The Umlauf couple learned how to get started selling on Amazon through Amazing Selling Machine (ASM). Jim and Maggie Umlauf grew a multi-million-dollar business and sold it in just three years. Less than a year later, the couple took their business back. Jim shares his insight on lifestyles changes after starting an Amazon business, customer experiences and journey maps, selling a business and taking it back, intellectual property protection, expanding beyond Amazon, and more.
Amazing Selling Machine Success Story
ASM Training and Community
Amazing Selling Machine Bonus Videos
Lifestyle Change and New Work Hours
Customer Service vs. Customer Experience
Mapping Out the Customer Journey
Selling a Business and Taking It Back Over
When to Get Intellectual Property Protection
Expanding Business Beyond Amazon
Working with Your Significant Other
When the First Product Doesn’t Sell
Unique Investing Approach to Maximize Profit Margins
Surveying Customers to Better Business
Key Takeaways for Building an Amazon Business
Create & Sell a Successful Brand (for MILLIONS) in Just Under 3 Years! – Full Video Transcript
Jason Katzenback talks with Jim Umlauf as he shares his insight on starting, growing and selling an Amazon business. Jim and his wife Maggie were both working full time jobs and longing for the time they needed to start their family and have kids. After taking the Amazing Selling Machine (ASM) training course, the couple was able to start and grow their own multi-million-dollar business. Three years after its creation they sold it to spend more time with their two daughters. When they saw their business declining less than a year later, they took it back over and grew it in one-third of the original time through a customer centric approach.
Jim and his wife tried a couple other Amazon training programs before they accessed ASM. Jim shared that ASM was the best program of all the ones he tried. Jim felt the program had the best structure in place to help new sellers get started. One thing that set ASM training apart was the community of people who were willing to help Jim. Even after being part of the program for 5 years, Jim and his wife still learn from the ASM community.
Jason Katzenback shares that Amazing Selling Machine (ASM) has released the third video of their free four-part video training series. The first video covers product selection and comes with access to Profit Spotlight, a software tool that helps new sellers find product ideas quickly. The second video introduces ways to find suppliers and provides access to an Amazon Automation Blueprint, a guide with everything a new seller needs to do to order their first product. The latest video released shows new sellers how to get sales on Amazon and includes access to the Rapid Ranking System, a tool that helps sellers get their product on the top of Amazon ranks in 5 days. This free four-part training video series is available for a limited time at asmnow.com/free.
Jim and Maggie both started their Amazon business working full time jobs and focusing part time on the new business. Maggie worked 10-12 hours a day and worked with Jim on their Amazon business on nights and weekends. After having their two daughters, Jim and Maggie wanted to focus more on their kids. They grew their business to the point where they could both retire from their jobs. This gave the two the freedom and flexibility of lifestyle they desired. They now work anywhere, anytime. This had a huge lifestyle change for their family.
The number of hours the couple puts into working varies. They pick and choose the hours they want to work. They always make sure to respond to customers as soon as possible but have the flexibility to work whenever it fits their schedules. They can work during the day or go out with their kids during the day and work at night.
The two things that drove the growth of Jim’s business was an excellent product combined with a phenomenal customer experience. Jim noted that there is a huge difference between providing customer service and creating a customer experience. Customer service is taking care of a customer when they have a problem, but a customer experience requires a seller to map out the entire customer journey. This includes everything from when the customer finds the brand, interacts with them, makes a purchase to what happens after the customer gets their product. Focusing on the customer experience allowed Jim and Maggie to build their brand early on. This structure led to other structures and processes they documented and built into everything they did. Those processes are what helped them to set their business up to sell. The processes are also what helped the couple to build their brand faster once they took the business back over.
Jim and Maggie recommend mapping out the customer journey to develop a customer experience. The couple hired an advisor to help them with their packaging and customer journey map. The map includes what kind of customers the couple wanted to attract, who they thought would be a good fit for their brand, how to get that customer on board, what happens when the customer makes a purchase, and how the company interacts with them after their purchase.
After having two kids, the couple felt they needed more money than they had to continue to grow the business. They agreed to sell their business, but remain 20% owners. When the person they sold the business to began to fail, they decided to come back and evaluate the new owner’s shortcomings. Originally coming back as consultants, Jim and Maggie quickly realized they needed to take the company back to steer it to where it needed to be.
Jim and Maggie concluded the failure of their company came when the new owner failed to focus on customers. Before selling the business, Jim and Maggie made sure they had many interactions with their customers, like autoresponders that worked to increase the number of reviews their products received. The new owner turned those autoresponders off and the competition caught up to them.
It took Jim and Maggie about six to seven months to get into trademarks and other intellectual property protections. They put these into place when they knew they had a viable product. Now they have everything that goes in to building a long-term brand, including trademarks, copyrighted images and patented products.
Leveraging Amazon’s platform allowed Jim to build his brand quickly, but his physical product company is no longer limited to just Amazon. After starting in Amazon U.S, Jim and Maggie expanded to Amazon UK and Amazon Canada. Now that Jim’s rapid growth has begun to steady, he has started to focus on building his own e-commerce website as a destination for product purchases. Jim and Maggie currently sell on websites like Jet.com and are growing into wholesale channels.
Jim and Maggie have grown an appreciation for their different skillsets. Maggie focuses on identifying and executing day to day tasks and Jim is good at looking at the big picture. The couple works together to leverage each other’s strengths to build their business.
Jim and Maggie tried a couple different products before finding their current, most viable product. Jim shares that he was fortunate in the way he negotiated low minimum order quantities with his supplier with his first products. This allowed him to keep trying new products, learn from his mistakes, and find the most viable product.
Jim revealed that his unique approach on Amazon is to sell premium products that are two to three times more expensive than the competitors. Jim has been able to do this because of the customer service and experience his brand provides. When choosing products, Jim and Maggie make sure they have a large enough margin to offer unique customer experience and advertising. Jim found that the cheap products did not allow them to customize the customer experience or product enough. He recommends seeing what products costs are at Alibaba and determining profit margins before making any investments.
Jim and Maggie rely heavily on Survey Monkey to ask customers about their experience with the brand and ways the company can improve their product. The couple has developed three products based on customer suggestions from their surveys. They continuously engage their customers and include them in bettering and improving their products based on the customer feedback they receive.
- Know your numbers – In the beginning, Jim did not know his numbers and profit margins. He forgot to incorporate things like advertising expenses and import fees. These are essential to determining product viability.
- Know your customer and how you want to engage them – Sellers may think their product has one niche, but there may be other customers the seller is forgetting. Building a customer journey can help sellers to think of all the customers they may encounter and how their brand will work to engage them.
- Provide excellent customer service – Sellers should develop a customer service plan and the exact ways they plan to engage customers. Sending out informational emails is a way to keep people aware of the brand and provide additional value.
Jason Katzenback.: And hopefully you’ve been following along with the free video series that we have, so I wanted to show you real quick. We’ve got a free video series at AmazingSellingMachine.com. In this video series, we’ve got … We’ve just released today, day three, we’ve released our third video in the series, which talks about the ranking system, the launch and ranking system. We actually provide you this really solid training to be able to get your new product on Amazon up and selling super, super fast. So if you go to AmazingSellingMachine.com, and if you haven’t done it already, make sure you opt in, watch all three videos you’ll see on the top here, video one, two, and three are live.
Jason Katzenback.: In video one, you learn about this opportunity, what selling on Amazon really means, how to find products, and they actually give you access to this free software, where we built for you that will show you how to be able to identify really, really cool opportunities very fast. In fact, not only does it show you, it’ll do most of the work for you. It’s a really, really cool tool, you’ll wanna check it out.
Jason Katzenback.: Then in video two, when you go to video two, that’s when we go into finding your supplier. So in video two, you’re gonna wanna opt in, and you get the Amazon automation blueprints, so this is a flow chart where it shows you everything you need to do to get your product ordered so that you can get it up and running on Amazon.
Jason Katzenback.: Then as I said, today, day three we’ve released an awesome video on really how to … Once you have your product, how to actually get it selling on Amazon, and in this video, we give you this really, really cool rapid ranking system, which in five days, we’ll show you … I even get your product to the top rankings in Amazon in only five days. It’s fantastic training, you’re gonna wanna check it out.
Jason Katzenback.: So on today’s call I have a special guest. His name is Jim [Umlauf 00:01:54]
Jason Katzenback.: Jim and Maggie, I was actually able to meet both of them a few years ago. I feel like it was four years ago, and now in Aruba. So we went on a mastermind trip, and they went to Aruba with us, and there they actually met one of our host, Joey Coleman, and it’ll tie together in just a minute. But Jim and Maggie, who are one of our students, have been able to create a very successful multimillion dollar business.
Jason Katzenback.: But they had a really interesting journey ’cause not only did they first of all create a business within three years that was worth millions, they sold it. Then as you can see here, I think this is such an interesting story, if you can see by the screen shot, as you can see, they have their brand new business, you can see here in 2013, so that was five years ago … Wow, time flies. You can see that they skyrocketed their business doing upwards of over $300,000 a month. Then as you can see here, they actually sold their business, so that looks like 5-5-16, so just about two years ago. And as you can see the business started declining from there.
Jason Katzenback.: But this is where Jim and Maggie took back over their business. Just about a year ago, one year short, I’m sorry, just a month short of one year from getting rid of the business, now they’re working back in it, and look at how they’ve been able to skyrocket. Sky rocket the results. And that’s because of their super hyper-focus on the customers and the customer experience.
Jason Katzenback.: We’re gonna get into that today because a lot of people look at it and they’re like, “oh customer service. It’s not really that sexy.” Well customer service is not just about responding to tickets and complaints. It’s about focusing on the customer experience. That’s mean understanding the experience you want your customer to have through the whole process of buying, and how that can help you build a very successful multi-million dollar brand.
Jason Katzenback.: So Jim, first of all thank you for being here. Let me get this picture out of your way so we can see. There we go. Excellent.
Jason Katzenback.: So Jim, good to have you here.
Jim Umlauf: Thanks for having me, Jason, I appreciate it.
Jason Katzenback.: Very cool. Appreciate you being here.
Jason Katzenback.: So how long has it been since you’ve been selling on Amazon now? It looked like 2013 you started?
Jim Umlauf: Well that’s for this business. We actually started I guess maybe late 2012 maybe early 2013. We tried a couple of different products out first and then we settled on this one, and have been growing it since July, 2013.
Jason Katzenback.: Okay, cool. So we’ll come back on that and ask some questions.
Jason Katzenback.: What I wanted to hit on is you’ve had obviously ups and downs. You guys, you had your business, pretty steady trajectory and then it came down. But one thing you know I had the privilege of being able to have dinner with you guys a couple months ago. It feels like six months ago now when I was in Scottsdale, Arizona. What I really enjoyed about that is just the appreciation that you and Maggie have, just because Of how your life’s been able to change.
Jason Katzenback.: I’d love to start this Facebook Live off right away just talking about that. How this isn’t just … This isn’t a job, this is a lifestyle change. This is gonna be able to bring opportunities into your life you’ve never had. Could you share a little bit about that for us?
Jim Umlauf: Yeah. We’ve been really, really fortunate in this process. Just to kind of give you an idea, when we started this business out we both were working full time jobs. We started this out in our part time. Really, the reason was we wanted to have kids. My wife worked ten-twelve hour days. I was working long hours as well. We just knew that we didn’t have capacity in our current situation to be able achieve some of the things we wanted to do, and so we were able to start this business up and it just steadily grew to the point where Maggie was able to retire first, and then I was able to retire. It’s been a complete game changer because it’s allowed so much freedom and flexibility in our lifestyle to be able to work from a laptop anywhere, anytime. It’s really been a game changer for the entire family.
Jason Katzenback.: Awesome.
Jason Katzenback.: And as we’re doing this call, one thing I wanted to remind everyone, if you have any questions whatsoever, we are gonna be taking some questions later on. If you want to post a comment just to say “hi,” introduce yourself. Talk about what you’re looking forward to. If you’re looking at getting into your own business selling on Amazon. But also if you have any questions specifically for Jim, I’d love to get back to those.
Jason Katzenback.: We talk a lot about freedom and we talk about lifestyle, and I don’t want people to get confused by that. When we say “freedom and lifestyle” we don’t mean that you don’t have to work. I wanna talk about that a little bit. Especially when growing your business, what dis your guys’ day look like? How much time did it take and what does your day look like now with where you are in your company?
Jim Umlauf: We really varied. The very beginning, like I said, we were doing this in our part time. So we were working on it at nights and the weekends. Once we knew it was viable and started growing, then Maggie was able to quit and spend some more time during the day. But the nice thing is we’ve been able to pick and choose our hours, when we decide to work. We respond to customers as soon as humanly possible but all the other stuff we’ve been able to … We can do it on the weekends, we can do it during the day if we wanna go do something with the kids we can do it now.
Jim Umlauf: It gives us that really flexibility in our schedule to do things very easily for us right now. That’s afforded us a lot of opportunities to do things that we wouldn’t normally do. Go on trips, go to Aruba, a bunch of things that would have been hard for us before is a lot easier now.
Jason Katzenback.: Excellent. Excellent.
Jason Katzenback.: With your business, I guess … I love that stat, we don’t need to bring it back up. You guys had a very solid growth. What was it that you felt that was the biggest thing that really helped you guys have that initial growth? And then if you could maybe talk a little bit about selling the business and then how you got back into the same business.
Jim Umlauf: Yeah.
Jason Katzenback.: Same brand.
Jim Umlauf: When we look back and we look at what really made our business successful, I think it’s really two main things.
Jim Umlauf: One, providing excellent products with phenomenal customer service, or customer experience. Customer service is taking care of that customer when there’s a problem getting through that transaction, but the experience is something that we really focused on as well. What does it look like when they meet our brand? What does it look like when they interact with us? What does it look like when they make a purchase? What does it look like afterwards? We try to curate that entire experience.
Jim Umlauf: There’s a lot of people selling on Amazon. One of our differentiations that really made us the most successful I think is probably that customer interaction. Because it’s hard for a company from China to do that. It’s hard for Amazon to do that with some of the brands that they do. They just can’t do it as well as we can. And that’s one of the reasons why I think we’ve had such awesome success and growth over the time.
Jim Umlauf: We focused on building a brand early on. That’s something that we wanted to do is build a brand. I think that focus allowed us to structure and gear everything along the way, but having that thought process in mind. We also built a lot of processes and structure into the business that allowed us to grow it, but then also allowed us to step back in and sell it. Or … I’m sorry, take it back over after we sold it.
Jim Umlauf: You look at that growth in the beginning, but then you look at the growth afterwards and it’s a lot steeper when we took the business back over. That’s because we had a lot of the learnings that we had, and a lot of the process is already in place that allowed us to grow faster. We’re able to go back to those processes that we had documented, and put them in place. So I think-
Jason Katzenback.: Yeah do you … Sorry, I just wanna show, I don’t know if the screen shows that well but that’s a good point.
Jason Katzenback.: I’m seeing here from March to May in a very short window the same level of growth as what took you guys it looks like three years prior. So one third of the time. That’s a really good point. Very cool.
Jim Umlauf: Exactly. So we built all this in and we had processes in place, and when we took back over the business, we just reimplemented the things that we had in place. We had very quick, sustained growth from that point on.
Jim Umlauf: So just to kind of give you an idea, Jason, we grew the business, we were growing the business, we were at a point where we were needed more money to grow the business. We had two kids on the way, we have twins now and so we had a lot of capacity constraints and money constraints. That’s why we agreed to sell the majority stake in the business. We still owned twenty percent of the business but we sold the majority off.
Jim Umlauf: Part of that deal was to have somebody come in who could do operations, and operate the business. That obviously failed, and when that failed we put ourselves in a position to come back in because we still had ownership in the business and we loved the brand, to take it back over again.
Jason Katzenback.: Did you find that when you focused on operations the customer experience slid? What was the focus, or what was the lesson, I guess, you learned from that? There’s gonna be other people in this. What did you learn from that?
Jim Umlauf: The number one thing is we look back and we see the failures was … They first of all didn’t focus on the customer anymore. That’s the number one thing. That focus was gone. A lot of the things that we had done to interact with our customers via auto-responders and a bunch of other stuff that we had in place, they actually turned off. That had a really detrimental effect because when they shut the auto-responders off, a lot of our reviews dropped.
Jim Umlauf: We had thousands of reviews in terms of a head start in front of some of the competition. When they turned off those auto-responders, the competition was able to catch back up to us with reviews. Right? That was huge. When we lost that focus on interacting with customer to get those outcomes and then shutting those processes down, that’s what ultimately really hurt the business.
Jim Umlauf: We can get into all the different processes, there’s a lot of them that they shut down, but really, the impact was losing focus on the customer.
Jason Katzenback.: Wow.
Jason Katzenback.: You know it’s … For some reason there’s just not that sexy sound to it when’s someone’s wanting to build a business that you really need to focus on the customer, focus on the customer experience. Its sounds like, “yeah, no kidding.”
Jason Katzenback.: I like your explanation. When you focus on the customer experience, you’re saying that what you guys do is you map out every step of the journey from the moment that they first see an ad to when they receive the product? Or is it bigger than that?
Jim Umlauf: It’s bigger than that, actually. What customers do we want to try and interact with, right? It’s understanding what customers we wanna go after, what customers we think would be a good fit for the brand, and then mapping out the journey of getting them on board, betting them to purchase, taking them all the way through the purchase and then afterwards. Then interacting with them post purchase as well.
Jim Umlauf: We had Joey Coleman help us a lot with that experience. He came on as an adviser for us, helped us with our packaging, helped us map out that journey. That’s something that unfortunately the operators that took over shut down, and then we reimplemented.
Jason Katzenback.: It’s funny how we always focus in on profits. We look at … And that’s the thing because if we don’t see a direct connection right away with, “well, that’s not making us money,” we don’t focus longterm enough. I think when you say “building a brand,” I think it’s fair to say that’s really changing your mindset to longterm. Because building a brand is a process. You’ve got to be able to get things in place.
Jason Katzenback.: Where are you guys now with what you did in the company back then to what you do now?
Jim Umlauf: We’ve largely taken over pretty much everything at this particular point. When we came back in in April, we were consultants for the first five months. Our role then was to fix the Amazon, US business, which is that graph that you see.
Jim Umlauf: After that, somewhere in the October timeframe, it really became apparent that the operators that we thought were gonna be able to run the business did not have the capabilities or the foresight to run the business. We agreed to step back into the business and take over a larger role to steer the business in the right direction, and that’s where we are right now. That’s included things like new product development, things that we do around IP protection and a bunch of other stuff to help protect our brand and grow the brand.
Jason Katzenback.: That’s a great question because you hear those things all the time, especially if you’re people just starting out. The moment you start your brand you don’t put IP protection, you don’t put trademarks in everything. Help people clarify that. When you start you wanna be really cash-focused, but then at one point did you start getting serious with putting legal things in place, trademarks, that kind of stuff?
Jim Umlauf: For us, believe or not, it was about six, seven months in. After we knew that we had a viable product, and we had that test in the marketplace and proof of concept, once we had that we knew that it was something that we could continue to focus on. Like I said earlier, we started out with two or three other products before we hit this one. Once we knew it was viable, that’s when we started putting protections in place.
Jim Umlauf: First thing was a trademark. Copyrighting our images and documenting our images correctly. We actually have several patents on our products right now that we were able to get as well.
Jason Katzenback.: Nice, nice.
Jason Katzenback.: And that’s, again, building a real longterm brand. Everyone on this call for the most part I’m sure is sitting there really investigating, “what’s the opportunity?” You hear us say “Amazon” and it is Amazon in a way, but what we teach here, and what we’re showing you, and what the free video series that you can get at the AmazingSellingMachine.com talks about is creating … Sorry. Yeah, AmazingSellingMachine.com, is creating your own physical product brand.
Jason Katzenback.: Now, the reason why we’re so hyper-focused on Amazon initially is because it’s huge. It’s so easy, you get you product up and selling on there and really tap into this huge, huge ecosystem of traffic and custom. But that doesn’t stop you from growing past Amazon. Are you guys in that phase at all now? Have you expanded internationally? Are you expanding outside of Amazon? Where are you with that?
Jim Umlauf: We actually started Amazon US. We did that for several years. We then expanded out to UK and overseas with Amazon using their platform to help us launch overseas. We’re in Amazon Canada as well, so we expanded up in Amazon Canada.
Jim Umlauf: We always had our own website but admittedly we didn’t focus on it nearly as much as we are now. It’s mainly because we were growing so rapidly on Amazon, it was just so … It was much easier for us to understand that customer because we’d been trained so well on it that we didn’t focus so much on our own website. That’s something that we’re focusing on right now, growing that channel.
Jim Umlauf: We’re also working on going into wholesale channels and other distribution channels as well. Our product is on Chewy.com, Jet.com, so we’ve really expanded out to other distribution centers as well.
Jason Katzenback.: Nice.
Jason Katzenback.: That’s the other great thing about doing this whole physical products business. We interviewed a lady, Angie [Shicone 00:17:01] a couple days ago. She’s created her own manufacturing and suppliers, so she actually help supply other physical product sellers with products. I hear you saying that wholesaling and everything.
Jason Katzenback.: A lot of people might be sitting there, someone might be sitting there saying, “you know, I don’t really know if I want to run my own physical product company.” Well the cool thing is with the training and what you’re learning is you can become a consultant for other companies, you can look at maybe you wanna start supplying products to other people, or whatever the limit is, you’re getting this skill base that the potential is just huge.
Jason Katzenback.: The other important thing I think that you hit on here is, accept that you can’t do everything right away. You talk about your website, you’re growing internationally and everything. So many times I see people, they get nervous, they’re like, “oh all my eggs are in one basket.” That’s okay initially because you only have a few eggs that you can fit in there. You can’t juggle too many things. As you heard you guys, once you have the systems in place and you feel you’re ready, now you’re starting to focus on your website.
Jason Katzenback.: I hear so many people that they try to create the shop adviser, they try to do all these other things, and they’ll start dropping on Amazon because their focus is away from that. So you guys stayed hyper-focused on Amazon until you felt you were at a level where you could expand outside.
Jim Umlauf: Yeah. That’s exactly it, Jason. Like I said, we were just trying to keep up with what we were doingon Amazon. There’s so much to do there. It was so hard to go outside those realms and really be successful. So that’s one of the things we did, absolutely.
Jim Umlauf: To that end, just kind of going back to the consulting; all the things we learned through the ASM process, I think were ASM 1 or 2, I can’t remember which one we were. Just getting into that community. Meeting people. Learning from everybody that’s there. Learning from you guys. Meeting people outside of that that we learned from. We’ve actually consulted on several businesses where people have had businesses in their own e-commerce store or their own retail store but wanted to get into Amazon, and we’ve been able to leverage our experience to help those people gain some traction and get started on Amazon that didn’t have that expertise.
Jason Katzenback.: Awesome. So very, very cool.
Jason Katzenback.: That’s the thing. People ask about our training and everything. It’s such a skill you’re learning, that you can benefit from in so many different ways. So that’s really cool.
Jason Katzenback.: Something that’s unique about your situation too is you’re a husband and wife partnership.
Jim Umlauf: Yeah.
Jason Katzenback.: That’s no always easy. How do you guys make that work?
Jim Umlauf: We’ve not only identified but appreciated our individual skill sets. I think having that appreciation of our skill sets is so valuable.
Jim Umlauf: Maggie is very good at getting things done tactically. “This is your task,” and executing the task. I’m more big picture. So we’ve found a nice balance for ourselves by working together, knowing who’s gonna do what, whose strengths are where, and leveraging.
Jason Katzenback.: Very cool. Very cool.
Jason Katzenback.: How are you guys able to manage family life with that? Do you work at the same time or do you just every week just kind of adjust your schedule, how it makes fit perfect?
Jim Umlauf: Before we had the kids we would work together at nighttime and things like that. But now we realize that that’s not really a capability.
Jim Umlauf: It took us a little adjusting to figure out the new balance. Sometimes we have the ability to work together, other times we sort of communicate in passing. We have designated times when we each do things. We’ve been able to figure that balance out now. Quite frankly it changes as the girls grow and they have different needs, we have to continually adjust.
Jim Umlauf: That’s the nice things about this business is it allows us to continually adjust. Because we’re not rigid with a specific schedule.
Jason Katzenback.: Makes perfect sense, yeah.
Jason Katzenback.: With your products and with your brand, have you looked at expanding into other brands yet or have you only focused on your one brand and really grown that up?
Jim Umlauf: It’s sort of interesting. When we sold the business, the majority stake in the business, our goal was to grow another brand. And so we started the process. We went back to, “what’s the process look like?” We started putting those pieces of the puzzle together.
Jim Umlauf: Unfortunately, that’s sort of, we’ll call it the red-headed step child right now. We haven’t been able to focus on that because we’ve had to do so much work getting this business up and situated. We do already have our brand picked out. We’ve identified what that’s gonna look like. We already have product, we just haven’t been able to focus on it as much.
Jim Umlauf: We have every intention of starting another brand, doing the whole process again and using Amazon as a launch pad for that. For proof of concept, getting sales [inaudible 00:21:56]. Just rinse and repeat.
Jason Katzenback.: Very cool. Very Cool.
Jason Katzenback.: You mentioned earlier that you had two products that you started with that didn’t work out so much. Are you selling those products still?
Jim Umlauf: No, they were … We learned a lot because we made mistakes in the first two products. We learned some things. For example in one of the products we didn’t know what our duty rate was and found out that the duty rate was really high and that wiped out some of our profit because we didn’t plan for that.
Jim Umlauf: The other product was just not differentiated enough in the marketplace for us to leverage as much as we wanted to. And so they were one time tuition expenses is what we like to refer to them as.
Jason Katzenback.: I’m glad you bring that in because we do need a reality check in this. Even with all the criteria we give you and everything it’s still that taking that action. We hear those wonderful stories of people that the first product they get up and running, it just takes off. I would say that’s definitely not the majority of the case. The majority of the cases it takes a couple products to really hit that one that’s a home run. Not that you won’t sell them, but then people ask, ‘What do you do if a product doesn’t sell?” Maybe you can explain that. It’s not that hard. If a product doesn’t sell, what do you do?
Jim Umlauf: For … We Actually … We were fortunate. We didn’t make a lot of money on the first two, but we didn’t lose any money. We were able to sell through the small inventory that we had because we negotiated a low MOQ at the beginning. Minimum Order Quantity. Then we just decided that once we got to the end … I think we still had a couple products left but we just pulled the plug and focused on the new product that we worked on and really put our efforts into that using the experience that we learned from the first two and moving that into the third product.
Jason Katzenback.: Very cool.
Jason Katzenback.: It really is … That’s the idea is you buy the product so that you can work a profit in, but at the end of it if you can’t get a profit you lower the price just to get rid of that inventory, get that cash flow back in so you can reinvest it. Excellent. Excellent.
Jason Katzenback.: I just wanted to see here we got some people. Shout out from South Africa and a few other places. So if you’re on here live, I’d love to know where you’re visiting us from, so shoot the country out, the city, whatever you wanna do. Say hi, let us know you’re here.
Jason Katzenback.: I see a question here. We don’t usually like answering tax questions because the reality is that with every country in the world no matter where you’re staying, you’re gonna need tax help. We’re not tax professionals. We’re not tax anything. We are taxpayers. But at the end of the day you’re gonna be paying taxes. But this question came in and I thought it might be relevant for you. First of all, please understand the disclaimer that Jim nor I are tax professionals. Well, I don’t know, maybe your background is.
Jim Umlauf: No.
Jason Katzenback.: Anyway, we’re not giving you tax advice here, we’re just sharing, we’re gonna both just share how Jim handles this situation.
Jason Katzenback.: Jim, so being in the US, and you sell products internationally, how does that work taxes wise for you guys?
Jim Umlauf: We pay, for the UK we pay a VAT tax. In Canada it’s GST. So we’ve hired accountants in those two areas that are experts in that, because we are not. And we leverage the expertise of those accountants to make sure that we’re in compliance with those taxes appropriately.
Jason Katzenback.: Perfect answer. Guys, it’s the same as trademarks, IPs, all that kind of stuff. You don’t want that stuff to get ahead of you and make a road block. The end of the day, keep track of all your expenses. As your business grows you’re gonna have to pay taxes. You’re gonna need to file taxes. There’s no getting around that. Anybody that’s successful pays taxes, if they’re making profit. But at the end of it, rely on tax professionals. That’s where the best advice is. Every country is gonna have a dynamic.
Jason Katzenback.: I can already picture people, “well what about this country?” We don’t know. Because every country is gonna have a different dynamic so you’re gonna wanna find someone that is a professional in dealing with your country’s specifically that you’re dealing with. Thank for sharing.
Jim Umlauf: Yep.
Jason Katzenback.: I wanna just see how much you invested again.
Jason Katzenback.: What do you feel … so Tomas [00:26:07] asks a question here … What would be the advice you would give, how much should you invest in the beginning? And should you go for cheaper products? Thanks for the answer.
Jim Umlauf: Interesting. For us, we’ve actually have a unique approach, we didn’t get into this earlier. We sell premium products on Amazon. If you look at our products versus the competition, we’re usually two or three times more expensive. The way we’re actually able to do that is because the customer service. That’s the differentiation that allows us to sell at a higher price. We’ve actually gone that route.
Jim Umlauf: The reason we did is because we wanted to have enough margin to be able to offer a very good customer experience, do advertising and everything like that. The initial products we started out with were a little bit cheaper and they didn’t work out for us because we weren’t able to differentiate them that much, whether it be differentiating the actual product in the manufacturing stage or differentiating the customer experience that well because we just didn’t have enough money in the margin to be able to do it.
Jim Umlauf: We took a very different approach and that’s what we’re doing right now. So from an investment standpoint I think you can go on to Alibaba, and I know this is part of the training with ASM is you can go to Alibaba and see what products are selling for over there, what you can buy them for. You can look at the margins … I actually created an Amazon cost calculator that I use that allows me to identify the margins in my advertising spend that I use every time we bring on a new product. It allows me to keep a focus on those margins correctly and then see what my investment needs to look like.
Jason Katzenback.: That’s such a perfect answer, because what I love about it is two things. Number one, you need to know math. I want everyone to know that if you’re gonna run a business, get familiar with math. I’m not talking about complicated calculations. I’m talking about profit, loss, cost. You wanna know you costs are getting sold, what it’s gonna cost you to sell your product, how much you’re gonna be put into marketing. We show you that all in the training, but the idea is first of all, you let your numbers guide you.
Jason Katzenback.: The other thing is there’s two different stories here. So to me, there’s the beginner who never has done anything on Amazon, that just wants to get up and running in selling a product. Then you have the Jim and Maggies, or the experienced, established brands that now have systems in place where they can effectively pick products that are outside the category. The criteria. So we give yous specific criteria for how to find that first product.
Jason Katzenback.: The criteria that we give you in the training on AmazingSellingMachine.com is simply for getting your first product up and running on Amazon. We do not expect Jim and Maggie to follow that advice for their new product because first of all they’re gonna be able to take more risk now. They’re gonna be able to invest in more inventory. They’re gonna be able to do a lot of things someone just starting out isn’t gonna be able to do.
Jason Katzenback.: Plus, they know their market now. They know what their customers want. They probably have a fantastic relationship with their suppliers now so they just have so many more tools in their tool chest to be able to get to those more complicated products.
Jason Katzenback.: When you’re first starting out, you wanna go easy. You wanna go with a product that you can guarantee when the customer gets it, it will be what they expect at minimum. You don’t wanna start out with a product that gets bad reviews because it’s cheap, falling apart, and you just can’t sell. At the end of the day we can give you the best marketing strategies in everything, it’s not gonna help you. It’ll get a rush of sales in, but then it’ll just drop right back off because you haven’t built the brand. You haven’t created a customer experience that people wanna go through.
Jason Katzenback.: So it’s a great question but please, remember there’s two stories here. There’s “do I wanna just get up and running? Or am I already established and now wanna find products for my business?
Jason Katzenback.: I wanna ask a little about that, Jim. How much do you rely on surveying or interacting with your customers to find what products to sell?
Jim Umlauf: Huge. One of our auto-responders is a SurveyMonkey that goes out, and in that SurveyMonkey it asks them about their experience, but it also asks them what additional products that they would like to see us make.
Jim Umlauf: We’ve actually developed, two, three, I think three products as a direct result of the surveys that the customers get.
Jason Katzenback.: Nice. That’s very cool.
Jason Katzenback.: The important thing here too that you’re hearing too is the constant engagement with your customers. Don’t look at it as “it’s a one time customer and I just want the money.” Look at it as a relationship. You wanna be able to, especially when you launch new brands, if you’re able to get these people to engage with you, get an email from them, get them to recognize your brand, when you have a new product you have a customer that is a huge, multiple times more reliable for being another buyer rather than trying to get a new customer.
Jason Katzenback.: I probably said that in the most complicated way possible, but I hope it made sense.
Jim Umlauf: You know Jason, just one thing on top of that too, just engaging with the customer. If you look … So we make rear seat covers for vehicles aimed at people who have dogs. You wouldn’t think that they’re very complex but the rear seat cover the we have that are our best seller, we’re actually on our twelfth revision of it.
Jason Katzenback.: Wow.
Jim Umlauf: It’s not just engaging with them for new products but we actually utilize it to make our product better. So when they get their product we ask them what we could do better. How can we design it better? What features would like and discover? We’ve slowly but sure improved our product over the years based on customer feedback. That’s probably another huge reason for our success and the reason why we have so many good reviews.
Jason Katzenback.: That’s another great point. Don’t expect your first product, even if it does take off, to just sit there and be on East Street now. You’re gonna constantly be wanting to listen to your products because new products are gonna come out.
Jason Katzenback.: This is another thing I wanna bring in too. People ask “how long do I have to advertise for?” You’re advertising all the time, correct?
Jim Umlauf: Yes.
Jason Katzenback.: The analogy I always use is, why do you still see Coca-Cola signs, if they don’t need to advertise? It’s because if they don’t keep advertising, someone else is and it’s gonna distract you. You always wanna keep your message in front of your customer’s face.
Jason Katzenback.: Let me just see here if there’s any other questions.
Jason Katzenback.: “Watching from Mexico.”
Jason Katzenback.: “Watching from New York.”
Jason Katzenback.: London, San Pablo, California, Cyprus, San Diego, New York, Kansas City.
Jason Katzenback.: So, Cassandra, Jacqueline, Bradley, lots of awesome, awesome. Montreal. Excellent. So very cool, glad to have all … Dublin, Ireland. Two Ireland in a row so that’s great.
Jason Katzenback.: I know you’ve gotta get going soon, so I want keep you too much longer. With someone that’s getting started right now, because that’s gonna be our primary audience right now listening to this. Yeah, you’re an established brand and we could get into some cool things that way, but let’s step back for second and think. If you were to start over right now, what would be … Let’s try to pick three really good learnings that you would do differently now. I’m putting Jim under the bus here because I never prepped him for this so I want an intuitive answer.
Jim Umlauf: First of all, I think it’s knowing your numbers. We talked about that earlier, Jason. That’s one thing that we didn’t do successfully the first go around in the first couple of products. So knowing your numbers and knowing what they all are.
Jim Umlauf: Like we talked about with advertising. One of the things that we didn’t incorporate in is really an advertising expense when we first started looking at some of those products. Nor did we factor in the correct duty and import fees. That really hurt us in the margin side, which made those products not sustainable for us. I think that that’s number one is just knowing the numbers. Doing a good analysis.
Jim Umlauf: Second to that is really thinking about who is you customer and how are you going to engage with them? So you can find a lot of products out there. You may think about one niche for that customer or for that product, but there might be other ones that you’re not thinking of. Really, doing a deep dive into what are all the possibilities for selling this product and trying them out. Building a customer journey or experience through that process to make sure that you’re successful. That’s been huge for us and when we started, like I said, when we were gonna move into our second product we actually started there. We actually started with who do we wanna advertise to? Who do we think we can advertise to? What customers do we know that we can leverage? What experiences do we have that we can leverage to find out?
Jim Umlauf: I think those two things are really huge for us.
Jim Umlauf: Then the other thing that I would say is excellent customer service. Putting together a very good, excellent customer service plan and stick to it. Make sure that you’re engaging with those customers once you get them on board and continuing to engage with them over the course of time. We send out emails now that are informational emails just to keep people aware of our brand and to provide additional value to them because that allows us to engage with them when we do come out with new products in the future.
Jim Umlauf: It’s not just selling to them one time. It’s really putting a plan in place that you can then sell to them multiple times.
Jason Katzenback.: That’s awesome. Three great tips there.
Jason Katzenback.: So first of all, know you numbers. Really make sure you know your math, know your profit loss all those kind of things.
Jason Katzenback.: Really map out your customer experience. What it is you want your customer to have. I think by mapping out your customer experience that’s going to help you to really focus on having a high quality product which is huge.
Jason Katzenback.: Number three, really map out a good customer service plan. Make sure to take care of your customers because at the end of the day they’re the ones that are buying your product. So, awesome, awesome.
Jason Katzenback.: I don’t have any other questions. A couple of things I wanna remind people of.
Jason Katzenback.: First of all, Jim took time out of his today to share this with you, so if you guys appreciate this, if you like this, please click that “like” or the little heart button on there, let us know you like him. Please share this. There’s great information in here. Jim’s sharing right from the heart stuff that’s worked from him and they’re great, trustworthy people so you’re gonna wanna listen to this.
Jason Katzenback.: I just wanna see if there’s a couple more questions.
Jason Katzenback.: Okay, we do have a couple more questions, but before I get into those I wanna remind everyone, if you haven’t already check out AmazingSellingMachine.com where we have our free video series where we’re gonna teach you, where we teach you the full step of how to create your own physical products business on Amazon, just like the one Jim’s talking about right now. You’re gonna go to AmazingSellingMachine.com and the first video, you’re gonna learn about the opportunity. We actually have access to really cool tool we created for you to help you identify opportunities.
Jason Katzenback.: In video two your gonna learn about finding your … Sorry, finding your suppliers. We actually give you a flow chart of the entire process.
Jason Katzenback.: Video three that was just released today we give you a very powerful launch system that’s gonna show you exactly how to launch your product in five days to the top of the rankings.
Jason Katzenback.: You’re gonna wanna stay tuned I believe on Wednesday we have video four coming out. But in the meantime your gonna wanna check out those videos if you haven’t already. They give you tons and tons of information. The downloads alone are of extreme, extreme value.
Jason Katzenback.: So Jim, thank you very much. We’re seeing lots of thumbs and likes, so that’s awesome.
Jim Umlauf: Hey Jason? If I could just one quick thing for you, really quick if that’s okay.
Jason Katzenback.: Yeah.
Jim Umlauf: I just wanna say that if there’s folks out there that are considering this, we tried several other programs before we tried ASM and none of them really worked for us. So I just wanted to say that if you’re out there considering this, this is one of the best programs with one of the best structure in place to try and help you get started. We really believe that. We’ve actually gone back and gone through a lot of the modules that we had. Even though we were experienced we went through them again just to pick up tips and tricks to launch our product that we were gonna launch.
Jim Umlauf: The other thing I’ll say is, there’s an incredible community that’s here. You guys have curated an incredible community of people that are willing to help. You guys always get great people and participates in to teach and to train everybody. So this program is definitely well worth it. I just wanna say that, truly from the heart to everybody that’s listening because this has been a game changer for us. We learned so much and we continue to. We’re still part of the community here, five years later.
Jason Katzenback.: Thank you very much for that.
Jason Katzenback.: So first of all, Jim was not asked to say that.
Jim Umlauf: No.
Jason Katzenback.: That came from the heart. It was really flattering when we went out for dinner a few months ago just how much you and Maggie … As being someone that you purchased something from to have so much thankfulness to us. That’s the whole thing that you’re showing with customer experience. We put a lot of pride into this work. I know Mike and Rich and Matt, everyone works really hard. Everyone here at the company to put the best training in the world together.
Jason Katzenback.: And it’s much more than the training. It’s also the experience you have. We wanna make sure that you can be walked through, that you get support, you get tools, you get everything you need to get going. So Jim, thank you so much.
Jason Katzenback.: I have a couple of questions here.
Jason Katzenback.: “What it be bad to start with a customized version of a popular product?” What’s you opinion about … Someone just starting out.
Jim Umlauf: I honestly believe anytime you can differentiate a product, even if it’s popular, I think it’s great. I think that’s one of the things that once you already know the product is selling, you already know that it’s popular, so that’s great. If you can put your spin on it and customize it, I think that’s a great place to start.
Jason Katzenback.: That’s one hundred percent what we recommend for everyone is … Especially when you’re just starting out. Find those popular products that are already proven and that’s why we tell you to try to find at least three of them selling already. If it’s just one, then it could be just a company with really good marketing and it might not be the product itself. But if you get three of them, there’s a good chance that you’re gonna be able to sell that product, and that’s where customized and that’s when you look at reviews, you look at feedback. You buy the product, you try to figure out how you can make it better.
Jim Umlauf: Exactly.
Jason Katzenback.: The big thing though, just a word of warning for that. When you’re first starting out, you really want to avoid risk from the perspective of customizing too much. If you’ve seen some specific complaints in reviews and it’s an easy fix. But if it’s something that’s totally changing the product, I’d recommend you start with something closer and then look at having a goal of getting to that point.
Jason Katzenback.: Would you agree with that?
Jim Umlauf: One hundred percent. For sure.
Jim Umlauf: It also helps if it’s something you know. We started our product out of a need. It was something that I needed and it just happened to coincide with us looking for a product. It was very fortuitous timing.
Jim Umlauf: What we did was customize something that was already selling well and just made it better.
Jason Katzenback.: Excellent, excellent.
Jason Katzenback.: Last question we’re gonna take because I know you gotta get going here soon is, “How many products can you sell?”
Jim Umlauf: I don’t … I can’t even think that there’s a limit. For us we have right now, we have over 50 skews right now. Some of them are size and color variations but it just keeps growing and keeps growing and keeps growing. I don’t think there’s a limit right now.
Jim Umlauf: Quite frankly I know a lot of people that are selling two different brands and doing very good job selling two different brands with multiple different products.
Jim Umlauf: I think it comes down to your capacity. It comes down to the processes that you have in place and your willingness to do the work.
Jason Katzenback.: Excellent. Great answers, man. Right from the heart. Perfect.
Jason Katzenback.: Well Jim, thank you very, very much, I totally appreciate it. I appreciate you and Maggie so much. Thank you for always keeping in touch and keeping us up to date on how things are going. Congratulations on being able to revive the company and keep it going.
Jim Umlauf: Thank you.
Jason Katzenback.: It’s just so awesome keeping in touch with you guys.
Jason Katzenback.: I’ll remind everyone again, if you appreciated this call, make sure you share it, “like” it. And leave a comment. We’d love to know your feedback about the advice that Jim’s giving you. And again, if you’re interested in getting started with your own physical products business, please, please, please check out the free training at AmazingSellingMachine.com.
Jason Katzenback.: The training is worth … I guarantee you you’re going to learn things from this training. It’s completely free. You get downloads with it that are very highly quality. Everything is newly updated, that’s something that I really wanna stress with everyone too. Every six … We are constantly updating everything. We audit. We make sure everything’s working right now because we all do this business as well. This is not something that we’re just selling training. We are all Amazon sellers and this is our focus. We have a passion for helping people leverage the power of Amazon to build businesses that give them freedom in life. Freedom to be able to work where they want, when they work, how … When they want and how they want.
Jason Katzenback.: If you’re interested, please check it out. AmazingSellingMachine.com On behalf of everyone here, Jason Katzenback and the rest of the company. I wanna say goodbye to everyone. Thank you for being here and Jim, again I appreciate you so much and thanks for taking time with us today.
Jim Umlauf: You bet. Great seeing you.
Matt Clark is the Chairman and Co-Founder of Amazing.com, a serial entrepreneur, and investor. He’s been featured on Forbes, CNBC, and Entrepreneur.com.