Ep. #1025 - Moving Forward When Things Go Wrong
In today’s episode of Startup Hustle, let’s hear actionable advice about moving forward when things go wrong. Andrew Morgans talks with Norm Farrar, president of the Lunch with Norm podcast, about how to do it. Learn how to evaluate risks, manage brand perception, and recognize the perfect timing to pivot as things go wrong.
Covered In This Episode
In business and in life, things may go differently than planned. That is why you must be prepared for every twist and turn in your entrepreneurial journey.
And on that note, Andrew and Norm give tips about moving forward when things go wrong. The e-commerce pros also share their insights on how to pivot and manage brand perception to your advantage.
What are you waiting for? Join them in this Startup Hustle episode now.
- How Norm got into business and scaled it (05:09)
- The process of making coffee and building systems (07:14)
- Having buy-in from the top down (09:53)
- How did Norm get into the Amazon space? (12:23)
- How Norm got an edge in the Amazon space (15:12)
- Working with orgs who needed help with corporate identity (20:51)
- Maximizing the potential of your skills (22:50)
- Learning and failing on the path to success (24:38)
- Evaluating risks (26:21)
- Why perceived value is important (28:58)
- Don’t let manufacturers touch packaging work (30:34)
- Being strategic with pricing, perception, and branding on Amazon (34:37)
- The product launching journey and knowing when to pivot (42:34)
- Learning and innovating when it comes to Amazon e-commerce (48:36)
- Tips for Amazon sellers (52:21)
This is what a lot of companies miss out on. They talk from the top down about SOPs or brand culture or building a performance-based culture. But it’s all in the CEO’s head, and they’re not building the buy-in.– Norm Farrar
Brand identity is hard on a mass scale. At a high level, it’s just hard to scale. You have a certain number of minds, not just designers.– Andrew Morgans
These processes in place, this risk evaluation notebook in place, [means] you can move on very quickly and get to the next one. It’s not working? Cut it and get to something else.– Norm Farrar
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Andrew Morgans 00:00
Hey, what’s up, Hustlers? Welcome back. This is Andrew Morgans, founder of Marknology, here as today’s host of Startup Hustle. Got a close friend, a colleague, with me today. But before I make that introduction and before we go into our topic, which is moving forward when things go wrong. One of my favorites. I’ve written articles that talked a lot about the art of the pivot and, you know, being flexible and being creative and being able to just handle whatever comes to you. I think that’s a true sign of an entrepreneur. So we’re gonna have some fun today. Before we get into that, a shout out to our sponsor, Full Scale, whom I owe. Today’s episode of Startup Hustle is powered by FullScale.io. Hiring software developers is difficult. Full Scale can help you build a software team quickly and affordably. And has a platform to help you manage that team. Visit FullScale.io. And without further ado, Norm Farrar. Welcome to the show, my friend.
Norm Farrar 00:54
Hey, thanks a lot. I’m having a little bit of trouble with my internet. I’m going to switch over. I hope I don’t lose you. But I’m going to switch over to my land.
Andrew Morgans 01:05
Let’s do it. Hopefully, we’re good. We are still live. How are we looking?
Norm Farrar 01:12
I just can’t get this thing to work. I’m an old guy. So I wish Kelsey was here, my son.
Andrew Morgans 01:18
The internet seems fine. And if we need to pause or we need to splice it up, we will, Norm. But Norm is the host of a well-known podcast called Lunch with Norm podcast. I had the privilege of being there, you know, a few days ago, and we got to chat. We just chatted about some security vulnerabilities. We talked about things that sellers are looking forward to in 2023 and things to expect. We had a great time at the show. So for any of our listeners, go over there and check out the Lunch with Norm podcast. But today, we’re gonna be getting to know Norm instead of myself. And, you know, I worried about it before the show. I just told him a tradition we have here is just really getting to know the guest and kind of what brings them to the podcast. Norm, I would love to hear some from you just like, you know, the early days. What was it like? Did you know you always wanted to be an entrepreneur? Or do you come from an entrepreneurial family? Where’s your story really getting started?
Norm Farrar 02:15
Yeah, so I did come from an entrepreneurial family. My dad was a serial entrepreneur. He had 20 businesses going at a time. He might have had more than that going at a time. But he was involved with a lot of different, lot of different companies. And they were all fairly significant size companies at the time, mostly in manufacturing. But it was a true story. But when I first went there and I was about 11 years old to help us sweep the floors, he did pay me 10 cents an hour and all the pop I could drink was so much. But anyways, for myself, I think I learned a lot from him and I got started in high school. So my very first kick at the can. Not big, but it was in rock promotion. So four guys and I got together and started this rock promotion thing and did parties and stuff like this while I was in high school. And when I went to college, I went to college for film in video production. I didn’t pay all of it, but I paid a good sum of it through a video production company that a buddy and I started up. And we did some government films at the time. So okay, went from there, right on through, and did some video production right after I dropped out of college, by the way. So I thought I could make more money right off the bat just doing my own thing. But after that, I don’t know if I forgot what happened. But we had to go back to my hometown. And I started working with my dad for a bit.
Andrew Morgans 04:03
And then that home was worse.
Norm Farrar 04:05
Montreal is originally home. But at that time, it was Kitchener, Ontario, which is just a suburb of Toronto. And I ended up working with him briefly and ended up going and starting another company. Actually, I did work with another company at the time selling premium incentives, tchotchkes, and stuff like that. And I got into the business. And this is when I was probably in my early 20s. And I learned that business. I studied and was educated in the business and brought on a partner, and we grew that business. Well, this is an interesting story because we tried to, and I talk about perceived value all the time. And this is where it really started. We looked at the research and showed that the average promoted company was usually a two-person operation, husband or wife, they had $300,000 A year was 23%, gross margins, not interested. We sat down, and we said, how can we do this? How can we do it better? And we thought, oh, vertical integration will own the embroidery company, the screening will own the fulfillment center, we owned the courier company like we just went right across the board and kind of bought everything and brought it all in-house. Then the second thing we did was to how can we do it better. So we put it in, we repackaged better boxes, our tape logo across fragile stickers, if broken, do not open T-shirts were packaged with our polybag each one with our label in it, just everything that you could do. So when somebody got it. And oh, by the way, our motto was on time every time, exactly like you ordered it. And all of a sudden, we went from nothing. And we actually got a cash advance from one of our customers to two and a half million dollars in a few months. And 45% gross margins at the time. And we reached one of the number-one promo companies in North America. So anyways, that’s how I did it. And I shouldn’t say I, my partner, did it. And it was all due to that and systems. So it was hypergrowth. If I didn’t read the E Myth, I would have, like, had no hair then took a few years to port fall out. But yeah, it was crazy. And I started building systems on everything. In fact, we had 23 people in the office. And they all participated in building the very first process, not SOP but a process on how to make coffee or why make coffee is how to make a perfect cup of coffee and why everybody thought it was stupid. But everybody said it was hot in the end. And that was, you know why? So the buy-in? Why should we have? Or why should we have this SOP? At first, everybody was joking around about it? What do we need to know? Are there any definitions like Amazon acronyms? What are any prerequisites? Then it goes into the SOP and then quantifies that? Who do you report to? Diagrams? So templates, like, for Amazon, could be a spreadsheet of some sort. But for this, it is diagrams where stuff goes. And it was interesting because, at the end of it, it wasn’t about making a cup of coffee. It was a customer experience. So people coming into the office got frustrated when they walked in the office, and there was one burnt cup of coffee with just a drop left, so they could make it tick them off. And then we found out that we’d have it back in the day. We had people coming into the boardroom all the time. What did they ask for a cup of coffee? Well, it would take 20 minutes before we got it because it wasn’t on or we had people, and this is a true story. We were talking about price. So we said, look, we’re always looking for the best price. A lady that started with us bought a pallet of creamer and sugars to keep the cost down like a pallet. It came in.
Andrew Morgans 08:24
I might have missed this part. But so you guys were selling coffee or promotional products. What was that? I couldn’t hear you. So were you guys selling promotional products? Or coffee?
Norm Farrar 08:35
Or no, this is just in the office to make a cup of coffee. So using a pilot coming in? Yeah, this was just to get my point across that we need systems in place. So everybody knew how to work with them. And anyway, at the end of it, people were going, oh, Uh huh. And we had a three-strike policy, first strike. And this is still done to this day. First strike. Nobody’s screaming, nobody’s yelling. It’s an educational process. The second time it happens. Okay, what went wrong? It still could be on us. The process might be something Amazon’s interface might be wrong or something like that. The third time it happened. It was okay. This isn’t meant for you. We either put them in a different position, or they were let go. And I don’t even think that ever got to that point. But we just did it right. And I did have a promo like a sales guy. That was our sales manager at the time. And he was the first one in, and he drank tea, and he was opposed to this whole process. So he got the first warning and this is like, okay, you know, what part of the process did you understand? He just basically said it sucked. I drink tea. I’ll be here at 530 in the morning. I’m not making coffee. All right. So explain to them the rule, not the rules, but just explain it to him and why it was so important. The second time he did it, it didn’t happen. Brought him to the office, said Cory. What’s the problem? You do know that the next time I’m going to have to let you go. He says you would not let me go here. He was making megabucks back than 120,000 bucks plus 3% of all sales. It was megabucks. And I said I’ll have to let you go. Because if you can’t follow this, how are you going to follow all these other processes that we’re building? And he got it, he got it. He wasn’t scared. He just got why we were doing it. And that’s how we had to build this culture. And this is what a lot of companies miss out on. They talk from the top down about SOPs or brand culture or performance base, building a performance-based culture, but it’s all in the CEO’s head. And they’re not building the buy-in. It’s so important for that. If you don’t have buy-in, you don’t get anything. And then you get poor performance, you get resentment, people quit, and you have bad trainers. And so if everything is, you know, defined, there are workflows, like everything we do to this day, you can find in a folder, you’ll be able to find three folders with any tasks that we have you go into the task, if you have not performed this task before, please click here. They click on it. And then you’ll see a checklist with everything that they have to do. The folder itself will have the process in it. So the policy and procedure that holds the SOP will have the templates, and then they’ll have a training area, everything, and so we’ve built it. Like we’ve got 279 SOPs, we don’t use them all. But they’re all there just on launches, just on our lunches.
Andrew Morgans 11:42
Norm Farrar 11:43
Yeah, so it worked. But that’s the start of what ended up being a promo company with and then from there. What did I there’s so many things. But I went into promo. And then I went into work with my dad. My dad approached me and said, Hey, how would you like to get into business with me and your brother, and get into contract manufacturing for some products. And it ended up us buying two factories in Taiwan and having a fulfillment center in Canada in the US. But doing fulfillment, doing contract manufacturing back 20 years ago, and then selling that business. But during that time of buying a specialty manufacturing company, buying specialty packaging came into it and understanding just how a few extra cents could get you many more dollars when you go to sell something. And at that point, I’m going I’m rush through things we sold the car to take your time. Yeah. Then at that point, I decided to become a day trader and I found out I was a really crappy day trader that was 2000 lost out on the big election swing, I went against my rules. And I lost out then just got into a tech cup. Had a really great run at that with this tech about Tampa, Florida. Just been all over the map. At the end of the day. It all comes back to Amazon. It was my perfect storm. I heard about this program called Hmm. Beta from Amazing Selling Machine and wasn’t interested in Kindle products. So I waited about another year and my buddy, Rizz came up and said, Hey, you want to go to Vegas? And let’s go to this thing I think was ASM three, check it out. I thought it was pretty cool. I thought okay, let’s get into it. Before I got into it, though, there was a group of people standing around. And they were talking about this doctor. And he said that, you know, he liked to, he doesn’t want to have anything to do with Amazon. It was too complicated for the deer in the headlights. But I heard him say I just want to beat the s&p, if I could do that. I’m happy. I went over to him and I said I can do that. And he is letting him go back, do his thing. And I presented him with 10 product opportunities. I said you don’t have to get involved with any of these. I’ll create the brand, don’t even have to do that. I’ll create the brand. I’ll find the products like the two that he picked up, package them up for you to get them onto Amazon. And I’ll write all your SOPs so when you exit, you’ve got everything on a silver platter.
Andrew Morgans 14:32
That sort of promotional business really set you up to feel so confident in Amazon space because he knew where to go to get products and get them made and you knew product packaging, manufacturing. You knew the fulfillment supply chain. You basically knew everything that goes into Amazon before the Amazon industry really started.
Norm Farrar 14:49
It was my perfect storm. Yeah, yeah, I see that now.
Andrew Morgans 14:52
So just question: What were you doing before you went to that event in Vegas? Like what was your like full time job or like business you’re running at the time was that the day trading? And you’re kind of like looking for something new? Or like what was? What did you leave behind I guess to go all in on Amazon?
Norm Farrar 15:09
Well, before I got into it, this is kind of an interesting story. You can always edit it out if you know, it goes on. But but one of the I created an opportunity, and I talked to people, this is Richard Branson that said something about if an opportunity comes up and you’re asked to do it, and you don’t know how, you know, just nod your head that you can do it like take it I forget the exact quote. But I live by that and so many opportunities come up. And this one, in particular, was one of our fortune 500 companies that we were doing their promo catalog for. I was in San Jose. And in San Jose, everybody was ticked off. I was in the purchasing department. They’re usually quite friendly. The VP of sales or purchasing was from Calgary, Calgary, Canada. We went out for lunch, and said, What’s What’s with all these people? He said, Well, these are all the non contracted suppliers that are just getting under everybody’s, you know, just under everybody’s skin today. They were getting paid over 240 days, some were 280 days. And they thought that because they were dealing with a big corporation fortune five that they would be getting paid 30 days they didn’t realize that would stretch out. So during lunch, at the end of lunch, I said, I’ve got a solution for you. And what do you get? I said, it might sound a little crazy, but make me your non contracted purchasing department for global? And he said, Well, why would I do that? I said, you pay me in 30 days, because I’m contracted. I said you let me keep the funds in the bank for 90 days. So you pay me 30. I keep it in the bank for 90 days and pay me five points. I’ll take care of all your headaches. And in about two weeks, I was this fortune five hundreds, global, non contracted purchasing department. Now the reason why I’m in it was crazy. But these all the people that we were dealing with were now extremely happy. They’re getting paid nine, they could live with 90, they couldn’t live up to 40. So during the time I walked into the purchasing department, this was in Toronto. They said we were trying to build a website. Have you heard of the World Wide Web? And I kind of did. Could you build us a co-op where you know we have the logo, we have the dealer on things like pens, keychains, coffee mugs, T shirts. And like I just said without hesitation. Sure. I didn’t know a coder. I had no way of knowing any of this. But the people that I was paying, there were a few, there were a couple of agencies in India that I was paying on their behalf. I reached out and said, Hey, can you build this? They said yeah, sure, ended up building it. And that started me off and back then a website, world wide web, like a website was really expensive. It wasn’t like it is today. That got me on my way with EA COMM. This is back in the 90s. Because other Fortune fives and other companies would come out. And you know, Hey, I saw what you did. I heard about what you did. All right. So I did that and was quite happy. And then I created another business in between. So in between the getting into trading and the promotion company. It was a print on demand company and Okay. Probably around 1999, I think, but there were only a handful. And I’m talking about four or five of these types of companies where you can come on to the website, you can order our product, we’ve created a logo, corporate identity, we could create business cards and letterhead and all that stuff and send it to you. So using the people from this fortune 500 company. I approached them in India and I said can you do logos? They gave me logos for $60 in 48 hours with all the different revisions I wanted. And we were charging $3,000 If you bought it in, what was it, I think 72 hours, and it went down to 15 if you wanted in a week and then over a three week period, it would be 340 bucks. But nobody wanted a $340 package. They all went for the $1,500 package. We were paying 60. I mean it was beautiful and it was something that A lot of people definitely weren’t into at the time. And then it was just getting out there that you could do this. So we were getting all these new companies that were coming to us for corporate identity work as well as branding work basically early on.
Andrew Morgans 20:11
Yeah, like branding work, like you’re essentially creating logos and all the materials that go with it. And, you know, the mugs and the mouse pads and the, you know, anything they’d want, right? Like, so you might create the corporate identity, but then you would get like promotional materials if I was kind of vertically integrated in that way.
Norm Farrar 20:33
Just, we didn’t, we didn’t promote the promotional side of it. But what we did is we partnered with a company who had a lot more money than us that was specializing in this and they did print on demand. And they had, they already had everything out there, we approached them and said, Hey, can you white label this for us? And so they did. So they could come in, they could get the logo, and then we would have ongoing business, recurring business, with letterhead, business cards, envelopes, but we were out of the promotional game at the time. I mean, it’s a good idea, you know, you think about VISTA and all those other companies right now. But back then, that was probably just too much that I don’t think that there were the capabilities to really do that on a mass scale, it would be pretty tough.
Andrew Morgans 21:29
brand identity is hard on a mass scale, I think like, you know, at a high level, like, it’s just hard to scale, you have a certain number of minds. And, you know, not not just designers, but the certain minds that can bring that kind of together. So just thinking about it, like creating systems for that, how do you scale creativity at maximum scale, you know, but I want to jump back into this Vegas meeting with this doctor, where you’re essentially creating him a brand with these two products he chose. And so you knew nothing about Amazon at the time, other than having gone to that event and being kind of excited and meeting someone because I write, yeah, I knew nothing about Amazon.
Norm Farrar 22:10
But I knew how to sell and I knew how to find products. So I was very involved with sourcing. At the time I was outsourced in India, I had experienced a lot of experience in China where nobody was going there yet. And we like what I owned at the not at the time. But I had two factories in Taiwan, and a lot of people went into Taiwan, until their currency just made it hard to compete with China.
Andrew Morgans 22:45
You’re just seeing opportunity, I would say you’re somebody. My dad was a lot this way. We were missionaries in Africa. And but we really were serial entrepreneurs in a lot of ways because we finance ourselves. And we were over there and things like that. And so more doing side hustles and business opportunities. You know, when I think about it, looking back, but you know, I grew up with a dad as a serial entrepreneur, even your story to this point, you’ve had multiple pivots and changes and more. So just saying, yes, opportunity is what it sounds like, just you know, some people see that as a downside. I think I’m more of that way than most people as well. Like it is, you know, for me, it’s something exciting, because it’s an opportunity for me to learn something that I didn’t know before, you know, so. Yeah, so So you’re, what was the success rate? I guess with that first, that first attempt at launching products? Can you share more about that for me?
Norm Farrar 23:43
Again, I’m really sorry, Drew, but this internet connection, I’m getting every second word.
Andrew Morgans 23:49
Okay, I just really wanted you to explain a little bit. Like, was it a success or failure, that first attempt on Amazon?
Norm Farrar 23:58
I got a bit of both. And I like when I fail, I fail big. I failed big. And I’m talking about, you know, you learn about moral people, which you always have to have your, your, you know, the red flags come up. So it’s not your fault. But you learn to see these red flags, you know, over the years. And there have been some really bad experiences. But if it’s all on my own, if I put the onus all on me. I would probably say I don’t know. I’m working with brands that I’m involved with that I have ownership in. There’s been some really great successes. I’ve had some rebrands and it’s probably an 80/20. I hate to say that because I don’t want to shatter people, but I bet you 20% of my launches have been the biggest successes. Now most entrepreneurs, or most people want to hear that it’s the opposite. But yeah, when I, when I fail in a product, it’s on a product launch, I usually try to fail really quick. Now, this is completely different than going into business and finding out that you’ve got the wrong mix, or somebody’s opened up literally, two sets of books, you see one, and they show another, when you’re doing the product launches on your own, I can quit very easily. And I’ve learned all these lessons, what do I need to do? How do I optimize? Things are going to change? Amazon’s gonna suspend my account for no reason, pesticides, or whatever. I have to create a risk evaluation. And the more that I put into risk evaluation, or the more that I put into, alright, how do we get out of this one? And how do my team explore? How do we get out of this quickly, we find that, you know, we’re okay. But it’s the ones that come out of the blue, and you have you’re not prepared for. So we just launched a product, it was a soy product. And first thing was they said we didn’t own the brand. So we’ve been fighting with them over that part. Then they said, Okay, you owed and everything was taken care of. Then they said when we went to create the store, well, no, this brand isn’t associated with this store. Well, for the fourth quarter, we’re trying to get all these Amazon posts, all these Amazon lives, everything we wanted to do, we just couldn’t do it. Because the brand registry was in conflict with the store. And we just got to resolve last night, by the way, these are things you can’t think about. But one thing I can tell you is the overall success of you know, knowing and putting these, these, I wouldn’t say milestones. But these processes in place, these this risk evaluation notebook in place, is that you can move on very quickly and get to the next one, it’s not working, cut it and get to something else, if five of your colors or 10 of your colors are not working out of 12, cut them and just work with the two. So there’s lots of little things like that. And you know that success is made in bunts. It’s not made in home runs. And what I mean by that is, what can I do to get that extra point of sourcing? Is it made up in me taking back like, not FOB, but let’s say using X works? Maybe it’s finding a better tariff code? What source Am I using? Am I going through? Am I getting dinged every time I use my bank, that is for the Forex exchange and for the cost to send a wire. If I can play around with all of that, and start to get more and more and more on my side, then those are things that a lot of other people aren’t working with. And the other, we talked about this but perceived value. So perceived value, I can give you an example that we had about a knife that we were working with. And it was a $16 knife 49 $49 was the one on Amazon, it was an ugly, ugly package, it was just a clamshell with cardboard on the back. And I saw it. I said there’s tons of potential here, it’s a really high quality knife. Why don’t we just throw it into some hard packaging with a magnetic clasp and it’s more of unveiling the product. So if you don’t even see the knife, when you open up the package, you have to you see all the details, then you have to take off this cover like a box of chocolates and there it is, like a really nice looking knife and everything was put into this extra couple or not even a couple bucks fucking change of this package. Well, we took that and we were able to bring it up to 99 to $124. Well, that’s not bad. And then we looked, we went to the manufacturer and we said, okay, help us out. What can we do at around the same price point? And he told us about hammering the same knife, but instead of having a layered hammer, it’s the same cost. And we went out. We didn’t let the manufacturer touch the packaging. We went out and we found this wooden packaging with an otterbox, kind of like an eye box.
Andrew Morgans 29:45
I mean, can you slow down just for a second? Why do you know why? Like as someone that’s a sourcing expert, ya don’t let the manufacturer touch the packaging.
Norm Farrar 29:52
What was that again, Drew?
Andrew Morgans 29:54
Can you share with the audience a little bit why you don’t let the manufacturer touch the packaging, like something you’ve learned?
Norm Farrar 30:00
They’re manufacturers. So. So you know, and I don’t care if it’s here, or if it’s whatever country you’re looking at, unless they have a specific design department, or you can see a diverse selection of packaging that they have, I might consider it. But nine out of 1099 out of 100, I do my own sourcing. So if, and I know this with pet supplements, I can take a look. And I can see pretty much the people who’ve gone to a pet supplement company, who are using the same packaging the same colors, they might have a German Shepherd instead of a golden retriever on the box, but I know who it’s coming from. And it’s just bad packaging. And I’ll go out and source like I’ve already got product packages that I’ve worked with for years, but I find those product pack manufacturer packaging manufacturers, I’d work with them to bring out the brand. And let them know what our brand is. Let them like let them tell us how we can be better than anybody else in the business. And it’ll always come down to the little things. It might be a metal class that costs you half a penny, it might be a sticker, it might be handwritten notes, it might be, like I said, the unveiling. So what we can put on top, it’s almost like the layer before you see the chocolates, it might be a mess. Again, the messaging along the top, it’s the outer box as well. So they’re specialists in this. And by doing that, and then adding your insert, sending it over. Here’s something that if you’ve never done this, you won’t believe I always when I’m negotiating my product, I get the manufacturer only to negotiate the product. And then I’ll go and do this myself. And when I come back, because I haven’t asked him about the packaging. I’ll just ask them if they can get it for us. It’s usually free. Very seldom do I get charged for kidding. It’s just something for the service. So here’s the packages, the boxes are coming over to you. Can you package my product in there and add the insert? No problem back to anyone listening, you just found a lot of money if you guys were listening to what Norm just actually shared that.
Andrew Morgans 32:23
That’s a big tip. All right, before we go into the finish that story, with the knife and the hammering in the packaging, I gotta get I gotta give a shout out to our sponsor Full Scale that I finding expert software developers doesn’t have to be difficult, especially when you visit FullScale.io We can build a software team quickly and affordably use a Full Scale platform to define your technical needs. And then see what available developers, testers, and leaders are ready to join your team at FullScale.io. To learn more we’re talking about, we were just sharing a tip about how you don’t let the manufacturers do your packaging, because you want to work with the experts, the people that live die breed this stuff. Same thing with developers or talent. FullScale.io is full of that. What they do all day, every day is full of amazing talent. When it comes to developers, check them out. FullScale.io Alright, going back to you, personally, to finish up with a story because we’re talking about just like, you know what to do when things go wrong, how to make things better how to pivot, we’re talking about you know, you’re talking about perceived value by things like a metal class for, you know, a layering before you see the product and unveiling of the product, so to speak. And it has to come from your background with your dad and your brother’s business when you guys got into packaging, manufacturing and learning some of those things that you’ve now taken into the Amazon industry. You know, as your wealth of experience we’re talking about you got the manufacturer to hammer, I believe that hammering the blade for a finish. Yeah, is that right? That’s what you mean.
Norm Farrar 33:57
So it was the same blade, it was the same metal one where the layered one was hammered. And the difference was the package. So you’ve got a different looking knife. We put the logo in the rivets like for the handle. It was a little bit different but it didn’t cost us anything more. Put it into this wooden container with even better packaging. And it was just the outside package was more like an eye box with a silhouette full color process on the back. So you know if you got it it kind of looks pretty cool. You have that whole anticipation thing like an iPhone, opening it up. And there’s the box you take it out. There’s the knife it’s unveiled. You can’t even see the knife when you take it. You open up this woodblock that has this class, and now it’s got this sort of silk with this information about the knife that went into the marketplace for 224 bucks. Whew, it was $3 where the packaging. So $16 plus $3. That’s $224. Now. Now there is a tip here and I when I talk about perception, and I hope this isn’t like this is going to take a minute to talk about. But whenever I look at Amazon, I look at, whenever I look at any marketplace, Amazon in particular, you’ve got your first page. And in that first page, and let’s talk about Dead Sea mud, I know Dead Sea mud. So if I go and do a search, I’ll see something that comes out at the lower end, around $7 to $14. Those are all the manufacturers or the newbies that have just taken a course that don’t understand anything about pricing, or perception. So they’re just trading dollars, seven bucks for an eight ounce jar of Dead Sea mud, up to $14. And you can see the manufacturers. It’s the same plastic jar, it’s kind of the same look, some of them are a little bit different. But then there’s this valley that you go up to the second tier, the second tier 24 to $44. These are sellers that know what they’re doing. They don’t know if they want to take the risk. And they’re usually pretty good. The slide deck is pretty good, they have a pretty good listing. And they get 24 to $44. And it’s the same thing, eight to 16 ounce, then there’s a huge jump, it goes from $70 up to 95 bucks, the $95 brand that’s on Amazon is 3.5 ounces. Now the traffic does drop off on this particular one. So it’s not 100%, you have to measure how much you want to sell. Now just imagine 3.5 ounces, they would be killing it with profit at $95. And I remember that was about six months ago, I checked that out. I don’t know if it’s exactly the same. But you do that with any product. Now here’s the very most important thing. Most, like 99%, I don’t know 80%, it’s the high majority that are exactly like that. You as a brand, like you have to work with your manufacturer, or you have to have that AI is the competitive analysis side, where do you want to come out. So if you come out and you say, Oh, I’m gonna just bump my price up, and you have a crappy slide deck, or you’re not, you’re a plus content, or you Storify all that doesn’t align. So you have a bad product, guess what, you just bumped up your one star reviews, because people sense it’s not worth it. Where I see a lot of the opposite happening is that you’ve got a great product, you’ve got a great customer experience, you’ve underpriced yourself, and you’re missing out on sales. Because you could have this great user experience, people are gonna love it give you tons of reviews, but you shouldn’t be in the upper tier, the only time one of the strategies we use is that when we’re doing a launch and say it’s a really high quality item, we’ll look at the higher price at the second tier. And we’ll launch it at that. So we’ll provide a discount showing people that the listing is immaculate, it looks fantastic. It’s worth that higher tier. But people are going to look at psychology as just psychology. They’re going to say wow, I can get that under like in the second tier now they had no no clue about the second tier, but you’ve gone to websites and you said wow, this is 24 bucks, you know, and all the like there’s a whole bunch of these other ones at 60 bucks or whatever it is. And it looks like it’s the same quality. I’m gonna get the $24 one. Well, we do that on the launches of a bunch of other things as well. But that really really works well. If you understand perception and pricing. You can really clean up.
Andrew Morgans 39:21
Yeah, I think something else that’s like an added bonus to great packaging. Alright, a great presentation. If you’re selling an item that is a giftable item, right so I’m the uncle buying something for I’m really buying it for my sister for her daughter jet. Okay baby jet. But what I’m buying the gift for is a baby jet that is one or two years old. Right? What I’m buying it for is my sister. She’s gonna appreciate the gift for her daughter. Okay, and so in that aspect I’m like, is this item gift ready? Like if she goes and looks at me on Amazon and buys the cheapest one. Which one Did I buy her? Right? So this is just like a, you know, a perception thing as well. But a lot of people will go and be like, Oh, I got this gift from so and so and they go and look it up or, you know, they kind of want to see what they got, like, I don’t know the price of things sometimes. So I go to look it up to be like, did I get what kind of gift and I get okay. And if they come, and now my sister is going to feel like she got a better gift if I didn’t buy the cheapest one. And if the listing looks good, and if when it presents, it’s like, as if it’s a gift for her, even though it’s a gift for her daughter, these are all the things that I’m thinking about as the uncle trying to buy the right gift is like I don’t want to be seen as the one that bought the cheap gift, I don’t want to be seen as the one. So when I’m looking at the item to buy, and I’m like, which one do I want to spend on the 24th? Or the 65? Or the 99? You know, I’m like, Okay, I’m not gonna get the most expensive, I’m definitely not going the cheapest. And what’s the best value I can get like, oh, I can get this one that should be 99. But 65. This will make it look okay, even if I got a deal, I didn’t go cheap. I like to buy her a nice kit. So it’s all this perception thing? Yeah, this emotional feeling about me being a gift of value. Because it’s going to open well, and it’s going to, if it’s just for me, I might be like, I understand marketing, I’m gonna buy the $24. One, it’s probably the same product, same same Dead Sea mud, and I don’t really care. So I’m buying it for myself. But if I’m buying it as a gift to somebody else that might not think like me, I’m going for that item that’s going to have that perception of the value, right? A little nuance there. But it’s something that I think convinces buyers to purchase as well, when it comes to packaging and getting ready. And nine all those things, too, is, you know, that’s why I worked the value. Norm Okay, so we talked about the knife. You know, we got a few more minutes here. And I want to talk about just like you know, some pivots and things like that. I think we got a few more minutes here. You talked about your product launches, success rate, maybe being at 20. And, you know, I don’t necessarily disagree with that. I’ve done less product launches for myself, and I’ve done for others, in a lot of times, like, you know, being able to pick some of those winners, but I do, I do agree with you that when you’re doing it for yourself, you’re not having to prove a win for someone else, like a client, like under an agency work. And it’s just like, Okay, how much of my effort and time and money do I put into this project before I pivot or try something else? What’s your kind of mindset around you know, a project you’ve been working on for several months that you’ve like, kind of gone to launch? And it’s, it’s not working out exactly like you want for you as a seller that has a ton of experience? What’s your mindset around? How do you conquer that as a team, like how you pick, how you move, how you pivot on? Is it like liquidation? Is it like a lesson learned? Is it like, Hey, I have all these other alternative ways I can kind of get myself out of this project? You know, what’s your thinking? Kind of? Is it just that you’ve put your mind into a place of saying, Hey, I’m really I just need to launch 10 to have these 10 will take off? The other eight are just expected. And that’s like your expectation going in? Or do you expect to win every time and just have like kind of a silver lining when it doesn’t win?
Norm Farrar 43:12
I definitely go into it wanting to win. And usually if I’m doing my proper competitive research and analysis, I’m pretty confident that I’m going to get a certain percent of the market share. So if it changes, or if there’s an issue, I want to know why. It’s, there’s no, there’s no magic formula. But there’s a consistent formula that if you just do this, and you do it properly, you should be able to get some sales. And if it doesn’t, and let’s say a product launch doesn’t just go your way. Okay, well, we look at exactly what’s going on, take a look at your indexing, take a look at your keywords. And there’s very seldom where I say this is a bomb, I mean, it’s no good. Usually, it’s just something I’ve overlooked or something that the teams overlook. Maybe we did a poor pre launch. So we like to get the word out there about what we’re doing before we actually launch something. Do we have a mailing list that we have for another like maybe it’s a new variation of something or another product and other asin that supports the brand? Do we have an email list that we send out if you know anything to let people know about it? Or are we let’s say you have Amazon posts or live are we doing anything there? Do we have the right videos? Did we test out our slide deck? These are all things that you do in your agency. But there are all sorts of little things that you can do. It could be to pick foo and figure Yeah, just just run a few polls. calls by people and see what they have to say. Maybe it’s that simple. Or by the time you started the process a few months ago, what did your competitor do? And we’ve seen that where the competitors come up with something modified, or they’ve lowered their price, or they’ve done something different, that was missed out on, or we didn’t address. So oh, let’s just let’s just say that there’s a negative comment that came out, that started to eat up or create a problem within the market share. And people were going to different products, similar products, but different. Well, you could have adjusted that. And maybe it didn’t, maybe you didn’t do a good enough job, addressing the benefits or the quality of your product, or one of the things that we’re doing right now is what we believe in. And that’s a big statement. And our fifth bullet point, some people put foreign languages, we put what we believe in, we believe in x. And we think that’s pretty important. Some of the time, it’s just not, you’re not engaged enough. And, you know, I listen to all these experts, you know, that they say that they launch and they all have different launching strategies. So as us, you know, I’ll go from one keyword phrase, very short, title, I’ll mix it up to a longer phrase, I’ll put three in there with a benefit, you name it, and we’ll play around with it. To see what works best, because what will work best in one niche might not work best in another niche, but don’t give up and always improve. So every time you go to order something, your manufacturer is there to help you. Or ask them for help. But see what your reviews are. See how you like it if you’ve got negative reviews, and they’re true? Well, don’t let ego come in, you know, don’t let ego stand in the way. Adjust it, and let people know, in fact, was it you? No, it was somebody else that was talking to me about how you can launch a product now that says it’s a similar but new product and have that on your listing. And you can increase your sales now this is them talking about me 30% extra sales that they received. Because if somebody wasn’t happy maybe with this product, or psychological again, they want the new product. Oh, I gotta get it. They’re clicking on that. That module that’s popping up now is that display.
Andrew Morgans 47:49
Wow, I hadn’t heard of that.
Norm Farrar 47:52
Yeah, I only learned about reprints ago.
Andrew Morgans 47:56
Wow, you might have to hit me up offline. And show me an example of that if you have one. Because I’m always trying to learn but something you said earlier in the show, when we were just talking about your your background and going through that flow is very in line with the way that I think and why I love Amazon ecommerce is because of someone that’s add someone that’s a serial entrepreneur myself, I’m always trying to innovate and learn new things. Amazon ecommerce brand launches, product launches is an area where you’re always learning, there’s always something that hey, I’ve done this 1000 times it worked. And this time it didn’t. Why did it not work? What’s going on? Like just some of the things you thought of that could go wrong on a product launch? You know, you were like, so many people will be like, Oh my god, PPC costs are super high. And Chinese sellers are now like in the market where I sell, you know, they’re going low price, and how do we compete? Well, in my mind, it was like, Okay, let’s just get better at everything else. Let’s get better at content. Let’s get better at storytelling. Let’s get better at thinking about bundles, or let’s get our packaging one size smaller. Let’s make our packaging amazing when everyone else is doing brown cardboard, or let’s do live and post because no one else is doing that yet. Or let’s add video because no one’s doing that yet. Or, you know, all the different things you’re bringing up where you’re like, let me go find an advantage here. Let me go find an advantage here. Instead of just obsessing about the one thing going wrong, what’s an area you can focus on that you can control or you can get better in? And I think that’s what a bullish market does. It essentially brings out all these new things that you got to focus on and, you know, adjust to pivot to when something’s going on. And that’s what I love about Amazon is because it’s an entire business model where there’s all these differences I guess, like focuses from supply chain and logistics and fulfillment and warehousing to product development to version two to very, you know, on and on and on. And which ones do we want to focus on if one comes into kind of like a lot of competition or a roadblock? Okay, where else can I focus? Where else can I get better at and if you’re a competitive person, if you love to be getting better, there’s no better space, I think, than that one. And that’s just, when you when you when I think you’re a seller, you’re a brand as an agency you get on these phone calls with brands are like, Why aren’t things working? And it’s like, let’s go, let’s go to the basics. What else has happened in the market? You know, has bad reviews come out on similar products, has someone lowered their price or is there a new competitor that we didn’t know of? You know, what’s changed from our research from when we thought this was a good idea to allow, and being able to pivot when those challenges come up, I think is the ultimate, you know, test sign of a true entrepreneur and a true and a true Brand Builder. So I went on a rant a little bit, but just passionate about like, if you really want to be the best at this, if you want to give it your ultimate focus, it’s it’s, you do the right things, these you know, you will get a certain amount of share a market share a certain amount of sales is so so true, like you said, Norm as we get close to those our time, because I can keep picking your head on these brand launches and how to pivot I love your insights. What’s something I know something that you personally are working on? We spoke about it on your podcast Lunch with Norm offline. And I’m excited to be a part of that. But I don’t know if you want to share that or something else. But what’s something that you and your team are working on? You know, going into 2023 that you’re excited about? And then also where can people get in contact with you? You know, find your podcast, you know, get in contact with you personally, I’m going to have it in the show notes. But for anyone listening, we’re going to get in contact?
Norm Farrar 51:41
Yeah, sure. I turned it off. I know nobody’s seeing the video. I turned it off just because I was having problems hearing it. But one of the things I just want to add to everything that you said is don’t be afraid. Don’t first of all, don’t What if a brand new product launch. So many people think that if it’s a death, they never do anything with it. The second thing is everyone pays their Amazon tax, and everybody makes mistakes. What you do is you pay those Amazon taxes, you make a note of them, and you move forward with your second, third, fourth, and fifth launch. Just be resilient. And that’s what it takes to be a successful seller. And always keep learning and keep listening to podcasts like this. And you’ll just continue to learn. So the best place to hear from or contact me would be I’m pretty much anywhere on the internet. We’ve got a bunch of social media. So just you can look for Lunch with Norm, you’ll see a guy with a beard, that’s me. Or you can just Norm at AMC dot club. I do have a bunch of stuff going on in 2023. One of them is that I’m working on a new challenge. And it’s going to be something that’s influencer based. I’m an old guy, bald with a long beard. I have no not a single influencer as a buyer influencer. So what I’m trying to do in 2023 is create a system for Amazon sellers on how to reach out to influencers and what to say what to do while I’m building out this buyer account. So if I can do it, everybody else can do it. Let’s kind of say it’s more of a fun thing that I’m working on. And we’ll see what happens. But if you want to reach out, we got a podcast that happens every Monday, Wednesday, and Friday. Andrew was just on it. He had an awesome podcast, and we’re gonna be publishing it over YouTube later on. I think it’s gonna be next Tuesday. But that’s it. That’s it for me.
Andrew Morgans 53:52
I love it. Norm, thank you so much. And to our listeners, as I said, I will have his contact info and how to find Lunch with Norm, and how to find his website. You know, I know Norm does a million things. We only talked about a couple of them on the show. He’s all over the Amazon industry. From sourcing to owning brands or launching products to having an agency himself. You name it, and this next venture is going to be fun. I’m hoping to be a little part of it as well. Thanks again, Hustlers, for tuning in. And thanks again to our sponsor FullScale.io. Do you need to hire software engineers, testers, or leaders? Let Full Scale help them have the people in a platform to help you build and manage a team of experts. When you visit FullScale.io. All you need to do is answer a few questions and let the platform match you up with a fully vetted, highly experienced team of software engineers, testers, and leaders at Full Scale. They specialize in building long-term teams that work only for you to learn more when you visit FullScale.io. Thank you, everyone, for your time and attention. Thank you Norm so much for your time and your expertise. I know you dropped a ton of gems and tips today. If you guys didn’t get them, I’m telling you they’re there. They’re listening again, some real value, add in ideas as well as profit saving things. The tip about even getting kitted by the manufacturer in the way that you kind of bring that up to them was absolute gold, so I’m going to hammer that again. And then, not to mention and not to forget Lunch with Norm, check out that podcast I got on there. Had a lot of fun. I know that we’ll both have to have each other back on the show. Do a little, do a little follow-up on some of the things we’re working on. And get to know you just a little bit better. Thanks again, Norm. I’ll see you next time.
Norm Farrar 55:36
Hey, thanks a lot for having me. You got it.
Andrew Morgans 55:39
See you, guys.