order? Because if we get something that is a hit and takes off and does well, we don't want to run out because you don't want to interrupt that momentum because you only really get one chance to do that.

Very rarely is a product so good that it doesn't matter if you run out of it or not. People are going to be lining up around the door for it forever especially in the situation I was saying with you. I mean, it's a finite amount of time that this is useful to a kid and a parent. So 1,300 isn't really a crazy number. I mean, let's boil this down to like numbers that you can get some comfort with and try to — and we'll get into the influencer thing here in just a sec. I haven't forgotten about that. But I want to just give you some comfort here with this number. If you were selling 10 per day, it's 130 days with the inventory. It's a third of the year. If you're only selling five per day, it's 260 days with the inventory. It's like about three quarters of a year.

These are pretty typical numbers for an inventory business to want to have somewhere between three to nine months with the inventory on hand. So the MOQ, even though it's kind of daunting and it is definitely an overwhelming number and I imagine the cash flow needs to place that order aren't small either, especially if you're just getting started, but this would be a pretty typical amount that I would order regardless. If the MOQ was even smaller, I’d still probably want to have something in the order of magnitude like this number of skews on hand to be able to handle the five or 10 per day that I would hope to sell moving forward.

So I think, first off, get comfort with that number, realize that you're probably going to give away 50 to 100 of them to influencers. And you're in this chicken and egg situation where you might not have the money to be able to place the order, if you can't get the money to place the order, then you can't get the product. If you can't get the product, then you can't get sales. It's kind of like this whole thing that kind of continues to feed back and forth on it. So, I just wanted to kind of take a minute and just kind of have some empathy and relate to the situation as I've been in that same spot, not only in the very beginning on the first thing that we ordered, but we go through this every single time we go to place an order, so I get it.

I guess the other follow up to this, I mean the amount, what is the cost per unit, what is the order that you would be placing here? Are these like five bucks a piece or 10, or what are they going to cost you?

Brenna: There's a couple of different versions of them and they range from about six or seven to nine, I think, nine, nine and a half.

Mike: Got you. And then what do you think — and that's made in the USA. So what do you think, have you looked into if they were made in China or Vietnam or someplace like that, what they would cost ultimately, at scale?

Brenna: I haven't gotten that yet. We haven't found any manufacturers over there. And I haven't really looked yet to be honest, just because everything that I've heard from friends and other people who have had any sort of like apparel made is that you should have your manufacturer close so that you can do your quality control and all of that. And I'm in San Diego and I know you're in San Diego too, and this manufacturer is in Chula Vista which is like 20 minutes from where we are. So that really appealed to me and I think that in the beginning stages, I would rather eat a little bit more of the costs and make sure it's like a really good quality product and it's being done right. And then once everything is straightened out and all the bugs are out, then maybe going to China and figuring out how to lower costs even more.

Mike: Yeah, I think that that's by far and away your best bet for a whole bunch of reasons. Besides the stuff you just mentioned is the timeline of getting the stuff as well is significantly longer in China. You're having to put money up further in advance. There's also some additional risk and you have the shipping cost of getting it here and all that stuff. Being able to just drive down to the manufacturer at this point, even if you're paying double the price is definitely a good move. So, in terms of retail pricing, what do you think you'll sell these for?

Brenna: I don't know, an average baby shower gift is 49.99. These would be a great baby shower gift. I would like to be just under that. There's two different versions, it's called the chilly child and there's two different versions. There's a sleeveless version and then there's a sleeved and hooded version. And I was thinking 39.99 for the sleeveless and 49.99 for those sleeved and hooded version.

Mike: Got you. So with your initial order, you wouldn't necessarily have 1,300 of one skew, you probably have more like 750 of each skew, or I did the math wrong, that's 650 of each skew.

Brenna: Right, yeah.

Mike: Yeah. So I guess the next thing is, is that a number that you feel comfortable then? Do you guys have $10,000 or $1,000 in savings to be able to do this or that put the first stress point you have right now is there's other stress points.

Brenna: Well, that kind of brings me to my next question is we're considering doing a Kickstarter campaign for it and I wanted to hear if you had any insight on that.

Mike: Yeah I mean, we've done Kickstarter a couple of times. I mean we've not been successful with it, but I think a lot of it had to do with the types of products we were trying to launch in the Kickstarter. I have a couple of friends who have done really well with Kickstarter, and this certainly could be the type of product that could land well that, the type of product plus the situation. For us, we weren't in a situation where when we were launching a Kickstarter were like legitimately we need a Kickstarter to be able to fund the product. It was more of just like a marketing gimmick for us to use Kickstarter.

And actually my friends that are very successful with Kickstarter that's kind of the case for them as well, but there's certainly a lot of previously very successful Kickstarters where like legitimately if it wasn't for Kickstarter, the thing just never would have gotten funded. And that could be a really great angle for you and also can just be some validation of, do people even care about this thing? So there's a couple of platforms that are out there for Kickstarter to help generate pre interest in the product. So before you launch it, you do get a list of people and you can do some pre interest, and that might be a way to tell the influencers about it, maybe even run some Facebook ads just as a trial balloon.

You start working on your channel and get people, you tell them, oh okay, April 1st we're going to be launching our Kickstarter, here's the pre prototypes and we're working towards getting a final sample by April 1st, and then launching in a Kickstarter. That could certainly be a way to go about it. And once it's live on Kickstarter just like refresh those influencer relationships. I mean, the way that we've done it has always been to send them a physical product and have them review it. So for you, you'd have to go through a different methodology of contacting influencers about something that doesn't exist yet which is going to be a little bit more difficult but certainly not insurmountable.

Brenna: Right. What were those platforms that you mentioned for Kickstarter growth?

Mike: This just came up the other day, someone was asking me the same question the other day and I still can't remember the name of the — it has the word kick in it. I'll tell you what, I'll email you after the podcast and we’ll also throw it in the show notes. There's a really popular one that that does it, and it's been over a year since I've used it and I just can't remember the name of it on the fly since we're recording right now. But I'll definitely make sure we put that in the show notes and shoot you an email with the platform name. But basically what it lets you do is it lets you manage your Kickstarter campaigns from like soup to nuts, so you're going to want to pre seed your campaigns.

So the idea is that they make the landing page for you that allows you to capture email address, allows you to talk about the product and what your future Kickstarter is going to be which is really important to be able to like on day one push all this traffic to your Kickstarter of emails that you have collected. And we’re back to kind of like doing an email collection which we were talking about not doing at one point, but if we're going down this route, I think it does make sense because you want to be able to get — the first day of the Kickstarter is the most important.

So if you have a big email list, you say okay, my Kickstarter is now live, go buy this thing. You can get a certain percentage of hopefully the thousands or tens of thousands of people to join your list to go over to Kickstarter and buy, and you hit your goal on day one and it gets to the front page of Kickstarter and other people are seeing it and it has that opportunity to become viral, then you have a good chance of that. So this software helps you with that, and it also helps with after the Kickstarter is over, it helps you collect the surveys. There's a thing called a survey on Kickstarter. After you went to Kickstarter you have to fill out your name and address, and things of this nature. And it's inherently pretty poor process the way that Kickstarter put together, so this software helps with all that as well.

Brenna: Okay. What would you think is — do you think there's any negatives going that route like the Kickstarter route?

Mike: Not really, I mean for us the negative was just our ego was kind of hurt, but we were we were going to launch the product anyway, both the products that we launched on Kickstarter we were going to do them anyway. The thing that's funny is the first product that we did ultimately, put up on Kickstarter the book that we put together, it was a product that it was my idea; it was a one of our coloring books. And the coloring book was — it's called, The Greatest Adventure. And basically, it's a story of a brother and a sister and a mom and a dad that go out on a picnic in the woods, and the sister and brother get separated and lost, and then it becomes like this kind of like almost like Disney story kind of thing where like they're going through the woods and lost, and then a bear comes and saves them.

And then they end up in the ocean and a dolphin saves them or whatever. And at the same time, there's also a band and trying to hurt them, and it tells this whole story over 50 pages. And my thought was when I came up with the idea, which I still think is brilliant but the market place has told me differently. The idea was that a parent or a grandparent would color the book and then give it to the grandchild. And it would be a story that they would read together and that it would be like this heirloom that the kid would have forever, or something that the grandparent colored because it's typically grandparent age people is our market.

And the Kickstarter failed miserably. And we made 4,000 copies of the book which is more than we typically make of a book on our first run and we still have like 3,000 something of these damn books lying around years later, because no one really liked the concept. So there's definitely times where the market is telling you something and you just want to ignore it because you're so convinced that it's a great idea. And maybe that's the situation here too. I mean I personally don't think so because I think what you're saying makes perfect sense and I know how not even being a parent, I know how parents obsess about their kids being cold, hot or cold but mostly when they're cold, they're even more stressed out about it. And again, it's something that you would use yourself.

The coloring book it was something I would never have use myself, I just thought it was a cool idea. But the Kickstarter can be the thing that helps validate what you're doing. And if you run a moderately successful or better Kickstarter, you'll know that you're on to something and that you can feel confident mortgaging your house or whatever it takes to raise the money to be able to release this product and put the effort into it, because it's not only that you're taking time away from your kids or your job or whatever the things you have going on to do all this, it's worth the effort to do it. The market validation part it certainly will be really helpful at this stage.

And if the thing just completely crashes and burns and people are like why would I ever buy one of these, this is just stupid? If you are better at listening to that than I was, it might help save you a whole bunch of money.

Brenna: Right yeah, so like down the line of product validity and everything, how do you go if you don't do the Kickstarter out, how much product validation do you think you need and what are some tools you would use to measure that? Would that all be through the influencer route?

Mike: There's actually another route that I've seen people do before and there was actually a presentation at EcommerceFuel Live last year specifically about this strategy. And I personally don't like doing this because it's kind of disingenuous going into what you're not actually looking to make a sale, but you're looking to get data validation. So let me just kind of walk through what you would do. The idea would be that you would some sort of Facebook ad for the product as if you were actually selling it, send them to a landing page. Something like ClickFunnels is the absolute perfect platform to do something like this.

And you can send them to a landing page where you can take it to one of like three extremes, like give me your email address and we'll let you know when this is available. You can have them add to cart and actually go to that point and the thing just like errors out at the point where they give you their credit card, or you can actually take the order and then just email them afterwards and say, sorry, we're out of stock. We don't know how long we're going to be out of stock, we're just refunding you. And again, like with all these, for me it isn't the way that I like to do things but it's a lot different when you're bootstrapped and you don't really have a choice. For this particular situation, for a couple of hundred dollars and ClickFunnels fees and some ads, you can get an idea of what your conversion rate is going to be.

Are people willing to — is the landing page, just give me your email and I'll tell you when the thing is available, what's your conversion rate there. It’s the thing like just add to cart and the thing breaks after that, and you can see what percentage of people are willing to add it to their cart, or are you actually going to try to get purchases. The add to cart one is probably the most effective measuring stick where just they add it to cart but it doesn't actually let you check out. Our add to cart rate is something like five or 6%, and our conversion rate is like 2%, it's pretty typical e-commerce stats. And if you're seeing something way below average, below that, then you know you probably have a problem, and if it's above that, you know you have a hit.

And if you're seeing a three or 4% conversion rate to purchase or a 20% add to cart rate or something astronomical, you know you have a hit and you can with confidence then go and release this thing and do it. And on top of that, you probably would already have figured out your audience and other things along that line as well. So, I like this method for you, as well as kind of like a bootstrap, scrappy kind of way of going about it.

Brenna: Back to that question from earlier about how to get influencers and what is a good enough offer for them?

Mike: Yeah, so for us, it's always been like I said, it's always been us offering physical products. So, the way that we've done it is we have it in three tiers, and this is in the coloring space or arts and crafts space and tactical space. We built them in both of these things where if it's under a certain number of subscribers, I think it's 2,000, I have to go back and check my notes, because it's been a while since I wrote the SOP, but I believe it’s if they have 2,000 subscribers or less, we simply offer them the product for free to do a review. So we’ll reach out to them manually and just say, hey, look, we have this tactical flashlight, we'd love for you to review it, let us know if you're interested, we'll send you one for free.

And typically at that level, they're willing to do the review for free almost no questions asked. They're just happy to get anybody that's talking to them and give them a free product when they're a smaller channel. If there are two to 10,000 people, we’ll offer them usually multiple things out of our catalog. In your case, you don't have that, so you might have to get more creative in what you're offering, but we'll send you this tactical flashlight and you can pick anything else off a Tec nine or we’ll send you a set of gel pens and any other one or two things or whatever from ColorIt, and we'll send you a care package, we'd love for you to review our products. And if it's over that, we offer them that plus product to give away to their audience. So they get the baby blanket, the chill, what did you call it, the chubby chill or? I forgot.

Brenna: Chilly child.

Mike: Chilly child, sorry, I'm going to write that down so I have it, chilly child. You offer them not only a chilly child for themselves and for their kid but also for their audience. So it's maybe you send five of them to them and the other four they use as giveaways. And that's worked really well for us. Surprisingly, a large number of people have taken us up on that, they continue to take us up on this method. The people that come back and ask for money, we just tell them no, like sorry, this is our best offer. And our goal is to align ourselves with people that are actually interested in the product, so if they're happy to get $50 worth of free product or whatever it might be in exchange and for nothing else, except for that and then do a review, that means that they actually want the product.

And they're making the video of that product because they want it and because they think it'll be good content for their channel. If they also want $500 or $1,000 to do the same thing, they're only doing it because they want to get paid. They don't really care about your product; they only take an interest in the money. And I watch a lot a lot of videos on YouTube these days. It's something that we're personally interested in making our own channel for some other stuff we're working on, and it's so obvious to me when someone is like, oh I'm doing this video about this magic food or this magic thing that I love and this video is sponsored by these guys. They sent us the stuff for free, all of a sudden they take an interest in this, and this is something they never talked about before.

I probably never would have talked about if it wasn't for the money. That isn't going to work as well with that audience as if it's something that they actually have an interest in like oh man, this was a great idea. I need something to keep my kid warm, please send me one, I'd absolutely love to have it. That person is going to be a much better influencer for you than the other one that just wants the money. The problem with that strategy is that you have to have the physical product and I don't know how to solve that problem yet for you.

Brenna: And then are you just direct messaging these people that you're finding that have…

Mike: We do yeah, we just reach out to them through their contact us on YouTube or if they — a lot of times that doesn't get answered, we will find them on Twitter, Medium, or we’ll find their website. Some of them, a lot of these people have a blog or a website in conjunction with their YouTube channel, and they'll have a contact us button on their website, or you can use the Whois record of their domain name. And so, we get pretty scrappy and try every angle we can to reach out to these people. And we’ll contact them three times even if we get no response before giving up if they don't respond, because sometimes it takes a couple of times before you hit them at the exact right moment. Then we go from there, and then it just becomes what can we negotiate and offer.

We try to be pretty steadfast because the Philippines team is doing it and I don't want them asking me about every single influencer. They have a pretty good system for it now and we have a procedure for it where again, if they're between X and Y subscribers, we do this, if they’re between A and B we do this, or whatever it might be. But we are always leading with the physical product and that's kind of the challenge for you is you might not have it yet.

Brenna: And then once the whole — if we end up doing the Kickstarter route or whatever, would you suggest going on to Amazon right away as like the first jumping off point, or would you suggest starting with your own e-commerce site first and then kind of going into Amazon as well? Or how would you approach that?

Mike: Yeah, I mean, it's a tough one because normally I always tell people do Amazon first, don't bother screwing around with everything else. You're going to be a solopreneur, you only have so much time, it's way harder to get business off Amazon than on Amazon, etc, etc. But with this product, it might be a little bit different because again, people aren't looking for you yet. So if that's the case, there is no advantage to Amazon in your situation because the advantage that I see with Amazon is the built in traffic, the built in eyeballs looking for a tactical flashlight or gel pens or a tow rope in Dave's case or whatever it might be.

They might not be looking for a wearable blanket. I know that they look for baby blanket because we actually sell a baby blanket for WildBaby, but that's not exactly what you're selling. It's kind of trying to take a square peg and put in a round hole kind of thing. It's kind of close to it but not quite the match that's going to convert well enough to rank for baby blanket. So, the first step I would do is just go see, is there any other search term that I'm not thinking about and use a keyword search tool thing that would show you the volume of the searches on Amazon. And if there isn't, if you're trying to create a market, Amazon is not the place to do it. That's the hardest place to create a market because you have less control over the whole marketplace.

So, I think what I would do to keep it because it sounds like budget is a concern to keep it cheap, I would use that same ClickFunnels methodology I was talking about earlier. If you have a single skew that you're selling, nothing is less complicated than ClickFunnels. Later on you can get a Shopify store and all these other things, but something like ClickFunnels makes it super easy to set up a one page landing page website with a shopping cart that people can buy. And you can also even offer an upsell, maybe it's a second one or a different color or whatever it might be, all integrated fully within ClickFunnels.

That would be probably the way that I would go about doing it, and then send the traffic that you're trying to capture directly to that page, basically to your website, maybe it's just chilychild.com. And your influencer traffic can go there, your Facebook ads or maybe your Google AdWords or other things that you're doing, all your YouTube marketing and Facebook, Twitter stuff and Instagram can all point to Chilly child which in actuality is just like a one page ClickFunnels site with a shopping cart, and you can literally get it done that easily, and that might be the way that I would look at doing it.

Brenna: Right yeah. I have a Leadpages, ClickFunnels, well I guess it's just a landing page up right now on Chillychild.com, and it's just email capture form and the offer is to win a free chilly child. I don't know when, but that's the offer for now.

Mike: I think Leadpages might have the checkout component as well now. It's been a long time since I've used Leadpages, but I'm certainly not a fanboy necessarily of ClickFunnels or anything like that. So any of the landing page builders are fine, just something that makes it easy and simple for you and keeps your cost down because obviously cost is a big factor here. And to start with, you're going to be putting all your money into the inventory and might not have thousands of dollars leftover to build a Shopify website or some of the other things that can cost a bunch of money.

And if there isn't traffic on Amazon, you're going to be kind of forced to doing this on your own which is both fortunate and unfortunate. I mean, you can look at it both ways. It's unfortunate from the standpoint of like it won't be as easy. You can't just have Amazon handle the whole thing for you and have that built in traffic where you can just start doing PPC on Amazon for kids’ blanket, and have this instant sales volume. So that's unfortunate. You have to make your own site and there's extra work there.

The plus side to that is that you'll own all those customers yourself. You don't have to deal with all the Amazon BS with competitors and copycat stuff and hijack listings. And I can go on and on about all the negatives of Amazon as well. So there's definitely bright spots to both things here. And I think that you should go with the one that makes the most sense for your particular situation.

Brenna: Okay, I just got like one or two more questions and I’ll let you go.

Mike: Sure.

Brenna: I have another one to get to, but I've heard you talk a lot about Facebook ads. What about, do you have any insight on Instagram because that's kind of where my target market is living right now?

Mike: Yep. So we've done both Facebook and Instagram. Instagram definitely skews younger, which I would imagine most of your customers are going to be. They're going to be 20 something or 30 something new parents, they're going to be hanging out on Instagram. Facebook could be the grandparent crowd certainly. The thing that we just struggled with and we have just personal experience with this, I've talked about this a little bit now publicly. We were paying always under 50 cents per lead when we do lead ads for ColorIt and Tactical. I was just talking about this and we just recorded a EcomCrew Premium Q&A today, so it's fresh in my mind. We're paying 21 cents this month for thousands of leads. And we're recording this midway through the month, 21 cents for ColorIt leads this month.

So I mean, the cost per lead is just really, really cheap. When we were trying this stuff for WildBaby, the best we could do was like $7 a lead. I mean, it was just awful, just embarrassingly awful. And as you know probably from just following us, I'm a pretty open book. So even if it's embarrassing awful, I'm still happy to share because I think that's important and that's how people learn. So, things that I've come to realize the difference now that we've been able to do this across four different brands and we've talked to so many different people in the community, these types of tactics work way better on an older audience, the 45 plus 55, 65 plus even better.

Those people are more willing to share their email. It sounds awful whenever I say this, but they're easier to convince with these marketing tactics, like you got a chance to win a free chilly child or whatever. To them, that seems really compelling. And a millennial age person is like that's such a gimmick marketing thing. Like, I don't trust the internet; they're putting on trusting and understand the dynamics of the internet. So, it's been much more difficult to get those people to convert. So we were struggling mightily. It was always just brutal.

And then to make things worse, Facebook changed their targeting. So you used to be able to target moms with kids that are zero to one to zero and two, and then it was like two to five or whatever the age ranges were. And WildBaby for us was that infant age is what we were targeting. And when they got rid of that, it made things even worse. So, I don't know exactly, you can't target moms specifically anymore. I don't know exactly how to go about running ads that are going to be super effective. I mean I think if I was to start over and be in your in your position, I would think of a brand that people would like that would be like a shoo-in, like if they like that product, they also are probably going to like your product and start targeting interest groups like that.

But here is the thing that becomes a problem and what was we were struggling with WildBaby doing this, and this is just a free lesson and $10,000 or more than that, way more than tens of thousand dollars in ad spend that we spent on WildBaby trying to figure this stuff out. The other thing that we realized was that because someone likes let's say Fisher Price, like just again not being a parent struggling for kids’ brands, let's just say like they like Fisher Price, that doesn't mean that they still like it, or that it's still relevant I should say to them, because you might have an interest in Fisher Price when you had a one year old kid seven years ago.

But Facebook has been around now for a while and that interest might be an eight year old kid now that your product is no longer applicable to. That was what was so great about the age targeting thing because you would get a newborn parent or a parent that has a newborn kid; you know that you were targeting the right person. So, I don't know exactly how to solve those issues. We just we were never able to crack the code there. But I do agree with your assessment that Instagram would be the place to do that. We did that as well. It just with our products which were not unique, and I think that was where we are still struggling, they weren't that aha, this is like super shareable and it was just another footy or another onesie.

And they're good products. I mean they're really highly rated and people love them and they got certified organic cotton and they're really high quality, but in a Facebook ad it isn't that like holy crap, I'm going to stop scrolling right now and tell all my mom friends about this onesie because they've already been exposed to all that. But your product maybe that happens, maybe your product has that aha like holy crap, I need to buy one of these chilly childs right now and tell my friends about it, and that will certainly help you.

Brenna: Right. Yeah, I think that's everything I had for you. I really appreciate your wealth of knowledge Mike.

Mike: Of course, happy to help. Let me add one more thing on the Facebook thing that also can give you some peace of mind. The great news about Facebook ads is you will have an answer on whether it's working or not typically with $100 or less. So it isn't like the old days where we had to buy a $10,000 magazine spend or something and hold your breath, and hope that it works. You can run some ads and know if it's working with relatively small amounts of money. So I just want to throw that in there. We did spend five figures on it, but we had the war chest to do it.

And I'm also really stubborn and I didn't want to have to say on the podcast that I tried to make WildBaby as profitable and I couldn't do it. That sucks. So I was always trying to come up with another angle, another way to do it, but it ultimately just it wasn't working with what we were doing. But I think that you'll know relatively quickly and I think that you have a better product to do it with as well. So I just wanted to throw that out there.

Brenna: Okay, great.

Mike: Awesome. Since you're in San Diego, we should get together sometime and grab lunch or something.

Brenna: I'd love that.

Mike: Yeah. Well, you have my email and I'd love to grab lunch with you, you can come by into our facility. And hopefully, you've enjoyed recording the podcast with us here. And we'll get your episode up probably relatively soon so you'll be able to hear yourself in the bright lights of the EcomCrew Podcast soon.

Brenna: Do you mind if I tell people where they can sign up for my email list?

Mike: No. Do it, tell people, go for it, do it, go for it.

Brenna: It's Chillychild.com and then you can follow me on Instagram @mommingout and that's where I'm kind of trying to grow my little following. So yeah, thanks so much.

Mike: Awesome. Yeah, I think if you're out there and are a grandparent to a newborn grandkid, or you're a parent to a newborn kid and you want to keep them warm, definitely go to Chillychild.com, and check it out.

Brenna: Yeah, thanks so much, Mike. I appreciate it.

Mike: Of course. It's great talking to you and best of luck with everything.

Brenna: Thanks again.

Mike: No problem.

All right guys, that is a wrap. I hope you guys enjoyed the 216th edition of the EcomCrew Podcast. If you'd like to get to the show notes for this episode, you can go to EcomCrew.com/216. And of course, if you want to be on your very own Under the Hood, you can go to EcomCrew.com/UndertheHood. All right guys, that's going to wrap it up for this week. Right now I'm recording this from New Orleans. By the time this goes out, I will still be in New Orleans for EcommerceFuel Live, which I'm looking forward to going to be speaking at the event here. So, I'll have an update about that when I get back. Until the next episode everyone, happy selling, and we'll talk to you soon.