Building an Industrial Equipment Empire – with Dave Huckabay

Andrew: Hello everyone, my name is Andrew Youderian and I am the founder of ecommercefuel.com, where we talk about building profitable online stores. And today I have a great interview in store for you. And in this interview, I want to find out how my guest grew his ecommerce business, which he started in the late 1990’s using a website which his 15-year old son actually built for him, into a highly profitable full-time business. My guest, Dave Huckabay, is an ecommerce entrepreneur with over a decade of experience building profitable online stores. He’s also the author of the, “Grabapple Guide to E-commerce”, which is an in in-the-trenches guide to selling online. Dave, thanks so much for being here!

Dave: No problem. Glad to do it.

Andrew: So, the question I want to start out with, we’re gonna dive into the history and the story of kind of how you gonna where you are today. Before we do that, I’d like to ask a question, I think a lot of people are probably wondering which is, what do you do in revenues right now?

Dave: Right now, we’re doing, year over year depending on the economy, between three quarters and just under a million dollars a year.

Andrew: Wow! Okay, and how many different stores is that gonna be? Or is that split among?

Dave: Most of the revenue comes from 3 big stores but about 30-35 percent of it every year comes from about a half a dozen smaller stores.

Andrew: Half a dozen. Okay, got it. So, quite a few.

Dave: So, there’s a lot of different websites.

Andrew: Got it! And could you give us here, I’m not sure how many are all of them obviously, but could you give maybe an example or two of specific store or stores that you run and what you sell on those?

Dave: Sure! Smtinspection.com is where I do a stereo microscope called amantics. I also do ultrasonics on a website called sonicsonline.com. These are ultrasonic cleaners and cell disruptors. It’s laboratory and manufacturing equipment.

Andrew: So, the microscope, this will be things that are used in government labs or medical labs.

Dave: All over the place. Everything, from people working on dental appliances to people doing hair transplants which maybe the single’s most disgusting application. I’d describe the process to you but you wouldn’t really want to know about it. But a lot of RMDs stuff, life sciences, and the core customer room for that particular site, probably print circuit board manufacturing and inspection. Hence the name SMTinspection stands for surface melt technology.

Andrew: Wow! So, you have a bunch of in markets and customers who are using these microscopes.

Dave: Right.

Andrew: And then, you mention some sonic equipment, can you give a little more detail on what you mean by that?

Dave: What most people would be familiar with when you talk about ultrasonic is things like the cheaper ultrasonic cleaners, like what you would see on Amazon.com or sharper image or something like that and they are just use for cleaning jewelry. We kind of attack the industrial end of that. I still do some consumer items and we ship quite a few of them, but we kind of shy away from the low-end of the market. That’s actually true on all the sites. I am typically doing the higher-end equipment and the higher-priced equipment.

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Andrew: Yeah, okay. I mean that’s probably going to be tined on your over-all treasure next niche selection which I didn’t go into a little bit further. But the real issue here exactly is, how you got into some of these markets are obviously not your everyday run of the mill markets. So, let’s take a step back actually. So, that’s obviously where you are today, you have some great successful businesses and a lot of experience with e-commerce but can you take us back to what your life was like before you got involved with e-commerce as a manufacturing rep and sales rep and can you give us an idea of what you were doing and maybe some of the struggles involve with that.

Dave: Yeah. Andrew it was a living hell. Yeah, for example, with the action of dying in a car wreck is what we used to describe it is. I was covering three stages as a manufacture representative for a group of industrial manufacturers. And they’re making equipment that other factories would use to make consumer goods and government electronics like spy phone and those kinds of stuff. And driving anywhere from 50-70 thousand miles per year, usually about 60 thousand miles per year, and spending at least 1 or 2, 2 to 3 day periods away from home, every month. And I did that from when I got out of the navy in the middle of 1988 all the way up through ‘99 full time, which was kind of the point when the internet really started to move and after that, I scaled it back and formed out a lot of my driving to an employee. And as of 2003, I did shut down the manufacture representative and ended the business completely. And we went completely online.

Andrew: Okay, so, how did you make that jump because it sounds like, at the beginning when you were driving 50 thousand, 70 thousand miles a year and really hating your life, there is a transition somewhere where you were actually an employee?

Dave: Actually, it seems funny when you say it that way but I believe that most people get up in the morning and hate what they do. Maybe not most but I know there is a significant percentage of us, that they get and go to a building not always full of people that we really want to be around. And we stay there all day and doing stuff that maybe we don’t enjoy that much. That’s the situation I was in, but I got a wife and kids and I gonna make some money. The turning point came in the late ’90’s. I just got the first notebook computer and they have Windows 3.1 on it. Awfully. The Windows 95 which made it slower was, that was awesome but my oldest son was playing with it. And he was the kind of kid that you could give in, he was not the kind of kid who’s gonna break something or tear something apart. And I noticed the screen was covered with texts, just texts flowing from the top of the screen to the bottom. And I ask him, “Shawn what are you doing?” and he said, “This is a role playing game and we’re playing a game about orcs and dwarves and stuff.” And I’m like, “Okay”. And you could look at the texts and you could see it was kind of like dungeons of dragons and text space. I asked him, “Who are you playing with?” He said, “I was playing with some graduate students at UVA”. And I thought, “Wow, that’s pretty weird.” And that was the first time I ever realized that there was something called the internet or I didn’t even know if it was called the internet or the worldwide web at that point.

Andrew: Approximately, what year was this?

Dave: Oh gosh! That must have been like mid-nineties or ‘96. There wasn’t a web like you and I think of it today. It wasn’t too long after that, that he came to me, holding my notebook and he said, “Look at this!” And he had found a site and I can’t imagine or I can’t remember what they were selling but it was an online store. And it was the first one that I have ever seen. And he said, “You know Dad, I bet you could sell your WA Brown stuff on one of these things”. And I thought, “You know what? Maybe I could.” And it was shortly after that, that we were contacted by Virginia Power. We were based here in Virginia. And one of the things we sold at that point in time was Industrial Infrared Heaters which are actually quite an amazing pieces of equipment. They are very, very hot and very powerful. One of the reason why Virginia Power was interested in us was that, despite all of their talked about conservation, what utilities do was sell power, right? So, they wanted to help me sell more power so they gave us server space. And my teenage kid figured out how to write code and put up a website for our company, the Virginia Power Servers.

Andrew: That’s amazing! And was he 15 at that time? Was I right? I think that was right.

Dave: Yeah! He was about 15 when he put up that first site.

Andrew: That’s amazing!

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Dave: Yeah, I thought so too! Wow! How does this all work? And he figured it all out. To begin with, you really could buy anything online. All that he did was pull phone numbers. People had forms, where they could send us some form and I will get an email and they would mostly call. But it started to make some money. And it did pretty well! I mean, there was no real SEO like what we have right now. There was definitely no social media but it actually worked well enough that when I finally bought the company I was working for in November of 1999, I contacted a friend of mine who was an inventor. I was selling one of his inventions at that time. I hand held X-ray system. Yeah, I know, very CIA. You could see through walls with it, literally. Literally!

Andrew: You should be selling some of those. I would be interested in buying one of those.

Dave: Oh man, you don’t even want to know.

Andrew: I’d probably couldn’t afford one, though.

Dave: No, no. I guess not for this interview but I guess great stories on doing demonstrations of those things for the _____ (19:20).

Andrew: So Dave, sorry to interrupt but I just want to make sure that I understand exactly what happened there. So, in those early days, cause you had your son put up the website, I think something that a lot of e-commerce entrepreneurs struggle with, was that first, I don’t know but I struggled with it, that first three to six months is brutal because every time you’re building something from nothing to get to the point where you can get momentum and build credibility and actually get some revenue going, some substantial revenue going, it takes a lot of work. Was that something that you experience? Those early days, did things take off pretty rapidly, pretty quickly? Or did you really have that kind of first three-six-nine month period where you put in a lot of work and just thinking, “Man, is this gonna pay off?”, “Is this something that’s gonna work?”

Dave: Not quite, not quite. Actually I put it “no work”, but it still took three-six-nine months. What we did was, we put the website to our business cards. And that time when we were still going out on the road, we had a thing called a “line card”, which we just shoot out telling these are all the equipments that we sell and here’s what it does. There you go, right? And every time we make the sales call to at least some of those with the purchasing department or whatever. And overtime, it just kind of snow-balled and on top of that, the people of Virginia Power were nice enough to send us people. So, they were sending us some traffic too.

Andrew: Got it. So, a lot of word of mouth and a lot of relationship or relational marketing is really what got your business off the ground.

Dave: It really is! That really is the truth of the matter and as we always saying with the guy with the x-ray invention. The reason why I was talking about him is that he was the only person I knew that had a real website on his own domain. So, I called him up and asked him how he got it and how did all of that work and he’s like, “I don’t even know, Dave, but here’s my guy.” He didn’t know! And he sent me to a guy, I don’t even know his name but, Adam Brawer, which was a very lucky introduction. And Adam built our first two websites.

Andrew: That’s amazing! I mean, you got this unique perspective of having seen, being involve with e-commerce, if not for the whole thing, then, for the majority of the evolution of it. From when the internet got started and to where we are today. I mean, what are your thoughts between the ease of, I mean, it’s gonna be such a contrast between what you had to do when you started selling online back in those days and what you can do now. I mean, what have you guys done in terms of evolving with different platforms. Or was there a point where you changed all of your platforms to something like shopify or yahoo stores? Where does that evolution been like?

Dave: Yeah, actually, first we had decided on the Virginia Power Servers and then we had a couple of costumed sites that were built by my friend, Adam, using Perl Script and HTML. I mean, he just coded everything from scratch. He just built it all from scratch. I love the guy but he was kind of a nightmare because for him, it was a hobby, because he’s wealthy and he was wealthy back then. And he just knew the guy that owns the x-ray company so he said, “Yeah, if I did it for Joe, I’d do it for you too”. Those sites worked really well. I finally had them both redone in the, let me see, around 2006-2007 time frame. I had them completely reworked simply because they could no longer keep up and they didn’t have the features that you needed to do e-commerce and to change the environments. Yeah, we really have seen a lot of changes. You know, if I can get in a time machine and take what I know now about SEO and search engines and promotion and marketing. It really has been continuous of non-stop self education since 1999. I would be a very, very wealthy man.

Andrew: I mean, if you could go back and get a head start on all the SEO’s stuff in 2001-2002 would be, I mean, ten-year head start is, I mean even the best of us. I mean, that’s quite a wall.

—– Approximate 15:00 Mark in Video ——-

Dave: Really, literally! I’m not joking, man. We used to be able to rank by just putting up a page. Just call it moosenuggles.com and put up a page that just said moose snuggles 20 times on it and you rank number one for moose snuggles.

Andrew: The old, the classic key word stuffing strategies that worked.

Dave: It worked perfect. Nobody knew what they were doing. It still works, not the keyword stuffing but the SEO still does work to some extent. One of the things that’s really happening now with the search engine especially Google is not so much of that SEO doesn’t work as well as it used to. It’s just that Google is changing the way the surf’s look.

Andrew: Yeah.

Dave: I think, going forward, we’re going to see if it’s going to be a lot more difficult for big commercial terms to rank at the top of the search and it doesn’t mean what it used to mean, either. You know, the surf used to just feature the surf, now it’s the ads.

Andrew: And when you say the search, you mean, the search engine result page.

Dave: It is the result’s page, I’m sorry.

Andrew: Yeah. That’s what I noticed too. I did an analysis of kind of the number one keyword ranking, because that’s some of my sites do. I think some of yours probably do, too, rank number one for different keywords. And back in the day, if you were number one in Google, you could expect 50-60-70 percent of the search volume for a specific term. And now, like you said, with just three or four ads, they’re very tough. A number ranking, I did some comparisons and I think, base on what the keyword tool says in a given month and what my sites actually receive in a given term, it’s something anywhere of 25-30 percent for a number one ranking.

Dave: Yeah. And you know, Google is not in it. It’s not a charity. They’re in it to win it, they’re in it to make money and make their shareholders rich and they’re making a good job but it really is a different environment. And going forward, at least, what we’re doing is trying to pull much traffic as possible from other sources. We’re gonna be pushing really, really hard. I know, it’s very difficult for industrial equipment. We’re pushing really hard to get into some of the prime directories and some of the social sites. All of that is just so difficult. I’m still managing it but it’s just hard to do. You really have to haunt for people who want to click on your widget blending machine website. I love widget machine blender.

Andrew: It kind of segues into your marketing and SEO efforts. Obviously, earlier on, a lot of relational marketing is what really got your business off the ground. Is that still what you depend on for the majority of your revenue today? Or have you gone into transitioning to more of an SEO approach or more of an organic traffic and advertising approach? Where did you get your customer? Where did they come from?

Dave: Well, right now, it’s a mix of historical customers, customer based, SEO, people coming in just over the transom through the search engines, Facebook pages, stuff like that and advertising; although I try to keep my advertising spent at a minimum. I really have to have some proof to spend some money on a keyword. I have to know that the keyword converts. And one of the things that I noticed that you also gonna look at is, advertising on a keyword because it converts as an organic search does not necessarily mean that it’s gonna covert as an advertising keyword so you really have to watch your metrics or you’ll end up throwing a lot of money after a keyword.

Andrew: Really? So, let’s say for sonic jewelry cleaner, (it’s probably not aright keyword but) you’d see a difference in conversion using a pay-per-click visitor from that keyword and an organic visitor from that keyword?

Dave: Absolutely!

Andrew: Really? And why do you think that is?

Dave: I think it comes down to the kind of person who clicks on ads. You have to remember that I’m selling industrial equipments and a lot of my searchers are professional buyers and they’re engineers. And those people, I believe are a little bit more internet savvy than some mom sitting at home looking for jewelry cleaner. I’m not always amazed anymore but it astounds me sometimes how little people know about internet. When really, in ever increasing extent, it drives the entire economy or drives a huge chunk of it. And a lot of people don’t know the difference between organic results and advertisements. They don’t know what’s been paid for and what’s really there. Just because it ranks, because it’s an authoritative website, or because someone spends a lot on Google and had it ranking, whatever the case may be. Those are the most different knowledge levels to where people click on the page.

—– Approximate 20:00 Mark in Video ——-

Andrew: Got it. Dave, let’s maybe shift gear just a little bit. You’ve got one of the biggest questions, I think one of the biggest struggles that people face when they’re getting ready to start an online store or thinking about it is, “What do I sell?” And it’s tough! It’s a big decision and you should research it a lot but it’s a huge, I think, road block for people who are trying to get started. You obviously insert a lot of different stories and a lot of different niches. But what are some of the characteristics and traits that you look forward to market or niche that you’re thinking about going into?

Dave: Well, number one, I want either enthusiasm, if there’s a consumer basis to it, if it’s something that someone’s gonna use in their home. I want to see some enthusiasm, I want to see some movement, I want to see that the people are gonna be excited about it. Or that they are trying to get away from pain. You know, those are the two big drivers; moving towards pleasure and moving away from pain. And when I say pain, I mean actual physical pain or emotional pain. When I say pleasure, primarily, I mean guys and their freaking toys, man.

Andrew: I found that too. It’s amazing what guys would spend on stuff when it comes to recreation.

Dave: Right. My dad was an avid fisherman and he spent lots of money on fish and stuff. My mom used to say, the only difference between man and boys is the price of the toys. And that’s so true. Having said that though, if you find a niche or if you identified something that you think would make a good hobby as website or a good outdoor interest website or what interest you’re going after. When I see something like that, I also want, if it’s possible, for there to be industrial or has business component to that, too. And you know, it’s not always possible, it’s not always the case but you can think of any number of hobbies where you might have a website to sell products which might extend from the personal or private domain into the business domain. And that does a couple of things for you. And just right at the top of my head, what about the guys who are into woodworking, ok? I got a friend that makes pool cues. He makes really beautiful pool cues with marble and ivory inlay and everything and that’s he’s hobby. I remember when he started doing it and his lathe was really a simple piece of machinery but if you go over and look at his garage right now, it looks like a freaking machine shop, right? Because he’s so into this stuff. He’s actually buying commercial equipment. That’s one way you could look at it. Another way is that..

Andrew: So Dave, sorry to interrupt. So, when you use him as the analogy, are you referring to him as he had a hobby of one who creates, you know, his pool cues for a hobby base but also he got so into it, that he gets to buying industrial machinery because it was such a passion, he’d want to be able to do it on his own?

Dave: And now it’s such a passion, he’d want to be able to do it on a higher level and has become a small business for him. And that’s one way that having both the personal and the business into a website can help. The other way is that, if someone comes to your website and they want a home, let’s just say, a home sterilizer; baby bottles or whatever they’re doing at home that they want to sterilize. There is some cache and there is an aura of authority if they see on your website that, “Oh, look, he does this big commercial sterilizers too!” This is the ones that the hospitals used! But now he’s got this little unit here. And I always thought that, that added something. And that meant something to people. And maybe I’m wrong but the other thing that it does is it opens you up to completely different customer base. If you’re gonna sell widget blenders, why not sell the personal widget blender for the home but let’s put the big ones on there too! Why not? Because once and a while even if you’re not going after that market, once and a while the guy at widget USA is gonna hit your website and you’re gonna get an order for like 5000 bucks. It happens! It happens all the time! There’s no reason not to do it. If you’re at the start and you’re looking at niches and trying to stand up and go all the way up, why not? The hardest thing, I think, about getting started with this, and I want everybody whose watching this to really listen to this, the hardest part about getting started is to get started! Guys just pull the freaking trigger because I tell you what, even if your niche doesn’t working and this isn’t the one that’s gonna be “it”. that doesn’t matter because you’re gonna learn a lot by doing the research, and putting your first store together and doing your first marketing campaigns and getting out there. The odds on you making zero money are pretty slim, you’ll probably make something but you may realize you know in 8-10 months, this one didn’t work, well then you can have it to something else or you can expand that website into a different area. If nothing else, when you find the next niche that you want to go after, don’t worry but that would let it pick up, when you find the next niche that you want to go after, you’ve got a website that you can shelve.

—– Approximate 25:00 Mark in Video ——-

Andrew: One thing, too, Dave, that I found and I think is a kind of road block for me and I know other people is feeling like, I put a website up that’s not nearly as pretty as a lot of other website. They’re not gonna look nearly as professional but when we were chatting earlier and let me know if this is an experience you’ve had but my first ecommerce business that I threw up, it was hideous! It looked awful! You know, it was not gonna win any design awards and it still made money because of probably a couple of different reasons but I was focus more on the market. I was focus more on providing a lot of information and value to the customers and the degree to which it was, it wasn’t professionally designed, didn’t matter as much.

Dave: I think that’s absolutely right. It might not be as true as it used to be. My sites are still ugly but I’m making money. They are, they are! Smtinspection.com is actually kind of a pretty site. That one’s okay but the rest of them are all pretty ugly and it doesn’t seem to make any difference. What they are though is they’re very functional and there’s a ton of information on them and it is all hand-written. No duplicate description, nothing like that.

Andrew: You’ve got a great chapter in your book, in “Grabappple Guide to E-commerce”, which really talks about content creation and making product listings that stand out and add value and will gonna be really valuable resources that are getting ranked well. You did a fantastic job! Can you talk about it a little bit and maybe hit on some of the things that you do to add value to a product listing that other people might not, so that you can build trust and build authority and build rankings. What would you add to your product sites?

Dave: Well, the first thing that you want to do is you want to actually get the product and take your own photos. And the next things that you want to do is you want to actually sit down and, as we used to say in the navy RTFM, “Read The Friendly Manual”.

Andrew: Friendly, I’m sure.

Dave: Friendly, of course! And you want to go through there and you want to make sure you know everything there is to know about them. The next thing you want to do, believe it or not, is you want to go to your competitors’ website and you want to subscribe to their newsletters and if they got their manuals up on their websites, you want to download those manuals and you’d want to take a look at those too. Because what you’re going to do is, you’re going to pull out differentiators, places where your product does something that the XYZ Company’s product doesn’t do. Another thing that you might want to do is actually buy your competitor’s product, I’ve done that, and use it and try to break it. The other thing that I do a lot of time is, and this is old school, everybody knows this and I don’t know how many people actually do it, go to Amazon. And look at not just your product that you’re selling if it’s on Amazon but look at all the similar products and when you read through the reviews, which you want to look for is people that actually had a problem with it. You’ll find sometimes, if you get into the Amazon’s reviews on really popular product, in those reviews, there’s actually a dialogue going on. “Man, I couldn’t get the adjustor knob to turn in.” and then someone else will put, “Oh yeah, but you know if do this first, it slides in perfect. You shouldn’t have given it 3 stars. It’s just awesome!” That is fantastic content!

Andrew: It is! That’s great!

Dave: It’s a great content, so you put a proposed on your blog or you put an article on your website about, “you know this is what we found…” The other thing that you want to do is, hopefully, if what you’re selling is consumer item, if you identify yourself in discussing passion to it, go to the sites where people hang out. Don’t spam their forum with a bunch of crappy forum for profile links. Get in there and really look what people are saying and look at how they are actually using the equipment. And you’d get a number of different things on that, not only are gonna get great content ideas, you’re gonna get ideas for different pieces of equipment, as well.

Andrew: Got it. So, do you create your own user manuals? Maybe not user manuals but your own kind of here is how you get the most out of the product based on the experience we’ve had and based on the customer have had, and put that on the website and the product listing to add value. Is that something you’ve done in the past as well?

Dave: Yeah, typically we bust out into a separate section of the website. It will be like ask the expert or whatever and now we’re migrating all that stuff over to blogs and some of it on to FaceBook. But yeah we do incorporate all of that. Another valuable source for content, believe it or not is the contact form on your website and the emails people will send you because people ask questions. I’m telling you, man, if I got 3 emails, over the last 2 mos. and they’re all about, “hey can I do this with my widget vendor?” And they’re all addressing that single issue, I’m telling you, man, I don’t care what the Google ad tool or keyword tool says or anything says, people want to know that.

—– Approximate 30:00 Mark in Video ——-

Andrew: Yeah.

Dave: You’re getting emails from real live human beings, you need to write an article about that and stick it up on your website. And tell people what they need to know. This goes back; actually, it ties back in to whether or not a website needs to be beautiful. I would actually say that there is an adverse relationship between how useful a website is and the requirement for it to be pretty.

Andrew: Yeah, It’s not like it’s so easy to get fixated to the design and the layout and everything that you spend so much time on that that you don’t focus on what you really need to include which is including as much information and answering questions that your customers are asking.

Dave: You see, what you gonna do is build trust because, I’m telling you, I don’t care what you’re selling, they can find it in someone else, cheaper. Every single thing that I sell, you can find it somewhere else, cheaper and you can actually find it in the first page of the search engine results. Every single thing.

Andrew: Yeah, competing on a price is a rough way to go.

Dave: You know, the guy that I bought the company from, Bob, may he rest in peace. He used to say that price is what to use when you don’t have anything else. And that he was an old-school-driver-on-the-country-type kind of a sales guy but he was right! He was right! Even back then, it’s all about customer service. And in those days, it was about actually carting a piece of equipment to a factory, demonstrating it, showing them how they could do it. Or flying the customer up to their equipment factory and taking them on a tour, whatever. It was a really big order. Now, it’s about the fact in your website. Your website has to do everything that brick-and-mortar stores do, what people and objects. In the book, I call out the example, I believe, of a Lowes or a Home Depot. Let’s say, you are trying to sell generators, okay, home generators for when there’s a snowstorm or whatever. You’ve gonna give them a reason to get the generator from you instead of just going down to home depot and just picking one out. And what you’re in competition with is whoever first going to be there at home depot to answer their questions. When I think about the last couple of times that I went to home depot, maybe that’s not that big of a hurdle to get over, but you’ve gonna give them reason to trust you. And to go ahead and click that freaking button on your website instead of hopping in the car.

Andrew: Do you worry about, this is an objection here from people. Do you worry about providing all these rich, fantastic information to help a customer make a decision to really inform them about the product and then, once they have learned everything from your side, they hop on over to Amazon and purchase it there at a 15% discount? Is that something you worry about it?

Dave: No. The reason that I don’t worry about it is because; number one, there’s not a damn thing that you could do about it and number two, if you don’t provide that information, there’s no reason for them to come to your website in the first place and number three, if you don’t have a comprehensive website with good information on it, they’re probably not gonna rank in there and they’re not gonna see it anyway. So, it’s something that you can worry about if you want but there’s nothing you can do. Not everyone that comes to your website is gonna buy. That’s just the way it is.

Andrew: One thing I found, too, is, you’re can’t worry about it, because you’re always gonna have those people that are just plainly price sensitive and they’re gonna use you as a resource. I think you’re also gonna have people that come to your website and based on the information and the expertise that you present, if you help them make a purchasing decision, a lot of people don’t forget that. They’d appreciate that. And as long as your product is not grossly overpriced, a lot of those people will thank you by giving you the business.

Dave: They absolutely will. And I think most of us are like that in our own lives. When I click something out for a bid, when I want to get something done on the house or something, I don’t usually take the lowest priced contractor. And I don’t usually take the highest price but sometimes I do. Mostly, I use the guy that makes me feel the best. The guy that walks through the house and I think, okay, this guy actually understands what’s happening here and he understand how to do this. Maybe he talks about another person, two streets over he had the same problem and he fixed theirs’ whatever, whatever the case may be. It’s about establishing trust and coming up with the level of comfort.

Andrew: Yeah. I agree.

Dave: None of it has anything to do with how pretty your website is.

—– Approximate 35:00 Mark in Video ——-

Andrew: Yeah, that’s true. Great point! Speaking of which, I’d love to transition into the supplier’s quickly. So, in terms of the products that you sell, do you stock in terms of percentage maybe a break up. Do you stock all of them yourself, do you drop-shift them from the manufacturer? How do you source your product? And how does that work?

Dave: What I normally stock are the consumer items. They tend to be smaller, easy to ship. Most of them weigh under 20 pounds. I also stock consumables. In the case of ultrasonic cleaners, I’ll stock the cleaning solution because a lot of time, people just wants to get what they all concentrate. So, people just might want one quarter of that. The things that I have drop-shift straight from the manufacturer are the big machines. And that’s for a couple of reasons. Number one, by just having them drop-shift, I don’t have to buy them in advance and carry all this inventory. At any given time, I’ve got at least $30,000 worth of equipment.

Andrew: Wow!

Dave: Yeah. I wish I didn’t but I’ve gonna have that much. I stock the accessories for the big stuff. I stock the small consumer stuff and I stock consumables. Big machines, 3D microscopes, all of that really expensive stuff. Drop this stuff, shipped from the factory all because I don’t want to hold of the inventory. And also, shipping is not insignificant one of our most popular item is a box that’s 31’’X 27’’X 24” and weighs 43 pounds. And I’ve gonna tell you man, some guy wants it second day for Virginia to Bakersfield, California, you really gonna do a few hundred dollars. I’m not gonna pay to have it shipped here and then, I have to ship it all the way out there. And at some point, it just become a little too much.

Andrew: So, this suppliers, the ones that you’re drop-shipping, I’m guessing because of the edge of the equipment, you know, they’re high-end, industrial products, they don’t just accept, they probably don’t advertise and encourage people to drop-ship based on the business models. So, are these suppliers that you found based on your previous experience in the industry, or are they suppliers that you found on your own? How did you come to build a relationship with them?

Dave: It’s actually a mix but let me back you up just a little bit. When we talked about drop-shipping, a lot of manufacturers have their product line split up and some of the stuff that they sell; they actually have their own direct sales people. Other stuff, smaller items, they can’t afford to fill a direct sales force. So, they just use distributors and that is what the distributors are for. You are going to be their sales force. They don’t have to pay your medical insurance; they don’t have to deduct FICA, they don’t have to do any of these stuffs that they have to do with an employee. With you, all they have to do is let you buy it from them and give you your cut. So, don’t think that it’s hard to find manufacturers that will drop-ship. The hardest thing to find is a manufacturer who is actually in the US.

Andrew: Really?

Dave: Yeah, yeah. It’s a lot harder than it used to be. And that is actually one of the reasons; one of the things that actually pushed me from being a manufacture’s rep into going full force with internet sales is that starting in the early 2000’s, you’re way too young to remember this and I’m a lot older but I could remember Ross Perot running for President and back then the big debate was over NAFTA, the “North American Free Trade Agreement”. And Ross Perot used to go around telling everybody that sucking sound you hear is all your manufacturing jobs heading for Mexico. Forget the politics or you think whatever you want about that, but he was right. What the people of Mexico did not understand though is that Mexico is just where we stop to refuel on our way to China.

Andrew: So, with products today then, is it possible, if you have a manufacturer in the States, you can chat with them, and maybe come back to how to approach them, in a minute but is it possible to be able to drop-ship from, a lot of these manufacturers overseas, do they have maybe a warehouse that they’ll ship everything to in the United States that you can then say that once it gets imported then you can drop-ship it to a sub-warehouse? Or are you just out of luck?

Dave: No. What you’re describing there is exactly right.

Andrew: Okay.

—– Approximate 40:00 Mark in Video ——-

Dave: One or two things that are happening normally, because so many manufacturers took foreign stuff out to other countries where labor is much less expensive and where they can do a lot of stuff they can’t do here in the US, to save custom and manufacturing. And they would only have one or two situations where everything will come in on a ship from China or whatever and there will be a US location and the equipment will fan out via drop-ship to individual customers if you got that kind of arrangement. Or they will ship inventory to bigger distributors. I even had a couple of situations where I can buy either from the manufacturer directly or I can buy from another distributor. Let me just add in the side here, I want to tell you guys, don’t be afraid to your competition. Those guys can be a tremendous resource, absolutely tremendous! I have a couple of competitors on one of my product lines where if I’m out of something, I can call them. I can email them a packing slip and they will drop-ship it to my customer for me. And I do the same thing for them.

Andrew: Wow.

Dave: So, cover each other’s stock requirements.

Andrew: That’s a great tip! That’s such great advice!

Dave: Well, you know, being in competition with somebody doesn’t mean that you want their children to starve, right? It’s a big internet. It’s a big country. There’s a lot of stuff going on. It doesn’t have to be mean spirited.

Andre: So, how do you find these manufacturers? You know, let’s say, for someone with your experience and your back ground, you have some industry connections by also managing, sometimes you have to go out and find suppliers without, maybe, having those connections. So, for someone who’s listening and who doesn’t have e-commerce business but maybe they have an idea for something that they want to go online. There’s kind of the traditional rites, you can go the world wide brands, you can go to some of these whole set directories, you can go online and search but are there any other ways that you approach the kind of supplier’s search the contact files into find them and outsource them?

Dave: Yeah, absolutely. When I have identified something that I want to tackle or niche that I want to or what kind of equipment I think I might want to sell; first off, I want to find out who’s already selling it. And go to their website and take a look at it, take a look at the pricing and maybe make up a spreadsheet, you know, to find out what kinds of pricing people are getting up and I’ll try and find out who the manufacturer is. And sometimes, it’s just easy as just, very carefully looking at pictures of the product they are maybe, downloading it or blowing it up or whatever, trying to find that data. Sometimes, what I would do is actually buy the least expensive one from someone that’s already selling it and just have it sent to me and normally then, you can find the manufacturer, it will be inside the owner’s manual or it will be on the label on the back of whatever it is but you’ll be able to find out who’s actually either manufacturing it or let’s say, a couple of page in China or Malaysia or something. You can find out who the main importer is.

Andrew: Will that main importer be stamped on the product?

Dave: It always has been. There’s always been something; there’s always been a way for me to track it down. Another thing that you can do is, you know, and this is gonna break the heart of some of the people watching us. Guys, you gonna have to pick up the phone, okay?

Andrew: That’s pretty terrifying for a lot of people.

Dave: You know what? It is kind of scary at first but, you know, ask yourself, what’s the worst thing that can happen, right? What’s the worst thing that can happen? And they will like, no click, okay. And it just reminds me of asking girls out in high school. I gonna the “no click” on the face to face for four years straight. You know, it doesn’t hurt that bad. You get used to it. The thing is that, when you start doing that, a technique that I’ve used and that I talked about in the book is what I used to call the “Amazon dance”. I’m an Amazon affiliate and I don’t do much in affiliate sales. I prefer to sell direct but I do from time to time, stuff will come in from Amazon but the main reason why I’m an Amazon affiliate is so that I can use pictures and other content from Amazon. One of the sites that I’ve got up right now, I actually was just haunting around for just a consumer item and I, myself, have a problem with my lower back and I sort of looking for back related products and I found one. And I actually built a site just using pictures on Amazon or off of Amazon and wrote my own descriptions and, I think you’ve seen it; it’s a nice, little website.

Andrew: Yeah!

—– Approximate 45:00 Mark in Video ——-

Dave: Once I had it set up, which is some basic stuff from Amazon, I just called the biggest company in that industry and pointed them on some of my existing sites and pointed them on this site and I said, “Hey, I would like to sell some of your stuff too.” Now, the stuff that was on my site, I mean there was a real shopping cart on there and you can buy it off the site but I had my price set so if you bought it from me, I can turn around and buy it from Amazon and then, send it to you. Okay? And actually that’s not a long-term thing but if you want to have something to show somebody, if you want to have something to establish some credibility, that’s one way to do it.

Andrew: So, what you’re saying is, in some of this manufactures, they may not drop ship for everybody, they’re not gonna be putting out fliers to try to drive people to drop-ship because that’s maybe not their business but if you can track record, maybe in your case, or if you can put up a website that looks credible and then you call them up and say, “Hey, here’s what I’m doing, here’s what I have,” and establish some trust and credibility. Then, you’re saying that, a lot of times for manufactures will be willing to drop-ship for you if you can convince them that you’re worth their time and hassle.

Dave: Yeah! And it doesn’t necessarily mean that they’re gonna drop-ship everything but maybe they’d want you to buy a few first or whatever. Sometimes, there’s an element of risk but, you know, here’s the thing about setting up a site and doing what I call the “Amazon dance”. It’s disingenuous, yes, a little bit, but when you talk to one of these people at the manufacture’s place, you’re talking to sales manager, what that person on the other end of the phone wants to know is, you know, “Are you for real?” Or are you just gonna be another scrub on her email list which she’s gonna be sending pricelist and letter throughout and you’re gonna work her and you’re not gonna do anything with it. When you show them that website, especially if you take care and you really build it, and you try to sell stuff on it and you know what, for me it actually worked. I sold a few things even though I had the same stuff that was on Amazon or it was higher-priced. It worked! And then, this big manufacture looked at the site and they were like, “Yeah” or “You can sell our stuff too!” And then I just blew the site up and put up all of their stuff on it. That’s one way to go about it.

Andrew: Wow! So, you can use Amazon as just, even if you’re not making a ton of money, but you can use them as a temporary supplier to test, not only to test the market but to get in the door with the manufacturer.

Dave: That’s exactly right!

Andrew: That’s great! Dave, can you tell me about your team a little bit? Some people, I mean I would love to hear the logistics and the behind, kind of the back office stuff, on how an e-commerce business works. Can you give me an idea of the people that you use, your team, how you ran your phones, just kind of behind the curtains look at how the business operate?

Dave: Sure! The way it’s set up is like, I don’t know if you can tell but I love to talk, so, I handle both the interaction with the customer who call in and a lot of our businesses, people are calling in. On top of that, I got my son, he sometimes comes down and he covers for me, he works for me when I gonna go out of town or vacation or whatever, doctor’s appointment or whatever that is. He’ll come in and cover for me although he has his own thing going on with all the Virginia. Aside from myself and him, my wife does videos and graphic works in addition to her own full time job. But then, I got a team that’s really kind of scattered all over the world. I have a guy that’s does coding for me that’s in, I believe, in Suri, England. My lady that does graphics for me is in Oz, she’s in Australia.

Andrew: And are they part time contract workers or employees?

Dave, No, they’re not employees. They are just like, when I need something done, I’d shoot out an email and then they’d flip it around and they send it right back. I’ve got a guy that does Word press sites for me who’s also an Oz. I don’t know if I’ve just been lucky but, you know, every single person I talked to from New Zealand and Australia has been awesome. They’re very cool people. They’re just really cool people. So, I got 2 people over in Oz, I’ve got the guy over in England and Cody, the lady that handles my main e-commerce website stuff and my yahoo stores stuff, the coding for that, is based in Illinois. Who else have I got? I’ve got a couple of other people that I use here, but that’s really the core of the team. And you know, that doesn’t count obviously, the people who manage your business gross you’re gonna have to have on board anyway which is, of course, you’re gonna have your accountant and your lawyer and do bankers always at least 2 banks. That’s pretty much it.

Andrew: So, really, you’re kind of handling, when it comes to interaction and then, you’re really leverage a team of contract workers. You’ve got access to programmers and designers and writers but you don’t usually have to have long staff all the time, which is great.

—– Approximate 50:00 Mark in Video ——-

Dave: No, absolutely not! And I don’t think at this point, in the way the world is working, I don’t think there’s a reason to. And I forgot to mention Lisa, my contact lady. Hi Lisa! She might watch this. As I can see maybe you have 30 e-commerce stores or just 2 gigantic ones, you know, maybe you need to do that but when you’re going after niche stuff like I am, I just don’t need full time employees. I just contact them as I need it, I just send them. And I actually enjoy having people on the other side of the planet. One of the reasons is that, I have an idea at an odd time of the day and I’ll shoot her down. I’d say, “Hey Belinda, I need this and this, can you do anything for me”. And I get up in the morning and it’s in my inbox.

Andrew” Yeah, the wonders of different time zones. Now it’s outsourcing.

Dave: Yeah and I love it!

Andrew: Yeah, that’s great! Dave, I want to chat about your eBook for a little bit here. So, the “Grabapple Guide to E-commerce” and if anyone wants to check that out right now, it’s grabapple.com. Is that correct?

Dave: That’s right. All in one word, grabapple.com. It’s spelled just the way it sounds.

Andrew: grabapple.com. So, can you tell me a little bit about the eBook? And what made you right it? And then, specifically, what it contains that would be helpful to us, e-commercefuel listeners and readers.

Dave: Okay. What the eBook actually is; is really two parts. Part one is how I ran an e-commerce business and I am talking detail. I go down to the level of how I organize the files in my file cabinets, I mean, really down into the nitty-gritty; what it looks like day to day, how I talked to customers, what kinds of things you say to customers, what kinds of things you don’t say to customers. With regards to suppliers, not just how to find them but the importance and how to develop a relationship with the person inside the factory. You know, you gonna find yourself a champion or if not a champion, then at least some who knows what’s going on. And there will be someone at every factory or at every major distributor that you can trust but I go in to how to find that person and how to work with that person. I talked about run a website where you’ve got products from competing manufacturers and the right way to juggle that and handle that so that you give everybody their just due without them worrying about the fact that they’re on the same website with someone they’re competing with. And there is a way to do that and to do it right so as that you don’t cause anyone any consternation. We go into first starting out, setting up your website, how to build your team and how to deal with competition. I got a big chapter in there on hoe to generate content. And that’s all part one, it’s actually the nuts and the bolts of it, how to put it together. In part two, I actually take a website with just a giveaway, the free word press thing and put an e-commerce site up. And I do it step by step. And I walked you through that step by step. And you can literally take the book and read through the first part of it; set up, people and company and everything, and read through the second part of the book and actually build the site. You can build a site just reading the book. Just do what I do, it’s full of screenshots, everything’s in color and you can literally put together your first e-commerce site just reading through the book.

Andrew: So, I mean, in primer from beginning all the way through getting the site alive and running, how to get an e-commerce site built based on your ten, twelve, fourteen years of actually doing it.

Dave: That’s exactly right. Not just to put that first website together for nothing but how to go about finding the products, how to go about finding suppliers, all the rest of it.

Andrew: Is there a sample, I can’t remember if I saw this right, is there a sample that you provide on your website for people who may be interested but they’re not sure?

Dave: Sure! As matter of fact if you go to the website, if you look in the upper right hand corner, if you sign up for the mailing list and I will not bombard you with emails, don’t worry guys that’s not what this is about. If you sign up for the mailing list, you get chapter 10 right away, which is the chapter on content creation. And you can judge by reading though that chapter whether or not the rest of the book is gonna be worthwhile. I gonna a pretty good kill writing on that, when people look at that chapter, they normally come back, a lot of them and buy the book.

Andrew: Yeah. I’ve gonna say and I obviously taken a look at the book and it’s a fantastic resource. It’ in depth, it’s detailed, it’s 200 plus pages, it’s well laid out and it’s really comprehensive. So you know, if you’re thinking about getting involve and starting an e-commerce business for an investment, it’s not much, it’s right around $50, maybe a little bit less.

Dave: I think it’s $37 right now.

—– Approximate 55:00 Mark in Video ——-

Andrew: It’s $37. It’s an incredible bargain for the price. So, having personally seen it, if you’re a regular on the blog and you see what I put out there, I don’t promote a lot of stuff, I don’t try to hawk a lot of things but this really is a pretty valuable resource. And if you buy it, and it’s not worth it, I’m sure there’s a money back guarantee, but if there’s not, I’d be happy to refund anyone’s money who buys it and doesn’t think it’s worthwhile. It’s a quality product. And again, that’s grabapple.com. That’s right?

Dave: Grabapple.com. There’s a 60 day money back guarantee. If you flip through and you don’t like it, just send me an email and I’ll take care of you.

Andrew: Perfect! Dave, it’s been wonderful chatting with you, picking your brain and kind of seeing the evolution of your business all the way from the nineties to now. As a parting note, for the audience, for someone out there who’s thinking about starting their own e-commerce business, not quite sure but what advice or what parting word would leave with them as a kind of getting started with this journey.

Dave: You know the best time to plant a tree is ten years ago and the second best time is right now. If I was gonna tell your readers one thing, I would say, pull the trigger. Pull the trigger, right now! As soon as your through watching this, pull out whatever spreadsheet or saved websites or whatever research you’ve already done while you’re thinking about this, or filling with it or trying to make up your mind and just do it, man. Pick something, put up a site, it could be a little word press blog with a free shopping cart, do it! My book is great! Andrew’s course is great! His website’s great! But you got to get in a tranches, man. And when you get in a tranches, resources like the ones that Andrew and myself are providing are gonna make a lot more sense to you. So, if I get to tell you guys one thing, it’s do it! And do it now!

Andrew: Yeah. Dive in, get your hands dirty.

Dave: Absolutely! Get in there and just get filthy.

Andrew: Yeah, good advice. It’s been a pleasure having you on, again great peek in your brain and chatting with you and a lot of insights and wisdom. Hopefully, in the future, maybe we can get to do this again. And maybe focus on one area and a little more detail but again, thanks for coming and it’s been a pleasure.

Dave: Same for me and I look forward to doing it again. Thank, Andrew.

Andrew: Absolutely! Thank you everyone for watching and hope to have more in the future. Take care.

Dave: Thanks guys!