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Mr. Biz Radio: E-Commerce, Paid Ads, and Optimizing Keyword ROI

Unedited transcription of the show is included below:

(00:05):

Welcome to Mr. Biz radio, Biz. Talk for Biz owners. If you're ready to stop faking the funk and take your business onward and upward, this show is for you. And now here's Mr. Biz, Ken Wentworth.

(00:19):

All welcome to another episode of Mr. Biz Radio with me Mr. Biz, Ken Wentworth. And this week we are talking about something that has really come to the forefront. It's been there for a while, but it really has come to the forefront, especially during the pandemic. And that is the way of eCommerce. A lot of businesses have gone from, you know, they were brick and mortar and during pandemic quickly had to, if they didn't have an online store already had to shift and pivot, I hate using that word so overused, but pivot change, whatever you wanna say into the, onto the e-commerce platform, right? When things were shut down, and if you had a brick and mortar, you're not getting foot traffic, et cetera, you gotta really shift in into things. And so it really came to the forefront. Again, it's always been there. It's been there for a long time, but it really shifted that.

(01:04):

And I think what, what I've seen anecdotally is a lot of businesses in that regard have said, oh, you know what? This eCommerce platform is actually pretty freaky cool when you get it nailed down. And so that's why, what we're gonna talk about this week on how to build that successful eCommerce platform. And of course we have an absolute guru stud expert this week to talk to us about it. And that is Lesley Hensell, she's the co-founder and partner with Riverbend consulting. She's got 60 plus employees who solve critical problems and offer effective growth strategies for sellers on Amazon and other eCommerce platforms. She has personally helped thousands of third party sellers get their suspended Amazon accounts. And as I NS back up and running, she leverages two decades as a small business consultant as an, an Amazon seller herself to solve the underlying business issues that small e-commerce businesses face. Lesley, welcome to Mr. Biz radio.

(01:58):

Thank you so much for having me on.

(02:01):

Yeah, absolutely. So you know, we've, we've talked about e-commerce on the show over the years you know, I don't know maybe a handful of times, but especially because it's like, as I mentioned, it's come to the forefront so much in the last couple, two, three years with the pandemic and things shifting. So I definitely wanna I'm, I'm looking forward to getting some of your tips on how to do that and set those things up, some of the dos and don'ts and, and whatnot. But before we get into all that, why don't you if you would walk us through a little bit of your entrepreneurial journey, how did you come to river bend consulting, doing what you do now?

(02:32):

So I am the classic story of someone who got their start on Amazon for personal reasons. And you will hear this from so many entrepreneurs who are on Amazon as sellers. So back in 2010, I had two boys and one of them was diagnosed with autism and other special needs. And at the time I was a small business consultant. I had been a marketing and operations consultant for many years and done that consulting kind of, you know, on the side at home working part to full time and taking care of my kiddos, having a great time doing that. And I realized once my kid had his diagnosis, there was just no possible way I could do all the therapy and all the things we needed to do and have these client relationships I had to nurture. And a friend of mine told me about selling on Amazon.

(03:24):

And I thought, that sounds pretty cool. I can do that anytime day or night. And if that's exactly what I did actually homeschool a kid for three years, did ridiculous amounts of therapy with him. And then when my husband would come home for work, I'd work on my Amazon store at night on the weekends, I would source product. And you know, it's funny cuz out there in the community, in the Amazon community, you find so many families that have these stories where necessity was the mother of invention. You're like, what am I gonna do in this bad situation? I need a side gig, a different income, a different lifestyle. And they turned to Amazon to sell. So after a few years, got the kiddo back in school, he's doing really well. And I'm trying to figure out what do I do now? Do I wanna go back to the old consulting I was doing?

(04:12):

I started going to these Amazon conferences meeting other sellers and some of them had been suspended from Amazon, had their accounts taken down, their key products taken down and they needed help to write the plans of action and to change their business so they could get back up on Amazon. I thought, okay, that's operational consulting. Some of it's marketing, that's the same things I used to do with traditional business. So let's do that on Amazon. So I started writing plans of action appeals five years ago, my partner, Joe Alta, and I started Riverbend. And now we have a giant team, including a lot of X, Amazon employees and spend our time every day, helping people who are having challenges on the platform.

(04:56):

Interesting. So, you know what I, one of the things I really love what you just said is you kind of mixed, right? So you had to, you had to, you know, make a change based on some personal things and all that, but then you come full circle and you're like, Hey, I used to do this. Let me pull this into this as well. And really, you know, create a, a, a, even a broader offering to be able to help people, not just, Hey, here's just this piece on Amazon, for example, but man, I can bring all this other stuff into it as well that have a, a bigger, bigger suite of things to offer people.

(05:27):

And I'm so glad I did because then eCommerce, as you said, it was already taking off prior, but especially during COVID and there are a lot of people who have had brick and mortar stores and decided to sell online, they really needed some operational help and guidance. And Amazon especially is a universe unto itself. There is this huge set of domain knowledge you have to have to sell there. It's not really like eBay where you're just tossing a product up and it's your own listing. And everything usually goes really well. Amazon has really strict rules and a lot of them. So it was a great time to, to make that shift into, or your favorite word, pivot into eCommerce <laugh> and and be in this exciting space. It's, it's been a really great place to be.

(06:17):

Well, it's interesting too, is I know during the pandemic and shortly thereafter, you know Bezos and Amazon and, and the like took a lot of heat of, oh my gosh. During, you know, because so many people were shifted to Amazon to buy groceries, to buy all sorts of things, right? So his net worth went, you know, through the roof and he gained this money and I looked at it the other way. I mean, I guess I, I took a little bit of a, a, a different approach in my thought process of, instead of sort of hating on Jeff Bezos and, and, and Amazon for growing their business. I'm looking at it and saying what a lot of people were shortsighted don't realize is Amazon provided a platform that may have helped. A lot of businesses actually stay in business and, or at least bring some revenue. And if you had a brick and mortar, you didn't have your own online store before that gives you a platform to be able, and maybe it helps you keep your doors open.

(07:07):

During the pandemic. 65% of the products sold on amazon.com came from marketplace sellers. Those are anywhere from people selling out of their basement to mom and pop businesses, to brand owners, to giant companies. So only a third of the products are actually amazon.com. And I will tell anyone who will listen to me that Amazon is the best small business incubator in the history of the world. There is no other place that you can take $5,000 launch a private label product, test it and see if it works. How else could you possibly get a product before the masses and test it and see if you have something viable and do it over and over again, till you have a line of products. And that's exactly what thousands of sellers do on Amazon every single year.

(07:53):

Yeah, no, I'm thinking, you know, the brick and mortar businesses that we're able to shift to that as well as, you know, maybe someone individuals that lost their jobs or, or at least were laid off temporarily or something like that that needed to bring in some money that, you know, turned to Amazon to be able to sell things. And again, continue to have some revenue coming in the door.

(08:11):

Absolutely true. We had clients during the pandemic that were specialty stores that were in states where they had to close their doors and they went online and that was how they made it through without having to lay off their entire workforce and being able to keep the doors open. And now they have both options. Now they're on Amazon. Some are also on eBay and other platforms and they have their stores back.

(08:33):

Yeah, no, I think that's a good thing. Yeah. It definitely helped a lot of people that I think a lot of people are shortsighted, you know, again kind of hating on Bezos and Amazon and things like that of, of taking a short sided view of that. But again, we're talking this week with this week with Lesley Hensell, she is the co-founder and partner with river bend consulting. We're gonna hit a break here. We're gonna come back. We'll get to Mr. Biz tip the week. We're gonna find out a little bit more about what she, she does with river bend consulting, how she can help us create that optimal eCommerce platform.

(09:02):

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(09:42):

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(10:11):

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(10:23):

All

(10:23):

Right. Welcome back to the show. It is time as always the top second segment for the Mr. Biz tip of the week. And this week actually is a, the tip is a quote from someone that I admire a lot. His name is Jesse Itzler. He actually was he's married to Sarah Blakely who actually was the founder of spans. If you're familiar with that. He's an amazing guy. Oh my gosh. He, he's hilarious. He's just a real guy. He's a phenomenal speaker as well. But one of the things that he talks about all the time, and I absolutely love it in the quote in the tip this week is don't negotiate. Your goals sounds really simple. And essentially what he means by that is once you set a goal, there's no negotiation. It, it, the goal is the goal you commit at that point to accomplishing the goal.

(11:04):

You do what it takes. Even if you have to extend the timeline, you're gonna have challenges. Don't negotiate them. Oh, well, I said I was gonna do. I said I was gonna run six miles today, but ah, man, I'm feeling really tired. I'm gonna run four. No, you committed to six. You do six. If you gotta run four and walk two, you do it. But you, you stick to the goal. You don't negotiate. Don't allow your, your mind to play with your yourself. And, and as far as negotiating that and scaling things down. So that is a tip of this week for Mr. Jesse Itzler all right. So I should, I should have mentioned, you can find out more of what Lesley going and how she does everything. We're gonna talk about that right now, but you on her website riverbendconsulting.com that's riverbendconsulting.com. So Lesley, tell us a little bit about what you do. Let's say let's say I, I already have, I'm already selling on Amazon, but I'm just really not getting things aren't taken off for me. It's just not working that well. And I come to river bend consulting. I say, Leslie, what do you got?

(12:01):

So there are a few different things. So a lot of our clients actually come to us cuz they're in trouble. Amazon has a large risk enforcement department. They're enormous. And they are looking for anything that compromises Amazon or hurts their customers. And so it sounds like to most people, oh well that's bad guys. No, a lot of really good sellers get caught up in that net. Even if they haven't done anything terrible, it might just be product quality issues or complaints. So we help people when they've been thrown off of Amazon or their products have been taken down for sellers who are just struggling because they aren't seeing the traffic they want or the results they want. We help with things like listing optimization. That essentially means getting people to look at your product listing and say, I'm excited about this product. I'm gonna buy it because we have great keywords or photography.

(12:49):

And also we do product videos for that. And then for entrepreneurs who don't wanna manage the day to day struggles in their account, we have account support. So that means we'll answer your customer service messages or did you know, fund fact, if you're a seller on Amazon and you send your stuff to the FBA warehouse, meaning Amazon fulfills the orders for you, they will lose damage misplace your inventory and then they don't reimburse you automatically. They say they do. And they reimburse you for a little bit automatically. We get all the rest of that money back. It can be thousands of dollars. So just a wide range of services for people on Amazon.

(13:31):

Awesome. So let's talk a little bit about FBA. So I've heard and that's fulfillment by Amazon as FBA stands for. So I've heard a lot of things about that. I hear some people that are like, oh my gosh, I would never do it. Maybe because of they've had some of the challenges you just mentioned and then I've heard other people say, oh my gosh, that is the only way to go. Where, where do you kind of side with that?

(13:51):

So I think FBA is a fantastic service from Amazon, but you really have to budget it in and understand the cost structure. It does cost you it's expensive, but so is using a three PL so if you have a company that fulfills your products for you, that would be a three PL the great thing about Amazon is it, you ship it and then you don't touch the products. Again, a lot of people have their manufacturer Shipp directly to the Amazon warehouse. So they're never actually touching the products at all. That is a huge time savings, money savings, operational efficiency. And you're really focusing on the things you need to do to move product or develop product instead of being a fulfillment warehouse. Not very many of us have that as one of our key areas, we're gonna really make a difference and make money, right?

(14:41):

Yeah, no, definitely not. So I I'd be remiss if I didn't ask about, so obviously there's been supply chain issues that have happened over the last couple years. You know, there's shipping challenges, logistical issues, and it sounds like we're potentially be gonna be facing a, a rail. The railroad folks are maybe gonna strike what are some ways that we can work around those or you've been able to find to work around those things or, or mitigate them as much as possible.

(15:12):

So a lot of the sellers that I've worked with many of them are looking for contract manufacturers closer to homes. So if they're the brand owner, they're private label, they're really looking for people in the United States or in Mexico for manufacturing, there's a lot of price, competitive manufacturers in Mexico, where if you look at the transportation costs and the differential in delivery time it's costing you the same as if you're sourcing from China or Taiwan in many cases especially when there's those port delays where you're paying for the stuff, just sitting out in the Harbor, right. And you can't control that. So that's one thing that folks are doing. And honestly, right now I've got a lot of sellers I work with who are stuck with last year's Christmas inventory, because it did not hit port and go into the warehouse until January or February. So a lot of them are very worried right now because they've got to move that product this year. They have no choice. And at the same time, they're trying to buy this year's product and decide how much of it to buy. There's gonna be some real bargains on Amazon and for second prime day coming up in October and then for black Friday cyber Monday, just because people have inventory from literally a year ago that they didn't even have an opportunity to sew last time around.

(16:36):

Yeah. It's been crazy that, that, that impact I remember hearing was it last year, I guess it was last year back middle of the year that Walmart had begun securing port spots and containers. They had foreseen like, holy crap, we we're gonna need a whole bunch of stuff right. For Christmas and the, the holiday season, et cetera. And they were out in front of that to, to the extent that they could, but they had the deep pockets. They can do that. You know, if you're, you're a seller on Amazon, you know, doing 10,000 a month or something, you don't necessarily have the, the, the capital to be able to pull that off.

(17:11):

Exactly. And the one, the people who did have some money a little bit larger brands, a lot of them had really complex difficult strategies. Like they were landing stuff in port of LA, but then they were sending some of it around a port of Houston or South Carolina, and then doing putting it on a, a train. That was <laugh>. So you do both the things and hope that something hits in time, so you can sell it for Christmas. It got really complex and very difficult and expensive Overland is expensive, but not as expensive as the cost of money and not selling anything.

(17:47):

Yeah. Yeah. I've got a client that's in the manufacturing space and they get a lot of material from overseas. And at one point last year we had 2.2 million sitting on the water as we call it. Excuse me at a port. Just it it's, it's at the port, but it's sitting, you know, offshore waiting to come in. It had gotten that far backed up and we were doing the same things. You had mentioned, Leslie, as you know, okay, well, can we ship to Houston and rail it from Houston to St. Louis and then truck it from St. Louis to Columbus, right. As an example trying to find out, you know, but it was expensive and even the containers. So in that particular business, the cost to ship a container was anywhere between eight and 10 times as expensive from the year prior, it was absolutely insane.

(18:35):

The difference and again, the, the logistical hoops you have to jump through, but in it's a competitive advantage, even though it's more expensive that if you at least have the product, cause a lot of your competitors might not have. 'em So interesting stuff again, we're talking this week with Lesley Hensell. She is the co-founder and partner with river bend consulting and find out more at riverbendconsulting.com. We're gonna hit the break. We're gonna come back. We're gonna talk to Leslie about how to optimize that, how to set up eCommerce on whatever platform you might have, what are some things we need to do? And maybe some things that maybe we gotta make sure that we don't do to be successful.

(19:11):

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(19:42):

Check out all three of Mr. Business best-selling books at mrbizbooks.com. Now, once again, here's Mr. Biz.

(20:12):

Check out all three of Mr. Biz's best selling books at MrBizbooks.com. Now, once again, here's Mr. Biz.

(20:22):

Hi there. Welcome back to this, Show. Sorry about that. I had a little cough little, little cough break there. Try to cover the microphone. But so Leslie, I want to, I wanna very curious and anxious to pick your brain a little bit on, I know there's, there's so many different ways to do this, but what are some of the things that are absolutely critical in setting yourself up for success in the eCommerce world? What are some things that we really need to focus on? Making sure that we accomplish?

(20:47):

So I'm gonna start with the most unpopular and unpleasant thing and get it out of the way, and then we can move to happier things. OK. So <laugh> the most unpleasant is the cost of ads online on platforms like Amazon, eBay, anywhere. If you're buying PPC, anything you're doing to boost the cost of those ads is skyrocketed over the last two years. There's a lot more competition and it's just how it's gonna be for a while. So whatever you think you need for an advertising budget, you need to triple it. And it doesn't matter if you're small or if you're big, you need to plan on spending when you launch products on Amazon and on other platforms, you get a honeymoon period and it's 30 days or 60 days, depending on who you believe. And during that honeymoon period, anything positive about your listing is multiplied by say 10.

(21:41):

So if usually you got 10 sales a day and it kept you at a certain ranking best seller for your product category during the honeymoon period, it's like so much more, it's treated like it's all glorious and beautiful, you know, just like a honeymoon <laugh>. So what's really important is that you start with the PPC ads immediately and it's expensive, but you wanna spend them while you're on that honeymoon. So I think a lot of people have this perception that selling online is kind of like, if you build it, they will come. It's not like that anymore. Just putting a great product out there, doesn't make you win. You're gonna have to push it. And PPC ads are one of the best ways to do that.

(22:22):

I like it. Yeah. I'm curious to see what's gonna happen with that because, and Amazon's probably different, but I'm, I was thinking more along the lines of even like on Facebook, I, I anticipate that Facebook ads will actually get cheaper in the short term. And the reason I think that is just simple supply and demand. You've got a lot of companies, as they're heading into a recession are gonna pull back on their advertising spend, which means less competition in that marketplace. Now Amazon's probably could be completely the opposite of it though, right? Because you may have, again, like we talked about during the pandemic, more people flooding onto the Amazon platform, more individuals, if they lose their job, et cetera, flooding on becoming sellers on there. So it may be exactly the opposite may even increase further

(23:03):

Well. And that actually brings me to my next suggested strategy, which is on choosing the right products to sell. Now during this economic time right now, we all know that people are focusing on necessities. They're not buying high end expensive items that they don't need the piece of jewelry. They didn't need the higher end clothing, the fancier makeup. However, that doesn't mean people still don't want specialty goods or even need specialty goods. I'll give you an example. When I had my special needs kiddo at home, there are so many like little handwriting trainers and gross skills, gross motor skills, trainers, all these kinds of products. They're specialty goods that only 10 people in your neighborhood might use, but there's tens of thousands of people in the United States who will buy them. Specialty goods is a great place to get your start on any online platform, because there is less competition and there are not massive players typically selling these goods.

(24:02):

It's other small mom and pops that you can compete against. Also the ad spend on these products is cheaper and you can use these crazy long tail keywords because specialty goods, people put in really long search terms like handwriting trainer, trainer for kid age eight to 10, they don't just say handwriting. And the longer the keyword, the cheaper it is for PPC. So it all kind of works together. You find a specialty good that has less competition. And the PPC ads are going to be cheaper, especially for a long tail. It's a great way to break in and try and turn a profit with that first product.

(24:41):

I like it. That's that's an interesting one. What are some other things? So I'm actually maybe maybe shift it up a little bit. Is there anything, what's the biggest thing that you see that people make a mistake. They get out there and they start selling and they, they don't do this, or they do this, which is completely detrimental.

(24:59):

So people do not look at the metrics in their account and they don't pay attention to product quality. They don't look at things like return rates. And here's the thing. If you have a high return rate, which means, okay, high return rate to me, anything over 2%, unless you're selling closer shoes, those are different. But if you've got something that's being returned, 10, 15% of the time, you are losing money on that product because you eat all the fees. Plus they claw back the money, the person paid, right? And you're paying for delivery and all these other things, you're very quickly losing money. There are sellers out there on all platforms that are selling new products that do not pay attention to return rates or comments. They think every buyer is out to get them and they don't believe it when someone says this broke, or if the seal was broken or it was the wrong color. You've really gotta believe that data and then act on it and improve the products. Cuz if you don't, you'll find yourself in the red really fast.

(26:01):

I bet. Yeah. I bet I can see that easily. I, I literally bought something off Amazon again, probably two to three years ago. I got it. And I ha the first time I used it, it, it didn't function correctly. I reached out to the seller and I'm like, Hey, this, you know, this isn't working. Right. You know, is there a fix? Is there something I need to do, trying to resolve without returning it and everything. And they said, we're a small mom and pop place. We really can't afford to take returns and everything. So sorry. I was like, what, what the heck is that? And I didn't, I didn't, you know, give a bad review or whatever, cause I'm like, ah, I kind of felt bad about it. And I ended up figuring how to work around with it myself. But but yeah, that experience was like kind of left a bad taste in my mouth a little bit is like that's kind of bad customer service.

(26:46):

So I guess let me ask another question in your opinion, so let's say I'm out there and I'm listening right now. I'm watching the show and I say, you know, I've been thinking about doing this. You know, what would you say is like the minimum for someone to be able to start? Right. I don't have anything out there. I wanna start, I want to start selling on Amazon. What would you say is like, you need to have at least X, right? Especially like you said, being able to hit paid ads during the honeymoon period. Think so. Things you mentioned before, what's sort of the minimum you would suggest for someone to start.

(27:14):

A lot of people can start out by sourcing products, just from wholesalers and distributors or direct from a small brand in your town that is not on Amazon, go to a business park visit stores or, or sorry, companies in that business park that manufacture their own products that are not on Amazon, get exclusives from them. You can get started for less than $5,000 and you can ramp up very, very quickly if you're just careful about the types of products that you source and that you give great customer service.

(27:45):

Awesome. Awesome. Well, again, you can find out more about what Lesley does and how she helps and all the different things and the army of people that she has, including, as you mentioned, some former Amazon employees riverbendconsulting.com. We'll run outta time here, Leslie, but what's like one more thing that you wanna leave us with that you're like, man, you gotta make sure you do this.

(28:07):

So if you're trying to be an online entrepreneur and doing other things as well, outsource whatever, you can find a virtual assistant, they are inexpensive worth every penny and will keep you from losing your mind or giving up

(28:21):

The, the losing your mind part for sure. It's funny. I tell people all the time when they say you know, sometimes people say, oh, I can't afford a virtual assistant. I'm like, no, you probably can't afford not to have one because you're probably bogging yourself down. Not doing, I call 'em RPAs revenue, producing activities for your business. You get bogged down and you get away from those. And it's funny, you talking about losing your mind, the, the practical advice I give someone when they say, I don't know what to delegate to my VA, I say, be very conscious and self-aware, and for one week, any task that you have to complete that makes you sigh or roll your eyes delegated, <laugh>

(28:58):

Aim into that. There are so many too.

(29:03):

Yeah. Yeah. If you keep track of that. And I know for myself, it's a lot my, my VA helps me a ton. Oh my gosh. And he, and he does them way better than I would probably do. 'em Anyway. So Lesley, look, we're we're out of time here, but I really appreciate you coming on. You shared some absolute gold nuggets. I'm sure everyone will, will love taking, you know, taking notes on the tips and everything really appreciate you coming on the show.

(29:25):

Thank you so much for having me. It was fun.

(29:27):

Yeah, absolutely. Well again, Lesley Hensell riverbendconsulting.com guys. Thanks for listening. Thanks for watching as always have a great week and don't forget cash flow is king

(29:41):

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