Value bombs galore in this AMA
Today we're doing an AMA from our Facebook group, Unofficial Shopify Podcast Insider's.
We answer your questions, such as:
...and more. Always more. Such as, "How much did Kurt lose on GameStonk?"
Kurt Elster: So, how much money did you lose on Gamestonk?
Paul Reda: That would be a zero dollars, because I’m a conservative investor. All my money is in SPY. S-P-Y.
Kurt Elster: That is the safe and prudent thing to do with your savings. I decided I could outsmart the market. I wanted to listen to Papa Elon. I bought GameStop, and anyway, now I’m stuck with this thing and I’m out $2,500. It’s a painful lesson.
Paul Reda: Yeah. I’m like Marge Simpson. I just like betting that all the horses have a good time.
Kurt Elster: Fortunately, Homer was able to rescue her from Gamblor’s neon claws.
Paul Reda: Okay. No, but that’s a different episode.
Kurt Elster: Different episode. Well, you know, the Simpsons fans will appreciate all of this nonsense.
Paul Reda: I sent you the article in the Wall Street Journal about the hedge fund guys that just had randomly bought GameStop in December because they liked the stock, and then ended up making like $700 million on it when all this dumb shit happened. But the thing that made them cash out was that Elon Musk tweeted about it and they were like, “It’s over. Get out.”
Kurt Elster: Papa Elon, what’d you do? Oh, no.
Paul Reda: It’s like when your dad uses the meme. You’re like, “Eh, that’s over.”
Kurt Elster: It’s over. When your dad shows up and he’s like, “Man, this is lit!” Uh oh. So, where have you been lately?
Paul Reda: I think my face is thinner. Do you think my face is thinner?
Kurt Elster: I thought you were looking a little thinner.
Paul Reda: Yeah. Okay, so the key to weight loss is to not consume any nutrition or water for eight days.
Kurt Elster: That doesn’t sound healthy.
Paul Reda: No. You know, look at the results, though.
Kurt Elster: How’d that happen?
Paul Reda: Yeah, so it turns out I had giant gallstones-
Kurt Elster: And by giant, you mean…
Paul Reda: I mean like literal charcoal briquettes inside my gallbladder. I mean, I think there were-
Kurt Elster: I saw the photo.
Paul Reda: Yeah. I had three.
Kurt Elster: He’s not kidding. It really did look like a charcoal briquette in every aspect.
Paul Reda: Yeah. I had three gallstones that I’m almost certain were 100% of the volume of my gallbladder.
Kurt Elster: Yeah. Your gallbladder looked like a deflated balloon.
Paul Reda: Yeah, and so one of them… A chip got loose, which caused me to have intense pain and pancreatitis, which is like pancreas inflammation, which just makes you scream and have 10 out of 10 pain.
Kurt Elster: Yeah. Turns out it’s complete agony.
Paul Reda: So, I went to the ER and I’ve been in the hospital for the last week.
Kurt Elster: And yet you’re here. You couldn’t stay away.
Paul Reda: Well, it happened last Monday, so we’re now recording this on Thursday, the Thursday after the week. So, it’s what, 11 days? I don’t know.
Kurt Elster: How many COVID tests did they give you?
Paul Reda: They gave me one. I got the Q-tip jammer right when I went in the ER. It wasn’t that bad. It was like just a tenth of a second. You don’t even notice it.
Kurt Elster: Oh, that’s good to know.
Paul Reda: No, it wasn’t… The people that complain about that, I was kind of like, “All right, settle down,” after I had it.
Kurt Elster: You’re the only person I see. I made it this long isolating. I’m holding out for the vaccine. I’m not just gonna start doing stuff right now after it’s now been almost a year.
Paul Reda: Yeah, I’m not doing anything either, but we already talked about this. The moment I get that vaccine I’m just running through the streets naked, ready to go, showing off my various scars.
Kurt Elster: Your various laparoscopy scars?
Paul Reda: Yeah, but so yeah, I was on a lot of Dilaudid the last week. It was delightful. Dilaudid is delightful.
Kurt Elster: Uh oh.
Paul Reda: Yeah. No, that’s my new-
Kurt Elster: That’s the first red flag for addiction potential.
Paul Reda: So, there’s a long-running joke between my wife, as you know. I had my appendix out in 2008 and I had like a little button plunger thing that I think gave me morphine or whatever when I was recovering from it, and it was on like a governor. You couldn’t just hammer it all the time. But I was like, “Oh yeah.” You could feel it, though, when it really came through. I was like, “It was good.” And I’d talk about that with my wife and I’m like, “I can’t wait to go in the hospital again because I’m gonna hammer that button. I’m so excited.” And she’s like, “If you ever go in the hospital again, I’m telling them you’re not getting anything. You’re not allowed any opiates.”
She’s very worried about opiate addiction.
Kurt Elster: Well, she should be.
Paul Reda: I mean, she… Obviously, she sees it all the time at work, but you know, it was always a joke between us that she was like, “You’re not allowed. I’m never letting them give you painkillers ever.”
Kurt Elster: I don’t think it was a joke on her side.
Paul Reda: But, so I was like… You know, so she saw me in the middle of the night on Monday and drove me to the ER, but when I told her like a day later, I was like, “Yeah, I’m on Dilaudid every couple hours,” and like, “Oh, I need it. It’s so good.” And I was kind of wondering if I was gonna get backlash from her and when I said that she was just like, “Oh yeah. No, you need that.”
Kurt Elster: Yeah. Pancreatitis, very painful.
Paul Reda: The fact that she was just like, “Nope, that’s what you need. You should be receiving that every few hours.” I was like, “Ooh, I really earned it.”
Kurt Elster: Yeah. You sounded grim. It was dark days.
Paul Reda: It was horrifying. Yeah, when they ask you like, “On a scale of one to 10, what’s your pain?” I was like, “That was a 10. I know what a 10 is.” You’ve had like nothing happen to you, right?
Kurt Elster: No. I’m extraordinarily lucky in all regards.
Paul Reda: Yeah, you’ve like never had surgery.
Kurt Elster: This GameStop thing is like the worst thing that’s ever happened to me.
Paul Reda: I know. You’re just like, “What’s a cavity?”
Kurt Elster: Yes. I’ve never had a cavity.
Paul Reda: You’ve never had a cavity.
Kurt Elster: No.
Paul Reda: Never had surgery.
Kurt Elster: No.
Paul Reda: God. Have you ever had to spend a night in a hospital?
Kurt Elster: Me personally?
Paul Reda: Absent like Julie’s giving birth and you’re spending the night with Julie.
Kurt Elster: No. Yeah. Well, I’m very grateful for it, but also now I’m like, “Well, I don’t have…” You know, that standard life experience. I’m on borrowed time. It’s only a matter of time until I cut off a finger accidentally or something.
Paul Reda: Yeah.
Kurt Elster: So, I can’t take it for granted. Today, on The Unofficial Shopify Podcast, we should talk about Shopify. We are gonna talk about how to scale your store. So, I posted in our Facebook group, Unofficial Shopify Podcast Insiders, and I said, “Hey, what are your questions? What do you need?” And there was a common theme to them, which they all… All the questions related to how do I scale my store. And so, we’re gonna try and run through those and answer those with that theme in mind.
And to help me do it, of course, is my wonderful cohost, business partner, and lead developer of many years, Paul Reda, recently released from the institution. I am so glad to have him back. All right. Would you like to read the first one?
Paul Reda: Sure, while I grossly clear my throat. Just Baum asks, “Do scarcity and urgency apps work? If so, which ones do you recommend?” And what do you think of post-purchase upsell apps? So, that’s like two questions. Scarcity and urgency apps, that’s like a yes with a but.
Kurt Elster: Yes. Yes, but-
Paul Reda: Yes, they do work. You gotta do them right. They gotta be the right kind of ones. The ones that like-
Kurt Elster: The key is authenticity.
Paul Reda: Yeah. It’s gotta be believable and not just like a clear lie.
Kurt Elster: Yeah. You’ll see those scam stores. It’ll be an Instagram ad and it’ll have way too many, like 10,000 comments, and you click through to it and there’s every widget on there, and the widget says something like, “Oh, a thousand people are viewing this right now and 1,500 have it in their cart and there’s only three left.” And then you hit refresh and those numbers all change a little bit each time.
Paul Reda: Oh no, even better is when it doesn’t.
Kurt Elster: When it doesn’t change at all?
Paul Reda: When the numbers don’t change at all.
Kurt Elster: Oh, they’re just static?
Paul Reda: They’re just like hard coded.
Kurt Elster: And technically, apps that fake those things do violate the Shopify terms of service for the app store.
Paul Reda: Yeah, those are illegal.
Kurt Elster: Yeah. No, that’s a naughty no no. You’re not allowed to do it. But people still do it, or they do customizations to do it, so I think 100% scarcity and urgency work, as this morning I tried to buy some… a $180 pair of Nikes in the Nike app, paid in the first 10 seconds of it going live because I know that there was scarcity, and then that just created urgency on my part. I had a reminder set. I did it. And then I didn’t even get them anyway. It said, “Well, we’re seeing. You’re in line. We’ll see if you got it. No, you didn’t.”
And so, 100% those concepts work. It’s human nature, right? You can’t avoid being attracted to urgency and scarcity and social proof. Those three things really make you want to buy stuff as a human. But it is not okay to lie to people to achieve that end. So, no matter how badly you want it, it’s still whatever urgency and scarcity you include needs to be authentic. And I think the right way to do it is similar to how those Nike shoe drops work, but today when you showed up, you handed me a box from the front door. It was three bottles of Buffalo wing sauce from Tacticalories. Why would I buy wing sauce off the internet and sign up to an SMS list to be notified about it? Because I know this stuff sells out so quickly.
And so, I stay on the Tacticalories newsletter so I can be informed when these product launches happen because they sell out on the same day. And so, I think that is the trick to get genuine scarcity and urgency, is train your customers that your stuff sells out. Selling out can be a good thing. It also makes it really easy to be able to predict how much inventory to buy, and then you’re not sitting on a bunch of distressed inventory.
Paul Reda: You know, one of the things… The main thing to me that you’re fighting against when you’re trying to sell online is the idea of is this website a scam.
Kurt Elster: Yes.
Paul Reda: Will I get the thing I’m ordering? Am I getting it at a reasonable, correct price? All this other stuff. And having all of those scarcity apps just brings up the scam-o-meter a couple points every time.
Kurt Elster: So, I would say they work. Use them sparingly, like dessert. You only do stuff that’s authentic. And as far as… But ultimately, you really just want to train customers, your recurring repeat customers, that your stuff sells out, so it’s a short purchase window. You need to make a decision. And that’s really what the urgency is doing, is giving you a reason to buy. If I don’t think it’s gonna sell out, I’m not forced to make a purchase decision right then.
Paul Reda: And I think there’s really only two things. In my mind, there’s only two you need to do, one of which is one of our apps, which is ShipTimer, because I think ShipTimer is an urgency app in that-
Kurt Elster: Yeah. That’s a really good urgency and it’s legitimate.
Paul Reda: If you order it within the next three hours, you’re gonna get it by Tuesday, or whatever. Something like that. And it’s just like, “Well, if you don’t order it, you gotta wait all the way till Wednesday? Come on! Just do it now.” That’s good. And the other is a little bit of a tweak we do. This can be done in Liquid very easily, where if you’re tracking inventory and the inventory runs out, it stops being sold on the product. If it’s under 10 left, it just says that. It’s like, “Hey, we only have seven of this left.”
Kurt Elster: Yeah. That’s built into themes. You can have a theme customized to do it. Apps will do it. And we have an app that does it, While Supplies Last.
Paul Reda: Oh, While Supplies Last. Duh. Does that too.
Kurt Elster: Which you wrote the core concept for that.
Paul Reda: Yeah. Listen, I’m still in my special place, baby.
Kurt Elster: If you’re skeptical about both of Paul’s ideas, check out Amazon. They do both of these things. They’ll say, “Hey, there’s less than 25 in stock, order soon.” And they’ll say, “Oh, order in the next two hours, 44 minutes, and we’ll ship same day.” Sweet.
Paul Reda: Yeah. I think in terms of like, “Well, do I need scarcity and urgency apps?” You need those two. You don’t have to buy them from us.
Kurt Elster: Yeah. There are other options, or they may be built into your theme.
Paul Reda: Yeah, whatever. And then once you start getting beyond that, where it’s like, “20 people have this in their cart.” And then it’s kind of like, “Okay, well, why do I give a shit?”
Kurt Elster: You know, While Supplies Last, we added that as a feature.
Paul Reda: Don’t like that.
Kurt Elster: It’s only if it’s below a certain threshold, so it triggers it where it’ll say like, “10 left,” and then it’ll also say, “And three people have this in their cart.” And I saw Etsy do it and I liked it so much I went back and stuck it in the app.
Paul Reda: I don’t know.
Kurt Elster: That app’s not… It doesn’t look sketchy, though, because it’s not like a timer, an emoji. It’s very straightforward. And his other question was, “What do you think of post-purchase upsell apps?” Absolutely try them. I think this is such an easy thing to do now on Shopify, and it’s a missed opportunity for a lot of people. The offering an upsell to increase average order value pays dividends, and often offering it on the order confirmation page has the highest take rate. And because they make it so easy now, in the past you had to replace your checkout to make this work. Now, it’s just native in Shopify.
I don’t think there’s a reason not to try it. That would be my professional advice. So, Zipify OCU, One Click Upsell, Bold Upsell, CartHook, there’s a whole bunch of apps that’ll do it. Moving forward. Angus Fraser asks, “What is the effect of a theme change on SEO? The fundamental site structure will remain the same,” he’s right, “however, a few URLs will be different. I’m worried this will reset my SEO.”
I don’t see how a theme change would change any URL.
Paul Reda: Yeah, that was… I didn’t want to speak out of turn, but I was like, “How does a theme change change any URLs? It doesn’t.”
Kurt Elster: Well, unless… It would be I was updating my navigation… I don’t know. No, you’re right. The theme change itself, Shopify has done such a good job of separating content and style from the theme to the store that changing themes really should not have an impact on your SEO. Where it does have an impact on SEO is in technical SEO in the page template itself, semantic HTML, so how the structure of the page, the HTML describes to Google what is on that page. So, your rich snippet data, where you get… It’ll say in a Google search, “In stock,” and with a price. That’s part of the technical SEO. And how the theme itself is laid out.
But I think at this point, any good theme developer will 100% have a grasp on this. Any theme in the Shopify theme store, Shopify does check to make sure, “Hey, you’ve got these best practices in place.” So, I really… Unless it’s something from like Template Monster, something like that… Oh, don’t do that. But if it’s from a competent theme developer or the Shopify Theme Store, I really don’t think you have any SEO fears when changing themes.
Paul Reda: Yeah. I think do a check on that micro data, like you were talking about, just to make sure that that held. But if you’re talking about something like, “Oh, I got this one blog post that’s really banging and I’m worried that changing themes is gonna screw up my Google ranking,” that is not something that will happen in any way.
Kurt Elster: No, it really shouldn’t. You will be okay, I swear. Present us with our next question.
Paul Reda: Melita Cyril wants to know, “Are there any benchmarks for gross margin for successful eCommerce stores (after COGS and shipping). Looking to set goals for this in the next year or so and only focus on products that meet this margin.”
I don’t know. I guess you have a special piece of paper that you spent a lot of money for that says that you know about business.
Kurt Elster: I received a scholarship.
Paul Reda: I put down some college on my applications, so what do you gotta say?
Kurt Elster: Well, initially my answer was, “Well, there’s too many variables, I don’t know.” But I think there are, from working in enough of these stores, I think there are some benchmarks, some rules of thumb, and some guidance. But I would take it with a grain of salt. I wouldn’t take it too seriously. But this is what I’ve seen.
I think in a drop shipping store, you’re essentially working on commission, so you’ve got a really tiny profit margin, where our largest dropping shipping client, I think they probably… and I don’t know this for sure, but my guess would be they take home about 8%.
Paul Reda: Jesus.
Kurt Elster: Yeah. Drop shipping’s rough.
Paul Reda: That sucks.
Kurt Elster: Drop shipping also, it depends so hugely on what category you’re in, but that’s also one of those instances where when you have that slim margin, you really want to be doing those upsells, those post-purchase upsells, and that’s where people I think out of desperation also start putting in all those nasty widgets we talked about earlier. So, that’s the toughest one.
If you’re doing private label, where someone else manufactures the product, but it is under your brand name, it is yours, those do a lot better. Sometimes my guess would be if a store like that is set up really well, it’s 50% is what they’re gonna take home. If it’s really slick. I don’t know what it costs to acquire traffic. That’s always the wildcard here.
And then the… I think the third one, the real magic, is you make your own goods, you design goods, you have them manufactured for you, but it’s an original work or you manufacture it yourself and sell it, if it’s a luxury good, that could sell at 10x cost of goods sold. So, that stuff could be 5x to 10x, so in that scenario, all right, now we’ve got a way bigger profit margin. But that’s also where we start to see spending a lot more.
Paul Reda: Yeah. You’re like building a goddamn factory.
Kurt Elster: Yeah. In our business, I’m always… I’m looking for 50%.
Paul Reda: So, that 8% number, that’s not inclusive of like advertising.
Kurt Elster: No, that’s where you really get eaten alive with drop shipping.
Paul Reda: Yeah, because that’s what I was gonna say. I mean, if your advertising costs go up, it’s like, “Well, not making any money this month.”
Kurt Elster: So, and that I think is an extreme example, but this question, there’s just so many variables, I just wanted to walk through three working examples. And all of those, I have in my head a specific business in mind that uses those figures. But it’s all anecdotal. So, some benchmarks, some rules of thumb.
Graham Komada asks, “What are the first things you should be outsourcing? What are the tasks you should never outsource?” And then he says he’s considering outsourcing first contact for B2B wholesale accounts to set appointments, answer basic questions and drive further contact with contractors and potential retailers.
I think the answer is you outsource whatever you don’t want to do. It is almost, I would say nine times out of 10, you will never regret buying back your time, and that’s what outsourcing lets you do. You buy back your time. You’re not gonna buy back your time on a thing you love to do, like my wife loves building LEGO. She’s not gonna hire someone to build LEGOs for her. But we have to have someone keep the books. I don’t want to do that. You don’t want to do it. So, it was totally worth it to pay a couple hundred bucks a month to have someone else handle it for me.
So, I think it’s gonna depend on the person and what excites you about your business. But that’s the way to look at it. You can buy back your time on just about anything, so what’s the stuff that you don’t want to do? And then when you get the overlap of like… I love this example he gave of outsourcing first contact for B2B wholesale. He doesn’t have to be doing that. It’s time consuming. But it’s also potentially hugely valuable if he gets a few good accounts out of it, so I say you look for that overlap. Stuff you don’t want to do, and you can outsource it, and you could do it in a cost-effective fashion.
Paul Reda: Well, and stuff you’re bad at.
Kurt Elster: And stuff you’re bad at.
Paul Reda: It’s like the thing where you’re like, “I know I gotta do this for my business and I kind of half ass it every month, but I really don’t know how to do this.” Okay, there’s the first thing.
Kurt Elster: And a lot of times, the stuff you need to do but don’t do compounds. So, I’d skip doing the bookkeeping and then at the end of the year it’s like, “Oh, now we’re doing 10 months of bookkeeping. Crap.”
Paul Reda: I remember one… There was one January where you were like, “I’m going to read you a list of check numbers and then you are going to tell me the amount of money in that check and we’re gonna add all this up.”
Kurt Elster: It was so bad. It was in that moment that I knew, I was like, “All right, this is the last year we half ass this.” And actually, as an example, if you want to outsource bookkeeping, check out Bench. Bench.co.
Paul Reda: Yeah.
Kurt Elster: I really like it.
Paul Reda: We’re all set. We got all our tax documents. Like I kind of started my taxes this week.
Kurt Elster: Yeah. Well, it is really cool, because it’s a thing I don’t want to do, and just magically in January Bench says, “Hey, here is the package to hand over to your bookkeeper. Look it over, if it makes sense, give it to them.” I did. Or to your CPA. I did it. A week later, taxes are done. Literally, I just forward an email and the taxes get done. That’s magical. That’s totally worth a couple hundred a month.
Paul Reda: Yeah.
Kurt Elster: Mr. Christopher Carr asks, “How do you set up digital download products in Shopify?” Which, info products, that business, 99% profit.
Paul Reda: Talk about profit margins. Christ.
Kurt Elster: Oh my God. You’re selling an imaginary item.
Paul Reda: I love it. I love them so much.
Kurt Elster: Info products, so good.
Paul Reda: It’s like we talk about… You and I fantasize. We’re like, “We should find something and then we’ll sell it. We should use our own magic to sell a product to people.”
Kurt Elster: We should be selling courses.
Paul Reda: I know, but it-
Kurt Elster: It’s so time consuming.
Paul Reda: But what I’m saying is anytime we kind of previously had that fantasy, it was always like a physical good we were trying to figure out. Oh yeah, show them off your watch.
Kurt Elster: Paul got me a cool Casio vintage watch.
Paul Reda: That was his birthday present.
Kurt Elster: For my birthday present. And I love vintage digital Casio watches. I’m up to three or four of them. I think I’ve gotta get a calculator watch. They’re great, because they’re like 25, 30 bucks. They’re so much fun.
Paul Reda: And now I realize that if we actually did do that, we would kill ourselves, because it’s like, “Wait a minute, we sold this thing for 30 bucks, but it cost us like 15? What the hell kind of margin is that?” As opposed to selling like our various courses or the holiday guide or stuff like that, where every marginal one we sell is 99% profit margin.
Kurt Elster: Right.
Paul Reda: It’s like, “Oh.”
Kurt Elster: Now, that ignores the… I don’t know what the effective hourly rate is. It’s good, but it ignores the effort up front to build it, to create the product, do the product launch, build the audience, and then support the thing afterward.
Paul Reda: Yeah. The profit margin on the first one is like negative 10,000%.
Kurt Elster: Yes.
Paul Reda: You put in all the work.
Kurt Elster: And then it gets better with each subsequent one. But no, people are saying… They’re like, “Wait, why am I selling stuff instead of info products?” You can do both. If it makes sense, especially if you’re in like a… If you’re in a hobby space, say you’re in… You sell drone parts for drone racing. Well, put together a video course on, “Hey, here’s how you build your first racing drone.” If you can do that, that becomes this tremendously valuable asset. You can both sell it, you can distribute it on other course platforms to try and build your audience, and you can use it as a lead magnet or giveaway.
Paul Reda: And that-
Kurt Elster: And you cut up into bite-sized pieces, it’s social content, as well.
Paul Reda: Yeah. To me, that’s always like a magical thing, is like… and that’s something that we do all the time, which that digital good just becomes like a freebie. You could just hand out to people willy nilly. It’s just like, “Oh, spend $200 on the store and you get the guide on how to build the racing drone.”
Kurt Elster: Yes.
Paul Reda: It’s like, okay, that cost you nothing. You just did a product upsell, you just upsold them to buying $200 worth of stuff. You gave them nothing in return. Cost you nothing.
Kurt Elster: Yeah. So, for people who do print on demand stuff, they experience this in that they don’t have to carry inventory, they just get paid out when the stuff sells, someone else fulfills it, it’s like magic. Now, imagine you kept 100% of the money on whatever t-shirt you sold. Instead of you kept seven bucks out of 30 if you’re lucky, you’re keeping 29 out of 30. Wow! That’s where digital products are really exciting and make a lot of sense.
The downside is it’s creative content that you have to produce. You can probably hire someone to do it, though.
Paul Reda: Outsourcing.
Kurt Elster: That’s right. You could outsource it. My grandfather-in-law is always trying… He’s like, “You should get someone else to make content for you and then sell that as an info product.”
Paul Reda: Hm…
Kurt Elster: Thinking about it. I’d consider it. Joel Torgeson asks… That’s such a great last name. Has a nice rhythm to it. Joel Torgeson.
Paul Reda: Seems very Minnesotan.
Kurt Elster: Maybe it’s Swedish. I don’t know. “I’d be curious to hear about influencer marketing dos and don’ts.” I don’t know that I can think of any current clients doing traditional influencer marketing where you just… You find some yahoo on Instagram or YouTube, you give them your product and some money, and then they promote it.
Paul Reda: All of our clients are the influencer.
Kurt Elster: Yes.
Paul Reda: They’ve become the yahoo.
Kurt Elster: Yes. Increasingly, I think the magic to building… If you’re setting your sights on really big eCommerce brand, I think the magic is you have to have… You need a person, you need an authority figure, you need an influencer, you need a content marketer. You pair that to your private label or original good. Maybe you augment it with drop shipping and info products. And then that’s how you churn out a seven-to-eight figure store. You gotta have that person.
And a good example, Tactical Baby Gear. Beav became that person.
Paul Reda: Yeah.
Kurt Elster: This character. It’s so great and he’s so good at it. Or you know, and this is like… So, he was able to do it for himself, or a larger one, you find someone who can be your content partner. So, like Overlander had… They knew they could sell the products, but they wanted great content for it, but they know, “All right, let’s get someone else to work on this with us.” So, they found Expedition Overland and that became the content partner.
Or like Hoonigan has Ken Block, but how many times do you find Ken Block?
Paul Reda: Yeah, so the world of like this woman on Instagram has 500,000 followers, I’m gonna give her X amount of dollars to pose with a photo with my product, we know zero people that do that.
Kurt Elster: Yeah. Currently. And the issue is not that it’s a bad thing and it can’t work. There’s just… There was a gold rush on it.
Paul Reda: There’s no way to track it.
Kurt Elster: And there’s so many people who are faking it, and it’s so hard to tell who’s real and who isn’t.
Paul Reda: I mean, I’ve heard so many horror stories where they give them a URL that has, you know, some kind of tracking code in it. And then they check the URL and it’s like 10 hits. Like zero purchases. Like this was pointless. It was like buying a TV ad in the ‘50s. You’re just like, “Okay, well, you got in front of a bunch of eyeballs I guess, but nothing actually happened.”
Kurt Elster: I would say if an influencer approaches you, I wouldn’t trust it. If you go looking on a marketplace for an influencer, maybe if you really do your due diligence, but just… But only spend money you’re prepared to lose if you’re gonna do that. Maybe it works, maybe it doesn’t. My wife used FameBit, hired two influencers. One was huge. Literally drove zero traffic. Had over 100,000 followers. Looked great. And the other one, way smaller, on YouTube, drove a ton of stuff and they developed a relationship out of it.
So, I think if you have a relationship with the influencer, it’s a different thing. It’s when it’s just someone you don’t know who is… That’s their job is trying to sell sponsored content.
Paul Reda: Yeah. They just sell slots every week and you’re just one of the slots. I mean, I think-
Kurt Elster: That’s where you gotta be careful.
Paul Reda: In the grand scheme of places to put your money, that is all the way at the bottom.
Kurt Elster: Yeah. Yeah, I wouldn’t. If it’s you have that personal relationship, fine. If not, tread lightly.
Paul Reda: Yeah.
Kurt Elster: Anthony Watts.
Paul Reda: Anthony Watts says, “What should you look for in a web developer for redoing websites? E.g., what to watch out for.”
Kurt Elster: You’re a web developer, what do you think?
Paul Reda: This might get a little personal. To me, I would say I’m against… and this could literally just be like Paul being idiosyncratic about how he does things, but it’s people that are extremely fiddly and add too many steps, like this thing where it’s like, “Well, we need to do wireframing first. The wireframing’s gonna cost you like $20,000, but that will give us so many insights in how to properly put together this project.” And then, you know, “We need to do stage two, which is we’re gonna build a mood board.” You know, it’s just like that shit over and over again.
Kurt Elster: Yeah. They turn the whole project into bikeshedding and then they bill you for it. And they told you it was a great idea.
Paul Reda: Yeah.
Kurt Elster: I agree with you. I would be-
Paul Reda: I mean, we worked on a project back in the dark days when we did stuff for marketing agencies, and they had hired a different, big time, big, famous Chicago agency to only do, what? Was it a wireframe?
Kurt Elster: They said, “Hey, we’ll hire you to do this website,” and it turned into, “All right…” The first proposal was literally just for wireframes, but it was in a really slick package. But it cost 15, 20 grand.
Paul Reda: yeah.
Kurt Elster: And then the actual design cost more. And it wasn’t even the entire site. It was like, “Here’s key templates and a little bit of a branding guide.” So, I mean, they ended up 50 grand all in, and all they had for it were a few PSDs.
Paul Reda: Yeah.
Kurt Elster: Brutal!
Paul Reda: Yeah. I mean, and I don’t know if when he says web developer he’s including… That means design or that means like the dork that writes it or what.
Kurt Elster: Well, so I think with a web developer, you want to make sure they have experience in what you’re trying to do. So, say, “Hey, can you show me… Give me three examples of similar projects you’ve worked on.”
Paul Reda: Well, and for all the people we’re talking to right here, they need to show you other Shopify stores they’ve done.
Kurt Elster: Yeah. Number one, duh, yeah, if the person’s primary focus or sole focus isn’t Shopify, and Shopify’s big enough now you can find people who all they do is Shopify. We’ve done Shopify exclusively for six or seven years now.
Paul Reda: Yeah. And I mean, I couldn’t tell you how many stores we’ve worked on where there’s weird ass bootstrap, like backwards stuff, where it’s like kind of made a Shopify theme out of bootstrap, or it’s just like-
Kurt Elster: Yeah, we inherit… The premise, when a competent web developer who doesn’t necessarily have Shopify experience goes and builds a theme, they don’t follow, because they don’t know, it’s not their fault, the Shopify best practices in theme development, and then it just cascades on down the line where we inherit what you lovingly call Jenga tower themes.
Paul Reda: Yeah. And you know, that’s a little different. Those are ones that like 10 other developers have poked at. It’s three years old and everything… There’s just holes.
Kurt Elster: There’s one I have in mind.
Paul Reda: There’s one right now that is on my list that I have feelings about. Yeah, I mean to me, in terms of the actual developer developer guys, it’s… You know, I shouldn’t say this, but it’s places where to me a pet peeve is like they’re just using a lot of unnecessary technologies, just to show… It’s like we need a sledgehammer. We need a sledgehammer, that’s it. Just get the sledgehammer out. We’re gonna set this up. And they’re like, “Well, actually I bought this very special automatic laser hammer and we’re gonna be doing this, and well, we need a special generator for that hammer…”
Kurt Elster: They overcomplicate it.
Paul Reda: And it’s just like, “Just get the sledgehammer. Let’s go.”
Kurt Elster: You want an operator.
Paul Reda: Yeah.
Kurt Elster: I want two things. I want someone who has enough Shopify experience to implement those best practices, because that’s an investment in this thing not being painful to maintain later. That’s number one. So, just, “Hey, how long you been working on Shopify? Can you show me some examples, some other themes you built?” Cool. That’s number one.
Number two… Well, I lost my train of thought. It was so good, too. It was so poignant.
Paul Reda: Oh, God.
Kurt Elster: Yeah, number two, you want an operator. You want someone who is interested in getting the work done, as opposed to overcomplicating it for the sake of billable hours.
Paul Reda: Well, for the sake of billable hours, and also for the sake of like-
Kurt Elster: Their ego?
Paul Reda: Yeah. There’s a lot of guys in my business that are just like… really get off on the cool thing that they did.
Kurt Elster: The shiny toy?
Paul Reda: It’s just like, “Look how I executed this.” And it’s just like, “I don’t care, man. I do not care.”
Kurt Elster: Does it work? Does it sell?
Paul Reda: Yeah. Does it work? It’s like did it work, did you make money on the billing from the client, and then you got to go buy a new TV? That’s great. Job well done. But yeah, this thing where it’s like everything is a weird, backwards somersault, it’s like, “I don’t care.”
Kurt Elster: Yeah. To serve your ego so you can feel like you compiled something as a web developer.
Paul Reda: Yeah, that. Where it’s just like why are we kind of compiling code? It’s just like, “Just write the fucking CSS, dude.”
Kurt Elster: Yeah. Get out of your feelings, get in your results.
Paul Reda: And I’m a heretic when I say that.
Kurt Elster: All right, moving on to Shirley Bredal, who says, “Ad creative. Work on it in house or outsource it? What works for product brands in 2021? Long form, short form, videos, pictures.” Oh my gosh. I love this question because… I tell you one thing. The brands, the Facebook ad accounts that we’ve managed and the clients we’ve worked with who are really successful buying traffic from the traffic store, i.e., Facebook, have one thing in common. It is just a constant flow of new creative. So, we’re always testing something new, and what works one month may not necessarily work the next month.
But certainly, multimedia content works in most Shopify product spaces. So, you want a mix of photos and videos, and ideally make a short video and a long video, and the advantage to that is long video works on… 10-minute video will work on YouTube, and in posts, and on the website, and the 30-second video will work as a Facebook ad. So, once you’re already in the effort of making video, like we make a YouTube version of this show. I don’t really make it for YouTube. I make it because I want the social content.
So, what’s great about video-
Paul Reda: The magic is not the one hour YouTube video. The magic is the like-
Kurt Elster: The cutdowns.
Paul Reda: The little five-minute blocks that you’re throwing up on Twitter and on the Facebook group.
Kurt Elster: Yeah. Yeah, the video editors at Hoonigan taught me that phrase. They call it the cutdown. Like, “Oh, that’s the cutdown. I need a 30-sec cutdown of this.”
Paul Reda: You’re like, “I’m a pro.”
Kurt Elster: Yeah. I’m basically… I’m a film producer now. Yeah. Call me Francis Ford Coppola.
Paul Reda: Don’t be him. He always loses all his money.
Kurt Elster: Oh, no! What about his vineyard?
Paul Reda: That’s the only thing that makes the money.
Kurt Elster: That’s funny. I didn’t know that.
Paul Reda: Yeah, he famously gets out over his skis, where he was just like, “Fuck you, I’ll make it myself.” And then he’ll make-
Kurt Elster: And he finances it himself?
Paul Reda: He finances himself and it’s like the movie made $2 million. You made negative $28 million on that movie. Like everything he made post-1987, like 1987 to 2000 was just him being like, “That pays off that debt. That pays off that debt.”
Kurt Elster: You know, it gets the job done. You need a little financial pain sometimes to get motivated. So, no, I think in house or outsource, the most successful ad accounts we’ve worked on, they did the creative in house. But that just isn’t practical for everybody. It just isn’t. And so, if it makes more sense, do the one that makes more sense to you. Outsource it or do it in house, or you could do both. You could use outsource to try and figure out what works out, then bring it in house, et cetera.
Paul Reda: I feel like the answer to this question of every piece of this question, what works, should it be this, should it be that, is just yes. The answer to this is yes, everything.
Kurt Elster: Yeah. Just make the content and keep making fresh content. I want monthly fresh content.
Paul Reda: Yeah. It’s like is the monthly fresh content 10 seconds? Cool. Is the monthly fresh content 10 minutes? Cool. Is it a photo? Cool.
Kurt Elster: At the start of the show, we talked about urgency and scarcity and I said those are the things the human brain… It just triggers things that make us buy. You know the other thing the human brain really loves? Novelty. The human brain craves novelty, so seeing the same ad over and over will make you remember it, but it won’t make you interested in it. Whereas seeing different content on the same theme, for the same product, ah, now you’re getting both. You’re getting those touch points. You’re gaining trust. And you’re getting people engaged with it.
Paul Reda: Cj Flood wants to know, “What are the often overlooked opportunities for brands in the bracket of: 0-100K, 100k to 1 million, 1 million to 5 million, 5 million to 50 million, 50 million to 5 billion?”
Kurt Elster: I like this. All right, he didn’t say that last one.
Paul Reda: Didn’t say the last two.
Kurt Elster: And I’m assuming that we’re referring to annual revenue numbers here for these figures.
Paul Reda: Oh, I just assumed that was like per minute.
Kurt Elster: Every 15 seconds. Shopify’s on fire.
Paul Reda: They got that little thing in the app and it’s just like constantly going. They can’t sleep at night.
Kurt Elster: The notifications made me crazy! That would be a good problem to have, wouldn’t it? So, zero to 100,000, I’m gonna go with the overlooked things, the things I have seen businesses in these brackets struggle with, break through, and then succeed because of. Zero to 100,000, it really is about nailing down the messaging and the positioning. Who’s buying this? Why are they buying it? What pain am I solving? And when you understand that and then you can communicate that, and then you can target your customer, life gets a lot easier. Now, of course all of this assumes you’re offering something that people want, and until you put it out there and ask people for their money, for them to open their wallet for you, you’re not gonna know if they want it or not.
In that early stage, all the apps, all the tactics, it’s just nonsense until you nail that cornerstone of positioning and knowing who’s buying it and why. Figure that out and then once you have it figured out, just plaster it everywhere, so it is clear to you, the customer, and everybody else.
When you have that figured out, okay, now we can get 100K to 1 million. That stage is really about finding a traffic source that scales, and finding a channel that’ll work for you, so maybe it’s we figured out Facebook ads, and then we brought… We outsourced our content and we figured out what worked and then we brought it in house, then we were making content nonstop, and we built a studio. That kind of thing. Figuring out, finding the one channel that works, doubling down on it, getting really good at it, just scale, scale, scale, with laser focus. That’s what’s gonna get you to 1 million.
Once you’re there, it is very much about, okay, we have systems, and processes, and built a team, and that’s where you want to read a book like Traction and figure out how we’re gonna do reporting. Those are my… The pitfalls I think that occur in those various revenue brackets.
Paul Reda: My one thing is I think in that 100K to 1 million dollar range, I think that’s the zone where you gotta get your email right. I think you can hit a million. You can hit a million dollars a year without your email right, but you’re not going from one to five without getting your email right.
Kurt Elster: Yes. And I can think of a store that was bad at email and now is doubling down on email and it is scaling.
Paul Reda: Yeah. I mean, I think people… That’s the engine of the entire machine.
Kurt Elster: That owned channel.
Paul Reda: Is the email. And so, I think below 100K, it’s like you got a whole lot of problems, you got a whole lot of things you gotta worry about, like I understand you probably don’t even have the user base yet to even do it. But like if you’re cranking out six figures a year on this store, you’ve got enough to figure out how to get the email absolutely perfect, and I think that’s the stage to do it, and then the year that occurs after you do that is just printing money.
Kurt Elster: 100%. I’m with you. Martha Vivian. Paul, is there podcasts that you listen to weekly? Or a podcast that you love? I feel overwhelmed when I search for Shopify or eCommerce podcasts. There’s so many!
Paul Reda: Well, she derailed that question, because there are many podcasts I listen to weekly. Zero of them are about eCommerce or Shopify, so it might not be helpful.
Kurt Elster: How many business podcasts do you think I subscribe to?
Paul Reda: You?
Kurt Elster: Yeah.
Paul Reda: You know what? I’m gonna take it back. I don’t think you subscribe to more… It’s definitely not more than five.
Kurt Elster: It’s zero.
Paul Reda: Yeah. Okay.
Kurt Elster: They’re so boring! Business podcasts are boring. And I very much didn’t want our show to be boring. And I got a soundboard, put some fart noises on it.
Paul Reda: You know what? And I want to say, I don’t know if this is because of my condition or whatever, like you’re trying not to agitate me, but you have not hit it at all this whole time.
Kurt Elster: Okay, so pretty much I have to now.
Paul Reda: I saw you tweet the Rodecaster was in WandaVision?
Kurt Elster: Yes. Yeah, the thing we use to record the podcast and use the soundboard, they used it as a prop in WandaVision, because it was like cool and sci-fi. I thought it was funny.
Paul Reda: I think Darcie was using it to route the sound from the WandaVision fantasy.
Kurt Elster: Yes. It looked good and it made sense.
Paul Reda: Yeah.
Kurt Elster: And they just, they had a QR code sticker that they put over the logo. And it drove me crazy. I was like, “I want to scan the QR code!” It didn’t work. Oh well. So, no, but all right, so I said I don’t subscribe to any business podcasts.
Paul Reda: I mean, I’m sure if you search for Shopify and eCommerce podcasts, woof. Ohhh, there is so many of them, and it’s just drop shipping, blow my brains out.
Kurt Elster: So, all right, if I had to pick, I’ve been on many, and I have listened to them one off. I just don’t subscribe is the truth. Ecommerce Influence with Austin Brawner is very good, and they have good banter, like the co-host setup is similar to ours. It’s good. eCommerce Fuel with Andrew Youderian is long running, longer than ours, and very good. And Shopify side, In Conversation with Shopify Plus, the caliber of guests they got on there is quite extraordinary. Episode 1 is Steve Madden from the… as in like Steve Madden shoes.
Paul Reda: Like John Madden’s brother?
Kurt Elster: Are they related?
Paul Reda: No.
Kurt Elster: Okay, good. I was like, “Uh oh. I don’t know. He’s messing with me.” Or maybe he’s not. You know a lot of trivia. If you ask me, I never know if you’re messing with me or not. So, there’s your answer and the dark truth about me and business podcasts. It’s also because I don’t want to be influenced, like I don’t want to listen to what other people do and then just copy that, so I kind of avoid it.
Paul Reda: Yeah.
Kurt Elster: She had a follow-up question. Martha Vivian, “What are your top 3 Shopify sites?”
Paul Reda: I mean, I don’t know. They’re just all… Who knows if site’s a Shopify site or not?
Kurt Elster: Well, I look at the URL structure is how I figure it out.
Paul Reda: I mean, if I’m on a store and I’m like, “This store is cool,” then I click view source and then you can see it right away. But you know, it’s like not a thing I note.
Kurt Elster: I can tell you-
Paul Reda: I mean, when I’m not doing work actively for our business, I put zero thought into eCommerce and Shopify. I’m just gonna be honest. Sorry.
Kurt Elster: Oh, I think about it all the time.
Paul Reda: Oh my God.
Kurt Elster: It turned into my way of life.
Paul Reda: I know.
Kurt Elster: Which is why I can’t listen to business podcasts about it. I need something else. My entertainment can’t also be eCommerce. The top 3 Shopify sites, the-
Paul Reda: I mean, for me it’s Overlander is right now. That’s obviously the thing we’re most proud of. We have… I mean, it’s just the stuff we work on, because the other stuff-
Kurt Elster: Overlander is super cool.
Paul Reda: The other stuff floating out there, I’m like I don’t… It doesn’t register in my brain.
Kurt Elster: Doing design work recently, I was looking for inspiration on designs, and so I looked at some other Shopify stores, and Nuggs I’ve talked a lot about. I like Nuggs. Nuggs is so crazy. I think… and they do so many… They do a lot of interesting things and I like the big, bold design. So, number one, Nuggs I like. Number two, JUDY. Judy.co. It’s an emergency preparedness kit. And then you pick what size you want, like do you want a giant Rubbermaid of emergency supplies or a fanny pack? And they have everything in between and it was one of Oprah’s favorite things last year for Christmas, and so JUDY I like a lot.
And as a third site, I’m gonna go with Baboon to the Moon. Baboon to the Moon I found recently, and it’s anti-design without being offensive. It’s good. Oh, Pit Vipers.
Paul Reda: Oh, God. Of course.
Kurt Elster: Oh, Pit Vipers. Yeah! Love me some Pit Vipers.
Paul Reda: How stupid of us to even think…
Kurt Elster: Yeah. No, I like these really just aggressively unusual designs. And that’s because I stare at websites all day and I think about websites all day. So, I get pushed toward the really atypical stuff. So, you should necessarily want to be like some of these stores, depending on what you’re selling. Yeah, it depends on your niche.
Paul Reda: Taylor Page wants to know top book recommendations for growing your business. Again, don’t read business books. Can’t tell you.
Kurt Elster: That’s funny. I do enjoy business books. I’ve not… With the pandemic, I haven’t read any. Really, I listen to them on Audible, but if… and it depends on where you’re at, but I like… If you’re early on, The E Myth is a really good book. If you’re trying to scale from one million to five million, I think Traction is the way to go. And if you’re trying to go from 100,000 to 1 million, you should focus on books about product launches, and so I think Ask is a good book. Product Launch Formula is a good book, so those are my recommendations. And in that order. E Myth, Ask, Product Launch Formula, then Traction. There you go.
Paul Reda: All right.
Kurt Elster: I could have made all those titles up, for all we know.
Paul Reda: Yeah. I can’t fact check that.
Kurt Elster: Not that we fact check anything on this show, just to be clear. We’re not journalists. This is just two guys talking. Daniel Mendes, “What’s Kurt’s process when he optimizes the conversion rate for any Shopify store?”
Paul Reda: Load the store up. Look at the problems.
Kurt Elster: Nailed it!
Paul Reda: Well, like see if it loads crappy when you load it, and if it doesn’t load crappy, then it’s just like the expertise of being like, “That looks bad.”
Kurt Elster: So, it is… It really-
Paul Reda: I mean, in my mind, that’s when… When I do it, when you’re like, “Paul, take a look at this store and tell me what the problems are.” It’s just pretty much me using my decade-plus experience and just kind of being like, “That’s bad. That’s bad. Make that better.” And that’s it.
Kurt Elster: So, it’s true. Number one is, “What’s broken on this store?” You would be surprised the amount of stuff that is broken on your store that you have just… Either you got used to it, or you just never noticed it in the first place, so number one, fix what’s broken. Number two, implement best practices, so it’s stuff that… The stuff that comes with experience. It’s the things that other websites have trained us all to expect, those are the best practices, so that’s phase two.
Then phase three, all right, let’s see… There’s how we think people are using this website and how they’re actually using it. So, let’s use heatmaps and let’s use screen recordings with Hotjar. I like Hotjar. Other people use Lucky Orange. I’m a Hotjar guy, myself. So, all right, let’s figure out what are they clicking on that they shouldn’t? What are they not clicking on that they should? What can we do about this? All right, now at this point we should have a pretty optimized site. After that, assuming that everything went as we expected, then the final one is hey, let’s throw stuff against the wall. That’s split testing.
When we talk about conversion rate optimization, everyone wants to go straight to split testing. No. That’s the absolute last step is split testing. There’s the process. There’s your million dollar business idea. Enjoy.
Paul Reda: A hot jar is where you collect your farts.
Kurt Elster: What? Oh, hold on. I have a sound drop for that.
Paul Reda: It doesn’t work if you need to like navigate through a menu.
Kurt Elster: I know, I need to… I got too many. I gotta rearrange them. What if I took the farts off? I took the farts off!
Kurt Elster: That’s the best I got. I blew it. Last question.
Paul Reda: Last one. Raoul Benavides wants to know, “I am starting a new project on Turbo and want to use Recharge for subs. Pros and cons. What are your thoughts about subscription apps on Turbo?” I don’t know, why wouldn’t they work? Why would Turbo be different than any other theme?
Kurt Elster: Exactly.
Paul Reda: Yeah.
Kurt Elster: Well, so earlier I said, “Hey, if you’re gonna change themes, don’t get one from just a random store. Get one from a trusted developer or the Shopify Theme Store.” If you pick a popular theme, which falls under that umbrella, pretty much all apps should install in it. It’s when you get into custom apps that follow some odd framework, so even… Or a custom theme. Even a custom theme that follows a default framework will work fine.
But it’s when you get into these just strangely built apps that it starts to get hard to install apps in them, and their auto installers break, you got a bunch of problems. With I think any of the Out of the Sandbox themes or the other major Shopify theme developers, and especially Turbo, just about any app should auto install in that.
Paul Reda: Oh yeah.
Kurt Elster: Because it’s a very popular theme.
Paul Reda: It’s so popular, like-
Kurt Elster: So, the app developers want their stuff to install in that.
Paul Reda: Well, and the app developers, nine times out of 10 they’re like, “Well, we’ll install it manually if it doesn’t work.” It’s like I don’t want to have to frickin go install it manually, so they gotta figure out how to get that system all set up so they don’t have to touch it ever again.
Kurt Elster: No, so yeah, you’re good is the short answer. Recharge or Bold Subscriptions. Good to go.
All right. I would love to hear your thoughts on this episode and if you want to be able to get your questions in for the next time we do a Q&A episode, join our Facebook group, Unofficial Shopify Podcast Insiders, and come talk to us.
Paul Reda: I’ve been meaning to tell you this for weeks and I finally get a chance to tell you about it, because I wanted to do it on the podcast. They are doing a remaster of… I believe his name is Abel Gance, who’s a Frenchman, they’re doing a remaster of his film he made about Napoleon. It was a silent film from the ‘20s. And the special thing about this film, it is the widest movie ever made.
Kurt Elster: What’s the aspect ratio?
Paul Reda: It’s shot in 4:1. There are sequences shot in 4:1. And so, because he literally was like… This was before widescreen was really invented, so he was like, “I got an idea. Put 3 cameras next to each other.”
Kurt Elster: Oh! I’ve seen this!
Paul Reda: So, and it’s shot so it’s 4:1 because it was 4 by 3. There’s 3 next to each other. So, I just want to tell you about that because of my hatred of no one on the website using aspect ratio. So, now I’m waiting for one of our clients to make us implement 4:1 video on their store.
Kurt Elster: Yeah, I think you’re gonna be waiting a while. And on that note, let’s head out.