Rob:All right, cool. Hey, Paul. How you going? Thanks for joining us today on the Digital Entrepreneur Career Fair.

 

Paul:Yeah, hey Rob. Good to see you, man. Thanks for inviting me on.

 

Rob:Yeah, I really appreciate you coming on. You know, I'm trying to give the parents and the students a variety of things to consider. That's one of the goals of this career fair, is students and parents are trying to help their students figure out the next step when they graduate from high school, and a lot of the choices are not being talked about in school. That's the whole point of this. Your topic is very interesting, because I don't really have another presenter that's talking about what you do. I think this is a really important topic for parents and teens to consider. Why don't you just, first, start off by introducing yourself briefly and tell us, what do you do today as a digital entrepreneur?

 

Paul:First off, Rob, I want to thank you for inviting me on, number one. Number two, I just really want to congratulate you on what you're doing, as a father of four, two kids in college, two kids coming through, I love what you're doing. The back story is, you reached out, sent an e-mail, and I'm like … We hadn't met before, so I'm like, “What's this guy, what's going on?”

 

Rob:“Who's this crazy guy? What does he want?”

 

Paul:Looking at the material you sent to me, I really want to say I appreciate what you're doing, and as a father … I have a 10 year old, a 7 year old, and a 2 year old, and kudos to you on what you're doing, and keep the hammer down, and best of success with it.

 

Rob:Thank you. I appreciate that. Thank you very much.

 

Paul:Sometimes it can be tricky. It's a big world, big uncharted world, this digital entrepreneurship, laptop lifestyle kind of stuff, and I love it, because here's the deal. I agree with you 100% that I feel like, and we were kind of talking about this before we got started, and I think you asked me to talk about my background, so I'll get to that, if I could just share this one little piece beforehand. That is, I feel like our system, as far as the education, and my mother used to work, she was an administrator at actually the college I went to, a SUNI school, State University of New York. I went to Fredonia. I have a biology degree. I was actually going to go to medical school, and my senior year, or my junior year I guess it was, I got to thinking, because I wasn't exactly sure what I wanted to do, right? What kind of medicine.

 

I actually reached out to a bunch of doctors that were in the community, and that I could network to get access to. I just asked them a simple question. I said, “Hey, knowing what you know today, would you recommend this profession to your kids?” You want to hazard a guess as to what the responses were?

 

Rob:Go ahead. Tell me.

 

Paul:I think we asked like 15, 17, and all but 3 said, “Absolutely not. I would never, in a million years, recommend this career path to my kids.” Medical school, college, all the expense, all the time, and then with the insurance changing. This is, what, 20 years ago. Insurance was changing. Health insurance and whatnot. In any event, I had a pivot. My dad and my mom were divorced when I was one, and my dad owned his own business, and my mom worked a job. I really feel like it's appropriate that parents deeply consider the options that they have for their kids, and compare that to the fruit on the tree from the educational system. Today, there's no longer the pathway that we had, which was get a good job, work your way up the company, have a pension. All that's gone. The average person has 5, 6, 8 careers in their lifetime now. Not that college is a bad thing. Don't misunderstand, but we live in such a digital, connected world, that I feel like a lot of people don't realize what is available.

 

Rob:It's amazing. That's why I started this whole thing. I tell this story in a lot of my interviews, and I apologize if I'm repeating myself, for the people who have watched the other ones. The one thing that got me started was looking at people that were doing online courses, and there was a women, Deanne Love, in Australia, she was a teacher, and she developed online courses for hula hooping.

 

Paul:Oh, wow. That's awesome.

 

Rob:It's a seven figure business. That just blew me away. I said, “I have to understand this.” It's funny, the things that you mentioned before, because the first reaction I get from a lot of parents is, “What are you doing? Why are you trying to convince my kid not to go to college? They have to go to college.” I'm like, “I'm not trying to do that.”

 

Paul:No, not at all.

 

Rob:I'm trying to say you have other choices. You need to think about them, because college, it takes a long time to get through, and it's a lot of money. Just expose yourself, and be aware of everything that's available to you. It's great.

 

Paul:College is still good for certain things, like socialization. The ability to learn. I have a biology degree. Biology degree. Spent a lot of money on it, and I've never used it a day in my life. However, I learned how to live on my own. I learned how to meet people. I learned how to learn biology, and physics, and all this crap that … That process is very valuable. It doesn't have to be an “or” situation. College or something else. It can be an “and” situation. How cool would it be to be able to have that college education funded from a business so that your child and you, or whoever is watching this, they have dual skill sets? That was my goal with my daughter.

 

Fast forwarding a little bit about my story, I had the biology degree. I asked these doctors, didn't get any positive feedback, so I pivoted, and I ended up … A buddy of mine talked me into the Amway business my senior year of college. I got started in that, and that's a network marketing. We did that for a couple of years. I'm not promoting that. It was a great experience. We learned a lot, but one of the biggest things I learned was the ability to generate time and money. For me, that was my first exposure to what I call “lifestyle.” Having time, but also having money.

 

When I pivoted out of Amway, which we ran I think for a couple of years, I actually evaluated over 100 different business models. I said, “Okay. I understand that there's a lot of money to be made, but I don't want to have to be working 100 hours a week. I want to have time for my family. I want to have time to enjoy life.” I looked at all these different business models, and I ended up settling on real estate. In that process, I learned the importance of marketing. If I'm going to try and do real estate transactions, I've got to have somebody to talk to about that. I met a guy named Dan Kennedy. I don't know if you know who he is or not, but he's a brilliant marketer, business develop guy.

 

I discovered that we were finding a lot of people who were in a foreclosure situation, that were motivated sellers, but then I also found out that a lot of those people didn't want to sell their home. They wanted to keep their home. We started a business back in 2004, well before the mortgage meltdown, to help people save their home. I built a rather large service business. We were doing seven figures, and I had just read a book called The 4-Hour Workweek, by a guy named Tim Ferris. Also, a book called The E-Myth, which was about business development and all this kind of cool stuff, by a guy named Michael Gerber.

 

I built the real estate company, we did a couple thousand short sale transactions, so we did a big business there, then I pivoted over and I built a big service business. Then, the mortgage meltdown hit, and so a lot of other people got into that business, and they were sharks. They took advantage of people. They ripped people off. They didn't help them. All the states started changing their regulations, and I ended up deciding to pivot out of that, because it wasn't the business that I got started in.

 

I started a business helping dentists generate more patients, a marketing business. We helped them with their website. We helped them with their paid advertising. We helped them with all things marketing related. I've always, in the back of my mind, been aware of my business model choice, because that choice has a lot of downstream repercussions. If you decide to go one way, you pick up one end of the stick, you're picking up the other end, and you have all these different things. The cool thing about a service business is you can put people on a recurring monthly retainer, for lack of a better term, but the downside is you've got a lot of customer support, and you've got to sell them on the service, right?

 

Rob:Right.

 

Paul:As all this is going on, I have a 9 year old daughter. She just turned 10. She was always asking, “Daddy, what do you do? How is business?” I've never had a job when she's been in the picture. I would try to explain it to her, but she never really understood it. Then, she started expressing an interest in wanting to start her own business. Her ideas were, like, get a bunch of pine cones and try and sell them on the curb for $3. Or, “Let me make lemonade and go door to door.” All these really passionate ideas, but flawed as it relates to the marketplace. I'm sitting there thinking, “Okay. How do I encourage this entrepreneurial spirit, but not set her up to fail?” If she goes to try and sell pine cones for $3, she's going to fail, and probably get discouraged.

 

As all this stuff was going on, I decided to … I asked her. I said, “Hey, Lily. Do you want to start a business? Should we start our own business?” She said, “Yeah, let's do it.” We started trying some different things, and we did some eBay centric stuff, and then we did some other different things. Long story short, we stumbled upon this e-commerce business model, and worked on it. We started it, and then we pulled back a little bit because I needed to kind of figure out what I was doing, so I had to go build a successful store, and then I kind of had to simplify it so she could execute. We went forward, paused, I kind of got all my stuff together and figured out how to make it successful, and then we revisited it.

 

Long story short, I currently own e-commerce stores, and then I also help other people who want to start their own e-commerce stores, like a coaching business. That's the only two things that I do. In my opinion, from a business model standpoint, and there's a lot of great business models, so don't misunderstand what I'm saying, but to me, an e-commerce store, selling physical products, not information products, not coaching, not how-to products, but physical stuff, is a tremendous business model for a couple of reasons. Number one, because your scale is nationwide, but also worldwide. Number two, people are so comfortable now buying stuff online. We're all doing it. Number three, Facebook, as a platform, provides tremendous targeting for client attraction. Then, number four, cost of goods is, without getting into a political discussion about cheap Chinese labor, because there's other ways you can skin that cat, but you can get stuff that's very inexpensive, very high value, internationally from China, and also there's some domestic suppliers and that kind of stuff.

 

The model that we use is called the drop shipping model. I'm going to stop yapping for a minute, and just go back around to you, Rob. I'm kind of [crosstalk 00:11:57].

 

Rob:That's fine, yeah. I appreciate it. I think the first thing I hear is starting an e-commerce store is, and you say physical products, that sounds very challenging to me. It sounds like, I would have to have a lot of money in the bank to buy these products. I would have to have a physical place where I can store them, a warehouse. These are kind of all the things that jump into my mind initially, but is that true? This drop shipping model, how is that different than just, I guess, kind of a traditional retail store? It almost sounds like a retail store online.

 

Paul:It is. That's a great question. What drop shipping simply means, is it means that you have the ability to sell a product, you collect money, you pay the supplier, the supplier ships the product.

 

Rob:You don't have to have a place to store any of this?

 

Paul:Nope. With a retail store, you have to, up front, invest a tremendous amount of money into the real estate, and of course all the fixtures in the store, but also your inventory. Then, you have to cross your fingers and hope that the stuff sells. With e-commerce, with our model, the way we do it, a physical product business, you actually don't buy the inventory until you've already sold the products. Now, would it be helpful to kind of map through how that process works, or what do you want?

 

Rob:Yeah. Let's do that. Let's pretend, I don't know … What's a hot item that people would want to buy, or something that is easy to sell?

 

Paul:When we help people set up stores, we go through a process. The first thing that we do is we talk about the market. Selecting the right market. There's, we call a niche selection, and then niche validation. Here's why. When you find a group of people who are passionate about something … An example of a market would be dog lovers, German Shepherd lovers, people who love cats, people who love yoga, people who love surfing. I'm trying to think through some of the niches our clients … People who love horses.

 

Rob:Don't try to sell to everybody. You want to try to sell to a specific …

 

Paul:No. No, no, no, no, no. These things kind of fit together, and they build upon each other. Step one is picking the correct market. Once that's done, then you want to pick the correct product. When you have a passionate group of people, the market is all about the people. It's not about the product. When you have a passionate group of people, and you've selected the correct product, and you drop that product in front of those people, they buy it. The criteria for the product that we look for is a couple of things. Number one, easy to ship. It's something that … You don't want to sell snow globes, because those things can break. High perceived value. Something that looks like it's $20, $30, $40. Low cost for you to get. Something you can get for $2 to $3. Maybe $4 including shipping. Then, the last criteria, and this is really important, is it has to be an impulse buy.

 

Think about the grocery store. You're checking out. You stand there, and you're looking around. What do you see? Gum, candy bars. They even have, like, gift cards now. Those are all impulse buys. When you're checking out, and you're impulse purchasing, you see a stick of gum, you're not Googling to see the best price of the gum. You just, “The gum looks good. I want to buy the gum.” We tap into that same thing. Now, when you have a passionate group, and you drop a product in front of them that aligns with their passion, that looks like it's high perceived value at a very low cost for them, now you're tapping into that impulse buy. That's how you're able to sell stuff online.

 

Rob:This is very … You mentioned informational products before, but this is very similar. I mean, it's the same kind of model, where you [inaudible 00:16:01] something. Maybe it's even a topic you enjoy, hopefully, right? Horses, or pets, or whatever. Then, you have a group of people that are following you, and you're selling information, but in this case, you're selling a physical product. It sounds very similar to some of the other talks that we heard as well.

 

Paul:It is very similar. I've just found that the physical product is, in some ways, easier than the information, because you don't have to explain it. You literally just drop a picture on their news feed, and they're like, “I love horses. There's a picture of a horse necklace. Wow, that's a great price.” Done.

 

Rob:How do you find these products? Is this very complicated to do all this?

 

Paul:No. How we find products is real simple. Now, everything I'm talking to you about is how we start. We build on this, and we can grow. This was developed so that my 9 year old daughter could execute this plan. She actually grew her store, I know it sounds kind of hard to believe, but she actually grew her store to $6K a month of a profit, and then she actually had the highest month of profit was $9K, with this simple process.

 

Rob:What type of product is she selling?

 

Paul:She's actually selling a necklace. She's selling some jewelry. We actually, we recommend our clients to start out with jewelry. Not forever, but at the beginning, because again, it's high perceived value. It's relatively inexpensive, and you can take somebody who loves dogs, or German Shepherds, and you can put a little … Like, there's a paw, like a dog paw necklace, or little bone, or different things that people who are passionate about that, they see that, and they love it. They love it, and then it's an impulse buy.

 

How we tell people to start their product selection is to go to Amazon to look around at the best that they can … Let's step back. Once they've selected their market, and they've validated the market, so what is market validation? That's all about making sure that the market is big enough, making sure that they can reach those people on Facebook, because we do all of our advertising on Facebook. Once those things are checked off the list, then you go into Amazon, and you literally search “dog jewelry” or “dog necklaces.” What we look for, is we look for products that have demonstrated they've sold well in the past. We're not looking to reinvent the wheel at the beginning. We're looking to basically tap into a product that we know the market passionately resonates with, to start. There's some cool tools. One of them I can share is called the Unicorn extension. It's a Chrome extension, it's totally free. You can download that, and you can type stuff in, and it will basically just rank all the different variables.

 

The other thing we do to look at products is we can look on Pinterest, we can sort by repins. You can also look on Facebook. Basically, what we're after at the beginning is we're just after finding products that we know are either selling well, or people are resonating with socially, passionately.

 

Rob:You're finding specific products, or just, like, the category?

 

Paul:No, specific products. Let's say that we find this dog bone necklace that I'm talking to you about, and it's a validated niche of, let's say, German Shepherd lovers. Once they identify that product on Amazon, then we utilize a site called AliExpress.com, at the beginning. Later on, there's a whole lot of different things we can do, but at the beginning, we start there, because what AliExpress is, is it's a wholesale component of AliBaba, which is the world's largest e-commerce site. AliBaba, you've got to buy stuff in units of, like, hundreds or thousands. AliExpress, you can buy them one at a time.

 

You find your niche, you validate the niche, you do some product research to find a product that's been selling well, that we know people are resonating with. We go find if we can source that product on AliExpress. We want to make sure that we're sourcing it with a reputable vendor, super important. People are like, “Isn't stuff from China, like, crappy and doesn't shipping take a long time?” No, if you work with a reputable vendor. They're all graded, and they're all rated. Then, once that's all done, then we go ahead and we do a two-step process to validate that product. Step one is we do what we call “yes” testing. Yes testing is where you can set up basically a post on a Facebook page, and you basically put an image of the product, and then you just put, “Hey, we're launching a new store. We're offering these for a $15 discount for a limited time. If you're interested, just comment ‘Yes.'”

 

The reason we do that is because there's so many variables in e-commerce, what we want to do is test the minimum number of variables that we can to make sure that our assumptions are correct. We ask them to comment “yes,” because that's a lot easier for someone to do than pull out their credit card.

 

Rob:Exactly. Now you know, and you don't even have to spend money on this. This is just a regular post you're putting on Facebook.

 

Paul:Well, you spend a little bit of money. We recommend $3 a day for 3 days, so $10.

 

Rob:This is an ad you're putting?

 

Paul:It's a page post engagement ad.

 

Rob:Got it.

 

Paul:Another way to say it is a promoted post.

 

Rob:A promoted post, okay, but again, no credit cards. Before you spend even more money, you just want to make sure this product's getting sold.

 

Paul:Exactly. The other half of the equation when it comes to Facebook is your targeting. On Facebook, you've got to know how to find those passionate people that you're wanting to put this product in front of. When we do the “yes” test, we're testing both the product but also the targeting, but we already know the product is resonating well with the audience. Doing the yes test is just to basically make sure that our targeting is accurate.

 

Rob:I see. You need to know a little bit about doing Facebook advertising if you want to do this, of course. This is just to say, “Okay, you set those parameters right. You're targeting the right people. Full steam ahead, now.”

 

Paul:Full steam ahead, yeah. When it comes to an e-commerce drop shipping model, which is what we're talking about, there's two categories of tasks. There's the one-time stuff that you just do once, and then there's the recurring stuff. The one-time stuff is pick your market, validate your market, and then set up your store. We use Shopify, a bunch of great apps. It's amazing. Then, the recurring stuff is the product selection, how to do yes tests, how to go live, try to sell. Our approach is, we don't want to be Walmart. We don't want to have 1,000 products we're selling two units of. What we want to do is we want to have one or two or three products that we can sell hundreds of units of. If you can just find one product to sell a lot of, you can make and earn about 5, 3 to 5, to 7, even $10K, like my daughter did, off of one product.

 

Rob:That's amazing, because I didn't even ask you that before. When you say setting up an e-commerce store, that's the other first thing I think about, besides what I said before, was number of products. You're saying you only need, like, a handful? Less than a handful. Your daughter just has the one necklace, or …?

 

Paul:No. Let's make sure we're clear on this. You only need a handful of products that you can scale. You still want to populate your store with product. Who wants to go to a store that has three things on the shelves? However, there's an app that allows you literally to go to AliExpress, click a button, and it's loaded in your store. It takes you about three minutes just to adjust the description, and you're done. It's very easy to add products to your store.

 

She did that $9K with one main product. The idea is, is you want clients, customers, to be able to, when they're buying your main product, at the bottom, in Shopify, it says, “You may also be interested in …” You want resonating products, so that when they're buying their main product, they'll see something else and add it to the cart. That increases the average order value. In other words, that increases the profit per customer.

 

Rob:You're trying to sell your core products, that you're trying to push. These other ones are more like extra impulse buys.

 

Paul:Extra impulse buys.

 

Rob:Related.

 

Paul:Related, yes. When it comes to after the yes test, so we've identified the market, we've validated, we've found some great products, we've done our Facebook targeting, we've yes tested, that stuff looks good, our store is set up, then what we do is we take the cream of the crop of the yes tests, yes tested products, we move them over to the store, or to Facebook, and we actually go live. At that point, now we're asking a client to pull out their credit card and buy the stuff, but the goal is, before we can sell 100 units, we've got to sell one. We've got to sell one. If we can sell one, let's see if we can sell five. Let's see if we can sell 10. When it comes to Facebook … My nose is itching, here. I apologize about that. When it comes to Facebook, it can be really complicated, but we keep it really simple. Basically, what we look at is the cost per purchase.

 

I'll give you an example from my daughter. She sells her necklace for let's say $20. $19.95. $20. That's the retail price. The necklace itself with shipping cost is about $4. 20 minus 4 leaves $16. The only other main expense is, how much money do we have to spend on Facebook to make that sale, or how much money do we have to spend on Facebook to acquire that customer? If we had to spend $16 on Facebook to get that customer, then she would not be making any money. As long as we're able to spend $10, $11, or even $12 or less, then what's left over is her profit per unit.

 

If you understand a couple of basic things about Facebook and know how to look at a couple of simple numbers, it becomes very simple and very easy to do, and to scale, and to grow.

 

Rob:Let's talk about some of the pieces, because I think this does sound like an interesting business to start, right? It seems like it's pretty semi-low barrier to entry, but let's talk about some of the components. You mentioned the store. You mentioned Shopify. Is this very complicated? Do I need to be very technical to set up?

 

Paul:Not at all. There's so many apps, and Shopify, one of the reasons we use it is because they had an amazing customer support. Literally, you can call up the phone, pick up the phone, call them up, they'll do stuff, they'll walk you through it. If you know how to do Facebook, you know how to do Shopify. Shopify is, like, only $30 a month, too.

 

Rob:I was going to ask you. Around $30 a month, and then Facebook advertising, how could you learn how to do this? All these things that you're talking about, you need to learn how to do some of these things. How do you learn? How do you learn these skills?

 

Paul:I think the first principle is that in business, the numbers tell you what to do. The biggest mistake I see with a lot of business owners, both in e-commerce but also my previous business in working with dentists and some other business categories, is they miss that important principle. They do things based on gut. In business, you want to let the numbers tell you what to do. How you learn is, what I did is I just hired a coach. I tried all the free stuff. I went online. I bought these little info-products. I signed up for these programs, but for me, I didn't get the support that I needed. I don't want to waste around, because if it takes me three months to get to $10K a month, and I could have done it in one month, I just lost $20 grand.

 

Rob:Everybody learns differently, right? That's what I find a lot, is that there's a lot of free information, of course, you can follow and try. You may get there. You may hit the one that works for you, but when you have a coach, you get that more personalized touch, and they can help you. They can adjust to how you're learning, and your style, and everything. I agree. I think that's a great strategy, is to find somebody to help you. Does that cost a lot? If I'm a student, I wanted a coach to help me get started, what sort of investment is that going to be?

 

Paul:It just depends on what you want them to do. What we do is we have an incubator program. It's actually EStoreIncubator.com, and there's a webinar that we have on that site, if you want to share that, or delete this out if I wasn't supposed to say that here. What we do is we actually, we do the work with them. For an example, we show them how to pick a market. We show them how to validate it, and then we have them submit their assignment. We review it to make sure it's accurate, and we do that with their products. Once they set their store up, we have a, I think it's like a 27 point audit, where we go through and make sure their store is done right. Then, with their Facebook ads, we always have them let us review their ads before they run those the first time.

 

Depending on what type of involvement, on the low end, you could look at a coaching program in the $3K range. I have some colleagues that are selling e-commerce coaching for $15K. Now, these are for already established stores looking to go to the next step. It really just depends on what's involved.

 

Rob:Even at $3K, that's not too bad. If you think about the cost of college, let's say I have a student who maybe even decided not to go, or maybe even dropped out, and they want to take a year just to kind of test this out, that's not really a huge investment. $3K is probably just two classes or so that [crosstalk 00:30:04], right?

 

Paul:Exactly. Yeah.

 

Rob:Give it a try. I think the other thing that students are looking for in this generation is, like, instant results, right? How quick will they realize if they're good at this? If this is going to work for them?

 

Paul:I think relatively quick. An e-commerce business is not a social business, right? If somebody likes working with computers, and likes numbers, and kind of checklists, they'll know that right away, and they probably should know that before they even start. This is a computer business. You're not talking to customers. You're not doing that. If somebody's like a social butterfly, and they want to be interacting with people all the time, this wouldn't be the correct model.

 

Rob:This is not where some of these models, where you have to write blogs, and get people to kind of follow you, and build your list, and this is all an advertising base.

 

Paul:No, this business is all about you do some set up, you learn a few key skills. I tell my clients this all the time. You know Vince Lombardi, one of the most winningest football coaches in history? This blew my mind when I first heard about it. I thought they were joking. At the beginning of every training, the first training of the new year, he'd hold up a football and say, “Guys, this is a football.” He would drill them on the basics of football, like the four things, you know, blocking, tackling, running, and [inaudible 00:31:30]. When it comes to e-commerce, once they go through, I'll call it the initial learning curve, this model is all about money into the Facebook, money out to the product. The way we show our clients how to do it is we show them how to hire a virtual assistant that can run, like, 95% of the business.

 

Once they have the basics in place, the highest level for an e-commerce selling physical product entrepreneur is learning how to manage Facebook, and then learning how to evaluate the research that their virtual assistant brought to them as far as product. A virtual assistant, great quality, I know political stuff aside, but our virtual assistants, some of the team is from the Philippines, and I can get a full time virtual assistant that has the equivalent of a master's degree for about $800 a month.

 

Rob:Virtual assistant is one of my top recommendations in this career fair. I have three people on that talk about it. It's one of the best …

 

Paul:It's so important.

 

Rob:It's a good resource, as well. I know why, because they're really top notch, and they specialize in areas, and give you the services that you need. In terms of the learning, to get started with those basics, how long do you think it takes to kind of learn before you start investing in this?

 

Paul:To learn, as far as the results, if they run a yes test, they'll get results tomorrow.

 

Rob:I mean learning this kind of model, just getting up to speed on everything that you're talking about. How do you get educated on this area in order for you to actually get started?

 

Paul:Depending on how much time they're putting into it, I'd say a couple of weeks or less. I mean, it's simple. We've talked about once you understand the basics of the model, then you've just got to fill in the pieces. Strategically, boom boom boom. One other thing I want to talk about, which I think is vastly under-appreciated, is within Facebook, there's what's called a Facebook Pixel. For someone who doesn't know what that is, let me try and explain it very briefly. It's tremendously powerful, because with an e-commerce business, you're actually building a sellable asset. Part of it is your customer list, but the other part of it is this Pixel. What Facebook does, is we all know they maintain hundreds of data points on all of us, our buying habits, our likes, all this other stuff. They also maintain data on who is interacting with your advertisements, and who is interacting with your products and your store.

 

There's these different events that are called “add to cart,” “view content.” First is “view content,” then it's “add to cart,” then it's “purchase.” As someone is going through that process of, “Oh, cool ad, let me view the content. Oh, wow. I want to buy that. Let me add that to my cart. Oh, wow. I want to purchase it. Let me purchase it,” Facebook is collecting all this data on these people. What you can do is you can train the Pixel to go out and find you more of the high, highest quality traffic, to send to your store. Eventually, you can get to the point where you don't even have to target. You can literally just tell this Pixel, “Go find me more people just like the people that have already bought from my store.”

 

Rob:I think it simplifies it, because you're basically saying, in the beginning, you're trying to target or you're trying to guess to see what parameters are going to give you the customers that are going to sell, or going to purchase. Then, once you find that, like, ideal customer, now you can say, “Okay, just go find somebody that looks like them.”

 

Paul:Bingo. Yes. At the beginning, it's actually harder, then once you get things up and running, it becomes easier. Now, you have this Pixel that's working behind the scenes, using data, and basically just putting your stuff in front of the people that are most likely to buy. It's a phenomenal asset, and it makes the process of managing Facebook ads easier, and where else do we have that type of technology, and that type of leverage?

 

Rob:Exactly. This really sounds interesting. If I wanted to start this, you gave us a lot of information already in terms of how to, but now obviously these ads cost money to run. Do I still need to have a large bankroll to do this, or …?

 

Paul:Brilliant question. Here's what we recommend. You want to have between $500 to $1,000 as your seed money for your Facebook advertisements. Here's why. Because at the beginning, you need some money to do your yes tests, then you need some money to go live and try to sell the product. Not every product that you go live with can you scale to selling hundreds of units, but here's what's cool. What will happen is, because we show all of our clients how to set up a simple Google Doc PNL or dashboard, we call it. Money in, money out, what's left? What happens is, the beginning, the first couple, three, four, weeks, it starts with being negative. We're talking, like, $10, $5 a day. Negative, negative, negative, break even, break even, negative, negative, negative, profit, profit, break even, negative. Then, what will happen is you'll hit this point of critical mass, where two to three days of sales retroactively washes out all the previous days and weeks of break even or negative.

 

If you have $500 to $1,000 to cycle through that process, that's usually the only money of your own that you'll ever need. After that, the project becomes self-funding. It's like a flywheel, because it spits off. You put $10 in, $100 in in advertising, and you make $300 back. You make it back that same day.

 

Rob:Now, do you have to continually add new products, or is this still on the same product or product grouping that you picked? In other words, how often do you have to refresh your products, or inventory, or store?

 

Paul:That's a great question. Just because a product is selling today doesn't mean it's going to sell next year. What you'll be able to do, is you'll be able to read the numbers. When you start to see a product trending, you go in there, you try to fix it, but if not, then that's a symptom that that product's life cycle might be dwindling. At that point, you hopefully have a couple of yes ad products queued up. You literally just push a button, turn on those ads, and as that product's phasing out, you phase in another one. It becomes very, very systematic and very reliable.

 

The other thing about this process of, “How much do you have to put in?” The seed money, is every time someone is interacting with your website, you're getting their e-mail, number one, and number two, Facebook has what's called retargeting. That's the other thing the Pixel does. It captures, if you've ever gone to a … You've looked at golf clubs, right, or you've looked at some clothes online, and then you're on the USA Today, or you're on a fashion blog or something, and you see an advertisement for that little thing you were looking at. That's called a retargeted ad. With Facebook, you can do the same thing. You have your e-mail list, and then these retargeted ads that you can follow up on. The retargeting is like, 10% of the cost of the main ad. E-mail is free, so now you're building this asset that you can now e-mail on a regular basis to sell more product.

 

Rob:Perhaps maybe you could even fire up another store based on a different type of product category?

 

Paul:Well, you could, but now you're starting the process over to a certain degree, from scratch. Typically what we find is that you can get a store, and I don't want to say this and have people think it's crazy, but truly, you can get a store to $50 to $100 grand a month of profit, off of one correctly selected market that you validate. What we recommend with our clients is that, “Listen, don't be distracted. The reason we fail is broken focus. Stay focused. Scale. If you want to add more income, go find another product. Each product is about $5 grand. $5 to $10 grand of profit.” You want more money? Go find more products, and you'll get to a point where the data, remember the data, is showing that you've kind of reached a cap. Then, at that point, you can decide, “Okay, do I want to pivot into another market, or am I okay making whatever the monthly income happens to be?

 

Rob:Got it. Interesting. Interesting. This is all on products that, I mean, in terms of the niche, selecting the right niche, it's all based on that? You have to do your homework, and you have to [crosstalk 00:40:35].

 

Paul:Passionate people. People passionate about blank.

 

Rob:It could be what you're passionate about as well, but obviously you want to find something that the market is really passionate about, and do your homework there.

 

Paul:It could be, and we have that a lot of times. People are talking to us about the coaching, and they're like, “I want to sell vegan protein powder.” I'm like, “That's great, but we've got to start with the market. We've got to validate the market. If it so lines up that that is applicable to your market, let's go with it. Otherwise, let's put our feelings aside and let's build a business that's scalable and that's long term.” You can do something you like if it checks off those important boxes.

 

Rob:Then, once this is up and running, if I was starting something from scratch, is it going to take a year, two years, to kind of get this running?

 

Paul:No. Gosh, no. My daughter, with my help, and of course she had full access to me, got that business up to the $6K mark in about six to seven weeks, then she had her first, the $10K mark, about a month later. With e-commerce, you can scale very quickly because your leverage is so great. If you got a VA that's running 90% of the store, then you have however much time you have to focus in on your product and your Facebook, so now you can leverage that time. It's the Pareto principle. 80-20, 20% of the … Whatever that …

 

Rob:Yeah, I know what you're saying.

 

Paul:80% of the result. We're talking here late in the day, so we're both caffeine-diminished. 80% of the result comes from 20% of the input. That's what's so attractive about it, and you get results fast. You can scale fast. You can get stuff done fast. Once you know it, then you can do stuff even faster. You can go from zero, realistically, you can go from zero to $10K a month of profit in easily six months or less.

 

Rob:A lot of people hear this, and they see these websites, and these advertisements as well talking about this, and their first reaction is like, “This must be a scam. This can't be true. This is not possible.” What do you say to those people? I'm sure people have asked you the same question. “Is this real? These numbers sound, like, crazy.”

 

Paul:They do.

 

Rob:“How realistic is this? Is this a scam?”

 

Paul:The challenge is, is somebody's mind frame. They've never experienced it. They don't know anybody who's making $250K a month of income, so therefore that must be shady. The reality is, it's not. There's people all over the place making a tremendous income from e-commerce, and again, it's because of the vehicle. I liken it to a Ferrari of a vehicle. You have different business models, you have a skateboard business model, a little moped business model, a 1992 Toyota Camry business model, and then you have a Ferrari. Not that e-commerce is the only Ferrari, but I think e-commerce is definitely Ferrari. What drives the Ferrari is the fuel that you put into it. If you put fuel that has impurities, if you put fuel that has water, that thing's going to bumble, and sometimes not run.

 

With an e-commerce business, the fuel is the person's mindset. It's their mindset that they put into it. Their focus. Their ability to learn. Their ability to stretch. Their ability to learn new things. If they just put the right mindset into this Ferrari of a vehicle, they can crush it. I've got colleagues that are making multiple six figures a month of income, and we have properties that are doing fantastic, too. It's truly the sky is the limit. Again, it's just simply because of the vehicle. You have a worldwide reach. You don't have to inventory. All you've got to do is, you invest money into Facebook ads. You know what you're doing with the ads, you find a great market that's passionate, you find products that make sense, you put those two together, you know how to target, you know a few things on Facebook, you've got this Pixel rocking and rolling, and then the sky's the limit. It's truly just a tremendous business model.

 

Rob:I think you hit it. It's really the mindset, to think differently. Even if you think about the products that you're selling, you're not trying to sell the magic weight loss pill and all these kind of shady products.

 

Paul:No. It's a necklace. It's a pillow case.

 

Rob:You're selling something to a niche, right?

 

Paul:It's leggings, yeah.

 

Rob:They want to buy it. They're passionate about it. I think you hit the nail on the head. It's the mindset, and this is really … We're speaking to the parents, because I think the kids … I call them kids, but the teens get it. They get it. It's really the parents that need to kind of help and enable this. What would you say to a parent, and I guess we'll kind of end on this. What would you say, as a parent, to another parent, if their child came to them and said, “Hey. Listen, Mom, Dad. I want to start. I want to try this out.” What would you say to them to kind of help them with that conversation?

 

Paul:The teen has seen our interview, and they're like, “This e-commerce thing looks pretty cool,” and then they want to try to talk their parents into helping support that. What would I say to the teen to help them with that conversation with the parent?

 

Rob:Yeah, and then also, what sort of advice would you give to the parent to just make them think differently?

 

Paul:That's a really good question. I hadn't really thought about that. For me, I want my daughter … I didn't grow up in a family that was wealthy. It was middle class. I saw how much finances affected … I'll never forget, one time when I was a teenager, probably 17, my mom was in the bathroom and I heard sobbing going in. I walked in, I'm like, she was crying. I'm like, “Mom, what's the matter?” She goes, “I hate the thought of going to work today. I can't stand my job.” I'm like, “Holy crap.” I remember thinking how cool it would be if I had enough money that she didn't have to mess with that.

 

As a father, to my daughter and sons, when the time is right, I want them to be equipped to be financially independent. That doesn't mean a million dollars a day. Financial independence is having more than you need. That's my heart for my daughter. I want her to be able to chase her God-given dreams, and her God-given passions, and not have to limit based on the paycheck, not have to restrict or reduce based on the affordability or the funding. I want her to be able to go and be free, and know … When the store was up and running, I think her and I were spending two to three hours a week popping into Facebook, looking at the numbers, every few days. You can't do that daily. You've got to let things roll, and you look at it every few days.

 

As a parent, I would just challenge you to break open the mold that maybe you came up through, not that it's bad, it could be fantastic mold. I had great parents, great grandparents. An amazing family. Look at what you would like to create and facilitate for your kids and your grandkids, and if that's the case, then be open minded. We're not talking about a business model that you need tens of thousands of dollars to set up. We're talking about a business model you can get started for a small investment, a business model that you will validate along the way, that will prove it's working along the way. A business model that can truly provide a tremendous amount of reward for your team, and also for yourself. How great would it be not to have to worry about how you're going to fund college? Financial stress …

 

Rob:Maybe do it like you're doing it, too. I mean, you're doing it with your daughter as well, so another thing is to consider doing this together, right?

 

Paul:Yeah. It would be a great project together, and when you can clear up the stress of the finances, that impacts marriage, health, it's just so many things that if you can have a pathway to move beyond that, man, life is just so much better.

 

Rob:Awesome. Love it. I really appreciate the information today, and advice that you've given. Thanks a lot for coming on. Where can people find you online? I know you mentioned your site before, but …

 

Paul:We do a free webinar where it's about 40 minutes, and we walk people through a little bit more detail of this process. We actually show some examples. I hop online and show how to find a product, how to find it on AliExpress. Our website is EStoreIncubator. E as in electronic, EStore, S-T-O-R-E, Incubator, I-N-C-U-B-A-T-O-R, dot com. That would probably be the best thing. Just go check it out. I'm not a guru. I'm not trying to be a guru. I've decided to work on my stores, and selling to my clients, so beyond that, there's not a whole lot of, “woohoo” kind of stuff, but that's a good webinar. Gives some good information, and at the end of the webinar, if they want some more information, we show them how they can set up a strategy call. We'll actually hop on the phone with them, and we can talk to them about their store, about their market idea, about their product ideas, and help them get some clarity on what they could do next if they want to go down that path.

 

Rob:Cool. This sounds really good. I'm going to get one of my kids into checking this out, as well.

 

Paul:Yeah. We actually have a number of clients that they've done that exact thing. They've been like, “Cool.” We're helping the mom and the daughter knock a store out, and it's fun, because it's a family thing.

 

Rob:It's something you create, so I think it's interesting because a lot of the other people that I talk to they say about the students, it's like this generation, our generation, thinks the current generation may be lazy, or they don't want to do anything.

 

Paul:No.

 

Rob:No, they want to do stuff.

 

Paul:They want to be inspired.

 

Rob:When they see there's results, and there's a purpose, and they're passionate about it, they're really driven. This sounds like a really good opportunity for them to kind of take the reins, the bull by the horns, and create something on their own they've built from the ground up.

 

Paul:That's theirs. It's techy. There is interaction on the Facebook, so you've got that stuff. It's kind of cool. It's sexy. It's going to be here forever. I think the teens get a bad rap, because they're stuck in this system that we were doing in the 1800s. Sit there for all this time, go through all this crap, and it's not as engaging as it could be. I agree with you. They're not lazy at all. They just need to be inspired. They need to be motivated, and it's amazing, with my little girl, is how much, I would say, song in her heart, and twinkle in her eye, comes from her having her own business with her dad.

 

Rob:That's amazing, and that's why we made contact. I saw you mentioned about your 9 year old starting this business. Again, thanks again for coming on.

 

Paul:Absolutely.

 

Rob:I really appreciate it. I think it was inspiring. I think a lot of people will come out of this, and really think that they have another choice they haven't thought about before.

 

Paul:Good. Good. Mission accomplished.

 

Rob:Awesome.

 

Paul:Thanks, Rob.

 

Rob:Cool beans. All right, Paul. Thanks a lot.

 

Paul:All right. Have a good one.

 

Rob:Yeah, cool. What did you think, Paul?

 

Paul:Are we still recording?

 

Rob:Nope. I'll stop the recording now.