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The following article is an excerpt from the book “Ecommerce Uncovered” by Nathan & Tessa Hartnett.
You’ll read a lot about time in this book. How important it is, and how you can use our model to get it back. As much as you can automate many aspects of this business through software, at some point you will need other people to help. People to help design your websites, help your customers, ship your products, and much more. This can be done through local staff, as well as contractors outside of your company.
This might seem like a big step for most people (depending on your background), but I can assure you, it is a necessary one. Ultimately, you should be looking to build your business to the point where all you do is think and strategise, and where all you have to do is send an email or two to the right people in your business, and they can then go move mountains on your behalf. We liken it to controlling an aircraft carrier with a playstation gamepad.
The ultimate aim is not just for your businesses to be able to run without you (when we first reached this point, we thought we’d made it – but we really hadn’t), but for them to be able to grow it without you as well. Nothing in nature is stagnant, it’s either growing or dying, and your business is the same (and so is yourself for that matter), so make sure it’s always growing and evolving.
Your team and business needs will also change over time. When you reach one goal, you’ll inevitably come up with another, and then you will convert from a passive phase back into an active phase. Once you’ve grown your businesses to the next level again, you may have to introduce new team members, and then rewrite many of your systems again to be able to bring your “next level” business back to a passive phase.
As at the time of writing this book, this is who we have on our team:
Warehouse Manager (staff)
Shipping Team Member (staff)
Article Writer (contractor)
Product Description Writer (contractor)
Customer Support (contractor)
Virtual Assistant (contractor)
Marketing Person (contractor)
Image Editor (contractor)
Web Guru (contractor)
Graphic Designer (contractor)
On any given day, some or all of these people are working on running and improving our companies. We certainly didn’t start here though, but even from the beginning, we recommend you start thinking, planning and dreaming about the day when you have lots of other people who have a vested interest in seeing your business succeed.
While this will be the case, they will never care about your business as much as you do. If you’re as passionate about your businesses as we have become, this can be a tough pill to swallow. We only ever expect our best employees to work at about 80% of what we would do in their position, and that’s the best you can expect. You can’t blame them either, they have other things in their life that are clearly more important to them than your business, and the reality is, if they cared as much as you did, they’d probably leave soon to start their own business anyway.
Because they’re thinking about other things, it’s vital that you have very clear systems for them to follow, even when you outsource your very first task. There need to be very clear expectations set, and step by step instructions on what they need to do, and what will happen if those instructions aren’t followed and expectations aren’t met.
Your business will live and die by how well you write your systems, and if there is one takeaway from this whole chapter that you need to be clear on it’s this. If a problem occurs in your business, never fix the problem yourself. Write a system that fixes the problem and ensures it will never happen again. This seems so obvious when you read it, but in the heat of the moment, it is so much easier just to fix the problem instead of having to write a system, and disseminate it to everyone. Sometimes your staff won’t like systems, as they can feel like they’re being treated like children. To this end, we try to make sure that every regular staff member/contractor has an up to date version of our operation manual. Most won’t delve too deep into what the other staff have to do, but it is a reminder that going outside of their systems can result in a ripple effect that breaks down other systems.
This is most prevalent between our customer support staff and shipping team. It’s amazing what assumptions each will make about the other’s role, and these assumptions more often than not result in a poor customer experience. When this occurs, make sure the systems aren’t at fault, then use it as an example to all of your staff how going outside the systems can result in a) a bad experience for your customers, and b) damage to your business and brand.
How To Find The Right People
Learning how to outsource is like any other part of your business. It takes time, you have to learn how to do it, and you will make plenty of mistakes in the process. As I’m writing this, I’ve just placed a job posting on upwork.com to find a “Product Manager”, and already I’m seeing notifications of applicants pouring into my inbox. Finding someone to apply for your position is not the difficult part, finding the right person, with the right attitude, and the necessary skills for the position – that’s another story.
Our primary source of finding customers used to be odesk.com and elance.com, but as they have combined to become upwork.com, that is now our main source of contractors. You simply register for the site, and then post a job that clearly describes who you are looking for, what their job will be, and what experience they need. Most of the contractors will then promptly ignore everything you just wrote, and apply regardless. One trick is to have something silly at the bottom of the job posting like “you must mention purple monkey dishwasher in your application, otherwise it will be rejected”. This will instantly weed out anyone who hasn’t even bothered to read your job posting before applying.
Once you have shortlisted the few applicants who actually did read the posting, it’s time to weed them out by those with no experience, no reviews, and generally poor applications. There is one exception to the “no experience” rule though, and that is those with really good applications, but no work history. You can occasionally find a great native English speaking content writer for a good price, who is simply trying to build up their hours and reviews.
Once you have found a few possibilities, it’s time to hire them for a trial. Make sure that they are clear that you are just going to check out their work for a short period of time, and that you are also trialling others at the same time. This is really where the rubber meets the road, and you’ll often find someone who has a great application, but for some reason just doesn’t click with you or what you need done. One of the main criteria that we look for now is whether or not we like working with them. In fact, that’s probably now our main criteria. We’ve now had contractors who had both the skills and experience to do the job, but they weren’t great communicators, which often left us feeling like their contracting business was far more important to them than our business, which is not how we wanted to feel. We want people that we can get to know, and who will fight for our business as hard (well, 80% as hard) as we do. So we replaced them with people we like to work with, and who also have the necessary skills and work ethic.
Another important thing to keep in mind with upwork.com and similar sites, is that when you post a job, only a certain number of contractors will actually see it. If you don’t find who you are looking for after a week or so, keep reposting the job until you do. It can be a frustrating process, but we’ve always gotten there in the end. If you haven’t figured it out already, perseverance is kind of a requirement for this business.
Hiring staff locally is definitely the preferred option, as you can meet with them and discuss issues face to face. We have a couple of part time workers in Brisbane (where our warehouse is located), which is great, even though we have often lived in other countries, it’s nice to be able to Skype them and chat about what’s going on.
Depending on where you live though, the cost of hiring local staff can basically make your business not viable. In Australia, we find it particularly hard, as the laws here to “protect workers” have made it near impossible for us to hire anyone. You can’t even contract someone with a mutually agreed contract, because if the Government finds out that they are doing regular work, it will classify them as an employee, and can make your life very miserable, even if both you and the contractor are perfectly happy with the arrangement! When you’re in a global economy, and you can’t meet local employment requirements (and I’m not talking about pay rate necessarily either, I’m talking also about minimum hours required, and all of the paperwork, red tape and bookkeeping requirements that go along with hiring locally), then it’s simple, go Global and hire someone from overseas.
We’re particularly fond of hiring people from the Philippines, as while not all of our experiences have been perfect, we have had a much higher success rate with hiring from there over anywhere else. When it comes to any kind of content writing though, we always go with someone from countries like the U.K., the U.S., Canada, Australia, or New Zealand.
How Much Should You Pay?
The amount you pay any given contractor is largely set by the market. It’s always tempting to try to go lower, regardless of what the market is telling you, but as the old saying goes, if you pay peanuts, you get monkeys. Expect to pay higher depending on skill level, and also depending on the number of good reviews a contractor has.
If you’re looking for ongoing work like customer support, or a marketing person, we recommend paying by the hour, but if it is more of a “project” like getting your banners done for your homepage, or getting a website built, we prefer to get a quote on the project.
Finally, when it comes to image work (product photos, image editing) we prefer to pay “by the usable photo”. The amount you pay per image will have to do with the number of photos you need, or by the complexity of the photo that needs editing.
Using a site like upwork means that you can set a price per hour (or per project), but applicants can also set their hourly rate (or project price). This will give you an idea of what you will be likely to pay.
What To Do When They Ask For A Raise
On occasion a contractor will ask for more money. Depending on how good a job they’ve been doing for you, or if there has been a change in the kind of work they’re doing, this might be perfectly reasonable. Remember, a 50c or $1 an hour raise might not make that big a difference to your expenses, but it can make a huge difference to someone’s life in the Philippines for example. Now, if you’re not feeling particularly altruistic, giving a great contractor a raise can make them feel appreciated, and in turn give them a reason to do an even better job for you.
Having said that, if they’re only doing an average job, not meeting deadlines, and they’re already being paid well, then this might be a trigger to go out and do a little shopping. It doesn’t cost anything to post a job on upwork.com, and the applications you get will give you an idea of whether or not you’re they’re being overly ambitious.
I’m a big believer that a good contractor or employee will do a great job no matter what they’re being paid, because it’s in their nature to do a great job. But if you don’t recognise this as their Boss, then you will lose these great people as they move on to greener pastures. Recognise your people, reward greatness, and you can end up with a team that will work almost as hard as you do for your business.
Hire Slowly, Fire Quickly
We mentioned that it can take a while to find the right employee or contractor for each position, and you should definitely take your time. Like trying to find the right niches to enter, you may end up putting a lot of time and effort into getting any of your people up to speed, so make sure they’re worth putting that time and effort into.
If you do hire someone though, and they lie to you, steal from you, continually fail to meet deadlines, or not produce the level of work you expected from them, then move on quickly for their sake and yours.
It might not feel nice, but you need to do it for the sake of your business. Don’t try to change them, as these are character issues that only they can change for themselves, and it needs to be at their expense, not yours.
People can either be your greatest asset, or your greatest nightmare, but they will always be necessary. At some point, when you are successfully growing and running your ecommerce empire, you will transition from being a “doer” to a “leader”, which is not always an easy move for some people. If you don’t feel comfortable with leading other people, don’t worry, you’re not alone. Try to remember that many great leaders throughout history were reluctant leaders, they did it because they had to. They were great because they stepped up to the challenge, not because they desired it. You too can become a great leader, and I’d encourage you to read books on the subject, and look at it as a great skill that everyone should eventually learn.
Tess and I don’t consider ourselves to be great leaders, but it’s definitely something we aspire to, and is a skill that we hope to improve over the course of our lives.
Well, it’s official. Tickets are booked, and Tess, Luke and I are selling our stuff (again) and heading off into the wild blue yonder. Much to the dismay of our families of course, as we are taking their only grandson away from them with no return ticket in sight.
The reality is, Tess and I have been going a bit insane living in the “burbs” back in Australia. Often rated as the country with the highest cost of living in the world, the value for dollar here is terrible when compared with just about every other country. It’s not that we don’t like Australia, but it’s a big world out there. We believe that by moving, we can not get back to living our dream, but also get more inspired to advance our businesses. It’s also far easier to get our time back overseas than in Australia. When we lived in Bangkok, we didn’t have to grocery shop, cook or clean, and coming back to Oz has shown us just how much time those things take out of your week. When your income doesn’t require you to be in any particular country, why would you stay somewhere that is holding you back in every possible way? I’d rather have my cake and eat it too thanks very much.
Good question! We have to go to Hong Kong initially to finish opening up a company and bank account there, but that is the only “required” part of our travels. We’re going to duck over to Macau as well to check it out (I’m a sucker for Portuguese egg tarts…). After that, we’re going to head to Chiang Mai. We have had not one but two lots of good friends convince us to go there as they are headed there at the same time. To be honest, we didn’t take too much convincing, and we’ll probably hang out there for a few months. After that, who knows? Maybe Japan? Maybe Taiwan? Tess just found out that they are opening a new Disneyland in Shanghai this year, so she’s pretty excited about the prospect of going there (Toy Story Hotel anyone?).
From a business perspective, we’re very excited about the idea of getting back on the move. Our best ever leaps forward in our businesses happened while we were overseas. There’s just so many benefits. You get more time back, and have less cashflow pressure (especially if you are in the early days of growing your business). Our biggest challenge is more likely to come from a rather strong willed one year old boy. We are very glad our business has grown without us over the past year, as he has been a handful! Travelling with him will no doubt present more challenges than if we continued to live back in Australia, but we want him to grow up around the world, so it’s a challenge we’re determined to take on.
Back In Business
Not having much sleep over the last year or so has definitely affected our business goals. While we’re very happy about our business growing without us being actively involved, we have missed building businesses, and do want to take ours to the next level. For a couple of months we’ll be more involved in selling up and getting into the groove of being “locationally flexible” again, but once we’re in Chiang Mai, we want to get back into business.
What Will That Look Like?
We’ve been getting a lot more into social media this year with ROI at the top of our list. Our white-hat SEO is 99% automated now, so we’ve started running some Facebook Ads with a wide variety of different copy, images, demographics and interests. As per usual, most of them have been an utter fail – except for one. Much like our SEO experiments of 2013, this seems to be the way business has worked best for us. Throw a bunch of stuff at the wall until something clicks, then try to analyze that (with imperfect information), and try to replicate it.
Tess has also been going mad with Instagram, and while we’re starting to see some conversions, we think (like all social media) it’s gong to be a slow burn. SEO is such “hot” traffic, it’s time for us to learn how to deal with “warm” traffic, connect with them, and then convert them later (sometimes MUCH later) down the track.
It’s also becoming clearer which of our niches have the ability to truly scale to another level, and which ones will just tick along as little earners on the side. This has led us to start prioritising our marketing a lot more. For example, if we get a post on a high DA blog somewhere that is only happy to give us one backlink, we naturally give it to our highest priority site. If they’re happy to give us five links however, then we are happy to give each of our top five sites a link. This results in our highest earning sites getting stronger and stronger, while our “lesser” sites still get the occasional bit of love.
Tess tends to fall in love with all of our niches, but our top site had a record week earlier this year, and when I told her that our top site made as much in one week than what some of our other sites make in a year, that helped me push my case a little further.
We are definitely getting back to thinking on a more international level with our top two niches. There are a large number of challenges that are associated with doing this, but from our perspective, it makes the most sense. Instagram for example is sending us traffic from all over the world, and when we get an article posted somewhere for SEO purposes, we usually (100% so far) find that they’re happy to link to our international sites as well. This means that ranking our international sites is not costing us any extra money.
Because we operate with high profit margin products, we are still able to offer fairly fast shipping internationally without charging the customer exorbitantly. We’ll still have a tougher time of it to convert than local competitors (we can’t offer overnight shipping or fast, local returns/exchanges yet for example), but if we can get enough traction with traffic (either SEO or social), then that will give us more reason to setup warehousing overseas. Hopefully we’ll be able to find more flexible fulfillment centres by then, but that’s a challenge for another day.
I was going for a walk along the waterfront this morning, looking out at a storm over the ocean, and like most people do in this situation, I wondered if the storm was headed my way. It brought to mind a lesson I learned from the late great Jim Rohn, which is to “think winter all summer”.
On the surface, this sounds a bit pessimistic, but it really is just good, practical, lifelong financial wisdom, and even the most optimistic among us should heed this advice. It is a reminder that even when business is going really well, at some point in the future, you are going to go through tough times – it is inevitable. By “thinking winter all summer”, you will make sure that when times are good, you are still preparing for the inevitable winter that will one day come.
Winters can come in a variety of forms. Maybe your business model will change unexpectedly (this happened for us on ebay many years ago). Maybe a new competitor will come into your niche and take away a lot of your sales. Maybe it will be recession (or worse!). There are so many things that can happen that are outside of your control, which is why it is so important to be prepared for when they happen.
It’s all a part of taking responsibility for everything that occurs in your life. If you go bankrupt one day during the next global financial crisis (or whatever your next winter might be), but you had the chance to adequately prepare (but didn’t), then the truth is – it’s your fault. The event itself might not be your fault, and you can tell everybody it’s not your fault, but the fact that you didn’t prepare properly, so it is definitely your fault.
So when business does start to go really well for you, make sure that you start preparing for your next winter. Winters can be scary, but they are also a great time to pick up cheap assets, and gain market share with your niches, as those who didn’t prepare go out of business.
For Tess and I, preparing for our next winter has not been easy, as the temptation to spend spend spend is growing daily (it’s certainly more fun than save save save), but we also know that if we play our cards right, our next winter could be the best thing that has ever happened to us. Make sure that the same is true for you!
Recently, I was having a conversation with some friends who were also in e-commerce. We were discussing the idea of Tess and I doing a course one day. And they raised the question would we move to a platform like Shopify, the obvious reason being that if you’re going to try to make money from teaching people about e-commerce, Shopify have an incredible affiliate program. If you’re not sure what an affiliate program is, it means that if we promote Shopify as being the platform of choice, and we have a link. And you click on that link, and then you go and register to Shopify, we make money off you, basically, registering to Shopify. And Shopify’s affiliate program is actually really good. You actually make money every single month that you’re part of Shopify. So if we recommended it to hundreds of people, we can make thousands of dollars a month just from that link alone.
Now I don’t necessarily have an inherent problem with affiliate programs like this. I can understand why people do it. But it has caused a bit of an issue in that if someone is doing a review of different platforms. For example, we use WooCommerce, which is free, a plugin for WordPress. Now if someone is doing a Shopify versus WooCommerce review, because WooCommerce is free, there are no kickbacks there. But if you say that Shopify is a better platform and somebody clicks on your Shopify link, well, you make money out of it. So that really comes down to an individual’s, I guess, integrity about promoting which might be the better platform based on its actual merits as opposed to the affiliate program. But it does make it difficult to know who to trust and who to listen to.
Most e-commerce courses I know of at the moment really do promote Shopify quite heavily, and I can’t say whether or not they’re doing that for the money. I’ve never actually used Shopify, and there are reasons for that. By all accounts, it sounds like it’s a good platform because some very big reasons why we can’t recommend it to anybody that’s following our particular model.
When you start an e-commerce store in a niche, you don’t have a way or knowing that that particular e-commerce store is going to be an amazing success. There’s just no way of knowing. We’ve got a lot of different ways to figure out whether or not we might be able to rank a site in Google by looking at various competition metrics. We can look at the potential profitability of the product. There are a lot of ways you can massively increase your chances for success, but you can never ever guarantee it. If you start in a particular niche that has all the right metrics, there could be three other people starting in that particular niche on the same day that you do. And you won’t know for 6 to 12 months that they’re in there and they’re going hard, and that might make it very difficult for you to do well. So there’s just no guaranteed way.
So one of the things that we always do when we help other people – and we do mentor quite a few other people – is telling them to start in at least five niches. Now if you’re new to this, that might seem like a huge task. It might seem like a herculean task just to start one, but in fact, it’s not that difficult, particularly when you can build one site, clone it, and then change the products and change the banners etc. So the reason we say start at five is because if takes you a year or two to really get an e-commerce site going, which it can do, and you’ve chosen a niche that just for whatever reason doesn’t work out and you have to start again, two things might happen. One, you might say this e-commerce thing doesn’t work. In actual fact, you might be doing everything right. It’s just that you’ve just chosen a niche. Or number two, it will work, and you will go, “Man, I wish I would’ve started more.” That is something that we have seen. We have seen it with some of the people that we’ve mentored.
They have had actually really good success with their first one, but man, I wish I had started more. So based on that, if you’re going to start five sites, the difference between starting five sites with something like Shopify, where you’re paying $29 a month even for a basic e-commerce store plus a percentage of sales – unless I think if you use their credit card processing facilities. All of a sudden, you’re paying more than $150 a month for these five stores, some of which may not work out. Whereas with WooCommerce, because it’s free, you can actually put them all on the same hosting for like $10 a month until you figure out which ones are really going to work for you. And gosh, after 12 to 18 months of pushing these stores, the amount of money that you save by going with the WooCommerce platform over something like Shopify is crazy. I’m talking thousands of dollars.Generate Hills of glory Ammo
So that’s our reason we couldn’t with conscience say definitely start with Shopify. Again, nothing inherently against Shopify other than the actual cost of getting started. WooCommerce, I would say definitely, it has its drawbacks as well. You get to learn a lot more about how to set the site up. Whereas Shopify, you have more help. And with WooCommerce, sometimes when you upgrade one plugin, something else will stop working. So there are other things you need to be aware of. So again, WooCommerce is not without its drawbacks. But for us, teaching somebody else how to do what we’ve done, we would have to go with something like WooCommerce, just because we believe that the risk of only starting in one niche is too high. It’s just too high. Whereas if you start in a few, first of all, you have more chance of success, more chance of finding at least one really good one. And hopefully, you’ll find more than one. And when you get a couple of years into this, then you’ll be able to quit your job or even be able to do more than that.
So that’s it. That’s why we would say WooCommerce over Shopify. Might be a bit different angle than other people talk about. Others might talk about different features, but for us, it’s very much about the business model as a whole. I hope that helps.
So today, I’ll talk a little bit about risk. Risk is an interesting one because most people that I know think that starting a business is risky, and I didn’t come from an entrepreneurial background in any way, shape, or form.
My parents hadn’t had a business background. I had no friends that have business backgrounds. So it was all very new to me and I just naturally thought that getting in business is risky. Looking back now though when I had a job (I used to be an air traffic controller) if I was to phrase my thought processes as whether or not, you know, staying in the job was safer than starting a business, I would have said that “Yes, business was definitely going to be riskier than staying in the job” but in hindsight I think I was wrong. When I look back at the reason why I quit my job was simply because that a job was not able to ever give me a lifestyle that I wanted.
Particularly with my wife Tess, and my new son, I didn’t want to go to a job everyday working eight, nine hours a day, five days a week, forty eight weeks a year for the rest of my life. And that means a job was one hundred percent unable to give us the life that we really wanted. Whereas in business – and obviously we’re talking about the right kind of business here – let’s face it, most businesses aren’t that great either. You’re looking for a business model that can actually give you the life that you want and that’s why we looked at online businesses, as we were looking for something that we could actually make passive. Something that would give us the time, the lifestyle that we wanted.
So, we all know nine out of ten businesses fail and does that make them risky? Well, the way we looked at it was a job was one hundred percent risky because it was one hundred percent unable to give us the lifestyle that we wanted. So therefore, even if ninety nine out of a hundred businesses fail, it was still less risky for us to start a business than to stay on the job.
Now, something else that’s happened over the years as we have achieved some success, and I still used to think you know, that businesses are risky. I used to think that you don’t want to be reliant on Google. You don’t want to be reliant on this business model. You don’t want to be reliant on this currency or you don’t want to be reliant on this particular economy. It certainly doesn’t matter what level of success you get to, you can always look at it as being risky.
And that’s when I came across a guy named Jim Rohn. I’m sure many of you will have heard, Jim is unfortunately not with us anymore and after watching a couple of his old videos I sort of really came to the understanding that if you can become a great entrepreneur you can start recognizing opportunity and being able to make them happen, and bring value to the market place in such way that you are rewarded for it, then that is the least risky position you can ever be in. A great entrepreneur, they don’t wait for somebody to tell them that they can have a job. They can never be fired by anybody. They never have to worry about a specific business model lasting forever because we all know business models don’t last forever.
A great entrepreneur is really what everybody should be aiming to be in life no matter what your background because that is the lowest form of risk. You can have it. Now, that might be hard for some people to understand but let’s face it if you’re in a job, you are reliant on somebody saying yes to you. Saying yes you can have this job and every day you turn up, you’re reliant somebody saying “Yes, you can keep your job.” If you say something wrong at the next office party, you can be fired.
So, the reality is the more control you have over the situation regardless of the environment the better. The more control you have, the less risk you have. Being a great entrepreneur means you are living at the least risky life possible. Whereas being in a job is actually the most risk you can have in your life so when you talk about risk, you need to start thinking about it in a way that perhaps is not the way that the teachers tell you or your parents tell you. What risk is actually in your life right now and what’s the risk for the future? I spoke to a great friend of mine, Carl recently and he’s about to quit his job. He’s built up his eCommerce business which is fantastic, but I asked him if he was worried about the future, as you never really know what will happen in business, whereas he is used to getting a paycheck and he said, he said something which I’ll never forget that is that, look, the problem with this job is that he could see the future, he could see all of his future, he could see right through to when he’s going to retire and what his wage would be, he knew what his job would be for the rest of his life. And that was far scarier and far riskier than quitting his job.
So hopefully you can understand the point I’m trying to get across here is that what’s a lot of the world will tell you is risky, it’s perhaps not as risky as you think it is and perhaps the risk that you’re taking on is far greater than you think it is. If you ever really think about that, watch this video a couple of times if you need to. I hope it helps. You can never go back once you cross the divide and start seeing success and again we’re not really talking about all businesses here. Not all businesses are good businesses. You’re looking for business models that will give you the life that you want so it’s very important to design the life that you want first and then figure out what business model out there is actually going to help you to achieve it.
Thanks very much. See you next time.tempat wisata jogja
Just a quick one this week. Have you ever been contacted by one of your customers who have told you that your ecommerce store is not loading? It always used to make me wonder just how long the site had been down for, and how much money it had cost us.
These days, there are plenty of site monitoring solutions out there that are either cheap, or free. We have been using Binary Canary for a while now, and it seems to do a great job. It continually checks our sites for us automatically, 24 hours a day, 7 days a week, and then sends us an email of it can’t access the site. It also sends an email if the site has recovered.
For some reason, this has given me great peace of mind. It doesn’t fix any problems of course, but it means I know that there is a problem as soon as it happens, so we can get onto it as soon as possible. Hope this helps!