Susan
Welcome to modern marketing. The podcaster explores marketing, product and everything business. I’m your host, Susan, and we’re talking today about how you can make online work for you. Now, I do have a very special guest today, Paul Woody, and he is a best selling author, but it is a magical book. It’s Shopify. The dummies and very soon he’s going to have another best selling book under his belt, which is learning to selling online for dummies. So selling online for dummies and that will be out mid June 2024. So keep an eye out for that. Time Paul is an experienced e-commerce expert and coach who has worked with some of the most prestigious and amazing brands. Some of these, and there are many, many me I just pulled out a few so you got show Pro riff Raff, Budgie Smugglers which of course is Aussie iconic and many many more. His expertise has been featured. Also in Forbes, so he definitely knows what he’s talking about, and I have actually seen him talk a lot with Koshi and those in Australia know who Koshi is very well. But he isn’t just doing this, and he isn’t just a consultant. He also has his own course that he’s launched to help people become successful in online business. But let me introduce the man himself so you can talk a bit about himself as well. Hello Paul.
Paul
Hi Susan. Thanks for having me. What a fabulous intro.
Susan
Not a problem. Do you tell us a bit more about your journey and and what you’re doing now? What your focuses have been?
Paul
Well, look, you know, for me, I I started in retail. You know what, like many people when they finished school, when I finished school. And I sort of, you know, had a few jobs that I didn’t really find all that fun. I never did so well in school. I kind of wasn’t, wasn’t really motivated to do well in school. So I kind of didn’t know where I wanted to be in my early 20s, and I always had an ambition to start a business. And start a business. I did. I started. I started a men’s shoe brand and. No experience, just kind of. I was just out shopping for shoes, you know, for a night out. And I just couldn’t find anything that’s under $200 that were nice. And the the Italian shoes were all very expensive, like leather shoes. And I I decided to take a trip to China and learn about what it takes to import shoes.
Paul
And I took a trip, landed in Guangzhou, met a translator there called Miss Miss Lou, who took us around or took me around for a week. And I just went to shoe factories, you know, and and kind of did that another 13 or 14 times over the next few years.
Susan
Amazing.
Paul
Is and and started a brand and kind of got that brand out in a lot of stores. As a wholesaler, David Jones and Asos and stuff like that. So kind of started to go pretty well and opened a bunch of stores. And so I had retail stores. You know, five in in total, 3 concurrently and and eventually just found that way too stressful and. The cash flow of simply paying wages every week and rent very heavy overheads, you know, and and having to fork that money out. And what I found in retail was that the best centres were left for the the big, the big retailers and then, you know, you were typically or the best positions and then.
Susan
Yeah, very heavy overheads.
Paul
Smaller ones are typically just shop fillers. They just go into any kind of store where they need someone, and you typically move into the you know, the the high turnover, the people who come in, they leave and and so that’s what I did and.
Paul
I just got sick of that and I closed all of the stores when I realised that I could kind of sell online and selling online started in 2007 for me and I had a website where I started selling the shoes and I was like, hey, this is good, the volumes are smaller, but I’m getting paid on time like. Quickly up front.
Susan
Yep.
Paul
I kind of liked that I liked packing the orders and seeing them go off and they liked hearing what the customers thought. And and so I then started experimenting with marketplaces with another product with jewellery. And I was selling, you know, on Amazon and eBay and Groupon and any marketplace that would roll through, I would have a I would have a go at it and did did pretty well as just little little cash positive businesses. And then eventually found myself, as you said earlier, at sold that and went to Shopo as the head of operation. And moved on to become the CEO of a watch company and leather company called the Horse and then started consulting full time. I’ve done a little bit of consulting and really enjoyed that and and had some early success and then sort of became just known as this consultant that would help other brands. Some of the brands that you mentioned and loved it. And here we are today. Really doing two things, which is, well, three things. I Co owned E combination which is a digital marketing agency, recently named Australia’s Best Retail digital marketing agency and.
Susan
Amazing congratulations.
Paul
Thank you. Thank you. That’s three years old now and going well.
Susan
Ah, you want an order already. That is amazing.
Paul
Yeah, big shout out to my partners Mel and Andrew, who really have done a great job and the whole team at Ecom Nation’s got great team. We’re really lucky there. And now I kind of have as you mentioned earlier, I have this online course for people who want to start. So I still coach bigger businesses like your budget smugglers and so on. And I put them into a programme now because I I just can’t do one on one coaching anymore. Too many businesses that want to work together. And so I have a programme that helps bigger businesses double their profits in 12 months. So that’s their goal. Come in and let’s work on doubling your profits in 12 months. And then I have a smaller lower ticket item for beginners and that’s basically anyone with no experience who thinks. How do you sell online, how do you kind of like my book selling online for dummies? How do you find an idea, validate it? How much money do you need? What’s a business plan? How do you import? How do you talk to suppliers? How do you use Alibaba? Can I take?
Susan
Do I have to? Do I have to actually go to China like you did and and and?
Paul
You on that journey. Yeah, 100 percent, 100% short answer is no, thank God anymore. You don’t have.
Susan
Find a translator to help me.
Paul
To. But there’s, you know, 150 odd lessons of me there talking people through that journey. And then I I coach them every week on zoom as well. Fun that’s been so much fun working with startups as well, so that’s that’s the two things that I do really, all the three things that I do. And and I’m very passionate about it. And my goal is really to, you know, my mission is to help founders that I work with to improve their lives. And everyone’s got to have a vision. So my vision is to be the best in the world at at my mission. And and here we are today.
Susan
I love it because clearly you’ve had so much experience with all these different brands. You’ve done it yourself as well, which is one of the unusual things when you look at coaches, a lot of them have gone and got their MBA, have done a course in it, they don’t have. The practical knowledge.
Paul
Yeah.
Susan
We where you do. You’ve been there. You’ve been through it. You can actually, really. Empathise and put yourself in their shoes to help them achieve whatever their goal is. Double or just starting wherever it could be. So I really do applaud you on that cause that’s amazing to be able to do that and and also feel revitalise yourself. You guys can’t see him, but he’s got the biggest cheesiest grin on his face the whole time he is talking.
Paul
It’s if I last week cause like some some sometimes people, especially on Facebook or or Instagram whatever like well, why don’t you do it instead of teachers like Father. I’ve done that for 10 years. I was doing it at 23, you know? And I’m still doing it. I’m I’m I’m I love.
Susan
Exactly.
Paul
Trading. So I’m still been working on a startup as well, so I’ll never stop, you know, try. Trying to do something in E commerce basically.
Susan
You’ve got the bug. Don’t.
Paul
You ohh yeah 100%. It’s just unbeatable. It’s like, you know, it’s still it’s only 20% of total retail. So that’s like if you think about that we could start an online business this week and like in 20 years, which is crazy, you still be looked at as like. An early adopter because. Like I look at my kids, they’re using iPads at 3 or 4 better than me, so it’s like, how could we possibly think that in 10 years, ecommerce will suddenly go backwards? Mm-hmm. It’s gonna get more digital whether we like it or not, not less. You know, podcasts and so on it. We’re we’re just becoming digital. And so I just.
Susan
Crazy.
Paul
Feel like anyone who’s in here now. It’s like a golden age of of commerce. You know, it’s it. It really is. And it’ll get harder in 20 years. So get in now and and change that. Your life and the life of your kids and grandkids and great grandkids because it’s kind of. Like a A. What do you call it? A when you’re, you know, gold hunting for big prospecting. You know when there’s a.
Susan
Prospecting.
Paul
Gold. Boom or whatever it’s called, someone struck gold and everyone flocks in. So that’s kind of the boom that we’re in.
Susan
Fantastic. And it leaves in perfectly for my first question and that is how you’ve actually seen the space of E commerce change over the last five years because you’re saying that we’re still in the early adopter phase when it comes to online as 20% of sales are going through there. But what have you seen particularly over the last five years, which does for for people in the future? It does include the COVID time period, too. Yeah, so do share.
Paul
Oh, what a five years it’s been, I. Think.
Paul
You know, it was so easy to make money in COVID, and unfortunately a lot of businesses like, you know, I learned the hard way a lot of businesses learned the easy way. And then when the easy, you know, the good times stopped, they weren’t prepared for that downturn. And we are in a downturn. No, no doubt retail is. A little bit down 1% in December, 1% in. So it is tough and so a lot of businesses you’ll see just haven’t survived that because the short version is really that they they raised their operating. Uses anticipating sales that simply aren’t there.
Susan
MHM.
Paul
And I I put it down to poor fundamentals more than what macroeconomic factors. So you know macroeconomic factors, you know, they’re they’re they’re always gonna be here. I was trading in the global financial crisis, you know, GFC there’s not. You know you’ve got to be prepared for that. That’s got to be baked into your plan. So you know yeah we’ll have good times. Have bad times, but we just gotta keep plugging away. I think the main difference over five years has been that it’s harder to make money. Now than during COVID and then before that we were, you know, we were ticking along, but it is a little bit harder when it comes to Facebook advertising, which used to be pretty easy money in money out. We’ve had privacy changes that have made it harder to connect with your your desired audiences. So costs are generally they are much higher.
Paul
So it’s a little harder to play, which just is fine. It just means you’ve got to be a little bit more strategic with what you’re selling. Does it have unique selling points, you know has your? Are you just selling anything or have you actually spound a product that’s solving a problem and it has genuine, you know, offer strong offer elements and I think you gotta work harder now and the good brands are still growing for sure and people are definitely still starting and making lots of money, but there are also some that have not quite. Grasped the product or they’re a little too dependent on paid media, which is high risk because if you know TikTok is banned or Zuckerberg has a meltdown and sells Facebook, then your business is.
Susan
MHM.
Paul
Finished. So you know, just good businesses is what I’m all about building good well rounded businesses and you know, it’s still only 20% of total retail so. Been an interesting five years of, you know, going well and then going great and then pulling back a little bit. Yeah, but still predicted to grow over the next few years. So I think the the future is looking good for you know for good brands but also for good businesses. We need to be not just good brands, we need to be great businesses.
Susan
And I completely agree with your point there in regards to future proofing by doing realistic budgeting, particularly when it comes to expected sales, that would then turn to revenue. I’ve seen myself so many times in working in some of these companies where they’ve just expected that because they’ve had a blip. One year that it’s going to 100% grow 5 or 10% the next year and then say for example COVID, they’re shocked when everything goes back to normal. And. Don’t want to actually acknowledge that it was actually poor planning and not listening to, say, the data or what teams are saying that change behaviours are.
Susan
Have you seen a lot of that?
Paul
As well, definitely you know, is it? There’s a real lack of strength in the numbers in e-commerce and people who just you know more than half that I ask what’s your gross profit and they don’t don’t know and they’re turning over multi multi millions of dollars and that’s a big business now you can’t you know it’s a reasonable sized business you got to know your numbers and there’s so much power in the.
Susan
Wow.
Paul
Numbers, and I think we’re just all a little bit too hooked on Facebook roasts and stuff like that. And yeah, I was kind of around before that when you had to actually, you know, convince a customer to purchase from you. Now what we think is you just show a customer something, just show my product to the right person and they’ll buy it. Yeah. But in the olden days, you have to convince someone. You know you have to actually convince someone and persuade someone, so I don’t know if we’re we’ve lost the art of persuading in our creative and our copy. Definitely. Some brands are great and I think Nike hammocks that is some stands out to me is doing a great job of that persuasion in a funny way. But. It’s just interesting we don’t. We just seem to be just ticking boxes. Here’s my ad. Here’s my copy. There’s there’s a call to action, but I think we’ve got to be lost. The art of persuasion and finding a product that is the Inflexion of people’s pain points, you know, so find a pain point and solve it. That’s how it always has been.
Susan
Yeah, I I do believe there’s a in some instances, particularly in more retail and beauty, there’s a dependency on influences and wanting to be seen as being used by that particular influencer. But does that necessarily resonate with the target audience that would use the? Product. So I think there’s a lot of disconnect out there as well. When it comes to connecting right with the right influencers or doing the right type of persuasive promotions.
Paul
100% right. You know, just because you work with an influencer who has a certain amount of followers, I can put a billboard on the highway in, in, in, in Las Vegas. And that doesn’t mean I’m gonna be successful and get millions of eyeballs. You know, it’s not about just eyeballs. It’s about the right eyeballs. And then it’s about persuading those people who are ready to be persuaded. You can’t sell ice to Eskimos. You know. You do need to be. Yeah. Right time. Right place. But you also need to be. Strategic with how you talk to influence a good example because influences is a relatively new concept and once again you could get quite a lot of traction. You still can, but they’re they’re simply putting their prices up and they all want to be, you know, paid sometimes a little too much. So that Channel again is becoming more expensive. So brands have to look at micro and nano influencers, which is just smaller influential people. And if you think about that, that’s just a marketing 101 which is just to target.
Susan
Finish.
Paul
Yeah. Target and niche and and the most influential people in that niche. So from that point of view, I like influencers, I just think. I think the idea that we just got to be on the biggest names and again it’s the same point I made about Facebook ads. It’s sort of like just just spending to get lots and lots of views or impressions isn’t really a strategy.
Paul
And also you know how many of those people were gonna buy from you anyway, because they’re on your email database or whatever. So we’ve just gotta be a little bit careful. Everyone wants to make money in this business and usually at the retailers expense. So This is why we have to be careful that the brands that we partner with for marketing. All the individuals are ultimately looking after themselves and This is why I think that a lot of retailers go bust because. They’re relying on other people or other platforms to do the work for them, and I think we’re getting a little bit, a little bit lazy. It’s like that wolf of Wall Street. You know, how many people could stand in a room and actually sell their product to a crowd of people? Yeah, I’m not sure too many. So it’s.
Paul
Harder than it’s ever been, I guess.
Susan
And being lazy reminds me of and this isn’t lazy. I do love this. This particular channel is one of my favourite ones. When done right, affiliate.
Susan
So get potentially giving away what you don’t need to, or stimulating that behaviour to wait for promotions through those channels.
Paul
Yeah, I mean, ohh that’s a tough. You know that’s for me, that’s a I’ve heard retailers, I always say you know we used to go on sale as retailers to clear our balance sheets up. You know where I put overstocked and then it just became to when’s the sale calendar and it’s like oh that’s not actually what it’s about and I don’t you know I think some brands can go on sale.
Paul
Like, if you’re a price leader, go on sale all the time. But if you’re claiming to be 90% of the year, a luxury brand or a quality brand, and then. 70 You know, 70% of the year you’re on sale then that that just doesn’t line and it doesn’t matter what anybody says. People like we all wait for sale. If you know your favourite brand’s gonna be on sale, you wait, you know.
Susan
Yeah, baby sells a perfect one there.
Paul
Yeah.
Susan
People will message each other and go when’s the big baby or toy sale going to be and they they then tell everyone in their community group, wherever it’s on Facebook, or even just a WhatsApp group. There it is.
Paul
Of course, that’s right. That’s exactly what happens. And again, if that’s your strategy going into business, that’s OK. If you’re a price leader with high margins and whatever, but certainly not a place that I want to be the most of the brands that I work with are individuals or couples that have started a business and they’re whatever. If you’re going price leader, you’re going up against your. Walmarts, your targets your Kmarts, your Kohl’s, your Aldi’s, your office works, your JB Hifi. I don’t wanna buy that. I don’t wanna be anywhere near that because unit economics will tell me that that they’ll get much better margins than we’re getting. And I I know that, you know, sometimes we have our own brand, but is our brand replaceable? Most of them are. So you know, if you’ve got a special brand or special product that’s fantastic that defends you against all of that, but then you don’t need to be a price leader anyway. But it’s a I just discounting more than sort of 345 times a year. Is like. You’ve probably got an inventory problem or your fixed costs are so high that you have to discount to cover them.
Paul
And a good reminder for everybody is that we judge our we should judge our businesses on our worst month, not our best month and that’s like November rolls around and everyone’s, you know, posting screenshots of their Shopify sales dashboards and it’s like well show me in January what your numbers look. Like. And I. You know, and it’s fine to break even. In your worst month, but certainly you don’t want to be losing. You know, throughout the year and then November comes and you, you, you stay afloat. You’re like, oh, thank God, my bank accounts and then you go through 11 months of hell again and then you can’t. And that’s just the cycle that I’m talking about because I see it a lot. Right. But if we’re just clever and we focus on, you know, my worst month is January, you know, I scraped through with a 3% profit, but then it gradually grows through the rest of the year. That’s fine. But let’s let’s put our businesses under the stress test and be a bit harder on ourselves. Let’s let’s judge by the worst month, not the. Best month, yeah.
Susan
And I I know when it comes to a lot of people out there creating websites and everything when they haven’t done it before, they may just slap together a website and not understand where expected sales will look like. So it can be hard for them. Naturally, this isn’t the best strategy because you you don’t know what to forecast. You don’t know, maybe what you’re doing in some cases cause you haven’t done courses or read enough about it. But but for those ones that are are doing those that don’t have those numbers that go back on what game plan should those e-commerce sites have in mind and what should? They avoid as well.
Paul
Yeah. I mean, it’s a good question. Yes, you’re so right. You think just because you can open a website doesn’t or build a website doesn’t mean you should. It’s like, you know, the example that I use is and Shopify is great. Like I wrote this book on shop. I it’s it’s made it so easy to open up A to build a website, but it’s like I say you know, just because I know where to find the timing belt in my car, it doesn’t mean I should go ahead and change it. I I give due credit and respect to mechanics because that’s what they know how to do. It’s the same as like. Same reason I don’t cut my own hair. You know, I can do it. I’ve got a pair of scissors. I got a mirror. But not gonna go too well for me. I know.
Susan
A game I were on audio. Everyone he may have.
Paul
Tested that theory. Yeah, I have tested it. Not lately, thank God, but I have tested it, but it’s the same concept. So if I wanna be an E commerce, I’ve gotta learn the trade, you know, like and they shorten up. There is shortcuts, but I don’t think you should take them. I think it’s a it’s about doing the groundwork. And it’s a funny thing, Susan, like.
Paul
You ask a lot of businesses and I speak to heaps. You know, I usually start with like a 10 minute triage call. The suss them out a little bit and you sort of ask a few questions. And like if you sort of say, yeah, well, so what’s your conversion rate? And they’re like, ohh, OK yeah, yeah. What I think where do I find that, you know, listen, you need to go back and read the book because it’s there’s a lot to do. You know, it’s I I think like lifetime value customer acquisition cost. There’s not repeat purchase rate. These are if like these are metrics, you need to know. These are things you need to know about your business. If you wanna have a great business. And I’m assuming if you’re in business, you wanna have a great business. Hmm. And how can you have a great business if you don’t know some of the fundamentals and you know, like talk about conversion rate, there are so many things that go into conversion rate. Outside of like what Shopify theme you choose, there are so many things. Do you even know when your conversion rate is declining? Do you even know where to look? Do you need you know you know how to use Google Analytics so there’s a lot of fundamentals in my course for beginners. I have a quiz at the end of each module and I I literally say if you if you don’t pass the quiz like 10 out of 10. Go back and do the the lesson again because part of it is, you know, I was watching something the other day that said if we spend 16 minutes a day. Focusing on something by the end of 12 months will be better than 90% of the population. Wow. So at that thing. And so let’s make ecommerce that thing like let’s just spend 16 minutes a day on it and let’s get really, really good at it better than the rest because that will increase our chances of success. And I just play averages. I’m like, well. If I do these things and follow these rules and read up on it, I have a better chance of succeeding than if I don’t, so that that’s all I do is just try and work really hard at, you know, learning things and learning a system that works. For me, and then there’s, you know, like in my course, like, I can’t guarantee your success, but I can safely say that if you follow the course and what it’s about, you’re a pretty good chance of success at the end. If you’ve dropped a pretty decent product.
Susan
Then, exactly because you’re actually listening to advice and learning what pieces need to be put together for that puzzle so that when you put it together, you’ve got the best. Pants when you go out and then market it to whoever. Your target is.
Paul
Exactly. It’s all about increasing your chances. And why would I open up an online store selling a product? And I’ve sought no advice for it from anyone, I just think.
Susan
Hmm.
Paul
You know, it’s like Homer Simpson who started his Internet business and then couldn’t answer any questions about it, was just like, can I get paid now? That doesn’t work that way. It’s it’s harder than that.
Susan
And a lot of these smaller ones that open, I’m going to assume are trying to get their cost to cover with their corporate wage would have been if they were on a on A roll before and then decided to go out on their own. So that there has got a lot of risk involved to ensure that you’re actually going to be able to match or exceed what you were getting because no one wants to not necessarily go backwards unless it’s part of a A like a lifestyle plan.
Paul
Yeah, no one wants to, but often they do, because they either quit their job too early because they think they just. Again, there’s. I’ve got a business now I need to focus on it, but being profitable, which is what I’m all about, starts from that making that decision. It’s like just keep your money coming in as much money as you come, as as into your life as possible and and put out spend as little as you can to do that. And that includes a dual wage. If you’ve got a wage coming in, why would you cut that? Off and then take money out of your business. You keep going until you’re at break point. Keep going until you’re you’re at the stress. You know the the put your put your business under a little bit of stress. Like I can’t do it anymore then higher. But taking the easy option and sort of saying oh, I’m gonna cut my wage and I think things will be fine that’s that’s not the case and. That’s a big thing. Not too many founders are definitely not paying themselves an adequate wage.
Susan
And I think a lot of them forget to as well to make sure they get paid first before they then look at what the profit is.
Paul
That’s a great tip, and that’s that’s something again, it’s like, well, my profit is XY and Z and you say, well, it’s not really because you’re not taking a wage out of it. And in my in my course for beginners, I build a I build them a budget with my template and I build a wage. Budget in there from day one. Now the day one budget is 0 cause sales are 0, but I I slide it up with sales so that one day when you need to pay yourself or someone else we’ve we’ve marked that out from day one and what you get is a lot of these businesses who don’t do that and who who just spend a lot of money on again on adverts.
Susan
Yes.
Paul
Rising. And then there’s no wiggle room to spend on anything else. And they say ohh, I’ve gotta somehow find a bit of money for wages or for an office or for whatever. And they they don’t know how to get there because they they pull back their ad spend and then their sales drop or they go on sale to try and push their revenue. And that’s just a broken system so. Taking that time to build it meticulously and correctly from the start, you know I run it like a $20 million business when it’s 1,000,000, that’ll that’ll, you know, that’ll hold you in really good stead.
Susan
Exactly, and and probably another tip is also make sure you do pay into your super. It’s not necessarily compulsory for smaller businesses, but that should be something that everyone also aims to do as well for their future.
Paul
Yeah, I’m self employed and you know I own a company and I actually top up that went to self managed super and and topped that up because there are there are tax benefits to doing that as well, but it’s also the idea that if you’re not paying your your super it, it can also creep up on you really quickly and all of a sudden you’ve got a massive. Liability to the Ato for super or for you. Know.
Susan
Taxes, or it might be.
Paul
For taxes in general. Nice, nice tip there. Another little tip is as well. Running a business is to. If you’re not sure about it, you find yourself behind on your bars, and so on. It’s just the end of each month. Just transfer 1/3 of your the money in your bank account, transfer 1/3 of it out to like a hold it just a an extra bank account just to keep it as a little tax account.
Susan
Now that’s an excellent tip and worst case, at the end of the year you’ve got an extra Kitty that you can really invest if you choose to or spend, and I think another another key point is also to ensure that you protect your margin as much as possible.
Paul
That’s right, exactly right. Exactly right. Yeah, exactly. Yeah.
Susan
Because you want to be a growing business and going the right way about it. And as you were saying, a lot of those pieces creep in and have added costs. So you’ve got your, your cost of goods and your cost of operations. Do you want to maybe touch a little bit on that?
Paul
The gross profit margin is the most important metric in e-commerce. That’s where it all starts, cause it’s your it’s your wiggle room. You know one of my one of my values, one of my philosophies is that we promote margins, not discounts. We focus on margins, not revenues. You know we focus on margin margin.
Paul
And it’s a good word because it’s like there’s a fine line between making money and losing money, and that margin is what we gotta focus on and where where I’ve got a 5030 twenty rule which says that. Yeah, very roughly. You should be aiming for a 50% gross profit margin. At least running your business on 30% of your monthly sales. X GST and 50 -, 30 leaves you with a 20% net profit, so that 503020 framework is one that I get asked about a lot and it’s a nice simple one and their ratio so they can move around a little bit, but it starts with the 50 the margin and that starts with the margin on your products which it should be about you know 70%. And simply the the more discipline you have with your margins and getting it right from the start, the more you’ll have to spend on advertising, which would then grows your business or brand building which grows your business. The more you’re able to spend on your own wage as well. But if you go into business kind of thinking like it’s not a great margin pulse says I need 70%, I’ve got 60. It’s just pressure from day one, and particularly for a new business. It’s it’s holds you back doesn’t give you the freedom to spend. So the the margin is.
Paul
The wiggle room. The higher your margin, the more you have to spend on growing your business. The lower your margin, the more pressure you have and less money to like you have less money to invest in growth. But because of your lower margin, you need the growth, you need volume in order to make a small margin pay off for you, but you don’t have the money to invest in the growth. So the best businesses I’ve ever worked with are high.
Paul
High margin businesses that generate lots and lots of cash even when things aren’t so good, you know, and that’s again where margins come in even when sales aren’t amazing, the margin protects you and makes sure that there’s still enough room to pay your bills and pay yourself.
Susan
And this is where when you do your due diligence, be honest. Is this actually going to work out to be a profitable business in the long run? Because if you’re not honest upfront about how these different margin ratios work out? And you’re you’re not. You don’t necessarily have a very different unique selling proposition than others you might come in pink where everyone else is in black or whatever it could be. You’ve really got to make that decision of should I go into business? Is this the right? Product or service? Or should I actually pivot and find what’s actually needed so I can hit these little targets? I’ve got to ensure success as much as I can.
Paul
Yeah, that’s where. That’s a great point, cause that’s where it starts, you know. My wife thinks that I can be a little bit brutal at times because people will come to me and say, well, this is my idea. Tickle my friends or will come to me and I think that’s a terrible. Right here.
Susan
Yeah, I can see you doing that with a BBQ. Yep.
Paul
Yeah, I was like that’s that’s a really bad idea, you know? Or if I’m being more tactful like, oh, needs a bit more thought and validation, have you validated that I because you think it’s a good idea. But my my line is have you validated that how have you validated that and so but you’re right we we kind of just think ohh no no no we’ll be right. Hold the mirror up to yourself and you know be be be a harsh judge cause being a harsh judge early days might end up saving you a lot of money. And.
Susan
And time.
Paul
Yeah. And time. And it’s funny, you know, like, there’s a lot of courses out there which will just say, start your business and go for it. That’s a trending product. And I’m kind of like, I’m, I’m happy to say to the students in my course, I’m like, listen, I’m a bit of the ante that at sometimes you’re gonna feel like sometimes I’m coming down on you because I am because my job is serious. I want you to make money or save money. And that starts right now. So I’m not gonna say hey, that’s that’s a good idea. Go for it, man. Just spend more. I’m not gonna say that because that’s that’s reckless. And I’ve been there at 23 and understand. And that you give that people that wrong advice. Some of my students are borrowing money from their parents to start, and it’s their last money. You know, you can’t be going around giving that sort of advice. The reality is business is hard. Not every idea is a good one. But there certainly are steps that you can take to give yourself a decent chance at success.
Susan
I completely agree, and I think part of that comes also down to the role technology plays. So how have you seen if technology used effectively and efficiently to create online businesses and probably the biggest question, does it help with scaling as well when you’re when you get to that?
Paul
Yeah it does. Yeah, absolutely. One one of the foundations of of what I teach is about control, like getting control for. Founders got on my screen here. The four things that founders look for is money, control, freedom and scale, and one of the ways that you you get control is through automation and process. Now, not all automation needs to be machinery and AI like there’s KPI’s that can be written out. There’s standard operating procedures, but at a certain point. Businesses who want control and scale need to have scalable systems in place, and one of the questions I always ask people in this 10 minute triage call is or in our strategy call is if you’re that sales doubled in the next three months, do you do you have the systems in place that would be able to? Water and some do, but the answer is usually no, and so we’ve got to invest in in this tech and I think well in these systems and there’s a there’s a, there’s a certain group of platforms, I guess in my preferred stack, but I will include ChatGPT in in that now as well or.
Paul
Or or or AI in general. I’ve got a virtual e-commerce coach in my students which is trained on all of the knowledge. All of the books and stuff that I’ve written so people can saves my time so people can say, hey Paul, what’s a good gross profit margin? That’s one way I’m using tech to help my life and my students. And brands have gotta be leveraging all of those tricks. Cost of doing business is pretty high. Automation is designed at scale, but also designed at scaling and saving money and therefore making you more profitable. So you know I’m a big believer in most E commerce businesses are spending. Too much on wages, you know, it’s usually like marketing followed by wages is the top one and two, and also top one and two for overspend. As well, and so I’m a big believer in process over people like have you thrown process over it before? You’re you’re, you’re.
Paul
You’re putting people in and usually when you hire people they don’t generate a return on investment, which is fine. They’re not really robots are not supposed to, but people think they will. Oh, I’ll just hire that person and they should help me grow my revenue. But process. Over people and making your life easier as a business owner through automation is gonna give you that sense of control, which kind of helps you sleep at night as well.
Susan
I think one of my most favourite ones when it comes to control. Is self service digital first approach to try and stop calls even getting through to say your customer care team that you you put in quality frequently asked questions that will help and not hinder and annoy the the people going in and asking questions. So then when? You get through to an agent and have to talk to them. It really is something that’s never been heard of before, but then that gets fed in as well. So the next person that might come along.
Paul
Yeah, it’s it’s so true. You know, it’s. When you used to have to have to ring Telstra or something on the phone and like, did you say billing or like no and now you know or in E commerce, we can pretty much like have good chat bots that will know what you’re asking. Like they can track your parcels for you. They can answer questions or like my my chat bot in my.
Paul
Group is like it’s pretty good it it. It’ll tell you like, what does Paul say about how much you spend on marketing and it’ll pull that information and give it straight back to you. And as you say, if it then finds its way past the chat bot, you know that it’s probably like a question that really matters and hasn’t been seen. For and, there’s still not a lot of brands utilising, you know, even that in their customer service and there’s no real excuse cause you can use platforms these days for customer service, just about all of them should have some form of AI. And again, it’s just about cutting down the hours that you need to put into that job into that role. And then it makes your response times.
Paul
Faster for your consumers, but time is money and the AI process and automation is all about saving time and therefore and therefore money. Money which can be used to scale your business.
Susan
Exactly. Exactly. So we’ve spoken about gaining new customers, which you’ve given us so many fabulous insights and snippets there. That what about the strategies that you’d recommend for retaining?
Paul
Yeah, I mean, retention is like probably a little under under focused as well because I think people tend to think that if they have a decent email series, you know or or a decent, you know sending two or three campaigns emails a week that that’s probably enough. I I learned a lot about CRM retention in building out my course actually because you you have a hell of a lot of you have a hell of a lot of different scenarios that a customer can take. Look at a product, don’t purchase the product, look at a product, refund the product you know, visit the website. Don’t look at the. Right. And so I kind of dug right into all the different journeys that people can take after visiting your site, let alone after making a purchase. I think there’s a lot of tech that can make CRM helpful like, you know whether that be clavio, you know your poo or you know who, who SMS or whoever is you’re using. As part of your retention strategy, but retention really starts with through loyal customers, right? So how do you make a customer come back? Well, you treat them really, really well. That’s how you make them come back. They’re not gonna come back because you’ve retargeted them ten times in a row. They’re gonna come back cause you had a fantastic. Experience, and I think there’s a challenge out there for brands to ask themselves, how do you create that magical experience? And there’s a, there’s an idea in in the in the customer experience like if you have a bad experience with with a brand, you won’t come back, right? This is why I kind of we feel a bit funny about our phone providers and stuff because we’re locked into these contracts. Even though we want to get out when their customer service sucks. Whatever. But what? What brands need to think about is the peak end rule and the the peak end rule is a rule that says that individuals have a memory bias and that memory bias is defined by the most emotionally intense moment of the the interaction and the example of this is a fantastic relationship.
Paul
Between a couple that could go for 10 years and be so good, so great, but at the end they break up because they have a fight. Yeah. And the whole experience, 99% of it was fantastic, but it’s looked at as a negative experience because there was a bad breakup. And that’s how humans are. And so the example in e-commerce of how we can combat that. Is it’s OK for you to do a good job, get the parcel out on time and whatever, but there’s a challenge there to offer a an emotionally intense moment during the the process. And who’s done this well and who has also speaking about retention, probably the best retention rates on the planet is. Amazon, now Amazon sell other people’s products and their own, but how do they get people coming back? It’s not just cause they’re the cheapest cause, they’re not always the cheapest. But Gee, they blow you away with that logistics experience.
Susan
I know that that same day delivery is just nuts, particularly if if you’ve got little kids and you’ve got something to live and you can’t get out, whatever the situation is.
Paul
It’s amazing. Exactly, exactly. You know, you can go there and they’ll have it to you that day or even on a Sunday. Yes. And for that reason personally, I’ll shop there for that experience and even pay a little bit more. And So what they’ve worked out is that emotionally intense moment, like, Oh my God, that look at us, we’re talking about delivery, you know, but that’s what I mean. It doesn’t have to be like. A gift with purchase. It could be, but find your way to wow that customer in in an emotionally intense moment, which is often where the anticipation is often like. I’m waiting for my parcel. Mm-hmm. So do you deliver even faster than you said? Do you have the fastest delivery option? I’m not sure. But that’s the, you know, do you have beautiful packaging? I again, I don’t know. This is for each brand to work out, but the idea I’m getting to is that retention. You could have the most sophisticated stack in the world, but retention starts with. How how good your product is? Because it’s gotta work. But it also start. It also really starts with how you treat your customers. Mm-hmm. And then you need to have all the touch points in place to ensure that they’re coming back and you’re retargeting them. And you have great, great post purchase experiences. And all of those great things. And of course, if you’re in a business that sells, I don’t know, fashion. Or. Fast moving products. The other way that you garner retention is through updating your product quite regularly so you know if you’re in, like let’s say, women’s fashion, you probably need to be dropping product every two weeks. So like great, we, we got you, you, you bought that dress. That’s fantastic. How do we get them to come back, show them something else, show them something? Here’s something else you might like. So again, this is.
Paul
Area where I get stuck at sometimes with brands who don’t want to push out their extend their product offering. They just really say, well, your products really nice, but people only need it every three years. But if you show them something else that you know, here’s our updated collection. Here’s your casual dress as well as your formal dress. So product drive protection.
Susan
The accessory that could work that we’ve just got in.
Paul
The best selling black black dress now in grey. You know these these sorts of things. Also, why did someone come to you to buy a product? Let’s bring them back with a product.
Susan
No, I think that that’s definitely a great way to look at it as well as don’t just be stuck on what product it is you’ve originally launched. Look at how you can expand that out and grow it to your current audience and and also new audiences as well as you can get two bites of that cake.
Paul
That’s 100% right. You’ll get acquire new customers and you’ll bring the old ones back. And that’s essentially the job is to keep acquiring new customers and bring back the old ones and the old ones have seen your product. They probably don’t need it again, unless you’re like a. A food or a perishable product or something, but the chances are that they probably don’t need your product again as quickly as you would have liked them to come back. So show them something else they might like, so constantly building out the the again, it depends what product category you’re in, because if you’ve invented that massage gun, the ferret gun, you’re fine. You just buy one of those and you’re you’re worth $100 million. But for most of us, we’ve gotta say, Yep, here’s what else we got. Here’s what’s new. Here’s what’s coming. Here’s what’s new. And that’s the job that becomes our job in. Retail. Yep.
Susan
What have you got to share with us? The successes and failures that you’d like to just touch on?
Paul
Well, I’ve got so many failures. That’s why I’m.
Susan
What we learned from them.
Paul
Yeah, yeah. They’re the best lessons. I used to look at them as, like, why me? And then I was like, ohh, I’m so lucky that I did all these things because, you know, when I write my newsletter or when I say something on socials or whatever. I always get people write back or comment like it’s like it’s really resonated with me. It’s like, you know, it’s like you were talking to me like, I know because I was you. You know, I I remember my first shipment to ASOS, you know, big, big fashion E Commerce store in the UK. I just shipped a container in from China and didn’t even contemplate. How to pay taxes and duties, let alone accounting for the 20 to 25% you know, duties that I had to pay so. Yeah, basically got the order in. Didn’t know how to clear it, didn’t how to pay the money to pay for it. I I once ordered a full container of shoes from China to Australia and they all came in the wrong colour.
Susan
Ohh.
Paul
Even though I’d QC them or I thought that I’d paid someone to QC them. Another sneaky one in shoes, just while we’re talking about that. Is that what some of the factories will do and like, even the big factories is like if you good test what for anyone listening. Right. Yeah. Next time you’re in the shop.
Paul
I’m not saying this is all brands. If you’re a size 10. Compare it to the size 9. And the size 9 1/2. And some brands will actually keep the size the same and just brand them as two different ones. Yeah, and this is again not your big your, your big brands, although shoes are is a is a nightmare because you could actually have even in like the huge brands a nine, A9 and a half and a 10 exactly the same length but slight different on the width. But what anyway, what happened to me is that I sent bought all these shoes.
Susan
Oh.
Paul
And the eights and the nines were the same size, but they put two different stickers and that was just to basically save on the production costs.
Paul
And the yeah. And so that whole shipment was kind of.
Susan
Every cancel.
Paul
You know wasted because the stores didn’t want to take incomplete sizes. Mm-hmm. Successes. Look, I’ve got so many that for my clients that have, you know, I’ve worked. With. So many of these, like Vic from Muscle Republic who when I met him was sleeping on the floor in his warehouse because he had no money and he couldn’t take anybody out on a date because he didn’t. When he wasn’t able to afford the Uber eats and he’s gonna turn over 2825 at least $1,000,000 this year and highly profitable.
Susan
Ohh it’s beautiful.
Paul
Baby Boo fashion is is, you know, started working with those guys when they were again, you know it’s very small and not really making any money and now they’re in the Fr Young witch list you know worth squillions of dollars Jade up Co which is one of the brands they work with recently made $3,000,000 in six hours. No, not on sale full price. They they did a delivery on Friday just gone and they made a million in an hour and a half. Two hours. So there’s a lot of success stories, and they’re all just people like you and I, who had an idea and stuck at it and. And. Usually failed in the early days and persisted and tweaked it, and it pivoted and got it right. But there’s these stories are out there. You know, these stories are. In in in a in in a more recent example, there’s a. Bridget, she’s doing. You know, she’s someone that I coach in the course. Went from nothing to you know, $85,000 a month by herself, with no staff, you know, profitable, paying herself a great wage. And again, sticking to that belief that you, everyone will say, you need to spend a fortune and she doesn’t. She just watches what she spends. She follows a certain routine of certain recipe. So, you know, for those listening and think can you start a side hustle and make some money? Well, Bridget’s done. And she’s, you know, 218 months in is making 85,000 in sales with a 25% net profit with zero staff and just working from home.
Susan
No offence listeners, but I want to know these. I want to do.
Paul
This myself. Yeah. No, it’s not. It’s not bad, is it?
Susan
It’s amazing. And I I guess that’s part of what excites you. But can you tell us what excites you the most about building online businesses?
Paul
Yeah, I think it’s. Every single brand that I work with. I have two motivations right. Personally, when I start a business, I want it to be innovative. You know the product I’m working on at the moment is incredibly innovate. I want it to be a game changer. I want it to be viral. I want it to be something that hasn’t been done before. It’s not really about the money, money. It will come later. If you do a good job for brands that like, you know, even for my coaching business, I don’t really think about how much money am I going to make. It’s. What? What drive? I know that that that all comes with doing a good job. I’m. I’m in the results and reputation business, so that’ll work itself out. When I work with a a business, I ask all of them. In the in the triage call, where do you want to be in three years? So that’s to me is like understanding what success means for them and then seeing if we can put in the building blocks. To get there. And then getting there is the is the moment you know. So it’s like sort of seeing. Two of my clients in the Fr top 50 rich list. You know, it’s seeing my clients. A lot of them are couples. A lot of them are, you know, seeing them buy that house. That they never thought they could afford. If if it’s a struggling business, seeing them paying off their debts and getting out of trouble, you know, so it’s it’s seeing them kick their goals because that means I’ve done a good job as well. So it just it’s really like staying.
Susan
It’s just rewarding.
Paul
Yeah, and understanding the like, what? Just make sure I know where they want to get. To. And then for me, that feels like I’m ticking it off as well in a way, because it’s not rewarding, just invoicing people. And then, you know, that’s it. Like it’s again, you know, for me to be engaged and doing a good job, my clients need to be winning. And I need to know if they’re winning in order to in order to really see if I’m doing a good job because I can invoice. Everyone knows how. To invoice. Yep, but it’s it’s about what people say about you, and I’m proud of that. And what the brands that I work with say about me. It’s positive because I work my **** off to make sure that they’re winning and I’m I get pretty invested in in their success.
Susan
I I don’t doubt that for one minute. You you seem that you are. You’re just so passionate about not just making your own business success work, but for others and and share and sharing all that knowledge even down to those small businesses to see like like you just said not sleeping on the floor anymore and not being able to pay for a date now been. Or to buy whatever home he chooses to and holidays and dates galore, and spoiling himself probably. As well.
Paul
Well, that’s that, that, that, that’s how you’ll be remembered at your funeral, right? It’s going to be like what people said about you not, you know, not how much money you made or anything like that. It’s the legacy that you leave behind and people will forget how much money you had. But they’ll remember what sort of person you are. So it’s important to have those traits that shine through in your business because inevitably. People pick up on that and they trust you and they work with you and they believe in you and vice versa.
Susan
Definitely now my final question, which I love to ask.
Paul
I saw this. Yep.
Susan
What brand? Any brand in the world best represents you and why?
Paul
There’s a really hard question.
You can.
Susan
Can’t be split personality.
Paul
I’m really happy with my new branding, which you’ll see on my website learningcommerce.com. I’ve just redone it in bright yellow. It’s got a lightning bolt and it brings that energy, so I’m really happy with that. That now reflects me, but I would say in terms of what I stand for from a business point of view is and I googled it before to get the name right. But you know the sriracha. Sauce. I think the guys name is.
Susan
Yes.
Paul
Full one, because I like food, but also because it’s $150 million business that spends nothing on advertising and and that’s kind of the goal, isn’t it? It’s like people just line up to work with you or buy your product cause that they know that it’s awesome. So I think that would be my goal is just to have. You know, and I don’t you know that that’s kind of it. Like people just wanna work with me if they know I do a. The job. So I think that guy is just a little old guy, humble Vietnamese American guy and he’s got this, he’s got this no similarities there, but he’s got this $150 million empire that famously he spends nothing on advertising and that’s what I always say. You know, if he’s got a, he’s got a bit of merch on his T shirt and I’ve got merch on my T shirt. But I always say like good news travels, if you do a good job, the best way to go viral is do a good job, have a great product and people. People will talk about it. So I think that kind of sums up my approach. So I would be sriracha sauce if I were a brand.
Susan
I love it and I love that everyone can share. You as well.
Paul
Yeah, that’s right and a bit spicy.
Susan
Thank you so much. And just to wrap up for everyone else, when you’re looking at online businesses. Particularly make sure that you get the fundamentals right. Don’t be suckered into poor fundamentals where you haven’t got a plan. Make sure you do, and that you really understand your business. The good times and the bad times. It’s really.
Susan
Easy to get focus on the winning month like December. If you’re a retailer. But you need. To really have a be the right judge for your business and look at the worst month and then stress test it to make sure that the groundwork is right for you to succeed over the whole year and not just depend on a one month strategy because that will fail you in the end. You need to also ensure that you’ve got a unique selling problem selling points because you want to solve a problem. Problem, that is how you can go out there, talk to your audience and have a real reason to talk to them because you’re solving something for them. You’re not just letting it go by the wayside. You’re not trying to sell them something, you’re helping them solve a problem, which is probably one of the most important things when. It comes to products and services. Make sure you really know your numbers. There are so many businesses out there that probably shy away because they think numbers can be scary. Don’t be put off, know them, understand them. Have them by ropes so you know all the key ones and just some of them to think about. And it’s not an extensive list, so make sure you know the ones that are right for you and your business, but your gross profit margin, conversion rates, lifetime value and how this all plays a part of your business’s success. You could even look at looking up Paul’s website and looking and understanding what the 503020 framework is when it comes to where your margins are and what you invest and where. So you’re set up for success from the beginning because you wanna make sure that your ideas gonna work and that you’re gonna be profitable as well because those. Functions really are important, so don’t always focus on the number like the revenue. Look at the profit margin and other margins as well to ensure you’re tracking for success. If in doubt and you don’t understand things as well as you like, there’s a simple tip that’s been provided and that’s spend 16 minutes a day learning it. Do a bit of research and do that over a long period of time and you’ll start to be a subject expert and feel more confident. And let’s face it, 16 minutes most people can put in their diary if you want to cheat, do 15 minutes, but you can do it. When you’re doing your money and you’re getting those revenues in and you have to pay things out, you’re sure to always pay yourself a wage. Otherwise you’re putting your business backwards because it’s not a true reflection of your costs. And if you’re unsure about taxes and other costs that may come in, throw a third of it aside in a separate account. For a rainy day and worst case, if you have paid everything correctly, that’s extra profits you’ve got there straight away that you can choose to do what you need to for your business. In the end, one way that you can help your business scale and grow is by having great control. Automation is one of the ways that can really help your business, and there’s all different ways that you can do it, from creating processes all the way through to doing something very simple, which could be a self service frequently asked question on the website it’s all about. Eliminating time and waste so that you can put your time and focus into the right areas and customers are getting things answered or solved faster. Make sure whenever you’re thinking about the experience, think about the future and what you want people to think about. You so often businesses fail by having the last moment with their customer being negative, and that’s that lasting taste on the mouth. No one wants that. You want everything to be enjoyable, similar to how Amazon has done this. With its delivery. So really think about those emotional cues and how you can make it work for you. So not only could you have customers coming back to you, but then you’re going with the power of word of mouth, which let’s face it, you can’t put a price on that. And my last tip is going to be extend your product range where you can for complementary products they extend your range naturally. Don’t do it for the sake of it, but make sure it’s something that you could use for retention purposes or also to acquire new customers, but also ensure that you make sure the margins work out as well. Last but not least, one of the first things Paul said to us, we are currently in the Golden age of E commerce. Join Now if you can with the right product. That makes sense. Make sure you’ve done your due diligence as well, but you’ll definitely be one of The Pioneers if you’re able to start joining now, how’d I go, Paul?
Paul
That’s we got through a lot. That’s there’s some. There’s some good stuff there. You don’t feel a loss.
Susan
Anything you’d like to add?
Paul
No, that was a marvellous recap. Well done. And it was really interesting hearing it all back because it’s it is sound advice and I think it’s just the advice. That, you know, people don’t wanna give because it’s there’s a lot of people out there selling courses by saying I’ll make you a millionaire. And I’m kind of like, so saying, yeah, you can be a millionaire. You just gotta work hard. So, yeah, I think that was a great summary. And we yeah, we definitely got through a.
Susan
Lot there. Thank you again so much for sharing your wisdom.
Paul
Anytime. Thank you for. Bring me.
Susan
And everyone else, don’t forget to order your copy of Shopify for Dummies. It is a best seller and in June 2024 a new book will be entering as well called selling online for dummies, which is also going to be a best seller. I can just see it now. Is there any place that you’d like to point everyone as well for your course of further details? Well.
Paul
Yeah. Look, if you’re a beginner and you wanna have a go at E commerce, head to learnecommerce.com.auor.com either or if an E Comm start is the course for you. If you’re an existing business and you kind of like what I’ve said and you want to hear how to double your your profits or help double your profits in 12 months. I have a new programme called ECOM 100 which is all about 100% profit growth. So either way you can find me on Instagram at Paul Woody e-commerce or learn ecommerce.com dot AU and yeah you’ll find your you’ll find your way to me somehow.
Susan And I’ll have them in the show notes as well, everyone, so you’ll easily be able to click on all those links there too. Thank you. Again. Paul, thank you everyone also for tuning in to more to marketing. Don’t forget to subscribe for more insights, leave a review to let me know what you think and also drop any comments as well to start conversations and share with friends who are passionate about marketing product. You know things business.
