Patrick Lehoux is the Founder of Bottle Cutting Inc., a do-it-yourself glassware company
In this podcast, you’ll learn how he runs a $3 million business working only 4 hours a day. His secret? Outsourcing.
In this episode, we discuss:
Why you should drive your non-English speaking customers to Amazon.
Why they redo their website from scratch every year.
Why you should buy Facebook ads in Europe rather than in the US.
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Show notes:
Store: Bottle Cutting
Social Profiles: Facebook | Instagram | Twitter
Recommended: Mailchimp, Product Upsell
Transcription
Felix: Today I'm joined by Pat Lahoux from BottlecCtting.com. Bottle Cutting is the do-it-yourself glass work company. It was started in 2012 and based on Sudbury, Ontario, Canada. Welcome Patrick.
Patrick: Hey. How's it going?
Felix: Good. Tells us a little more about your store and what are the most popular products that you sell?
Patrick: BottleCutting.com, we've basically ... Every product we sell is all in that same space which is Bottle Cutting but the main product we sell is the Kinkajou Bottle Cutter which I invested back in 2012.
Felix: Very cool. Tell the audience a little more about what is bottle cutting. What is the purpose of cutting bottles?
Patrick: Bottle cutting is nothing new. It's been around ... It was pretty big in the 70s. It kind of died out and it's kind of making a comeback now. I think it's more popular now than maybe it was in the 70s because the bottles these days are a lot nicer. There's also ... While we recycle things, upcycling seems to be the new recycling. Instead of recycling something, you use it for something else. I think the third thing that's kind of pushing it forward is I don't think there's ever been a time in history when people loved their brands as much as they do now. If you're into Heineken, you might want to Heineken glasses. If you're into some craft brewery that's down the street, you know, that makes great bottles, you might want to reuse it for something else.
Felix: Very cool. How did you know that this was a ... I guess a growing market or a market where you felt comfortable starting a business? You know, you said that this was popular I guess in the 70s. Did you recognize the trend coming back? What did you see about the marketplace that made you want to get into this business?
Patrick: My story is probably a little backwards. It really wasn't a plan that started out, "I'm going to get into the bottle cutting space." How it actually all started was I've always been somewhat of an entrepreneur. I had just left a venture. It was like on a Friday and during that weekend, this is 3 years ago, I had just discovered Kickstarter. Back then it was kind of just blooming. The Pebble Watch had just been funded. It was kind of on all the blogs. I was just really excited about this new platform. By Monday, a couple of days after discovering it, I decided, "That's it." I'm a big junkie for new experiences and I wanted to do a Kickstarter but I really had no idea what I was going to do. I spent that day kind of surfing the internet trying to come up with ideas. I came up with a few. Two of them would have required months and months of RND and were pretty complicated. The third was an idea for a bottle cutter. I had seen YouTube video about someone cutting a bottle with a piece of string and acetone and lighting it on fire. I thought, "Okay. That's pretty cool but I can probably do better than that."
It was kind of a roller coaster. When I get passionate about something, I'm just kind of like a dog. I just don't let it go. Twenty days later after having coming up with the idea, I was on Kickstarter. I had applied for a patent. Come up with a prototype. Filmed a video. It was kind of a really quick process. I threw it up on Kickstarter. Thirty days later I had raised $80,000 for the Kinkajou Bottle Cutter.
Felix: Very cool. I would definitely want to get into the Kickstarter experience just a second. You came up with these bunch of ideas or at least a few ideas and then it sounded like you had a ... I guess a list of criteria that you wanted to follow either maybe on paper or in your head to narrow it down to bottle cutting. Can you talk to us a little bit about the criteria that you're working with? How you came up with them?
Patrick: For me, when I did the Kickstarter, it really wasn't ... I wasn't focused on starting a business. I was more focused on just having a Kickstarter experience. I thought it was a really cool platform. Something I want to participate in. My criteria was more about how fast can I do a Kickstarter and my other ideas literally had software involved, hardware and it would've just taken a long time whereas the bottle cutter, like I said, from the day I had the idea to the day I was on Kickstarter with like pitch video was only 20 days. That was the main criteria is how fast is I get on there.
Felix: Very cool. Yeah. Twenty days is definitely fast. I definitely want to hear more about what you did in those 20 days. Before we get there though, you said ... It sounded like you have a pretty rich history of entrepreneurial ventures. You had just left 1 before you started the bottle cutting Kickstarter campaign. Can you tell us a little more about your experience? What other kind of projects or businesses have you worked with or launched in the past?
Patrick: Sure. I started down the entrepreneur path in my early 20s. I had been working in the computer industry and while it was great, I kind of felt it'd be great to try something on my own and I ventured off into the, back then the ever growing internet service provider industry. The ISP industry. I started my first ISP. It went on for a couple of years. Merged with a much larger ISP. We ran that for 5 to 6 years and then eventually sold that to a much larger ISP. From there, I ended up actually going back to school. I did an MBA. I figured if I was going to be in business, I should maybe get a bit of education in it. Then from there, I hopped around a few companies and the last venture I was involved in was a software company. We were developing apps at the time for Android, Blackberry and Apple. While it was a growing market, it was a very competitive market, I just felt ... It wasn't a good fit for me so I got out of that and then that's when I kind of stumbled on Kickstarter.
Felix: Yes. You had a computer industry experience, online experience, software. These are all pretty ... I want to say they're not tangible but when you're moving into a physical kind of product space, was that a hard transition for you? What kind of things that you have to, I guess, learn for the first time when you make that transition into selling physical products?
Patrick: Yeah. It was a pretty steep learning curve. I was pretty naïve about the whole thing, building products. I was thinking, "Okay. Well, I'll get a mold made here or in the US. I'll order third party parts. I'll assemble the stuff in my garage and just ship out of my house." Very small thinking. That was my plan but while it was on Kickstarter, I was fortunately to have the timing of it all. When I was on there, several manufacturers from China reached out. The first one spoke no English at all so that wasn't going to work. The second one spoke some English but really didn't understand it. It was obviously a communication issue. Then the third person to reach out actually was American who had been doing business in China for over a decade at the time. Communication wasn't an issue. He basically gave me a quick lesson on the things I was doing. I was crazy to try and build this stuff even in North America with the prices or having the mindset that I needed to touch every piece and ship it out myself. He kind of put me in the right direction really early on which really saved everything because I would have probably crumbled under the amount of work I would have had to do if I physically had to touch every one of these things that I sold.
Felix: Yeah. During that time where you were thinking about launching a Kickstarter campaign and you came up with this idea, did this kind of product exist before or this was a complete totally different ... I guess a brand new invention?
Patrick: There were other bottle cutters on the market. It was kind of a spaced ... These bottle cutters that were still around were the original ones from the 70s. I felt like there was really no branding to them. They weren't doing any sort of marketing that I could see. Most of them didn't have websites. It was a pretty noncompetitive space which kind of gave me an edge. I came out with a brand, a cool name, a device that was very different than what was actually around the 70s. It allowed me I think to grab a pretty significant market share.
Felix: Yeah. That's interesting. I think when someone's out there thinking about what kind of product, what kind of business to start, we think this is a ... I wouldn't say scalable but like a repeatable process where you look for industries that have an existing product already but there's like no clear leader, no clear leader that's branding or marketing well and then coming in and taking over that space. Is that like a pretty repeatable process?
Patrick: I think it is but the trick is obviously stumbling upon these on these industries. I stumbled upon this by accident. I think actively going out and trying to find these industries it might be tough because bottle cuttings are pretty niche thing. If I was actively looking for something like that what I have stumbled upon then, probably not but I'm a big believer in don't compete if you don't have to. Competition is great and all but it's also tough on business if you can find a space that's kind of where no one's playing, it's a great place to start.
Felix: Cool. Let's talk a little bit about the Kickstarter campaign. You've launched 2 but we'll start with the first one which was the Kinkajou Bottle Cutter with the goal of $75,000. End up raising $80,000 from a 1,087 backers. Did it come down to the wire because most Kickstarter campaigns, you raise a good amount of money but it just barely crossed that goal line. Did it come down to the wire at the end of the day?
Patrick: Yeah, it did. Back then Kickstarter was very new and very few people knew about it compared to now these days. Like I said, when I launched this I was pretty naïve about the whole thing. I put it on there and then literally the first few weeks I got no pledges. I was like, "Okay. Well, how does this work?" I spent a lot of time contacting blogs and just generating traffic. I remember there was days I would contact 20, 30 blogs with, not cookie cutter emails, but all personal emails. Maybe everyday 1 of them will pick up but every time 1 would pick it up it would generate another 3 or $4,000 in pledges. It definitely took the 30 days to get to the finish line.
Felix: Yeah. That's one of the issues I've heard from other Kickstarter campaign creators is the early traction is the hardest where when you don't have any sales early on, nobody really wants to pay attention to you because they think that it's not going to be a worthwhile product or it might not come to market because there's not that early traction. I think your approach made a lot of sense. You start reaching out to these publications and getting some eyeballs onto the project itself. You said that you made a ... You really personalized with those emails rather than ...
Patrick: Yeah. You know, these blogs get inundated. I figure these copy paste emails aren't just going to work. I took the time but it's a very different space now. I feel like back then the blog might have been getting emails but they must be getting inundated now.
Felix: Yes.
Patrick: It's just the scale and the amount of projects live on Kickstarter is 10 times or even maybe a 100 times what it was. Kickstarter since then has opened up in all sorts of countries so it's a whole different beast when it comes to getting your word out there for your Kickstarter.
Felix: Right. What's the process that you follow when you want to personalize emails and not making it not necessarily a chore but like it's really hard to do so many in a given day. Do you have a process when you sit down and ...
Patrick: I would really focus on blogs I felt where my product would fit. I'm a big fan of a lot of blogs and I felt like it'd be great to get on those blogs but it really doesn't fit. I focused on a lot of the ones that it fit and then a lot of times I would find an independent writer for that blog and reach out to them directly. Yeah. I would say it was easier back then because I think these blogs ... Kickstarter was new. It was exciting. A lot of blogs ... If they haven't covered Kickstarter before, it was a good opportunity for them to start.
Felix: Cool. You went on these ... Found a bunch of blogs that you thought your product would fit on and then you looked for the individual authors or distributors onto that blog. What did you ... You found their email address or Twitter. How did you reach out to them? What did you say to them?
Patrick: Email, Twitter, some on LinkedIn. Just kind of used every resource I had. Yeah.
Felix: How did you personalize it? What were you saying to make sure that they knew that it was personalized?
Patrick: If it was a writer, I would say ... I would reference one of their previous articles, things like that. At least there would be an opening line that made sense and it wasn't cookie cutter. They could tell or actually knows who I am or things like that.
Felix: Yeah. It's funny, you know, like you're saying how people get inundated with emails today. Even personalization has become so frequently used that you start to notice ... Three years ago I think that that definitely worked. Even today you start recognizing people ... At least for me even though I started recognizing when people would take that approach of mentioning an article or mentioning in my example a podcast episode that they had heard previously. I think it's a format that definitely make sense. I think the more personalize you can make it the better. Even today, I tried even harder to make it even more personalized. I want to talk about the first 20 days. The 20 days that you spent before launching a Kickstarter. What did you do during that time because you had call with the product, you had to create all the marketing material for the video, the copy on the Kickstarter campaign. How did you spend your time?
Patrick: It was crazy. It took me 5, 6 days to mold through multiple prototypes. Once I felt I had a good idea I literally built one out of Lego wheels. It's kind of how it started. Then I needed to get something a little bit more substantial for the video, for the pitch video. I had no idea how to use CAD but within a day I was able to get enough CAD skills to pull out a decent 3D model. I sent it to a 3D printer. Three days later I had it FedEx to my door. Stuck my Lego wheels in it. I must have cut 2, 300 bottles. Finished those bottles. Handed them and then started working on a pitch video. Then during that whole time I was trying to work out like what's this thing actually going to cost because I needed to get a realistic idea that I asked. The reason I asked for 75 grand which is quite a bit of money is I had no intention of going to China. Twenty days is not ... I had never dealt with China. The whole thing felt really daunting. I was just going to deal with someone in the US. That's kind of where the price flow was. Yeah.
Then I filmed the pitch video. I got a hold of the patent lawyer. Make sure I was protected and just kind of launched it.
Felix: Yeah. I think nowadays Kickstarter's even more strict with making sure that the creator has everything figured out beforehand. I think you were saying that you hadn't done the manufacturing yet by the time what you launched. Was that something you worried about like not being ready if the campaign ... Just to see like what do you do next?
Patrick: Back then there really wasn't a sentiment that projects fail because it was fairly new. These days there's obviously a sentiment all projects succeed. The whole notion of like putting your ducks in a row while it was important really wasn't ... It wasn't a big focus at Kickstarter. They didn't really have this ... They didn't focus so much on due diligence at the time because for the majority of the projects back then I think they didn't work. For me, again because I was naïve, I think I'd given maybe 3 months as a completion date but I missed it by ... I think it took me additional almost 2 and a half maybe even 3 months after that. I overshot my deadline by 3 months simply because the whole thing ... I underestimated and I think a lot of people do underestimate what action takes to build a product especially overseas.
Felix: Make sense. The campaign ended. You had $81,000 ready to go from over 1,000 backers. What did you hit the ground running do? What did you do next?
Patrick: The funny is I really ... I had raised this money and again I still wasn't in the position where I was thinking. I was going to start a business with this. This was more about I'm going to fulfill these orders and I'm going to go and get another job and I did. I was working almost part time on this and we're fulfilling these orders because I went and got another job. I worked at that job for almost 4 months but during the time that I was at this new position, I kept getting emails everyday from people saying things like, "Hey, I started Kickstarter but I missed it. I wonder if I could pre-order it?" I was being inundated with them. I said, "Okay. I'll take pre-orders for sure." I mean I'm making a little bit of extra money. I opened up a Shopify store. Nothing too fancy. Just put her up there. In the time my Kickstarter ended to the time I actually shipped, I took another quarter million dollars worth of pre-orders. Now, I had raised over 300 grand and really known had I physically touched this thing yet. I thought, "Okay. Well, obviously there is a business here." I quit that other job and went full time on Bottle Cutter.
Felix: Wow. Quarter million dollars after just raising $81,000. That's crazy. What was that period of time that you raised ...
Patrick: Five months. The crazy thing is like I did 0 advertising to try ... When you're doing a Kickstarter they give stats in the background of how many people viewed your video and all sorts of analytics. I remember when I ended my Kickstarter I think my videos views were at maybe 40,000 for the entire campaign but by the time I actually sold my first Kinkajou, my video views on my Kickstarter were upwards of 130,000.
Felix: Wow.
Patrick: It was just kind of a sweet time for Kickstarter because it was so new that people would spend time inside Kickstarter seeing what else people had done. I think they were more likely to look for other projects that may have missed their chance but still wanted to get in on them.
Felix: A lot of your sales are just by straight up driven from your Kickstarter page even though the campaign had already ended.
Patrick: Yeah. It was frustrating too because back then and I think it's still like this. Kickstarter locks your page at the end of the campaign. You can't go back and make changes. I had this intention of changing the main screen to saying things like, "Hey, if you missed my Kickstarter, you can reach me here." Just an easy way for people to reach me. I didn't know that Kickstarter locked the page so my campaign ended and I came to put up this new slide and the page was locked. I mean it was pretty frustrating because I knew my ... These video views were happening. Even the emails that I got I feel like if I had had some type of messaging on there I would actually probably raise a lot more.
Felix: Yeah. I think now they let you have that buy now or shop now button.
Patrick: Yeah. It's become much friendly.
Felix: Yeah. Definitely. I'm sure this makes a huge difference because you don't want people to come into a page and wanting to buy but then not knowing where to go next.
Patrick: Yeah. They can't find you. Exactly.
Felix: Yeah. The manufacturing. Once you got the funds, the $81,000, you found a English speaking or American out in China that you wanted to work with. How did you get all the manufacturing set up?
Patrick: Working with him, he had engineers on staff. He took my pretty crude CAD drawings and turned them into something that could actually be put through a manufacturing process. He works ... He's 12 hours time difference from me so we work at night via Skype and everyday we would kind of push the project forward. By December of that year, we had products that were on their way and selling.
Felix: Awesome. What was the I guess supply chain? Like they manufactured it and they shipped it to you or logistics company?
Patrick: Yeah. My guy in China basically said, "Look, if you're planning on touching every one of these things, you're going to drive yourself nuts. You can't do this. It's not scalable." He talked to me into going to find a logistics company in the US. Now, everything is manufactured in Asia. It's put in containers. Brought over by boat. My logistics company is in Atlanta. It's sometimes depending which coast they land on. Basically it makes its way to Atlanta. It's somewhat automatic. While we're having this conversation, if I sell a product, I really have to do nothing. It just kind of happens.
Felix: Very cool. After this Kinkajou Bottle Cutter, I think about a year later you launched another Kickstarter campaign. This time setting your goal lower to $15,000 but end up raising almost the same amount of money, $76,000 from 981 backers. You returned back to Kickstarter. Did you ... I guess what was the reasoning behind that?
Patrick: It's just it worked so great the first time. I thought let's try it again and it worked. It's always easier to do it second or third or a fourth Kickstarter especially if you delivered on your first because you can go back to your backers and then if they had a good experience with you and they like the space, there's a good chance they're going to support the next Kickstarter.
Felix: Yeah. Makes a lot of sense. Do you have the emails from people that signed up for a pre-order or backed the campaign the first name? Could you just email them?
Patrick: Yes. When you finish a Kickstarter, you send out your customer survey and that's when we capture everybody's email. I don't think you noticed but I actually ended up doing a third Kickstarter and it's not linked. You probably didn't see it on my account but there's another account Kickstarter where I did a third Bottle Cutting Project.
Felix: Oh very cool. Yeah. It's not linked. Tell us more about that.
Patrick: It was a smaller one. It was more of ... Even more of a niche product. It was for converting bottles into pendant lights. It was called the Firefly LED Pendant Light Kit. That one raised $21,000.
Felix: Awesome. Between the second campaign and the third campaign, were there things that you learned from that very first one or maybe even the second that you knew you had to either do again for the next subsequent campaigns or you had to make sure that you did it right for the subsequent campaigns?
Patrick: One of the things ... It's definitely this ... For me, I feel it's chicken and egg thing where when you're doing a Kickstarter, you want to present your best foot forward. It's great to present prototype but that prototype really needs to be almost done because I feel like you have so little ... You get one shot at someone watching your video and if they're not completely wowed, they'll just move on to the next video. A lot of times it's hard to get that finished polished product without the Kickstarter funds. There's definitely ... It's hard to one without the other but I do a lot of mentoring for Kickstarter projects. I will always tell people like don't launch until you're absolutely ready and always put your best foot forward.
Felix: Yeah. That's a point that I want to talk about. You said that don't launch until you're absolutely ready and then there's also I guess the other side of this or the opposite of it which is like you should be launching before you're ready. I guess what do you think that you need to have lined up that you definitely need to have ready before launching? What are some things that you can kind of figure out along the way?
Patrick: Well, if it's a product, the product's got to be 90% complete I feel otherwise ... Because what's happened is Kickstarter's turned into this place where it's no longer ... While there's still people in the garage tinkering, it's turned into this big money, big engineering firms, big companies like Pebble putting a high end finished products. If you're going to compete against them and you brought something with duct tape on it, it's a little tough sell.
Felix: Make sense. The market is a lot more competitive because there's a lot more stylish and successful businesses coming in.
Patrick: There are people out there that have done dozen of Kickstarters and they've upped their game every single time. Now, these products while maybe they're not quite Apple products but they're starting to look like them.
Felix: Make sense. What about promotions? Because I know the first time you did it you launched the ... The very first kit that you launched nothing happened for the first couple of weeks. The second and third campaigns, did you approach it differently when it comes to promotion?
Patrick: No. I did the exact same thing but I noticed that by the third campaign I think we got 1 blog pickup. I felt it was just so saturated. The only thing we were ... Our biggest asset was our ... Not only people who had contributed to our previous Kickstarter campaigns but also every products we've ever sold we have listed those people. Once you're established and you have a mailing list, it's just a little easier to get going.
Felix: Did you find now if you were to launch on Kickstarter that you had to bring your own customers and audience and you can really rely on pitching to PR?
Patrick: I think it's obviously the easier route to bring your own audience. Otherwise, I feel like every time you see a Kickstarter that's raised a million dollars and it just looks like it happened overnight, I feel that there's a good chance that they probably spent 100 or 200 grand in marketing. Facebook and all these different mediums now. It's such a competitive space. It'd be hard to believe that you were able to do something like that without that back engine pushing it.
Felix: Make sense. I wanted to talk about I guess your marketing now because I know that Kickstarter was definitely a big driver for you. The traffic came from there. Outside of Kickstarter, what other ways have you found that works well for you to market and drive traffic to your BottleCutting.com?
Patrick: Our main place we market is Facebook. We've been doing it for about 3 years now. We spent significant funds on Facebook over the last 3 years. I feel like it still works. It's definitely ... It didn't work as good as 3 years ago. It was a gold mine. Every dollar you'd put into Facebook, you'd get $10 back but it's also become very competitive in Facebook too now. Facebook ads and you know the prices have gone way up. It's tougher go but it still works for us. That's basically still our main focus.
Felix: Yeah. Let's talk a little bit about your strategy for Facebook ads. How do you ... What are I guess campaign set up like? What kind of ads are running? How do you figure out what should go in the ad itself?
Patrick: We're always testing. One of the things that we try to do is we always try and touch base with our audience a few times a week. We have ongoing things like Bottle of the Week where we highlight a new bottle that we've cut and finished. Pushed that out through Instagram and Twitter but mainly through Facebook. We do Candle of the Week because now we're selling candles. Candle making kits. We're also big on always adding new products for our lineup. We always launch 2to 3 new products a year. Those always give us new traction with customers. When we do ... Every year I feel like we're upping our game. The website ... We redo our website every single year from scratch. We're always doing new videos and ever time we do it, we get a bit better at it. It gets a little bit more professional. We're doing that. Then for Facebook ads we tried them all. We run whatever works and what no longer works we kind of readjust and try something new.
Felix: This Bottle and Candle of the week approach I think this is going to be interesting because I think other store owners out there could probably could do something similar. You are featuring one of your products and then you're just running ads with that product's photos. How are you promoting that Bottle of the Week?
Patrick: Yes. For our space while people might like the bottle cutter, it's not really what they're interested in. They're interested in the finished products. We take time. We grab bottles from all over the world. We get them. We finish them and we feature them every week. If you were to go to our Instagram page, you would see like hundreds of bottles that we've cut, we've finished.
Felix: These bottles are obviously not for sale, right? These are just end results of using the products?
Patrick: Yes. We've never sold a piece of glass. That's not our business. Our business is selling the tools to create these things.
Felix: Mm-hmm (affirmative). Is it just you posting the content organically or you boosting? How do you actually spend money on Facebook to drive traffic?
Patrick: We used to do a lot of boosting of posts but we feel it's only great when we'll do it at Christmas or we'll do it Father's Day's a big time for us. Maybe we'll boost poster on them. We just got our ads running every single day. I think right now our current spend is I think it's about $1,500 a day US in Facebook. That will fluctuate ... That's kind of like our low points. This is a slow time of the year for us. Once we get close to Christmas, you know, we'll ramp that up. I think at the most we've ever spent in one day was $12,000 on Facebook.
Felix: Wow. That's amazing. You don't have to go into specific details but how do you figure out how to target those ads?
Patrick: Targeting is always a challenge. I think we're doing what everybody's does. You take your customer list. You upload it to Facebook. They create lookalike audiences. You target those. I think the more you this and once you start spending the amount of money we spent, it becomes tougher and tougher because you do run out of audiences. In the beginning, the audiences ... You know, you might think an audience of 30 million is great and you'll be targeting them for a long time but once you start spending a couple grand a day, you might hit 3, 400,000 of those everyday. It doesn't take long to run through that 30 million. Part of our strategy too is while we have our store, we've also jumped on Amazon.com and this year we've jumped on all the Amazons in Europe. What I'm finding is doing Facebook advertising in other countries other than Canada and the US because it's not a saturated as it is here, the price points are a lot better out there. I see more effectiveness in those countries. More reminiscent of what I used to see 3 years ago in the US.
Felix: Very cool. If you are targeting non-US countries, is there a different strategy that you have to take when you are marketing to Europe?
Patrick: We don't ... Right now we're marketing to the UK is kind of our big marketing push in Europe. Right now it's pretty simple. Everything's in English still. Italy and France are our next targets. We haven't quite decided yet if we're going to translate that because our site are currently isn't in ... It's not in these other languages. Only in English. The other that that's kind of a little bit different because we've had sales on BottleCutting.com from Europe but it's kind of difficult for our customer to spend $50 on a product and then have to pay another $40 in shipping to send it to the UK. Then it gets there and there's a 20% VAT and it's kind of a hard sell. When we do Facebook ads in Europe, we directly them directly to our Amazon page which is not ideal because we have no way of really tracking how effective each ad is other than we see an increase in sales.
Felix: Amazon will take care of the translation?
Patrick: Yes. Amazon recently changed things in Europe where it used to be ... You had to deal with every site. You have to open up ... If you want to do Amazon FBA, you have to ship product to Spain, to Germany, to Italy, to France, to the UK but they kind of ... No one was doing it because it was too difficult. Now, if you send all your products to Amazon UK, you can connect to all of the other Amazons. Now, your Amazon page will still be in English but I feel like these countries are used to seeing that with Amazon.
Felix: Yeah. That's true because all the buttons and layouts are all the same anyways. It's pretty easy to know how to purchase. That's a really good, great point. Getting on Amazon, what was that process like? How did you ... I think it's a market place that a lot of store owners out there are thinking about expanding into it. What are some of the pros and cons of being on Amazon?
Patrick: I feel like Amazon is a necessary evil unfortunately. It's such a big space that can't be avoided but it's also not an easy space to deal with. The fees are fairly high. To give you an example, we weren't on Amazon for the first year and a half and then we decided, "Okay. You know what? We're going to jump on Amazon.com." Then within a few months we were selling $50,000 a month on Amazon. We really didn't do much. It was ... What we started noticing was when we do Facebook ads and we drive traffic to BottleCutting.com, there's definitely ... While we can't measure it, there's definitely people out there who feel more comfortable buying from Amazon. It might be something they do every other day and it's a no brainer for them. Every time we boost ads or we spend more on Facebook or Amazon, sales go up. While we get sales on our own site, Amazon also benefits as well.
Felix: Wow. That's a great point and that's amazing how much of a difference it made just from being on there. What was the process like if someone out there wants to get on Amazon today? What's involved?
Patrick: There's 2 models for Amazon. One is the FBA model where you send your inventory to Amazon. In that model there while there's still some headaches, Amazon does all the work. They ship it for you and everything. You really have to do nothing. The second one is where you fulfill your own orders. Luckily the fulfillment host that I use in the US was already integrated to Amazon. It was kind of ... It was easy. We went flick a few switches. What happens very quickly is Amazon has to have the most, the strictest of rules when it comes to how fast your order go out. When a customer sends you an email request or any kind of questions, you have like 24 hours that. If you don't, you get penalized. It ripples down the road. Well now, I have a whole new respect when I see sellers with a 5 rating which is the highest you can get. They're working at it everyday. Ours is always hovering like 4.9 and 5.0. we spend a lot of effort making sure it stays there because I think not only does it give customers a sense security that it's actually ... Things are going to work when they order it but Amazon has these buy boxes where it won't promote you if you're not ...
You won't make the buy box if you don't have this score. They kind of get you on your A game for sure.
Felix: Yeah. That make sense. You also mentioned that you redo your website every single year from scratch which is amazing and crazy it seems at the same time to bring on such a big project once a year. What's that like? How do you just start another ... Not start another store but like build your store, your website from scratch every year?
Patrick: I feel with this space everything needs to be fresh all the time. If someone visited our store last year and came back the year later and it's still the same, it's not that it would discourage them, I just feel like if it was updated, it would kind of get them the sense of, "Look, this thing is actually moving. It's something real." One thing we haven't talked about and I can touch base on is I run a very lean ship. I run this out of my kitchen. I have myself and I have 2 contractors that help me and that's it. We run it a lean ship. When it comes to website development, I farm that out to a contractor out in the West Coast. When I comes to ad design or branding, I farm that out to an artist in Colorado. I'm a big believer in farming on the skills that you're not amazing at. Even if you're pretty good, odds are you can farm it out at a better cost and get better results.
Felix: How do you know what you should keep in house?
Patrick: I used to work ... Kind of a big of a back story here. In all my other entrepreneur ventures, I worked a lot. Sixty, 80 hours a week was the normal week. When I launched this business, I realized that there was a better way and that's ... If you're working ... Once the business is setup, I spend a lot of time and money on automation, I would rather have a business that turns X amount of profit but that also gives me a work week of 20 hours versus that incremental increase in profit by having to work 40, 50 hours. We've actually turned down a lot of opportunities that would have made things complicated. We've been approached by our companies who wrapped Walmart and we turned it down just because the headaches and the margins, the whole thing seemed like a horrible deal even though if you sell a million, you'll do pretty great. It just didn't seem worth the headache. I would rather run a tight ship maybe if the business is a little smaller, profit margins are a little higher and a lot less headaches and I sleep better at night.
Felix: That's awesome. This is just based on our experience from having to work those 60, 70 ...
Patrick: Yeah. There's no point. I feel like as I'm getting old ... I'm 41 now and I'm like what's the point of working all those hours? The best years of your life. Now, I'm more into ... I have a great routine. I meet with my contractors a few times a week and they have their own responsibilities. They just fill me in on those and it allows me to focus on other products. I plan on launching many more businesses just like this one.
Felix: Awesome. What is your day-to-day like then if you try to turn down anything that gives you too much of a headache and then outsource or farm out a lot of the tasks that you don't feel is your core competency. What do you spend your days doing?
Patrick: My work day consist of I start at about 11 AM. I finish around 2:30. I keep it short. Then a few times a week I will touch with Asia which is 12 hour difference so that usually happens 8 or 9:00 at night. Yeah. Then what it does it just frees up my time to come up with new ideas and it's worked. We've been working on 2 other types of businesses outside of the Bottle Cutting space and I plan on doing a new Kickstarter hopefully in August once all the prototyping is done.
Felix: Yeah. You're probably out of all the entrepreneurs I've spoken to over 100 entrepreneurs you're probably the one that's closest to "The 4-hour Workweek" dream that everyone ...
Patrick: I definitely tried it. It's a great book. I've tried it. I think 4 hours is just not enough for me with what I need to do.
Felix: Four hours a day sounds like works for you.
Patrick: The thing I love being an entrepreneur. I love this space. I don't mind spending 20 hours. Some weeks I do spend more but I actually enjoy it. If I only had 4 hours to spend in it, I'd probably miss it.
Felix: No, yeah. Definitely. I think the reason why a lot of entrepreneurs get into the space is because they do like building something and working on something and working long-term on something whether it'd be a business or a project. It's kind of a gifts and a curse that way. It's a battle that you have going on inside your head. Do I want to keep working or do I want to try create more of a lifestyle for myself?
Patrick: Yeah. You're going to love this space. I feel like so many people think, "Oh, I'm going to get into this and it's going to make all this money and I won't have to do anything." While that might happen sometimes, it's definitely not the norm.
Felix: Make sense.
Patrick: You end up working a lot.
Felix: Yeah. I think listeners out there might be thinking about how they want to either start a business like yours or create a lifestyle business like yours. Maybe they already have a business and want to get to this stage. How do get started with reaching this stage where you are able to outsource and automate things? Where do you even begin? What do you look at in your business to determine what you can turn out?
Patrick: I do a lot of mentoring in this space. I get this question asked almost every time I mentor someone. The thing I tell everybody is while you might think you need to sell a million units of something in order to earn out a living, the truth is you don't. Selling 10,000 of something might completely change your life especially when you're manufacturing in Asia and you're selling direct, you might be in a position where you have a 4, 500% margin. You might only need to sell 5 a day to support your lifestyle. You know, come Christmas when you sell 200 a day, that funds the rest of your year. I would say some people think they need to come up with the next iPhone because that's the only way to make it. I think you come up with a small product. I really believe that whatever product or space you're going to get into, it needs to be a passion because in the beginning, you are going to spend a lot of time in the space. If it's a space you don't even like, I must have mentored well over 100 people now and only maybe 20, maybe even 15% of them actually get to the Kickstarter stage.
A lot of them just lose interest in it. While there's lots of energy in the beginning to get something going, they lose interest. It kind of gets boring and it feels like works and they don't like it. If it's something you're passionate about, if it's a space you love and you don't mind spending that needed time in the beginning, I think that's probably the most important thing is whatever space you're getting into, make sure you're passionate about it.
Felix: Yeah. This is a really important point about the passion because I think a lot of us or a lot of entrepreneurs hear this ... Not actually the phrase but they hear that they need to be passionate about it. What if you're ... How do you know if you're actually passionate about something or you're just interested in it? Is there a difference in your eyes?
Patrick: There's probably a difference. I'm sure there is. It might be hard to figure out where it lies but one of the things I tell people when I mentor them is, "Look, if you're serious about this project, you need to touch it everyday. Seven days a week. You need to move." I always give the analogy of pushing this boulder up the hill. If you're not at least holding that boulder back or pushing it up an inch and you do that for a couple of days where you haven't touched your product or thought about it, I think it's already rolling back on you. It's such an uphill battle in the beginning. It's not that it's hard work it's just ... It's a lot of work. It's a lot of like late nights and you might be tired. I think that's where the difference becomes and you like it or is it a passion. When you're tired and it's sunny outside and you just want to hang out with your friends but you stay inside and you work in the garage, I think that's when you can tell it's a passion.
Felix: Mm-hmm (affirmative). Are you passionate about Bottle Cutting or is it your passion about launching businesses? What is your passion?
Patrick: I never really ... It wasn't about bottle cutting. I'm passionate about business. Just entrepreneurship and the whole process. That kind of drives me.
Felix: I see. You don't necessarily have to be ... I mean I guess you should be at least interested in the products you're selling but if you're just passionate about building a business in general, would you consider that enough fuel to ... I guess enough of a reason to get started?
Patrick: Yeah. I feel definitely but I don't know if you really know that unless you've been through the trenches with the business before. You might think you're passionate about a business but if you've never done it, I don't know if you really are.
Felix: Right. I guess you just have to kind of get started and see ...
Patrick: You get started and you'll find out quick if it just kind of disappears from your top of mind awareness. All of sudden you haven't thought about your ... This idea in a month. Well, odds are it's probably going nowhere.
Felix: Mm-hmm (affirmative). Share whatever you feel comfortable with but how successful is the business today? You know, you launched this 3 years ago. Raised a ton of money in pre-sales and everything. How successful is the business today?
Patrick: Last year we did over 3 million in sales. This year we're trending towards 4 to 5 million.
Felix: Awesome. Yeah. Great stuff. I think outsourcing was a big thing for you to get into this more of a sustainable business for at least for you lifestyle. Do you also depend on any tools or applications to help run the business?
Patrick: Mailing lists through MailChimp I think is a necessity. I don't think there's anything that works as well as sending an email to someone and you don't want to spam your customers but keeping them ... Making sure you're always in their top ... We might send out 4 or 5 emails a month. I think that's probably a good number depending on your space. I know like Victoria's Secret. They send out emails everyday but people don't seem to mind. They can do that. It all depends on your space I think. In the Shopify platform, there's a couple apps that we use that work really well. One is there's a product up sell app. It kind of blows my mind. We put this on a few years ago. It's just one of these apps that as you're checking out it says, "Hey, how about adding this to your cart?" Since we've added that, 14% of everybody who's every gone through our system has purchased that item.
Felix: Wow.
Patrick:
That's accounted. I think it was over ... I think to date that app has generated a quarter million dollars in sales. It's kind of odd.
Felix: It's amazing.
Patrick: Yeah. I never thought you know that I really worked but obviously it does. I think anyone who doesn't have that, that's definitely a ... It's a low hanging fruit they can throw on there. Abandoned carts is something that everybody talks about. I don't know what the industry average is but ours is fairly low. I think in a month we might ... I think I went back and looked last month we had 300 abandoned carts. We were able to recover 104 of them.
Felix: Wow.
Patrick: We don't ... It's either because we're sending the right type of traffic to our site or there's something on our site that is keeping someone interested enough. If they actually make it to the cart, there's a good chance they're serious about purchasing. Those are probably the biggest things.
Felix: Cool. You mentioned a couple of times about your mentoring program. Tell us a little bit more about it. What is it? I guess what kind of business or what kind of people would it make the most sense for?
Patrick: I'm a big believer in karma and when this thing happened to me, this business, this whole Bottle Cutting thing has literally changed my life. Not just financially but in so many ways. I'm a big believer in giving back. One of the things I feel like the best place I can get back is through helping people through their own journey like this. I actually did a TED talk about this. There's a TEDx. If you just Google my name in TEDx, you'll see it will come up. It's called "The 20 Days That Changed My Life." In that talk, I talked about mentoring. Basically I'll mentor anybody who ... I can't mentor everybody but on our Bottle Cutting sites under the more link, there's a place that says entrepreneurial mentoring. If anybody wants to touch base, I usually Skype with them. Spend an hour with them. I try to schedule at least 1 or 2 a week. I met people from all over the world. Some people have done nothing and other people have gone on to ... I have a friend who used to work at Best Buy and he's become a close friend now. He's got a million dollar business now.
Felix: Wow.
Patrick: This stuff does happen.
Felix: Awesome. What are the other plans you have for the remainder of this year? What are some goals that you want to hit with Bottle Cutting?
Patrick: We've already launched ... Like I said, we try to launch a couple of products every year. We've already launched our Candle Kits which we just launched a few months ago. In August-September, we're launching something called Kinkajou Projects which is just the whole set of different types of products that just are add ons to the whole Bottle Cutting space. Come August or come July is when we normally start looking at our website redesign. We start typically beginning in July and we'll have it up and running by mid-September. Come July we'll look at a whole new rebranding and get that going.
Felix: Very cool. Thanks so much Pat. BottleCutting.com. B-O-T-T-L-E-C-U-T-T-I-N-G dot com is the website. Anywhere else you recommend our listeners check out? They want to stay in touch with you. Follow with what you're up to?
Patrick: We have a blog on BottleCutting.com. I feel like it's probably the best place where we post everything that's up and coming. If you join the newsletter that's on BottleCutting.com, you'll definitely stay in the know. We plan on launching a whole new product in August which is in a whole other space. We'll be announcing that shortly. If you're on that list, you'll be notified.
Felix: Very cool. Thanks so much Pat.
Patrick: No problem.
Felix: Thanks for listening to Shopify Masters. The eCommerce marketing podcast for ambitious entrepreneurs. To start your store today, visit Shopify.com for a free 14 day trial.
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About The Author
Felix Thea is the host of the Shopify Masters podcast, the ecommerce marketing podcast for ambitious entrepreneurs, and founder of TrafficAndSales.com where you can get actionable tips to grow your store’s traffic and sales.