April 2, 2020
How Steve Chou Started eCommerce with a Handkerchief in 2006 Ep20

How Steve Chou Started eCommerce with a Handkerchief in 2006 Ep20

are you ready to scale and outsource
your business okay let’s go welcome to the outsourcing and scaling show I’m
your host Nathan Hirsch a show where we talk about everything
Amazon shopify ecommerce and digital marketing let’s get started
hey everyone welcome back to outsourcing and scaling today we have a very special
guest Steve Chou how are you doing today pretty good man how are you doing great
Steve runs a popular blog my wife quit her job where he teaches others how to
sell physical products online he also runs an e-commerce store with his wife
called bumblebee linens and an e-commerce conference called the cellar
summit and a short tank-like show called the 5 minute pitch Steve that’s a quite
impressive background why don’t we take a step back I don’t want to go too much
into your childhood but give us a it was like glimpse into what you were like
growing up were you a rebel where you’re a straight-a student did you know you
wanted to be an entrepreneur I’m Asian so I went the straight-a student route
always knew that I wanted to become an electrical engineer when I grew up and
so that’s what I did I studied engineering and I actually had no
intention of going to e-commerce or business at all pretty much growing up
but what end up happening was you know my wife when she became pregnant with
her first child she wanted to quit her job and we live in the Silicon Valley
pretty much need two incomes to get a good house a good school district right
told me she was gonna quit that’s when we started looking at business
opportunities and what year was that that was 2006
okay so I’ve seen him before I got in D commerce what was ecommerce like back
then it was the wild wild west I ended up using an open-source shopping cart
that I’m still using today basically there weren’t the Shopify as of the be
Commerce’s or they were very much in its infancy so you had to pretty much do a
lot of things by hand from scratch so you’re like one to quit your job youyou
kind of got into ecommerce walk us through that how’d you come across it
how do you start it out how do you learn it was it all all self-taught yeah I
mean okay so we kind of stumbled into it when when we got married my wife knew
she was gonna cry and so she was looking for handkerchiefs everywhere we couldn’t
find any in the it’s that she liked then we found this
Factory in China ended up importing him you we employ a bunch we used maybe a
handful of them and then we sold the rest on eBay and they ended up selling
like hotcakes and that’s kind of how we decided to start that handkerchief store
when she became praying with her first child what was the second part of that
question yeah what was it like kind of building it up I mean you said you saw
China I’m assuming there weren’t any classes like there are today saying hey
this is how you store some kinda these are the mistakes to avoid what was X
correct when we first started out we had no idea what we were doing we actually
had the vendor handle everything for us for our first couple shipments and then
just gradually got more bold tried different things in terms of the the
website fortunately I have a technical background so I was able to get that up
you know basically for free you know the shopping cart part stitching together
all the credit card processing all that stuff had to be a little bit manual back
then as well but yeah it’s also taught I there’s there’s some luck involved also
my my brother-in-law happened to be working for Google he kind of taught me
how to do AdWords or he suggested AdWords that’s how we got a lot of our
early business we also started content marketing like way before it was sexy
and we kind of stumbled upon it by accident really and that’s how we got
our initial sales very cool so you’re growing this business how long before it
took off you found the supplier you build the website you start running
Google Ads give us that time period yeah I mean it depends what your definition
of takeoff was but our goal for that first year was to actually make sixty
thousand dollars in profit but we ended up doing six figures in profit which was
instantly how much my wife was making at the time and so she was able to quit her
job very cool so you’re running this business and then how long after until
you watch the blog and how come you did it oh yeah so the blog didn’t happen
until a year later I got inspired to do blogging by this guy named Steve Polina
he wrote this post called how to make your first love dollar and at the time
you know all he does is write and I think he was only monetized via Adsense
back in the day and Adsense is like this ad network that Google has and he was
making $4,000 a day off of Adsense and that kind of inspired me to
acumen my experiences it’s crazy so what was the initial stage of setting up a
blog how many posts were you writing did you just throw it together did you
create some master plan dad no no master plan at all I spent 10 bucks starting
that thing just a wordpress site on Bluehost and I in the beginning I was
writing every single day and then that kind of burned me out and then gradually
went down to three posts a day and then one post a day and I maintain that one
so I not one posted a one post a week right and then I maintain that pace for
the last good Lord it’s been 10 years now I think so so what was the original
purpose of the blog was it to get content out there do you have a goal and
has that purpose kind of changed over time yeah I mean the long-term goal was
to be like Steve Kalina right but the other goal was to kind of keep a journal
of my business progress and the funny things never work out the way they are I
thought my friends would be really interested in this because we were all
having families and around the same time but none of them read it at all and it
was just these random people that started finding it online and started
asking me questions and that kind of inspired me to continue writing and it
also inspired me to create this training class that teaches e-commerce which I
released I think two years later after I started blogging so talk to us about
this class or is it more focused off Amazon is it Amazon is it a combination
of both yeah a great question it started out as nothing to do with Amazon because
back in the day Amazon wasn’t around right right that type frame but since
then it’s evolved over time and so now it has you know basically 50% Amazon 50%
selling on your own store and the you know the recommended flow I have now
actually is to start out on Amazon make sure that your product sells and then
once you know you’re gonna stick with it then create a store around those
products cool so you started your store you started the blog you start teaching
other students how did the conference seller so I might come to be okay you’re
for and I imaginated that that’s a big in Denver just endeavor just starting
off a big conference it is yeah I had no intention of starting a conference I had
no intention of even starting that training class it was just basically
based on demand people to meet each other people wanted to get
together and people are just asking me to throw some sort of event I knew
nothing about events but fortunately an event I met my partner Tony Anderson and
she had been running events for like seven or eight years and we had this
pact so I said you know she told me hey you get the speakers you sell the
tickets and you get the sponsors and then I will handle all the conference
stuff you just need to show up and so that was enough for me to just give the
whole conference thing a try fortunately it was successful but it is
actually quite nerve-wracking yeah I think the rent conference is it’s hard
it’s risky it’s a lot of time and money what did you learn in those first few
years maybe someone listening out there is thinking of starting their own
conference what should they know yeah I think the best way to do it is to start
out small because you are putting your money upfront you have to fill those
hotel rooms right otherwise you’re you’re up for the bill so what I would
do is I would actually email your list and see how much interest there is and
just create a sub list of people who are interested in it and then try to pre
sell tickets and based on how many tickets that you can sell then create
the size of your event according to your pre-sale quota that’s the safest way to
do it I did not do it that way however but that’s how I would do it again if I
were to start all over got it so you’ve got a lot of stuff
going on right now how do you divide up your time in 2019 and what are you most
focused on yeah I mean to be honest with you I assume you’re asking about
business I’m actually the most focused on my kids right now okay but outside
the kids I’ve been just focusing more on projects that I enjoy doing as of late I
don’t actually spend that much money I’m quite frugal and so the amount of money
that I make across the ecommerce store or the blog the conference and all that
stuff is more than enough you know to make a living and so that’s how five
minute pitch came about I was hanging out with my buddies Greg Mercer Scott
Walker Mike Jack miss Linda night at the cellar some and we were like hey you
know what I think we should do a shark tank show you guys want to do a shark
tank show yeah sure and so we just decided to do this show and it’s been a
whole lot of fun and again this is a project that makes zero
dollars it’s a good amount of time but it’s a fun project that’s awesome so if
you’re living more of that lifestyle business where you get to spend more
time with your your friends your family you have these businesses that are
somewhat running out on autopilot how big is your team I mean this is the
outsourcing time take it behind the scenes
yeah what’s funny about this is like I think I’m like the wrong guy for you to
have on your pocket but okay so to run the blog I basically just have one VA in
the Philippines to help me with that for the event I have Tony and then we have
two other people that we hired just to handle the day of stuff and planning
right for the e-commerce store we have four employees and those are actually
physical employees they actually go into the warehouse and pack and ship orders
and then our Filipino VA of course helps out with with that business as well
see I think you’re the perfect person for the show because it shows so many
different ways that you can run a business you’ve got people out there
that are trying to build their empire and every time they get a free hour
they’re investing it back to their business and then there’s people that
are frugal that they’re like hey I’m making enough money my time is the asset
I want to invest that time if the products I like it and my friends and my
family okay so tell us more about e-commerce in 2019 I mean we kind of I
started 2008 so like you said it was the wild wild west and then people started
to burst on the scenes you had big players coming in and now everyone has a
course and they’re teaching and everyone wants involved where do you see
e-commerce going in 2019 and beyond I mean you know I’ve always preached
having our website and having your own brand and building your own audience and
a lot of these courses out there they’re preaching like selling Amazon selling
Amazon but you know guess what Amazon’s been doing a lot of dirty things lately
right so for example a number of my friends when they’re advertising an
Amazon they have a listing but right in the buy box is an ad for Amazon’s
branded product at like a third of the price or half the price of what they’re
selling so Amazon is leveraging their private label products and their power
on the platform to steal business away from third-party sellers Amazon’s been
changing up the rules there’s lots of Asian sellers on they’re doing
knock-offs one of my buddies Kevin Williams he had
his product knocked off and he spent like I think over a million bucks
fighting it Wow get these knockoffs off so you know
unless you have some sort of mind shirt or your audience you can make money in
the beginning don’t get me wrong like but if your product becomes super
popular it’s gonna be ripe for knock-offs and unless you have that
strong brand unless you have your own audience and unless you have customer
loyalty then in the long run at least your margins are going to erode right
and let’s talk about marketing too because you said I recommend having your
own website and I consider you a marketing expert as much like consider
you an e-commerce and and if you can’t market nowadays I feel like you’re
missing that that whole bubble you’re 100% relying any in the time so how do
you see marketing changing in any marketing tips for people listening yeah
I mean see the thing about Amazon is you don’t really have Amazon does the
marketing for you really they have this huge built-in audience but unfortunately
also beholden to them as well and so when it comes to marketing I mean that’s
a really broad question you ask Nathan but in the long run it takes a customer
I would say between four to eight touch points to get to know you and so
basically what you need to be doing is you need to be gathering you need to
have a way to bring people back over and over and over again until they are ready
to buy so whether that be through email Facebook messenger push notifications
whatever I mean you need their contact info so you can bring them back and
that’s that’s probably one of the fundamental things that you need to do
and in marketing today very cool well Steve we really appreciate you coming on
I’d love to hear more about where people can find you more about the seller
summit what you’re excited about there get people to to buy some tickets and I
know I’ll be there I’m excited for it’s my first one but yeah tell us about it
yes so seller summit we’ve been sold out for over a month now we can kind of that
really small it’s only about two hundred and twenty five ish people and here’s
the thing we we eat together we drink together at night and everyone is there
it’s a foot it’s a networking fosdick’s focused conference so by the end of the
event you should know almost everyone there and what’s funny is on the first
day everyone’s a little we wish about networking but by the end
of the event everyone’s like best friends patting each other on the back
so that’s stellar summit my wife quit her job as a blog where I just talk
about my experiences as we mentioned before I have a training class over a
profitable online store and if you guys are getting married I can hook you up
with some wedding handkerchiefs over at building limits we’ll talk about that
soon thanks to you for coming on hi man hey everyone thank you so much for
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