http://www.worldwidebrands.com.com A podcast series focusing on small business issues. en-us Copyright 2008 Worldwide Brands Inc., All rights reserved. Worldwidebranads.com radiohosts@worldwidebrands.com 120 eCommerce Worldwidebrands.com eCommerce, Dropshipping, Dropship, Wholesale, Products, Sell, Online store, Home business, Home based business, Work at home, eBiz owner, webstore, Wholesale products, Drop ship, Dropshipper, Drop shipper, Wholesaler, Distributor, Wholesale supplier, Drop shipping, Dropshippers, Drop shippers, Wholesalers, Distributors, Product, Wholesale, suppliers, Supplier, Suppliers, Wholesale supply, Wholesale source, Wholesale sources, Product sourcing,eStore, eCommerce store, eBiz, Online business, Internet store, Internet business, eBay, Auction, Auctions, Online auction, Online auctions, Home eBiz, Home-based business, Market research, Find products, Find products to sell online, eTail, e-tail, eCommerce retail, eCommerce website, Internet retail, Online retail, Online sales, Liquidation, Importing, How to import, Yahoo store, Yahoo stores, eBay store, eBay stores, Product supply chain, Supply chain, Volume wholesale, Amazon store, Amazon stores, Volume wholesalers, Light bulk, Light bulk wholesalers, Bulk wholesalers, Bulk lots, Liquidation lots, Instant import buys, eCommerce wholesalers, Sell online, Online seller, Online retailer, Internet retailer, Internet seller, Retail, Retailer, Retailing, eTailer, e-tailer, website owner, web store Tips and techniques for achieving eCommerce success from the Internet's leading experts on product sourcing for home eBiz. no Thu,20 Nov 2008 00:00:00 GMTFind out why prices are going up on China imports and how to keep your costs down when sourcing China products.Mon,15 Sep 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO091508_Entrepreneur_podcast.mp3-00:-19:-54Learn what you should know before attending an international trade fair and what to ask potential suppliers when you get there.Mon,8 Sep 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO090808_Entrepreneur_podcast.mp3-00:-18:-32Find out what trends are influencing buyers this Halloween, learn how to capitalize on the season in your own eCommerce store - regardless of what product category you sell in.Mon,1 Sep 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO090108_Entrepreneur_podcast.mp3-00:-18:-22Find out where the affiliate industry is headed and how you can make money with affiliate marketing.Mon,25 Aug 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO082508_Entrepreneur_podcast.mp3-00:-17:-52Rob: Affiliate marketing is an effective way to promote your products, but you want to stay on top of the trends to ensure that you're getting the most out of your affiliate program. Joining us is Shawn Collins, cofounder of AffiliateSummit.com, to share the latest developments affecting the affiliate industry. And if anyone should know what's going on in the affiliate industry it's Shawn.

Rob: Thank you so much for being here. Welcome to the show Shawn.

Shawn: Thanks a lot for having me, it's great to be here.

Rob: Shawn, if you'd like to start out here with a brief history of affiliate marketing.

Shawn: Sure thing. A lot of people attribute the whole concept to Amazon.com and that's somewhat true. The real first player in affiliate marketing was CDNow. They beat Amazon by about a year or so with somewhat of a primitive affiliate program. But then Amazon came along and they really formalized it and made it a lot more of a popular concept and sort of revolutionized it. So I'd say they were maybe the cofounders of the concept, and this was back over ten years ago now. And since then there wasn't an affiliate network at that point, so Amazon created their own technology. But soon after they came out and started to grow like wildfire, then some of the big players that exist today started launching like we've got CommissionJunction and Performics is owned by DoubleClick as well as LinkShare, and a number of other players have followed since then.

Rob: So for all the new folks out there, can you give us a simple example of how affiliate marketing works?

Shawn: Sure. Probably one of the easiest examples is to use Amazon since they're so prevalent. Say if you had a hobby page about your favorite baseball team and you might want to work with Amazon to feature a couple of the books on that team you'd put them up there and say you put the cover of the book and a little description of that book. If somebody clicked on a link for that book and went to Amazon and purchased it, then you would earn anywhere from maybe 5% to 7% on that book purchase. So it's basically just performance marketing, if you refer a sale you earn a commission on it.

Rob: What are some of the current trends in affiliate marketing?

Shawn: I'd say two of the biggest ones are mobile phone marketing and video and they're both really in their infancy, so it's an exciting time for them.

Rob: Can you talk a little bit more about each one of those and how they work?

Shawn: Sure, absolutely. As far as video, there is a lot of talk these days about how YouTube is going to be monetized and affiliates are sort of very new to how to create video and a lot of the merchants that run affiliate programs are sort of at the baby step stages of it too. But there are a handful of companies that are using some vendors such as one called WebVideoZone where they can actually make the video clickable and imbed affiliate links into it. So that's a way that the affiliates can actually feature some video content, say a commercial for their company, on their site and have different calls to action in the video and make it interactive. But with the way that YouTube is going to work is they have a couple different ways they're going to enable people to create videos to monetize them. Some of the more traditional ways are to just have a pre-roll and a post-roll ad which is sort of a commercial that's maybe 3-5 seconds right before and after the video. Whereas now you just see the video itself on YouTube, soon it's expected that people are going to have to, I guess, sort of endure a commercial before and after each one. And also they're looking at doing some things with inline ads where instead of having the before and after commercial they'd have maybe on the bottom 10% of the video screen just a text ad and a logo to advertise a certain company.

Rob: Has YouTube tested any of those types of things yet?

Shawn: Yeah, these things have been in beta for a limited release, so I haven't actually been able to play with it myself, but I've seen some other sites who have been testing it.

Rob: Huh. So how do affiliates promote affiliate links?

Shawn: In the early days it was really just sort of people who had content sites would just put up a 468 x 60 banner, it was sort of a cut-and-dry thing, but it's really evolved these days where people are using pretty much any message that you can market with online. For instance, people that have blogs or social networks, email lists, video, pay per click, search engine campaigns, those are all different ways people are promoting their affiliate links.

Rob: Right. Really, in a way it's very similar to information marketing, except that it's really pointing back at another company.

Shawn: Yeah. And there are a few different ways you can have an affiliate program. The most popular way is to do it on a revenue share like the example of Amazon where you can refer a sale and get a percent of that sale in commission. But then also a very popular method these days, for instance with Google AdSense, is that you can run ads on your site with a bunch of text ads and if somebody clicks on that you get paid a flat amount for that pay per click fee. And then also there's pay per lead if you get somebody to fill out a form, say maybe a lead for a debt consolidation company you'd be able to get some kind of flat fee for them as well.

Rob: Great. I know this is a difficult question, people always ask me it, how much can someone expect to make as an affiliate? Can you give a range? Are there people making full time livings being affiliates?

Shawn: Yeah, the minority of people, and people throw out a lot of different numbers like the 80/20 rule or 90/10. I'd say it's probably even more like maybe 98/2 with 2% of people making about 98% of the commissions out there. The majority of people aren't making a living on it, but it's certainly possible depending on how much savvy you have in marketing and the resources you can put into it. I think if somebody is starting with not really any kind of budget they're not going to go so far, but if you have some capital to invest you can make some big things happen. One popular example is a guy name Jeremy Schoemaker who has a site shoemoney.com and he details the different things he's doing and he has become quite a success well into the 6 figures, if not 7 figures. And there are a lot of actual corporations that act as affiliates so it's not just the individual making the money there. Like UPromise.com functions as an affiliate with hundreds of retailers, and one longstanding example in the coupon space is a woman who runs a coupon directory where people go if they're going to shop at, say Gap.com or Amazon or Apple and they want to try to get free shipping or 10% off. This woman name Connie Berg has a site called FlamingoWorld.com and I think it was back in 2002 or so that she grossed a million dollars that year as an affiliate.

Rob: Wow. So I'm hearing a lot about Affiliate 2.0. What's that about?

Shawn: It's sort of really the next step whereas the first iteration of the industry was really just text links and banners. Now people are moving a lot more into using web services and data feeds and video and it's really just sort of the next step of the industry where I think the traditional banner is going to go extinct at some point. Nobody really clicks on it anymore and it really doesn't generate any revenue. People are looking for more creative ways to reach out and generate revenue as affiliates.

Rob: And that term, affiliate 2.0, has kind of become associated with that?

Shawn: Yes, absolutely. And it relates in a lot of ways to web 2.0 I guess in terms of being tied to user-generated content and just sort of innovative ways to market.

Rob: Right. You mentioned user-generated content. Can you explain what user-generated content is and give me some examples of that?

Shawn: Sure. I guess one example would be YouTube where you've got tens of thousands, maybe hundreds of thousands, of people that are on there that are making their own videos and uploading them. So it's just a marketplace where they can run ads against those videos. So it's a very attractive business model because you've got really the public out there that's providing your content instead of having to pay professionals or editors and different people to turn it out for you. And another way you see that is with blogs. These are social networks like CafeMom.com that's essentially a big social network of moms around the U.S. and it enables them to go in there and they all have their own built in blog and they can share their thoughts and post different things about their families and it's a big thriving community. So every day you go in there and there's tons of new activity from these people and they're all reading each others activity there. So CafeMom is able to serve up ads against that.

Rob: And affiliates can participate in something like that with the moms? I mean, do they ever have any policies against that?

Shawn: I guess the way that affiliates can benefit there is CafeMom is going to be launching an affiliate program so they can send leads over there for new members and they would get compensated on sending new members there. But that was an example of user-generated content in general, but what an affiliate could do is set up their own kind of community like that. There's a software that I use myself to run a social network called SpartaSocialNetworks.com and they enable you to sort of have a ready-made customizable social network where you can sort of replicate that to whatever niche you're in and you can run ads against it, either affiliate ads or Google AdSense or whatever you want to put in there.

Rob: Now, you touched on it briefly, but how can affiliates make money from video?

Shawn: In addition to YouTube with their upcoming opportunities to monetize it, affiliates can also use that. There's a site called Magnify.net where you can create your own video community and you can either leverage the videos that you've created yourself or else you can import videos in that other people have put up at YouTube or Revver.com or Google Video so you can specify videos for a certain niche through their spider technology and they sort of bring them in there and you don't alter them in any way, you're featuring those videos in your environment there. If you went onto YouTube you can get the source of that video yourself and put it on your site, but this sort of automates it for you. And the way this works is you can input your Google AdSense ID into the system there as well as ID for Revver where they have pre-roll and post-roll ads and you're able to get 50% of the income that's generated from the traffic you send there.

Rob: Hmm, wow. Any other ideas for monetizing video?

Shawn: One thing I've been doing is just create very content-rich video and include a URL on the bottom of it so it's sort of a subtle call to action for people to get come to get more information and when they go to that URL I'll have affiliate ads there and relevant content. And hopefully within that content I have embedded some text links to sell different products and services.

Rob: Sure. It makes a lot of sense. So Shawn, we've spent a lot of time talking about video. What does an affiliate need to do to actually create videos?

Shawn: There are a lot of different levels depending on what kind of quality you want to put out. At the very base you can do it just by having a webcam and some kind of editing software. I use one called Sony Vegas, it's available in a lot of places for just a little bit more than $100 and it enables you to have all kinds of transitions and effects and titles and a quality looking video. But if you want to have something that's more elaborate and professional, then you'll want to get a more professional digital camera and tripods and lights and things.

Rob: Can we talk about making money with social networks again?

Shawn: Yeah, absolutely. A lot of folks in the affiliate marketing space are getting worked up about FaceBook maybe supplanting MySpace as the big place to really go and participate, but I think MySpace still has plenty of life in it. One way that I work there to monetize it is within my profile I have a blog there, so the blog that I use just to post everyday myself, I just copy it over to MySpace and have the content there to get some incremental readers. Generally there are a lot of links built in to different resources that are affiliate links, so that's one way you can monetize it. And also just by making different friends there you can communicate with them through the bulletin feature. You're not really supposed to be using that in a commercial way, so you have to be careful there. I would really use it for a social network to meet people and then maybe try to do relationship marketing with affiliate links that way, not too really be pushy and push the envelope there. But similar to the way you can post a blog to MySpace, FaceBook has actually automated it so you can just set up whatever your RSS feed is for your blog and every time you post to it it imports it into your profile and they have a thing where they refer to it as a note. You can post a note, but also each RSS feed will suck in each post you make to your blog and post it automatically as a note in your FaceBook profile, so it makes it a lot easier for you to not have to worry about another place to go and do some work.

Rob: Sure. What about sites like Twitter and Tumbler?

Shawn: Twitter is a neat one. Actually taking a step back for a second, they just recently synched up with FaceBook so you can post a Twitter from FaceBook. But Twitter is basically known as microblogging where you used to have 140 characters and the purpose was to say what you're doing and what you're up to, but a lot of people will go in there if they have a new product or service. They'll just post a short blurb about it and put a link or if they just blogged about something they'll just put the link to the blog and the link to that within Twitter. One example of an affiliate who is using it in sort of a neat way is there is a site called TwitterLit and the woman who runs that will twice a day take the first sentence from a book and post it to Twitter along with her Amazon link and she's become quite popular and has sort of a cult following. A lot of times I'll click through because I'm curious what the book is based on that first line and I've actually bought a couple books based on what she's doing there. So that's just one example of a very innovative way you can take that very small amount of real estate and monetize it.

Rob: Anything else you want to add about affiliate marketing?

Shawn: I guess I just want to say one thing in the future I would want to touch on is that mobile phones have a big future there. People using SMS which is the short message service and sort of how you see on American Idol how people can vote with a 5-digit number to register a vote. If you do one of these votes with these things called short names you can send something back an auto-response and you can use that with some kind of link to try to sell something. I think that's the future to monetize that in different ways with mobile phones.

Rob: Fantastic stuff. That is our show for today with Shawn Collins. Thank you so much for being here. Remember you can find them online at AffiliateSummit.com.]]>Find out how to create financial security and fortify your total income by building in many revenue sources.Mon,18 Aug 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO080408_Entrepreneur_podcast.mp3-00:-21:-59Find out what criteria to look for in an affiliate program, what questions you should be asking, and how to make sure you're working with the affiliate programs with which you can make money.Mon,4 Aug 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO080408_Entrepreneur_podcast.mp3-00:-15:-12Chris: Thank you for joining us today. I'm Chris Malta.

Rob: And I'm Robin Cowie. Affiliate marketing is a terrific means of driving traffic and increasing sales, but there are certain things you should look for when joining an affiliate program. We'll be talking to Wade Schlosser, Director of Business Development for AffiliatePrograms.com, about what questions you should be asking in order to determine which program is right for your online business.

Rob: Wade, welcome to the show.

Wade: How are you doing?

Rob: We're doing really well, thank you. So after you've researched a niche that you're interested in, what's the beginning point here? What should you look for in an affiliate program?

Wade: One of the #1 things that you look for is, does this program provide affiliate training and support? Do they have a dedicated affiliate manager? Some companies are awfully small and they don't have a dedicated affiliate manager, however even the president or marketing coordinator or assistant might be helping with that. And that's awfully important so that you can ask questions and get any support that you need and get provided the materials on time.

Rob: Sure, an affiliate manager can make a real difference.

Wade: Yeah. Affiliate marketing is no longer just a plug and go situation, it's another business unit and it needs to be treated as such and it's more of an active role now than it is passive. So some of the other things that you look for are, does this program provide keyword research for you, content creation, you know, the content necessary for you to pitch the consumers correctly and convey the type of message that program is putting out there. Do they provide coupon and data feeds? Now it's not just a manual process of putting products or services or information on your website, it's all dynamic and you can just cut and paste a code into your website and now the merchant automatically updates that with a data feed, that's awfully important. It takes a lot of time and energy away from you and makes sure that all the products and services are up to date.

Rob: And sometimes that would be known as RSS feeds.

Wade: Exactly.

Rob: You know, not to dive too deeply into RSS feeds, but that's essentially what you're talking about where a company will provide that information and you just put a snippet of code on your site and then it feeds that data there. We do that, for example, with newsletters that we have and articles and podcasts for our affiliate program. So I just wanted to illustrate what he was talking about.

Wade: Exactly. And some programs don't quite voice that accordingly like I believe you have them advertised quite a bit across the website to let people know that you have these available for them.

Chris: Yes.

Wade: And sometimes you have to ask them. So it's advantageous to be able to post that and make it known that you do provide these. Another thing that is kind of industry term is private labels or white labels. Nowadays as an affiliate if you go out, you might own a domain name that communicates the brand or communicates that industry very effectively and if you talk to your affiliate manager or the company you're working with to see if they provide a website for you that has all the content information in there, has all the pictures and the form and has all the things necessary, it's like a big selling tool and it's just a cut and paste situation where you can upload that and now all the affiliate has to do is do the marketing which that's what the affiliates are really good at.

Chris: Right.

Wade: Alongside that is a 1-800 number. Everybody wants to plaster their 1-800 numbers. The percentage of people that call now that are unsure if this a real company, every company wants to put up a 1-800 number because the majority of them call just to even check if it's a real company.

Chris: Sure.

Wade: Well, the affiliates are sending that traffic and they should get credit for it. So there are plenty of solutions out there now that you can have dedicated 1-800 numbers and when they call in, it tracks directly to that affiliate, the affiliate gets credit, and everybody's happy. The newsletter creation is another idea that you can supply your affiliates. And those are just a few ways to get training and support from an affiliate manger standpoint.

Rob: You say that it's important to find out what kind of payment and commission plans a program has. Can you tell me why that is and what goes into that?

Wade: Absolutely, I can touch on that quickly. As an affiliate when you roll in and you figure out if this program, is it a sale, is it a lead, is there just a form, or do I get paid on click, or do they mix it up, it's important to know where you get paid, because some people have forms that go endlessly it seems like and the consumer gets tired as they roll through there and that's less credit to the affiliate.

Chris: Right.

Wade: So that's important to go through and make sure that you understand what action you're getting paid on. There's a thing that you kind of have to look in terms and conditions and that you need to watch out for or talk to your affiliate program manager about. It's called stat finalize. So what happens is they finalize all returns, all charge backs, everything on a certain time of the month, for example, the 10th of the month they close all commissions, they close all returns back, it's done, reporting is finalized for the previous month's production, and you want to make sure you understand when that shuts off or when that date is, so that you can actually finalize your numbers with your merchant to say, hey, I've sent so much traffic, I'm due X amount of money. So that's something to watch out for. And then obviously the frequency of when you get paid and the method of how you get paid. As an affiliate, especially a large one, you have to get paid as quickly as possible. Even the smaller ones need to get paid as quickly as possible because that's their money that they're funneling back into your marketing campaigns to drive you more business.

Chris: Right.

Rob: I know that when we introduced PayPal for our affiliate program that we got a really strong response from our affiliates because really it's instant.

Wade: Yeah, absolutely. Not only is it frequency of payment, it's how you pay. You know, you cut the check and the check doesn't get there or it gets lost and it takes forever to get over there and PayPal is a great example of where, when you finalize the numbers, you can just post the money over there and they can go get it and then dump it back into your campaign.

Chris: Right.

Rob: Very important.

Wade: Yeah. So I think people take that for granted for their program management. And then they just state it on the terms and conditions and the affiliates, if you don't ask and you don't get in there and pry into, try to get them to help you promote them, they're reluctant to let you know, because they have cash flow that they have to watch too. So it's just a question the affiliate needs to ask and the program manager will let you know and then you can make it the best you can together as a team.

Rob: Yeah, you know, while we're talking about this commission structure I want to bring up something, if you don't mind, that's kind of related to this, but not really. One of the things that we've found that has been really bad in some of these areas is sites that give a really skewed affiliate percentage. We've found that to be kind of a sure sign that the site behind offering that skewed percentage is probably not very ethical and probably in business for different reasons. Have you ever run into that kind of an experience?

Wade: Well, this is why we're actually on the show together today is that as an affiliate there are so many scams and so many opportunities out there that you have to watch out. Absolutely there are programs out there that claim they're going to pay X amount per lead or X amount per sale and it just seems obscene. It's not what the market is typically used to, and that's a red flag.

Rob: Yeah, it is a definite red flag. What we've found is that what they're really looking for is the customer membership information, they're really looking for the customer's personal information that they'll then turn around and sell for a high dollar value.

Chris: Right, it's something that we call lead generation when we talk about it actually, Wade, and I can give you a general example, a company who would sell something in our market, for example, worldwidebrands.com, we're a wholesale information publisher, someone who would sell something along those lines, and then what they're really interested in is turning over that lead to people who sell other things like coaching programs and so forth and they make much more money. They're not really interested in their product, they don't support their product really, they're just looking for those leads and they turn those leads over to people who pay much higher affiliate commissions to them when they sell that lead on other types of programs.

Rob: And really, they do a great disservice to the affiliate marketer.

Wade: That kind of leads us into the section of creative and the conversions of what's going on with that affiliate program and that company you're looking to promote. You need to, as an affiliate marketer, pull up to the website and actually go through the entire process as a customer.

Chris: Right.

Rob: Yeah.

Wade: And when you fill in that lead information you get 400 emails and ten calls the next week, you're realizing these people are just kind of in it for taking the lead information and reselling and reselling and reselling. Yeah, that doesn't promote a repeat customer, that customer isn't coming back to your affiliate site to find any more information, because...

Chris: I actually met someone over the weekend, who we know is an affiliate or ours and has a membership in another program that does this, and when he started backing away from that program that company contacted him and said, I'll tell you what, we'll give you 100% affiliate commission.

Wade: Oh (laughter).

Chris: Now there's an indicator that they're not really interested in their own product (laughter).

Wade: That's the classic bait and switch, huh?

Chris: Right, right.

Rob: Absolutely. Let's get back to creative here and talk about what kinds of things should people expect a program to supply and support within the programs?

Wade: Well, obviously it depends on your industry and if it's a per sale or per lead or per click, but you'll want to supply as many types of banners as you can for your search affiliates, you'll want to supply even the keywords, I mean, if you're a program that's out there to market you want to supply them some keywords so they can go derive some more keywords to find out what's going to convert for them and go down that line and help market with you. You want to supply text links because obviously now text links are getting higher conversion rates than the banners because you're not flashing out in front of people so much. You can follow it, you read it, you understand it and if the consumer is ready, then you can click through over to the property. Another thing is coupons and sweepstakes and sales and discounts. Always be fresh and new with your product and supplying that to your sales team, which is the affiliate marketers, affiliate marketers need to look in and make sure that your program manager is supplying these things for you so that you can have the best possible conversion with your consumer coming through on your property. So any discounts or sweepstakes offers that these people offer to drive the consumer back over to their property is a big deal. It's going to help you convert that customer. That's a question to ask them. And then you need to ask them, more importantly, which ones convert? Programs now have so many banners, so many text links, it's like an endless scrolling and it gets confusing. So that's why it's very important to have that support so you can have somebody to call and say, what's converting? Here's my type of site, here's the type of traffic, here are some of my demographics, what do you suggest, what do you see is converting in that area? And then supply me something either similar or give that to me to test and try to run traffic through.

Rob: Yeah, and that's an important distinction to make there because obviously different sites or different affiliate techniques are going to convert in a different way with different content. So it really has to be, again going back to that importance of that affiliate manager who knows who you are as an affiliate and what you're trying to achieve and can really push the right conversion content to you.

Wade: Right. And these are all questions from an affiliate standpoint. I guess I can't stress any more to say you have got to pick up the phone and do some research and call and email the program manager, whoever's in charge of that marketing channel, and get this information from them. Because sometimes they don't even display half of what they supply and you have to ask them to get this over to you so that you can best promote their company. And it's unfortunate, but if you think your audience is going to buy these products, you've got to pick up the phone so that you can get the best material to promote them.

Rob: Let's talk about traffic here for a second. Is it important to understand what kind of traffic they accept or reject and really can you explain that concept of accepting or rejecting?

Wade: Sure. The prime examples are email and incentive traffic.

Rob: Okay.

Wade: If I have an email database and I have been collecting names for the past three years and I've been buying similar names into my database and I am a good mailer. I don't spam. I make sure that the communication is good. I make sure that people are opting in and I understand the rules and regulations and I get high conversions. Some programs simply just don't take it. And you come in and you start picking up some creative and start running some of their stuff, then you don't read or call or talk to the affiliate manager about what you have and what you're doing. All of a sudden you rack up $5,000 worth of sales for the month and they turn around and go, well, how did you do this? I'm an emailer. We don't accept emails. Oh, well, looks like you're not getting your commissions for that month.

Chris: Oh geez.

Rob: Wow.

Wade: And that you have to watch out for. And incentive traffic works for certain industries, but it doesn't work for some. And you can't go out and tell your user, hey, I'll give you $100 to fill out a form. That's a little less quality lead. Does it work in certain audiences and do some programs take it? Absolutely, but you've got to be careful on how that membership works and how to incentive-ise that traffic and make sure that user understands what's going on. And if you have that type of traffic, you're not going to get commissions if you're promoting certain people. So it's important to understand, hey, here's my type of traffic, I'm this type of affiliate. Communicate that to the affiliate manager or to the team over there and make sure that you're in line with what they're looking for and what their audience is used to and talk to them about how to promote it if you have that type of traffic.

Chris: Terrific. That is our show for today. Wade Schlosser, again, thank you so much for being here. Remember, you can find them online at AffiliatePrograms.com. Join us again next week. I'm Chris Malta.

Rob: And I'm Robin Cowie.]]>Discover useful tips that you can easily apply to improve your own web page rank and increase your conversion rates.Mon,28 Jul 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO072808_Entrepreneur_podcast.mp3-00:-21:-52Chris: Thanks for joining us today. I'm Chris Malta.

Rob: And I'm Robin Cowie. Every eBiz owner wants to see more traffic and higher sales, but few know how to get there. One who is qualified to talk about SEO and web conversion is our guest today, Mr. Andy Jenkins, founder of online business forum StomperNet.com. Andy's techniques and practices have helped hundreds and hundreds of online retailers see success in their business. He is a long time friend of the show and a long time friend of worldwidebrands.com.

Rob: Andy, welcome to the show.

Andy: Thank you Robin, I still get goose bumps whenever you introduce me. Maybe it's the accent, I don't know.

Rob: (Laughter)

Chris: (Laughter) How are you Andy?

Andy: Hey Chris, how are you doing?

Chris: Good buddy, how are you?

Andy: I'm really good man, thank you.

Chris: Excellent.

Andy: Any better and it would be illegal.

Chris: Ooh. You may have to take a trip to Atlanta some time soon, huh?

Andy: (Laughter) It's the hot bed of internet marketing activity, I'll tell you.

Rob: So Andy, let's talk about content. Content is king. There are lots of challenges when creating a webpage. You have to make the copy compelling to the user and consumable to search engines. So how can I make the text of my webpages work for both the people reading it and the spiders ranking it?

Andy: This actually, Robin, if you hear a fuss in the background, it's me putting on my propeller cap and starting up my motor.

Chris: (Laughter)

Andy: You're really talking about something called keyword density when you talk about how to make your webpage compelling to the spider. For example, if I wanted to rank for the phrase "pasta" the old fashioned way of doing that was to put the word "pasta" throughout my keywords or throughout my body copy a lot of times. So I might end up with a page that reads something like, "If you're looking for pasta, you've come to the right webpage. This webpage is all about pasta, and if you are seeking new and interesting ways to think about or get pasta, this is the right pasta page for you."

Chris: Yeah.

Andy: So you end up with this really horrible-sounding, creepy webpage that was designed for the spider first, and that's absolutely not the way you should do it.

Chris: Andy, can we take just a step back and explain to people who may now know what a spider is?

Andy: Okay. Chris, again, the propeller hat is going, I apologize, let me take that off.

Chris: (Laughter)

Andy: And let's actually teach people what a spider is. A spider is the agent, it's the little software user agent that a search engine sends out to your webpage and it looks at it, and they call that a crawl, and that's the whole reason for the terminology "spider." And they look at that webpage and the spider says, I'm going to use my mathematical algorithms and I'm going to make a determination that the webpage is about this. So when spiders were dumb, you could fool them by saying what your webpage was about a lot in the copy of the webpage, and they would say, well, we're going to draw this conclusion that this webpage is about pasta, in that cruddy example I just gave.

Chris: Right.

Andy: Now, we are in the 21st century and the internet is a much more competitive place, and it's full of really smart people and really smart consumers, so that kind of webpage isn't going to fly anymore. People are actually on the internet to find out information. When I was thinking about what to talk about during this show, I really wanted this to be a tip-oriented show, I wanted people to have actionable items that they can take away. So we're going to talk quickly about something called latent semantic indexing. Now, you can go do a search in Google and find out what that's all about, but basically it talks about how keywords like "pasta" relate or are related to other keywords. For example, pasta is a form of spaghetti, is a form of elbow macaroni, is a form of fusilli or angel hair or linguine. Pasta has carbs. Pasta is usually served with sauce, marinara sauce or Bolognese sauce, butter, garlic. All those things are related to the phrase "pasta." And interestingly enough, the search engines know that. So the hot tip here is, when you're creating your webpage copy, if you're trying to rank for a phrase like "pasta," sure you can sprinkle "pasta" throughout your copy, but what you really ought to do is use other related phrases or words to "pasta" in order to really make it sing with the search engines and be very useful to your customers. It's really vital that we try to service both humans and spiders, and one of the ways to make sure that our content is not stale is to actually write it with the concept that someone is going to actually read it that has a brain. So I think probably we can move on beyond that, but a quick little tip is, if you need to find out what kind of words are latently related to the words that you have on your page, if you go to Google and you do a search for your keyword, but you put a tilde, "~," in front of it, like "~sports," you would end up with a bunch of results on the first page of Google that would have all of the latently related words to it. So "~sports" would reveal words like "golf," "basketball," "baseball," "hockey," and all the things that we would easily relate to the word "sports." So do that when you're doing your content creation, and that way you can serve both the humans, by getting interesting related words in there, and also serve the spiders.

Rob: Sounds terrific. Okay, so once I've got a visitor to my webpage, what kind of design tips can you give me that will help me keep them there longer or do what I want them to do next?

Andy: We've done a lot of studying on this, a ton of studying, and we actually have a member of the StomperNet faculty who is a cognitive psychology specialist, believe it or not, we've got somebody that is that geeky on board. And one of the things that we know by observing human behavior on a webpage, and we're talking about actually using infrared signals bounced off people's eyeballs to see where they look on a webpage, one of the things we know is that humans see in a very specific way when they're working on the web. Now, this could take years to explain, let me do it really quick for you. If you make your hands into fists and you put them together almost like you're simulating looking through a set of binoculars and then you look at a webpage, that's all that your eyes can focus on at one point. In fact, if you were to map it out on a webpage, it's about 150 pixels wide by about 75 to 80 pixels tall. It's like this little oval, and that's all that a person can look at on a webpage and digest at one time. Now, your eye flitters around all over the webpage many, many times a second, but one of the takeaways here is, if you want to make sure that your webpage is easily consumable by humans, you have to overcome one huge, almost insurmountable task. You've got 8 seconds to prove to someone, when they arrive at your website, that you have the information they want; and since you can only see in that 150 x 75 pixel oval without them actually having to sit and read, you need to design your page to be delivered to the human in chunks that are rectangular like that. So make sure your headline or your logo, even the headlines within the body text, your icons, your little blocks in your nav bar, are only a maximum of 150 pixels wide and 75 pixels tall. It's actually a concept called foveal versus peripheral vision in human cognitive psychology. It's really fascinating stuff and we've got some videos over at the Stomperblog.com for you to take a look at. But that's really the takeaway, make sure you're designing to deliver information to humans in small chunks.

Chris: Sounds like the people who created banner ads may have been talking to a cognitive psychologist as well.

Andy: Oh definitely. The only problem that they did with banner ads is they made them too wide, they made them 460 pixels wide is your average size of a banner ad. Really, you need to cut that more than in half in order to deliver a coherent message. Now, when it comes to branding, everybody knows what the big double arches are, for McDonalds. Everybody knows what the Coca-Cola logo looks like, you can make those enormous. But when you're trying to convey a message like: 100% money back guarantee or free shipping - those messages that are not brand specific need to be delivered in those small chunks.

Chris: Okay. So, testing is vital, once you get these things going testing is vital. What happens when I find a design or form of advertising that works, for instance Google AdWords. How do I, and do I, continue testing with it?

Andy: You do. The term AB split testing is a pretty common idea out in the world of testing on the internet and that basically says you're going to serve an A version of your creative ad or a B version. And what you end up with there is, half of your traffic sees one ad and half of your traffic sees another. You're paying for that traffic, but you might, through the course of testing, arrive at a place where you've got one ad and it's doing pretty well, and you don't want to necessarily hurt your business by throwing half of your traffic at another ad that you don't know is going to do all that well. Well, you don't have to AB split test. In fact, specifically one of the things you can do with Google AdWords is load up two different ads with half of your traffic going to the A ad and half going to the B ad. There we are again losing half of our traffic to an unproven creative advertising technique. So instead of doing that, make ten ads. Nine of them are your control, nine of those ads are the same, it's the exact same ad nine times, and ad #10 is your test ad. That way, 90% of your traffic is going towards a proven creative tested ad, and 10% is going toward this new ad. That way you get the best of both worlds, you get to introduce to 10% of your traffic this new advertising to see how people react to it, but you're still maintaining the cash flow into your business because you're still sending 90% of your traffic to an ad that's proven itself to work.

Chris: Right, and you just work the math and you get the same answers you would have had the other way.

Andy: Exactly. When you're talking about click-throughs, especially with Google AdWords, there are really only a couple things. There's position of the ad, there's impression, there's click through, there's cost per click, and then there's conversion rate. All of those are only representative of what the traffic does with that ad, they don't necessarily relate back to the other ad, so you can test them in isolation, is the point.

Chris: So of all the elements of a Google AdWords ad, which have the most impact on the click through rates and conversions?

Andy: We've got this really good pie chart based on a whole mess of traffic and a whole mess of conversions and what we've found is 56% of the affect of an ad is depending on the landing page. So while you've got 44% of your remaining conversion based on the actual ad itself, 56% of your conversion is based on what page they end up on. And the singular thing you've got to take away from that metric is that it has to do with market to message match. That means that your ad needs to be sending specific visitors to very specific pages. It's not enough anymore to throw a bunch of keywords out into the marketplace and when people click on your ad send them all to your homepage because you think that ad somehow related directly to that person's need. It's just not. You should have a landing page, and this is easy to do with paid advertising, for virtually every keyword that you are going to advertise to, or every core keyword. So you don't need all the derivatives, but if you've got a keyword that you're advertising for like "pasta" and then one is "spaghetti" and then one is "linguine", you should send them to very specific landing pages that highlight that particular product, not only in your body's copy, but also make sure that if someone is searching for linguine, don't send them to a pasta page, send them to a linguine page. And as an aside, about 18% of the overall conversion has to do with the headline of the ad, and that means that you really have to make sure you are attracting the right visitor to your ad and that's how you increase conversion.

Chris: There are so many people out there who find the keywords that are attracting a lot of people and then draw them to a totally disassociated product.

Andy: Yeah.

Chris: And all they're doing is spinning their wheels and wasting their money.

Andy: Well that's exactly right, Chris. And even more egregious than that is they send them to a place where they try to get a user to buy from them the very first time. I almost feel embarrassed to bring it up because it's so obvious and so well known throughout the universe of marketing, and that's a customer needs to be exposed to your marketing message seven to twelve times, and I really think the reason why there's a variable there is that we don't even know how many times it takes. But we know that it's more than once, and we think that it's probably at least seven times somebody's got to see your marketing message. So we go out and get these broad keywords and bid lots of money on them and we send them to a page that it might be relevant to that customer. But one of the things we never do is try to capture that customer's interest and get them on to a newsletter where we can continue to talk to them and engage them in a dialogue and try to get them to understand that our solution is, in fact, relevant for them. So I think if you're in a position where you're sending traffic from a set of search phrases that you're not 100% sure is really making a big difference, do yourself a favor and try to capture that visitor in the form of a newsletter lead or subscription, so that they will know what kind of company you really are, because it will give you the opportunity to send them more information over the course of time.

Chris: Makes sense.

Rob: Sometimes people talk about duplicate content?

Andy: Yeah, and I think that's sort of a hot button for a lot of search engine optimizers and web masters out there today. To explain, duplicate content is treated harshly by search engines when pages that are so similar that live on a separate domain, it actually causes those pages to go into this sort of purgatory called the supplemental index, and that's a bad thing. Because once a page is in the supplemental index, none of the value of that page is actually manifested in the form of links going to other pages or its inability to rank, it ranks very poorly. So duplicate content is a really big issue for a lot of people and it manifests itself usually on eCommerce stores. For example, you might have a page that sells a pool cue that is sponsored by a particular football team. And on another team there's the same pool cue, but it's sponsored by a baseball team. Well, the dialogue on each one of those pages, the only thing that might be different is the team that it's sponsored by. The description of the product is the same. So what happens is the search engines say, hey, this page is so similar I'm only going to let one live in my vibrant, normal index, so the other one goes into this supplemental index. So one of the ways you can determine whether or not you're likely to get into this supplemental index and have this duplicate content. On every page of your website there are probably some design elements that are the same, like your navigation bar and your header graphic and your footer graphic and maybe you have even a right hand navigation bar. I use that to put my offers like money-back-guarantee, in stock, contact customer service, etc... Well, if you take all of that text and count it up, in my case, I'll find that I'll have 250 words worth of template, in my footer, my nav bar, and in my header graphic that's the same on every single page. In order for me to create a page that is not going to get put into the supplemental index and be counted as duplicate content, one of the things I shoot for is to create at least 251 words of original content that's different from my other pages. So in the area where I'm describing my product, I strive to have at least more original content than actually exists in the template, the permanent layout of all my pages. And that's absolutely something that's critical, especially if you're selling a lot of similar products. Believe me, it's hard sometimes to write really interesting and witty descriptions about a pool cue, I mean, it's straight, it's long, it hits the ball, and it's got a logo on it. What else can you say? Well, a quick tip here is manifest your copy as some form of ownership experience. You need to tell them what it's like to hold this pool cue in your hand, how it's going to improve their game, how long it's going to last, how wonderful it is to be a supporter of X sports team. And that is one of the ways you can avoid getting trapped into this mire of the supplemental index, as well as engage your customers in terms of talking to them about benefits.

Chris: Makes sense. Got another tip you can throw out at us?

Andy: I'll tell you what, one of the things I want people to go out and take a look at is, do a search in Google today for the phrase "no follow." You want to no follow your privacy policy, your contact us page, and your terms of service page on your website, and when you understand what no follow means it will make perfect sense. Basically you don't want the spiders to go there because you don't want to pass page rank to those pages, it's a waste.

Chris: We're out of here Andy, thanks a lot for being here. I'm Chris Malta.

Rob: And I'm Robin Cowie.
]]>Discover the different types of testing available and how they can reveal the most most effective marketing strategies to improve conversion in your eBiz and to lower customer acquisition rate.Mon,21 Jul 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO072108_Entrepreneur_podcast.mp3-00:-19:-33Chris: Thank you for joining us today. I'm Chris Malta. Getting traffic to your website is only one part of your marketing effort. Once visitors arrive at your site you still have to convert them into buyers or you've just wasted your advertising dollars. That means figuring out which elements of your sales process are effective and which are costing you customers. Today we're talking to successful internet marketer David Bullock, Managing Director of DavidBullock.com, about testing and modifying your site to see higher sales and lower advertising costs.

Chris: David, welcome to the show.

David: Hi, how are you?

Chris: Good. You know, higher sales and lower advertising costs appeal to me greatly, so let's talk about some of that. I believe that we met you at the Ken McCarthy Systems Seminar.

David: In Chicago, right.

Chris: Right. It was either my co-host, Robin Cowie, or Collette Marshall, our Business Development Director, and I heard good things about you, so we're very anxiety to talk with you about this.

David: Well thanks.

Chris: Can you explain the difference between testing and tracking and why it's so critical for the online merchant?

David: Well tracking really is observation. To track means that you're paying attention to what's happening on your website, how many people are hitting this particular page and how they're moving forward. That's just observation. Testing is actually a comparison. When you're looking at one thing versus another to see what is actually working better from a conversion standpoint or what is working better in terms of lowering your actual advertising cost for customer acquisition.

Chris: Okay, so what's changed in the last few years in terms of online analytics?

David: Over the last couple years when I came into the marketplace in 2004 there were not very many tools out there that would actually do the testing and the tracking and the basics of knowing what's going on on your website. But with Google analytics actually taking the Urchin software and making it free, now these tools are becoming more and more prevalent. So you have ClickTracks, Google Analytics, Optimos, Vertster, just to name a few. These companies now provide the insight you need into your website. These tools did not exist some years ago. When I came into the marketplace and was looking for something to just rotate more than four different elements at the same time, the tools did not exist.

Chris: David, you said that Google has bought Urchin and made it free. Do you have any idea how much money I spent on Urchin over the past years (laughter).

David: Oh gosh, yeah.

Chris: I used to buy that software and put it on the servers and now it's free. Well, alright, that's good. I'm happy for everybody that's coming along now, that's wonderful (laughter).

David: Well look at the model that they have. They started with just search and then they went to the pay per click model. As soon as people have to start paying their money to get traffic to their site you have to give them a way to look and see what's going on with that traffic.

Chris: Yes.

David: Otherwise you're spending money and possibly throwing good money at the bad. The thing that's really changed more than anything else is you can actually track from the keyword all the way to sale. And when that technology started to become more and more prevalent there's no guessing anymore.

Chris: Right. And we use that on our website, we actually use what is now Google Analytics converted over from Urchin, and it's been great.

David: Oh yeah, oversight is what you need.

Chris: Right. Now you're an engineer, David, how do engineering and testing come into play with increasing your sales and profit?

David: Selling online is a process with a beginning, middle, and end. And since I was an engineer first and then I moved what I call a belly to belly salesperson, moving from an offline selling environment taking that same skill set. Okay, I have someone who says they're interested so where are they? Are they gathering information, are they looking to buy now, are they looking to improve a buying decision, are they evaluating? It is the same process except it's online. Now, I say process because as an engineer you're always breaking things down into little bitty pieces and saying, okay, this works and this doesn't. I never quite understood how you could just put a website up there without having the marketplace help you to design it, helping to create the copy, and even tell you what's the best pricing.

Chris: Right. So many people would just put something up there and just hope it sold.

David: Oh yeah. The common idea is if we build it they will buy.

Chris: There are too many people watching movies.

David: Exactly (laughter).

Chris: I, myself, was actually a systems engineer for Kodak and I'm familiar with breaking the processes down into steps and deciding which ones actually work and which ones don't. So was there more you wanted to continue with on that subject?

David: Well really, from an engineering standpoint, you can't improve something that you can't see and most of the time you find situations. The listeners need to be very careful that they're actually on platforms that allow them to test and track and there are certain situations out there that they don't have enough control over the website so they can't even put tracking in place. So I would warn them against that and see that they have platforms that allow them to see what they need to see so they can actually improve.

Chris: That's a very interesting point. There are an awful lot of hosting platforms out there and they don't all give you those options. Some of them just want to sell you cookie cutter websites and that's all they want to do.

David: And the funniest thing is, I was talking to one of my clients just today and he's on a very popular platform, but he has no control of his shopping cart whatsoever to the point where he can't see when an order gets there from a tracking standpoint. And it's really a sad situation. So what does he have to do? He has to change platforms. It's not the right platform so you have to make some different decisions. And a lot of that is education from the consumer side to know what they need to look for when they're planning and designing their website.

Chris: Right. I think so many people start an internet business without taking into account that they need to become educated on certain things and get easily frustrated. You need to learn about testing and modifying. Take the time to learn these things before you get frustrated.

David: Absolutely. One of the things that I learned very early on, because I didn't go in deep as most people go into the internet marketing space. I learned very quickly that if you actually tested and tracked it undercut all of your SEO efforts, it would actually undercut any of the copywriting efforts. You'd be able to see if your SEO was working. You'd be able to see if your copy was working. You'd be able to see if that image you have on the page is working.

Chris: Right.

David: Just by testing and tracking. So the education actually came from the doing of sending the traffic and seeing if it did do what I wanted it to do.

Chris: So going back to engineering then, how can our listeners reengineer their sales process?

David: Well, the first part you need to do is put some tracking on your site so you can see what the mechanisms are. And again, you can't improve something that you can't see, but once you can start seeing how people are moving in and around your sales process you can start to test different messages and images to see how that can increase your response. So the testing, or comparing one thing to another against a stream of traffic, is actually a reengineering process. There's no need to put the site out there and let it sit static.

Chris: And when you talk about testing, for example, put out one pay per click ad that leads to a certain page on your website and then another pay per click ad that leads to a similar, but slightly different page, correct?

David: Right. Different images on the page will convey a different message. Different headlines on the page will convey a different message. You can even test pricing online. Something may sell better at one price than another. Those are the things that you can easily test, and I like to tell my students you can test anything that you can see on the page.

Chris: Right. And just as an aside here, I found an interesting website a while back, I believe it's called pricepoints.com, where they'll actually tell you what the most popular price points are from zero to $10,000.

David: Wow.

Chris: It's just a whole long list. Instead of $148, choose $149.95. So what is the total marketing approach that you practice?

David: Because I was an offline salesperson long before I ever moved online, we actually used radio, television, and newspaper, classifieds, basically used online and offline, meaning we'll go in an offline media and drive those people online and then convert them there. And we find that those are very qualified prospects because what did they have to do? They had to hear a message, become interested, remember the URL, and then come to a computer. So they've already jumped through at least four hoops before they even showed up.

Chris: Right.

David: And then when you tie that to the traditional online methodology, the pay per click, SEO, banner advertising, or email marketing, but again, it's the best of both worlds. People live offline, they don't live online. There are at least forty to fifty channels that you can move your message on, but what we find is the people who are online tend to stay online and the people who are offline for some reason tend to stay offline. If you merge those two together and then tie that in with some of the advanced testing and tracking methodologies you get a situation where you know where the person came from, how they're moving, how they're buying, and you can actually optimize that one channel.

Chris: Right.

David: So that one channel becomes an income stream unto itself. So you may have forty income streams all working synergistically to create your total income.

Chris: So basically you're channeling everyone into one area and then testing them and tracking there.

David: Right.

Chris: Okay. Now, you use a special testing method called the Taguchi Method. What is that?

David: The Taguchi Method was created back around 1940 by a guy named Genichi Taguchi. He was an engineer in Japan working for the telephone company. The long and short of it is he was in a situation that when a machine would go down they would lose a lot of money. So as an engineer you know that you have to keep the machines up. His testing method is essentially what I call the 80/20 rule of testing. It tells you what's important and what to pay attention to while you're testing so you're not testing everything. It actually takes maybe eighteen different creatives or landing pages or eighteen different situations you're putting in front of your client and it actually simulates up to 4,000 different tests. Now, it doesn't necessarily take a shorter time, but with the math that is done automatically in the background it actually tells you, the headline is important here, pay attention to that, or the color on the left side of the page for that image, pay attention there. So what do you do? You concentrate your efforts where it's important based on how the marketplace is responding as opposed to you just guessing.

Chris: Right.

David: With the Taguchi Method people think it's like this magic formula that you just throw stuff into it and great stuff comes out. The person who taught me the methodology said, garbage in, better garbage out. You just tested garbage.

Chris: Right.

David: But if you take the time and there's a whole innovation piece too where you're actually designing the input to go into the test, there's a whole other piece of it. So you're designing good stuff that goes into the test and then the testing methodology will tell you of those things that you just put in here, these are the ones that are important. Then you concentrate on those and then your response rate and profitability go up.

Chris: Right. So where has the Taguchi Method been used and why is it important for eBiz listeners?

David: It was used in industry first with the auto industry. But some years it started to be moved into direct mail and then years later it started to be moved into the online space. It's important for your listeners to know that some of my students have been able to achieve 600% increases over baseline.

Chris: I would say that's important, yes.

David: Okay. And reduced their cost of customer acquisition upwards to 90% just by using the methodology.

Chris: That's fantastic.

David: Also, there are some other students who have gotten 95.7% increases over baseline, others who have gotten 213% over baseline, meaning they tested their site, they found out where they were, they started employing the methodology, and then they got these increases that were far beyond anything they could ask or imagine.

Chris: Using this methodology can you explain the difference between tracking, split testing, and multivariable multivariate testing?

David: Okay. Tracking, again, is just paying attention. I like to call that a one-legged split test, you have one leg there and all it does is looks and observes objectively as to what's going on. Split testing is when you have one thing compared against another, so you're comparing red versus blue, which one works better. Now, as soon as you start adding at least four different items, like red, blue, green, and purple, you can get into what they call arrays, and here's where it gets scary to people because we start talking about mathematics and arrays.

Chris: Right.

David: Folks, don't worry about it, it's all done in the background, it's automatic. But what happens is as soon as you start testing four different items against each other you can get into a situation where it's called multivariable, which is several different items, multivariate which is when you're testing how does this item in combination with other items on the page work. And really you're talking about the best of both worlds, you're getting several different items and combinations of items placed in front of the consumer at one time and you're tracking just to see how they respond to this particular page rendered this particular way. And then the math takes over and it tells you of those items you put on the page this one works best, this is the most influential item on the page, and hey, pay attention to that, make sure you amplify that message and see where it takes you.

Chris: Right. And that's obviously where the confusion comes in because people start thinking if you're testing four or five different things at the same time how do you know which one works. But that's what you're saying is that's where the math takes over and that's where this testing can really show some differences.

David: Exactly. The math gets into some very high level mathematics, but now the nice thing is that mathematics is done for you in the background so you don't even have to even trouble yourself with it.

Chris: We talked about tracking, split testing, and multivariate testing. Are there any cautions when using this methodology online?

David: You have to be really careful on what it is you put into it. Again, garbage in, garbage out, and there is a methodology in place to make sure that your inputs actually make sense and you don't enter in contradiction. So there is a caution there.

Chris: Does advanced testing work with pay per click and SEO traffic?

David: Absolutely. I've used it with pay per click. My clients and I have used it with SEO traffic and you can definitely use it offline.

Chris: Great. Why is innovation so important when looking to get improved conversion rates for online business?

David: Because most people have websites and they will always write the same headline, always use the same images. If you're going to get a better result, you have to do something different. And what we teach is how to get outside of your own head to create different inputs for your web business.

Chris: Right. And this isn't necessarily just going out and copying everybody else, I mean, you've got to actually get creative here, correct?

David: Oh yeah, you have to get creative, you have to start looking at different processes, different sequencing, and all that is part of the thinking that has to be in place to actually use the testing well. And this will work with your split testing and multivariable testing.

Chris: What should our listeners look for when evaluating conversion improvement tools?

David: They should be looking for a couple of things, ease of use, will it work on their platform, make sure you look at the specifications to make sure you can actually use what you buy. The next thing you're looking for is relative accuracy, how is it looking to find out what that visitor is doing? Is it dropping a cookie, is it looking at the log file? Just know what that is and know how it's tracking because that will be an indicator on how accurate it's going to be.

Chris: Log files is one thing I can appreciate about paying for Urchin all those years is that I no longer have to host those massive log files.

David: Exactly.

Chris: What should our listeners do today to improve their conversion rates and profitability?

David: I would say to start. Get some type of tracking mechanism on your site today, even if it's not the most accurate in the world. Just by your knowing how people move through the site, then because you can see you can actually start to improve something. You can get a baseline and you can stop guessing as to what the marketplace is doing and you'll know. That will take your stress down substantially, I promise.

Chris: (Laughter) That's always a good thing. So how about the next big thing in the marketplace for testing and tracking?

David: What I'm seeing now is that the keyword to sale tracking is becoming more and more prevalent. What I'm seeing happening is that keyword is now dynamically generating the next page of the person it's going to see as though the website is now reading someone's mind, and they're keeping that tracking information. It's beyond personalization at this point, it's now at the point and technology that people expect to see what they're searching for on the next page after they click on that blue link. And now those pages are being dynamically generated not just with product information, but also with ancillary information as well as other supporting evidence to say that this is the thing that you want to buy and this is the merchant you want to buy from. So it's no longer just a commodity situation, it is almost an intelligent website situation.

Chris: Which is fantastic. Learn what people want to see and give it to them.

David: And give it to them every time.

Chris: Right.

David: It works both in physical process optimization. We wouldn't accept a 99% failure rate in manufacturing, but yet in marketing we accept a 1% conversion rate and act like that's okay.

Chris: Right.

David: So again, coming from a manufacturing background, I didn't know that a one-click/one-sale was not acceptable, so I always strove that way.

Chris: Wow. That's a lot of great information, David. That is our show for today. David Bullock of DavidBullock.com. Check out that website, you're going to learn a lot about testing and tracking. Thank you for being here, David. I'm Chris Malta.
]]>Discover the tremendous benefits of sourcing resalable items for your online business from police auctions.Mon,14 Jul 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO071408_Entrepreneur_podcast.mp3-00:-19:-54Colette: Thanks for joining us today. I'm Colette Marshall, Worldwide Brands Business Development Manager. Police auctions are one of the most overlooked resources for high quality resale items. You can purchase goods at a tiny percentage of their retail value and add variety to your standard product line or auctions. Today we're talking to Bill Keck, CEO of PoliceAuctions.com about how ebusiness owners can use these product sourcing opportunities to their greatest advantage.

Colette: Bill, welcome to the show.

Bill: Hello, how are you doing?

Colette: I'm doing wonderful, thank you. Quite a variety of different auctions are out there and one that's often missed is police auctions. Many sellers and retailers out there don't realize the value they can find at police auctions. How much merchandise is auctioned off each year at various auctions?

Bill: Hundreds of millions of dollars.

Colette: Wow.

Bill: It's a big, big market segment out there.

Colette: I've seen a few of them myself. It's quite an interesting event, quite fun really (laughter).

Bill: (Laughter) Yeah, it is, a little chaotic.

Colette: Do police auctions represent a different bidding opportunity than other government auctions? How do police auctions differ from government auctions?

Bill: They tend to be smaller and less publicized. You're getting seized property from criminals and abandoned property. A lot of cars have been forfeited through nonpayment of violations and so forth.

Colette: For those who aren't familiar so much about police auctions, would you just take a step back a minute and describe a police auction and how the product actually comes about and then how the seller can actually buy items.

Bill: It all starts with some kind of criminal activity, whether it's theft or a drug bust or a forfeiture due to nonpayment, which is very common. The police will take the property and will hold onto it and catalog it over a period of time and then periodically they hold these auctions to bring in the public and offer it to the highest bidder. So it literally comes in, you know, you could have a diamond ring, for example, that would be worth many thousands of dollars and they're going to start out with a very low bid, if not a dollar. So there are a lot of opportunities like that. There are bulk buys. You'd see more of those in the big federal custom seizures. Sometimes a whole shipment will come into the United States of a particular product and they'll seize it because it's either counterfeit or they didn't do something right or nonpayment of taxes, whatever the case may be. There was an example at one auction I went to where they had these sunglasses and I didn't read the catalog correctly. And then the bidding started going crazy and I realized it was for 150,000 sunglasses.

Colette: Wow (laughter).

Bill: (Laughter)

Colette: That would do very well in Florida.

Bill: Well I think the sunglasses ended up going for 30 cents a pair. And if you can buy them at that price and resell them even for just a couple of bucks you're doing pretty good.

Colette: Were these brand name?

Bill: I don't think so because they didn't label it that way, but it was such a huge lot, who knows what was in there.

Colette: So the key is, just like any other auction, you really want to make sure you read the description, understand what you're bidding on. Sometimes you may luck out and there might be some brand name items in there, but you need to take a look and see what you're actually getting.

Bill: You definitely want to inspect it before you bid.

Colette: At many of the auctions, you actually have the ability to inspect the products themselves?

Bill: Yeah, typically there's a preview period, either on the same day of the auction or several days in advance, depending on the size of the auction.

Colette: Okay.

Bill: And you definitely want to go through that. Doing research on market values is also a very good idea. You want to know what it's worth when you're bidding, otherwise you're bidding blind and you're taking chances.

Colette: That is a great point. We often say on the radio show here, market research is key. Really understanding what that market value is and then using that to your advantage when you make purchases, either on auctions or even buying directly from your suppliers, you want to make sure you'll be able to make that profit and understanding the market value is key for that.

Bill: eBay kind of makes that simple because you can just go on eBay and see what they're going for and you can get a bidding strategy out of that.

Colette: Yep, that's one way you could. There are so many ways out there nowadays, if you don't take that time and do it you're just hurting your bottom line. It's a very important process.

Bill: Absolutely.

Colette: So you said bulk buys are available and it just really depends on how much of that property was seized. Now, what about return policies, can you return this product to the government?

Bill: No (laughter).

Colette: Aww, come on now.

Bill: The return policy is, you bought it, go away.

Colette: (Laughter)

Bill: The only time they'll take it back is if you can prove that they misrepresented it and they take great pains not to do that. So there is very little chance you're going to be bringing it back for a refund.

Colette: Just like other auctions, it's very important to understand the procedures of these auctions and it sounds like these auctions are buy as is. If the product is damaged and you purchase it, there's probably a lot of product that's good in there, but you need to be aware of what you're buying.

Bill: Yeah. They do try to make sure they're giving an accurate description. If something is not in working condition, they will typically state that and that does make a case. If you bought something and they didn't represent it correctly, if they said it was working and you take it home and it doesn't work, then you might have a case. But keep in mind you're dealing with the government, and you're going to be filling out forms and standing in line and it's not going to be any fun.

Colette: Right.

Bill: So you want to factor that kind of risk into your bidding strategy and typically people do that and that's why the bids are lower at these places. Occasionally someone is going to run up the bid into a retail area and you want to stay away from that, but you've got to take all those policies into account before you start bidding.

Colette: Right. The one that I witnessed was actually at a police site, it was a very small one. What percentage of police auctions are available online versus in your local area? Would you recommend going to a local one first or just go straight online?

Bill: They both have their benefits. When you go to a police auction that's online, you're probably facing a little bit more competition because it's so accessible. If you go to one in your local area that's not as well publicized, you'll have a better chance on really getting in there on something that a lot of people don't know about. If I was actively seeking product I'd be doing both, I'd be all over it.

Colette: That is a great point. But also, for people who are not as familiar with the process, I usually recommend that they actually go to a local auction so they can get familiar with the process and that will also help them with understanding online. Would you agree with that?

Bill: Yeah, absolutely. I think they both have their advantages. It's a different flavor of experience. When you go to an auction, the auctioneer can really ramp up the temperature in the room by driving a lot of excitement into the bidding. Online it's more about the bidders setting the tone because you're literally only seeing the bids come in against other bidders. The tradeoff, of course, is you don't get to see the merchandise in person.

Colette: Good point. With both of them, are there no reserve auctions or buy it now type things?

Bill: You'll see buy it now opportunities on government auction sites, but those typically aren't government auction items. They hybrid between government and non-government items.

Colette: Okay.

Bill: But as far as reserve, sometimes it depends on the government agency. When you get into the bigger high ticket items, like real estate and boats, a lot of times the government will put a minimum bid on it. If you're going to buy high end autos in a federal auction, you're probably going to have to have a $5,000 deposit with you.

Colette: Okay.

Bill: So sometimes there are minimums. Sometimes the auctioneer will try to open it up at a certain price. They don't always start at a dollar. Especially in the federal auctions, they'll start at $100 or $500 depending on what the price of the item is and then they'll just work their way down if nobody bids. So if they start the bidding at $5,000 for a big ticket item and nobody bids, then they'll drop it and they'll keep dropping it until people jump in.

Colette: Do they ever start out with no reserve, is that what you're saying?

Bill: Yeah, that's what I'm saying. Most of it is no reserve.

Colette: Oh, okay. Sorry, I misunderstood there.

Bill: Yeah, most of it is no reserve. Sometimes they'll try to get an opening bid.

Colette: You know, whether it's going to a local event or an auction online, can you go through that process?

Bill: Sure. Maybe I could just describe each one a little bit. If you're going to an offline auction, the first you have to do, of course, is find out where they're happening and that's something you would do through our site or through newspapers. Then you would attend the auction and most likely attend the preview to the auction which means either getting there an hour or so before it actually starts or, if it's a bigger auction, the day or two days before. And you would go in and inspect the merchandise and try to zero in on the ones you think would represent a good buying opportunity, products with known resale value. Jewelry is always a good candidate for that. Cars, of course, have a book value that you can easily determine from Kelley Blue Book and other methods. So you would go to the preview, pick out what you want to bid on, and then form a bidding strategy based on your own market knowledge and research. And then the auction is going to start at some fixed period in time and it's going to be held by an auctioneer who's going to stand in the front of the room screaming out the bids and trying to get everybody excited.

Colette: (Laughter) And it's not just the gentleman up at the front, it's all the other people in the audience who are actually helping out the announcer. It's quite a fun process.

Bill: Yeah, it's a lot of fun and you can definitely get caught up in it, so you want to be careful about that. If you get into a competitive bidding situation you've got to really think back to what your bidding strategy is and try to hold that line. For resellers, that's absolutely critical. This is obviously a lot different from the online experience where you're going online and the property is being offered and you're seeing a description and a photograph, much like you would on eBay. There's typically not going to be an opening bid unless it's a big ticket item like real estate or cars or boats, and in those cases there may be. So you'll see there's either no opening bid or a fixed opening bid and you can do your research away from the auction just by surfing around online. The temperature of the auction is really only set by the bidders, so you're up against other bidders and you see how many bids are coming in and what they're bidding. The one thing that's a little bit scarier on the online side is people can come in at the last minute and really ramp up the bidding. So you can be following an auction for days thinking it's going to go at a certain price, but everybody decides to hold back until that final minute and they start bombarding the auction with bids and all of a sudden it's a completely different picture.

Colette: But in the same case, you decide what your set limit is and you can't go above that.

Bill: Yeah, it could be a lot more convenient too because most of the online auctions have proxy bidding which you can just set your high bid and it will bid up as necessary and then you're set. You can cover a lot more auctions that way because you're not going to win them all.

Colette: What are some of the kinds of items you can find that are good for resale at these police auctions? You had mentioned jewelry and cars. I'm sure there's quite a variety of products.

Bill: It's pretty much going to be everything you could find in a home. Anything from personal computers to furniture, antiques, electronics, DVD players, televisions, clocks. Anything that you would find in your home is potentially something that could end up at a police auction.

Colette: And generally just like any auction, the kinds of products that are available are going to vary.

Bill: Yeah, especially depending on what their cases are like, what kind of seizures they've made over the period of time between auctions. A lot of times these drug dealers buy a lot of toys.

Colette: (Laughter) I guess that's one way to look at it. You have a video on your site, PoliceAuctions.com, and I believe on there you say, what is criminal activity ends up being public gain.

Bill: Yeah, the criminals loss is the public's gain.

Colette: Yeah. There are a lot of things out there that you can definitely utilize to enhance your product lines or offer as special package bonuses. There are a lot of ways you can think of using police auctions and other types of auctions as well to supplement your product lines. Now, I often see a term called "estimated replacement value." What does that really mean?

Bill: That usually is being applied to jewelry because that's the one where values are so difficult to understand. It's an insurance value. It's not a literal market value, so you've got to make sure you understand that. When you're going into auctions for jewelry you want to be knowledgeable of jewelry, you want to know approximately what a 1 karate diamond at a certain grade of stone would go for out in the market, because you can't really rely on estimated replacement values. Those are insurance values. And if you know the market, you can get some idea how to bid off of those, but it's a little convoluted, it's not a real market value. It's just a very complicated market segment because you have wholesale, retail, and insurance and appraisal values and they're all different. So a lot of times you'll see the ERV which just gives you some idea what insurance value to put on it and if you're good with the jewelry market, you can extract maybe a wholesale number out of that. Usually in federal auctions, the government will appraise it's jewelry, but they don't share any of its findings with anybody. So the auctioneers know what it's worth, but they don't pass that information on to the public.

Colette: So the key is to educate yourself. If you're going to go to these auctions, make sure you know what the market value is and definitely go to those preview sections.

Bill: Absolutely. It's easy enough to do the research because if you're on an online auction, you can surf around before you even place a bid. You can go to eBay and go to other comparison sites and see what you think you might be able to get that same item for. We've heard consistently since we've been doing this, which is going on six years now, testimonials from people who have made a lot of money doing this. It's like anything, how much you're going to get from it is how much you're willing to put into it and you just have to be careful, but people have made a lot of money from buying and reselling at these auctions. One guy told us he spent $600 on a car, drove it for two years, and sold it for $1,200.

Colette: Wow.

Bill: Another guy bought a houseboat for $100,000 under its value just by being a tough negotiator with the government because they weren't getting a lot of bids on that. There have been other examples of people buying things in bulk and just knocking the ball out of the park. So there are definitely a lot of opportunities there, you just have to be careful with it.

Colette: How often do these police auctions take place?

Bill: Depending on where you are, obviously if you live out in a very rural area, you may not see as many.

Colette: Now, I would assume that the largest cities are the ones that are going to have them more often.

Bill: Yeah. Some of them have them once a week.

Colette: Wow, really?

Bill: Yeah. The really busy ones have them once a week. It's going to follow the demographics of the population, the more population there is in an area, unfortunately the more crime and the more these auctions are fed, so they need to dispose of their property.

Colette: Along with your site, what are some other ways to find these police and government auctions?

Bill: I think most of them are mandated through their local city governments that they have to announce through a newspaper or some other means. But that's typically how the word gets out. They're very bad at maintaining websites. So you have a lot of inconsistency out there. Some police departments have it completely dialed in and you can go right to their website and it's very easy to deal with. Others, you would have no idea that there's anything even there. They're only going to advertise so far in their surrounding area.

Colette: Will local police stations actually post when these auctions are going to be at their local facilities or would it be better to focus your attention on a site like yours and newspapers?

Bill: I definitely wouldn't be driving to the police department and looking for it. You can look on your local police department website, which is typically listed under a city government website and, like I said, there's a very small percentage of those that will actually give you the information that you need. The second tier is they advertise in the newspapers around them, but again, they don't have big budgets for this stuff, they don't have dedicated PR people, dedicated webmasters. It's really a background thing for the police.

Colette: Do you have to pay to attend these police auctions?

Bill: No, typically it's open to the public. The only restrictions that you'll occasionally find is on vehicle auctions where they only want to sell to the dealers and that's going to vary by state. There are some states that are mandated by law that in government seizures, they will only sell their vehicles to dealers. It's actually more of a consumer protection thing because when you buy the vehicles from government auction are not going through the kind of checks and maintenance that they would through a dealer. When a dealer sells you a car he's responsible for what he sold you. At government auctions, they check out the vehicles and they represent them correctly, but once you've got the vehicle, there's no warranty. If you know about cars and you have a lot of experience, then sure, that's probably a very good place to get something below market.

Colette: Another term I've heard is proxy bidding. What exactly is it?

Bill: Well that's something you're going to find on websites. Let's say you're watching a bid online and the current bid is $100 and you're willing to bid up to $700 in total. So you put in a bid of $700, but the software is only going to update your bid to $101 or up as necessary for you to capture the high bid. It automatically bids up for you so you don't have to sit there and constantly watch the auction and keep upping your bid.

Colette: So that's what you define as proxy bidding.

Bill: Yeah.

Colette: Okay.

Bill: Yeah, it's either called proxy bidding or automatic bidding.

Colette: As a reseller do you need to be licensed to attend these auctions?

Bill: No, but if you're going to actually sell it, depending on the state that you're in, you've got to be able to collect sales tax. And in order to be able to do that, you have to have a resale license. If you're just doing a one-off, probably not, but if you're doing it as a business you definitely want to make sure you're complying with the laws.

Colette: That's a great point. And as we say with any kind of product sourcing method you have, you must make sure to have your sales tax ID and make sure you are a legitimate business. Bill, it's been wonderful having you on the show, thank you so much for taking the time today. You can learn more at PoliceAuctions.com. I'm Colette Marshall.
]]>Find out what advantages a permanent wholesale mart can offer your retail or e-tail business, what buyer requirements they hold, and what tools they provide to help you maximize your product sourcing experience.Mon,7 Jul 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO070708_Entrepreneur_podcast.mp3-00:-22:-17Chris: Thanks for joining us today. I'm Chris Malta. Most online sellers know they can meet new suppliers and find new products at thousands of tradeshows that are held across the country each year. But what you may not know is that most major cities in the U.S. have permanent trade marts that are open all year long. We're talking with Jeff Walton today, General Manager of the Minneapolis Mart, to find out about the benefits of incorporating wholesale merchandise showrooms into your product sourcing.

Chris: Jeff, welcome to the show.

Jeff: Good morning Chris.

Chris: Great to have you here. What is the purpose of a permanent wholesale merchandise mart?

Jeff: A mart, very simply put, is a gathering place, and it's a place that both a resale customer and a wholesale supplier are going to make a connection, they're going to engage in commerce. We represent a lot of different product lines in this mart. We're not the largest mart in the country, but on the other hand, if you look at the number of products and the number of lines that are represented here, it can be overwhelming. We're really a one-stop location, regionally-based, for small to medium sized resellers to find their products.

Chris: That's excellent. And you don't have to be the largest mart in the world. You're serving your regional area.

Jeff: I think there are advantages to not being the largest mart actually, because we can really target the customers that are the smaller and medium size startup. So this is a good size for that type of customer.

Chris: And we have been to what may be the largest one and, you've got to bring really good walking shoes and a bottle of oxygen because it just takes forever.

Jeff: And your calendar has to have a lot of time blocked out.

Chris: Yeah, you want to spend a week. So who are the target customers of a merchandise mart?

Jeff: For this mart, there's two classes of target customers. The first ones are the locally based - 250 to 300 miles out - which is a good estimate for covering about 80% of our customers. We call ourselves a regional mart for a reason, because we do cater to the people that are more local and there are lots of marts around the country that also cater to that type of clientele. So typically you're going to find customers that will go to a permanent regional mart to be a small to medium size customer. The other type of a target for a mart is if a mart has got a specialty. For example, here Scandinavian products are something you don't find in a lot of other places around the country, so that's going to more of the national component of who we would attract.

Chris: Are those furniture products?

Jeff: Mostly house ware and clothing type items. There is some furniture. We wouldn't be a good source for a lot of furniture things. There are marts that specialize more in that - big furniture marts.

Chris: Yeah, but for ecommerce resellers, they're not looking for furniture anyway. You want something, generally, you can ship with UPS or FedEx with that 70-pound weight limit.

Jeff: I would say that matches with most of the showrooms that are here in this mart.

Chris: So how, again, does a regional mart differ from a national mart?

Jeff: I called Minneapolis a regional mart because our focus is going to be primarily geographical. The national marts are going to be a lot larger. You mentioned you went to a large one. Atlanta is a good example of a mart that is spread over several different buildings.

Chris: That's where we went.

Jeff: They require a lot of time and logistics to get there. One of the other differentiations that you'll see with a regional mart is that we're not dominated so much by large manufacturers. I think you'll find primarily manufacturing showrooms at the national marts. Here you're going to find manufacturers reps and importers, people working in a little bit smaller scale, people working to a smaller audience. So I would say that here the smaller manufacturers and importers are going to have an equal footing to what a large manufacturing company would have at a national location.

Chris: And again, a good basis for an ecommerce seller, because the most successful ecommerce sellers really work in niche markets.

Jeff: Oh, absolutely. And I think we have an advantage of being able to actually spend some time and work with our customers. The national people have a national focus and a national goal. We are working with the smaller retail stores and ecommerce people. We do have a small, but growing, ecommerce base of customers that come here.

Chris: Right. From what you're saying, as far as dealing with the size of the place, we send people to shows and marts all over the country and when they get to the really big national ones, they'll send us back every couple of days a box full of business cards and pamphlets.

Jeff: Yep.

Chris: They're just going down the line. There's so much to cover; there's no real time to actually sit down and talk to people individually. And what you're doing with a regional mart, it sounds like, is more time to actually deal with the wholesalers themselves and find out what they carry, what they're doing, how they work with you.

Jeff: Yeah, absolutely. And with a permanent mart, we're here 365 days of the year. It varies from showroom to showroom in terms of what part of their business model is based on being here. Certainly, everyone is here for shows, but we have about 25% of the showrooms are here on an everyday basis and the majority of them will certainly make appointments with people. So I would encourage anyone that would like to go and get a little bit better face time with your suppliers, a regional mart, and there are a lot of us around the country, is really a good place to start.

Chris: Excellent. Do the various permanent marts specialize in certain product categories the way temporary tradeshows do, or is there just a wide variety?

Jeff: Well, it really is a mart to mart question. We have some specialties here and I mentioned earlier we have Scandinavian type products. Somebody that's looking for western or southwestern type things may go to the Denver mart.

Chris: Sure.

Jeff: It doesn't mean that's all we have, it just means that there is a fairly strong presence of that type of product in addition to everything else here. We, in this mart, have 5,000 different product lines represented, so to say we specialize in any one or another... And I have to be careful because every mart is different, they have a different personality and the mix of the lines that are represented are always changing.

Chris: Right.

Jeff: But a good example of the type of shows, if you're looking for a specialty, unofficially you might want to go to New York for the tabletop products, because they've got the largest show in the world for those. That doesn't mean that we don't have any, but we don't have the percentage or penetration of that type of line here.

Chris: It's like you said, at a regional mart, you're also talking about the region that you're in, say, southwestern products - Denver. You may see more of a preponderance of the region reflected in the regional mart.

Jeff: Absolutely. You're probably not going to see Scandinavian products in the Denver mart or really in many other places around the country, just because that's not a big part of the population.

Chris: Sure.

Jeff: Nor will you find a lot of southwest products here, just because that's not the type of product that is moving in this locale. You can't categorize a mart as being only one type of thing. We're going to have a lot of different product offerings and compared to a national mart, let's say that we still will have about 90% of the product lines, although you'll see less selection from within a line.

Chris: Let's talk about participation. Can anybody participate in permanent trade mart shows? And this is one of my favorite questions, Jeff, because so many people don't get this. What do they need to qualify as a customer?

Jeff: The Minneapolis Mart and most permanent marts are what you would call a wholesale mart. So wholesale, by definition, is not open to the public.

Chris: Yes.

Jeff: So a buyer that's coming to the mart here is going to be asked for some credentials. There are business reasons, there are tax reasons. When I first started here at the mart, I was greeted by a tax audit (laughter), and one of the things that we had to demonstrate as part of our audit for our tax status was that we did, in fact, require credentials from people coming in here, that it was not open to the public and, therefore, transactions in here were not going to be taxed the same way that a retail store would be. Typically, you're going to need to demonstrate that you have a legitimate business. You need a tax ID and credit information at most every mart.

Chris: Right.

Jeff: Coming here, we offer the opportunity for people to pre-register and, frankly, most people that come here once will come back again, maybe annually, maybe several times a year. We have permanent credentials that are available for people. We'll ask you for your tax number, a business check, a business card, just to demonstrate that you're legitimate.

Chris: And let me just drag out my little soap box here and climb up on here for just a second...

Jeff: Okay.

Chris: ...because you need to form a legal business. You need to get a tax ID if you want to get the best prices because you're not going to work with wholesalers otherwise.

Jeff: Right.

Chris: And so many people argue with me.

Jeff: (Laughter) Yeah.

Chris: Because the guys are out there all over the search engines pretending to be wholesalers and telling people you don't need a tax ID, come on over here. And, of course, you do, but it sounds easier. Now, if you want to clean out your garage, then don't get a tax ID, just sell your stuff on eBay and clean out your garage. If you want to make money, you need a legal business, you need a tax ID, and it's not that hard to get. Most people are afraid of it, they're scared by the legal stuff, but if you want to be successful, you want to make money, you want to replace your day job, you've got to be legal.

Jeff: These things are done for the benefit of legitimate buyers.

Chris: Yes.

Jeff: If you're in it for business and you're serious about it, this is something you really should want to do because it separates you from the garage saler. We don't offer any kind of cash-and-carry here, and I would discourage anybody that would be thinking of coming here for that reason.

Chris: Right. So what do people leave with besides product orders when they come to the mart?

Jeff: I think it's important, with the type of products that we're selling, it's a hands-on experience. You get a firsthand impression. Some of the things you'll see as you travel from showroom to showroom, in this or any other mart, are ways to effectively display products, how to present the merchandise. There are educational opportunities. We have seminars every time we do a show in order to try to educate people as to how the market is changing, and certainly things the retail people have to understand is they do need an online presence. They need to really embrace the internet. It's not a battle with the internet, it's embracing it. I have the same type of steep learning curve here with people that have been in business for many years that haven't taken advantage of all the business tools that are out there. So you're going to have an educational opportunity when you come here.

Chris: And just talking with the wholesalers, just being able to talk face-to-face is such a huge advantage as well.

Jeff: Absolutely. You can mix not only with buyers, but with business owners just like yourself.

Chris: Jeff, when a reseller is at a permanent mart, are they better off to buy direct or work with a sales rep, and can we kind of explain what the sales reps are doing at the merchandise marts?

Jeff: Sure. At a regional mart like this, typically the people that are working in the showrooms are going to be independent as opposed to working for the manufacturer. Oftentimes they're going to have a stake in the company. And it really doesn't matter what industry you're talking about, whether you're talking about computers or dinnerware, as suppliers get larger, they tend to try to work to change their staff. They'll go to a corporate or direct sales force and they'll go back and forth, but typically the manufacturers' reps are going to make it advantageous to work through the channel that's been set up for their lines. With buying direct, they can offer the same price in many cases, but I can tell you that you won't get the same type of follow-up or service. In this business, relationships and who you know and where you have connections is very important.

Chris: I think it's important to have a dedicated sales rep honestly, no matter how you're working. If you're working directly with a manufacturer that has a sales staff, or if they're contracting with sales reps at a mart or even within their own wholesale company somewhere, the personal connection...

Jeff: A sales rep is a knowledgeable advisor and it's somebody that has a face and a name that you can attach to the product that you're trying to source. So they can give you information that goes above and beyond the literature that you can pick up or websites that you can go look at. They really have more of a pulse on what's going on out in the market.

Chris: Yeah. For me, with my online businesses, when I can call a wholesale supplier and call my rep and say, hey Christine, I want to do this and this and this, and she goes, okay, no problem. And we're good. It's so much easier to have that connection. Now, once a seller finds products they want, why shouldn't they just continually order those same products? Why do they need to continue to visit marketplaces and shows?

Jeff: The same product that works today isn't going to work tomorrow.

Chris: Yeah.

Jeff: It's as simple as that.

Jeff: Don't get stuck with a shelf load of pet rocks or Beanie Babies. I'm old enough to remember those.

Chris: Me too.

Jeff: The market changes and you need to be looking for the direction that the market is taking. Whether you're in bricks-and-mortar or ecommerce, you've got to get out of your store, get out of your location, and go see what's out there, because that's what people are looking for. So coming to a mart on a regular basis is going to expose you to the things that are coming. It's going to introduce you to the people that have the next hot item.

Chris: Right. And I tell people this also, product sourcing is a continuous process in your business, it's not something you do once when you open your online store and you're done. It's a continuous evolving process.

Jeff: You have to do it well many times, not just once.

Chris: Yes (laughter). Very good, I'm going to use that if you don't mind. Now, you're a regional mart so you're talking about a 200-300 mile range. With travel being expensive and time consuming, can sellers just buy on the website and not go to the show or the mart?

Jeff: Well again, you're going to miss a lot. And I would say that the websites are certainly tools that you want to embrace. You can come to the mart and spend your time just looking around and go home, and at 2 o'clock in the morning, somebody can be sitting in their bathrobe and placing orders, and that's fine. Once you've had the opportunity to meet the people that you need, actually see the product - if you look at a little four inch resin figure, if you've held it, looked at it, it's going to mean a lot more to you than just looking at a picture. You can go back and reference the picture later, but these are tools that are provided to you to use after the show, but I'd encourage you not to isolate yourself.

Chris: Right.

Jeff: The sales rep is going to be able to help you, is going to be able to follow-up with you, and it's important to get out there and see things, whether it's at a permanent mart like ours or some of the temporary specialty tradeshows. Touching and seeing the product is a far better way to understand what it is you're promoting.

Chris: Very good point. Every etailer wants to find niche offerings that aren't the same old products that online shoppers can find at any corner store. So how can a permanent mart help sellers offer unique items for their customers?

Jeff: I think one of the things, going back to one of the earlier questions, is what's the difference between a national and a regional mart. If you're a heavy hitter, you're going to be comfortable and at home in a national mart environment because you're the type of customer they're looking for. But, at the same time, remember that the players that can afford to be there and are there are typically the ones that have gotten very large and their products are being sold in volume. So the chance of finding something that is really unique as a small player is limited.

Chris: Yes.

Jeff: However, when you come to a regional mart, one of the things you're going to see is, in addition to being a manufacturer's representative, there are a number of these companies who have been here for many years who have also gotten into the importing business. And they've got relationships offshore and with other small manufacturers, and they can oftentimes offer you a product or a direction that isn't something that's going to be seen on every corner of the block.

Chris: Right.

Jeff: So I think that's an important thing. Small is not necessarily bad. Small offers you the opportunity to get something that maybe hasn't hit that huge mainstream yet.

Chris: Yeah, I think small is good. I don't know if you've read The Long Tail of Ecommerce, by Chris Anderson. It's the smaller items, the niche markets that are really making the money out there. You can get to be a big player someday, but you need to start at being a small player. Walk before you run. You're not going to go to a national mart and buy $50,000 worth of something and go to try and sell it online. You need to be sensible and start with niche markets and new products and, like you said, get out there. If someone was on the outer edge of your region, how many times a year would you recommend they come to the mart?

Jeff: I would say maybe two times a year. I would encourage them to come in, we have temporary shows that also coincide with two of our permanent marketplace dates where we attract extra exhibitors. So that's one measure of it. Then, typically, I think everybody experiences a national show at least once every few years just to see what it is. And I think they'll discover that when they come back to the regional marts, that you're not missing a whole lot and, in fact, you can get more face time, you can actually get more of a quality experience than the bigger shows.

Chris: Sure. What do you think about the difference between temporary shows and permanent marketplaces? When it comes to product sourcing, what is the key difference, do you think?

Jeff: A temporary show is something that's going to attract, typically, your small suppliers, not always, but the small suppliers that can't afford a permanent showroom presence.

Chris: Right.

Jeff: With our shows we attract an extra 200-300 exhibitors for each of those shows. In our case, by rule, there is no duplication from one showroom to the next and the people that come to the temporary show and display there also cannot have any overlap for what we have. So we guard that pretty jealously, we want to make the experience, not only for the wholesaler that needs to represent their product uniquely, but also for the buyer. If you go to the first showroom and you go over to the temporary show, you're not going to be repeating the same product, it is different.

Chris: Okay. So let me understand the difference between the temporary shows and the permanent marketplace. The Minneapolis Mart is open all year long, you can go in there any day and source.

Jeff: Correct.

Chris: But during the year you have larger shows that get together at certain times.

Jeff: In our case, March and August are the two major marketplaces where we also feature a temporary marketplace nearby in a different location where we set up booths for the temporary exhibitors to come and display their product. Some of the marts also do temporary shows actually within the same facility, maybe they have an auditorium. We don't happen to have that here.

Chris: Yeah. With the permanent marts being very large and people having limited time, do the marts offer any tools to help visitors use their time more effectively?

Jeff: We do. You mentioned books earlier, and my favorite from here is The Buyer's Directory, and we publish that a couple times a year. It highlights the different showrooms that are located here, along with the product lines they have to offer. Included in those directories, and I think every major market has these, they will provide you the contact information, so that you can do all of your follow-up work after the show is over. So it's important to use that, not only for after the show, but really before you come to any show, I think it's a good idea to target the amount of time that you have, target the type of products and the suppliers you want to visit, because logistically, you talked about earlier Atlanta, you'll wear out a couple pairs of shoes. You may not get to see everybody that you want. Even here, if you walked around the mart three times it's 2 miles. I can tell you because I do it a couple of times a day (laughter).

Chris: Wow. It keeps you in good shape, I'm sure.

Jeff: Absolutely. You need to plan your time. You're competing with the clock, you're competing with other buyers, and you're competing with your feet, just to cover the site. So our website offers a lot of information, web based lookups of the products. And typically the people that are walking around here are carrying our Buyer's Directory.

Chris: Great. Now, for people who aren't in your area, Jeff, how can we find the closest permanent mart?

Jeff: As we mentioned earlier, there are literally dozens of these permanent marts all over the country. Every big city has got some sort of a mart or is going to have some sort of a temporary show. There's a lot of good paper publications. I can mention Giftware News, or something like that, which is particular to this industry that we deal with, that features information on all the marts.

Chris: That's all great information. That is our time today with Jeff Walton, of the Minneapolis Mart. The website is www.MPLSGiftMart.com. We really appreciate your being here Jeff.

Jeff: Hey Chris, thank you very much. I enjoyed speaking with you.

Chris: Thank you. I'm Chris Malta.
]]>Learn to successfully leverage government auctions to locate products to resell through your retail or e-tail business. Find out what to expect, how to prepare, and how to get the best deals, so you can maximize these tremendous sourcing opportunities.Mon,30 Jun 2008 00:00:00 GMThttp://wbi3.worldwidebrands.com/shows/podcasts/PO063008_Entrepreneur_podcast.mp3-00:-19:-46Rob: Thanks for joining us today. I'm Rob Cowie. Did you know that federal, state, and local governments auction off just about every type of abandoned, seized, and surplus item that you can imagine? What's more, they're typically willing to sell the item for whatever they can get. Government auctions can provide an excellent means of product sourcing discounted products for you to sell on your e-business. With us today is Ian Aronovich of www.governmentauctions.org to tell us all about government auctions.

Rob: Ian, welcome to the show.

Ian: Well, thank you for having me, Rob, I'm very glad to be here.

Rob: So tell me how does a typical government auction work? Give me kind of the nuts and bolts of it.

Ian: Sure. I think the two main categories of auctions are actually seized property auctions and the surplus property auctions. Now, the seized property auctions come about by various ways. First, the most popular thing that people probably hear is from criminal seizures. In other words, a drug trafficker's home is raided and his possessions are confiscated because they were purchased with money from illegal activities, and those items are sold at a government auction. In addition to that there are a lot of people who don't pay their taxes when they should and the IRS finds those people and goes after them. The IRS will confiscate stuff to satisfy outstanding tax liability and that will also show up at a government auction. And, in addition to that there are custom seizures which probably have every type of thing you can imagine, because this is essentially what comes into the country. And this happens when companies try to smuggle merchandise into the country without paying import duties or it sometimes even happens when people return from vacation from a foreign country and just don't declare their purchases properly. And, from any and all other ill-gotten gains. There are police seizures and stolen property that are not claimed by the owner. There are local sheriff sales for closed real estate and so forth. I'll just go through with you the surplus property auctions also.

Rob: So that's all under the category of seized, right?

Ian: That's all under the category of seized and there's a multitude more, but I just gave you the main ones over there.

Rob: Okay, so let's talk about surplus.

Ian: Now the surplus are essentially auctions for goods or property a particular government agency no longer needs. The government tends to buy in bulk plus just about every manufacturer always give the government a discount, so the government gets these cars, equipment, w