Quantum Networks is listed as one of the top 500 e-commerce companies in the country and experienced 100% growth each year for the past three years. What has Quantum Networks done right to achieve this exponential success? This company, founded by three friends, changed online retail by working with brands to bring an exceptional experience to the customer. This unique business model revolutionized e-commerce by becoming a hybrid of B2C and B2B.
In the Eleventh episode of Skubana’s E-Commerce Mastery Series where we invite experts of their respected fields to share their best practices for success, our host, Dr. Jeremy Weisz of InspiredInsider.com interviews Eytan Wiener of Quantum Networks.
E-commerce sellers will discover:
The story of Quantum Networks’ beginnings by three friends who shared a cubicle
How Quantum Networks cultivated its growth achieving 100% growth year after year
New services that minimizes your cart abandonment rate and focus on customer retention
Qualities to look for in a prospective employee for small businesses
Unique marketing techniques to stay ahead on this technologically evolving market
Raw Transcript: Eytan Wiener of Quantum Networks.
Jeremy Weiss: Dr. Jeremy Weiss here, founder of INspiredINsider.com, where I talk with inspirational entrepreneurs and leaders like the founders of P90X, Baby Einstein, Atari, many more, how they overcome big challenges in life and business.
This is part of the Skubana E-Commerce mastery series, where top sellers and experts teach you what really works to boost your E-Commerce business. Skubana is a software platform to manage your entire E-Commerce operation.
Today we have Eytan Wiener. He is co-founder and COO of Quantum Networks, founded with Ari Zoldan and Jonathan Goldman. They grew from 0 to 30 million in sales in just under four years. They sell items such as wireless routers, signals boosters, hard drives and much more. It all started with Eytan and two friends in a cubical.
Eytan, thanks for joining me.
Eytan Wiener: Thank you so much for having me.
Jeremy: Straight from New York.
I have a fun fact that’s really interesting about you, and we’re gonna talk about… You’re really good, and I have a long list about advanced analytics, marketing, what you guys do with text support, partnerships, challenges.
But you started off and you went to dental school.
Eytan: Yeah.
Jeremy: Why?
Eytan: Why?
Jeremy: Yeah.
Eytan: My dad’s a doctor. My uncle is a doctor. Most of my friends are doctors. I was gonna be a doctor, and then I was, like, “Maybe I’ll be a dentist,” which was probably smarter, based on the current healthcare situation.
Jeremy: Right.
Eytan: Then I was, like, “Okay.”
And I had pretty good grades. I went to dental school. I did very well on the academic side, but all the laboratory, tedious, nitty gritty millimeter work made me a little…
Jeremy: Crazy.
Eytan: …Cuckoo, yeah. I had a baby on the way and I wasn’t sure what to do. It was a lot of investment.
But I just really wasn’t happy, and I didn’t want to continue that.
Jeremy: Did you end up finishing?
Eytan: It happened to be not the greatest school. I think, if I would have gone somewhere else, they probably would have pushed me through. So it wasn’t the best support system. But I was, like, “You know what? Let me try something else.”
I got into marketing, and then the rest is history. But I do have a science background.
Jeremy: Okay. Yeah. I thought that was really interesting, actually.
So we’ll talk about when that first started in the cubicle. But first, what’s working? What’s a must for sellers to boost sales? You guys drive a lot of sales. What should people start to think about and do that you are doing?
Eytan: It’s funny. I went to a lot of trade shows recently, and the whole thing now is Omnichannel. Omnichannel, Multichannel. So Omnichannel being different platforms, and Multichannel being different marketplaces.
So when you have a site, you have to have a mobile site, and you have to have an iPad friendly site, whether it’s responsive, whether it’s adaptive, or you have a custom site. Most purchases now, or a lot, are made on mobile devices. It’s the hottest thing, the payment side of it, etcetera. So that’s huge. People are starting to use their phones more than their computers, a lot more, to buy stuff.
So streamlining that process, making it efficient and making the checkout efficient is key.
As far as multichannel, the Amazon and the eBays of the world are hard to leave out. So there’s a lot of conflict sometimes. You want to sell on these channels. They violate certain pricing rules, or they control the market, or it’s monopolistic. But there are ways to do it. You have to play with it. It’s usually for the good. You can do a lot of sales. Sometimes it hurts a brand.
But if you do it right, and we’re pretty good at that, and the vendors that we carry, it could increase sales a lot.
So putting the brands that we represent, or manufacturer, on our website, as well as the other channels, and in all of the different formats for different renderings for different devices, is key to really get out there.
You have to be everywhere on the web, so to speak.
Jeremy: So what channel should people be thinking about?
Eytan: Our website was very, very successful at the beginning for different reasons, which I could go into. But then we got into the whole Amazon world, and that really grew our business a lot. The problem with that is, a lot of times you’re not so sure how much money you’re making with all of the fees and associated issues, and you also lose your own brand name and customers.
So you sell cell phones on a website. You have the brand, you have your name, contact the customer and own the customer. On Amazon you can’t really contact the customer, and they take their fees. So you pay acquisition costs for your website as well, but if you have your own brand and your name, you really want that.
When these huge Amazons and eBays take over online, it’s number one and two, and everyone else, it’s very hard to build a website. So what we’ve done is, since we’ve shifted a lot towards the marketplaces, we’re shifting back now to build our own brand and website with certain features, from learning experience, to really make it pop at the cell. Not abandoning the channels, but diversifying, going back to our roots.
Jeremy: Yeah. You realize you own that customer and you can follow up with them, and they recognize you as the brand.
What was working early on? You said the website early on was really big.
Eytan: Yeah. So, early on, as I said, we were guys in a cubicle. Or, I think you mentioned that in the intro.
Jeremy: Yes.
Eytan: So I got into web marketing. SEO and pay per click with someone who I met, and then my partner Ari was working on the same floor. He has a telecom background, and he also had telecom companies. The most recent was an equipment company where they just started listing refurbished and re-certified products online on eBay, and they build customer base from it, carrier base from it. He had sold those companies, and he wanted to do the next best thing, which was 4G, WiMAX, wireless. So we got into that. We basically made a website where we listed every single 4G, WiMAX or LTE product before it was that prevalent.
Jeremy: Yeah. I think I saw it. It’s, like, going WiMAX.
Eytan: Yeah. We have some blogs and media centers that we still use.
So WiMAX was one technology that’s [inaudible 00:07:01] and clear wired deployed, and then there was LTE, which is what people use now, AT&T and Verizon, as you know. It was in its infancy, so people would call from Africa and third world countries. They would want certain products, and a lot of times it would just be not realistic because of all these different licensing issues, and this and that.
That said, we did close several very large deals. So we have a large network in Panama, in the Virgin Islands, in Africa. So it was good business, but it was a very long sales cycle. Sometimes years. Sometimes [inaudible 00:07:39]
So it didn’t really pay the bills, but it was something.
So we’re, like, “We need to figure out something that’s more consistent,” and that was really when E-Commerce was taking off. So we started to sell stuff, but we didn’t want to sell things that were such commodities, like cell phones.
Jeremy: So you’re competing as everyone else, in other words.
Eytan: Right. We wanted to find a niche product. So something that has a certain price point, a certain margin. A sales assist model where you need to explain to someone what it is, and help them.
So we’re, like, “We’re [inaudible 00:08:15] retail online.”
They lobbed us a couple of questions. Usually it was cellular boosters. People who don’t have cell coverage for their home or office. They don’t even realize, which is part of the product secret, if you tell someone a product exists and they don’t even know about it, and help them so much, it’s a pretty easy sale.
Jeremy: Right.
Eytan: Despite the price. So we can charge a premium. We don’t have to compete on price. We help them. We find them the right solution, and instead of them paying thousands of dollars for their cell bill, or they need it for an emergency, now they have a booster or an amplifier for their home.
So, quickly, because of that model and some SEO and strategic online moves, we were selling a lot of this stuff. [inaudible 00:08:57] a lot of these smaller companies. But then we continued to find more of that type of genre product.
We diversified a little more to just regular consumer electronics, but most of the stuff we sell has a little edge to it, or a twist. Usually not something…
Jeremy: It’s a little more niche, or higher end.
Eytan: ..You couldn’t just buy it in a Best Buy or a Target. We sell storage and surveillance, but it’s usually on the higher end side, or the studio side, or something that’s a little different. So there’s pricing the margin, and there’s a program where there’s some kind of value add for us that makes it make sense. We in turn offer the value to the vendor, so we’re not just some other guy online selling their stuff. We’re providing a service. We’re doing installation. We’re remodeling the brand and the challenge strategy.
Jeremy: Yeah. I want to talk about that later on too, about the tech support and how tech support helps drive more sales for you.
But back to… What’s interesting is, talk about what was working with SEO and online. What’s interesting is that people, like you said, don’t even know there’s something out there. So how do you get those customers through the online… Obviously you’re an expert in online marketing, to… Who didn’t know this even existed, to actually coming to your site and getting a product?
Eytan: That’s a good question.
I think people were searching, in this case, [inaudible 00:10:27] which is a good example, because that’s how I honed a lot of the method.
So people didn’t have coverage. So you Google, like, “What do I do? I need coverage in my house.” You can’t build a cell tower in your basement. This was before femtocells and the carriers weren’t really so onboard, because for the carrier to say, “You have bad cell coverage,” is admitting that their coverage isn’t good. So they didn’t really like boosters. They went through a whole FCC process, which is a whole other separate discussion.
But we would post a lot of content about it. So any time… I was just speaking to my customer service team about this. When you get questions from customers, it’s important to document it. It’s important to transcribe it, almost, and put it on Q&As in the blog. So if someone searches, like in your case, you know how to get video podcasts out there, and your blog comes up, it’s very targeted. So Google is getting better at that.
So if someone searches, “How do I get the right cell amplifier for a 4000 square foot warehouse in Atlanta,” and it had that content, it usually comes up for the long tail search.
Jeremy: Yeah.
Eytan: The long tail cumulatively is much shorter than the short tail, if someone is searching cell amplifier. So sometimes people don’t even know it exists. They just say, “I need coverage.”
Or those keywords, like coverage, reception, blah, blah, blah.
Jeremy: Yeah.
Eytan: When it became a little more popular, which it is now, there are these companies I used to sell that are actually in Best Buy by now. I would never think they would be. They were much more niche and specific. Now they are more co-funded by VCs, and they are very out there.
But people search the brand names. People search the solution, and we would come up with different blog spots and videos, and custom landing pages, and ad word campaigns, just to target that base. Then we built a lot of repeat customers from that, which is what you’d say was the value of the website. So whenever they needed a solution, if they were installer, or for a home or for a friend, they would come back, and that’s really how we did that.
We applied the same method to other products and solutions.
Jeremy: Yeah. So you were doing content marketing before it was called content marketing, probably?
Eytan: I mean, that’s what I told everyone when I started. Content is king. At that time people were doing spammy links and all this other stuff that was driving Google, and whenever Google changed their algorithm people would get penalized.
[inaudible 00:12:48] problem. I think nowadays SEO is very hard to do. It’s almost like… What’s the word? I wouldn’t say untrue. It’s almost, like…
Jeremy: Like a myth or something?
Eytan: …Yeah. It used to try to find things to fool us, or [inaudible 00:13:10] robot or Google. But in reality they’re just getting better and better.
Jeremy: The algorithms are getting smarter.
Eytan: Semantics in realizing what’s going on.
Jeremy: No, but I like your method. I mean, your method of basically document all questions, and… Document all questions and write them down, because this is the exact word and verbiage people are using, and then put them in either Q&A or blog posts and answer them, and you become the expert.
Eytan: Yeah. I actually had a friend. He was starting a business where he would record all of the receptionist’s calls and transliterate it into content. So you’d [inaudible 00:13:43]
Not sure what happened to that, but that’s the idea.
Jeremy: That’s smart. Yeah.
Eytan: Yeah. That was one of the ways we started. Again, now it’s much harder. But, by continuing to do content, you can thrive.
So one of the things we’re doing now is video content. So since retail is going away, you want to bring that retail experience to the web.
So we partnered with a company that does a lot of video based marketing. So every product that we have on our new website, there will be a video. But it’s not as though there will be a custom video from the vendor, but the beauty of a lot of the software and the process is that it will pull from existing content.
So if I’m selling, let’s say, a NetGear or switch or router, I don’t have to really do a review on that, because there’s a lot of existing content. So I can pull from YouTube. I’ll pull from iTunes. We can serve up the best video, and aside from the video being on our product page, we’ll also have a dot TV.
So if the site is jeremy.tv, you’ll have all your products, videos. Then people will click there and it will take them to the actual checkout page.
The conversion is almost 60% to 70% higher.
Jeremy: Really?
Eytan: You’re getting relevant content, video content of what they want to buy, and explaining it to them. Almost like a customer service person explaining what this is to you.
So with some of this software that we’re building and collaborating with, we’ve seen really great conversions, and it’s a real big value add for the vendors. I think that’s the next level of SEO and the web, where it’s a virtual shopping experience.
Jeremy: So in the [between], Eytan, do you pull in certain things that you know are good, or is it built now to automatically pull in certain videos? I’m just curious if there’s certain content that you look for that you find work better to be on that page.
Eytan: It’s a good question.
So the beauty of the software is that, based on the sales conversions, you can see which video did better. Let’s say you want to buy a TV, and I show you one… We don’t sell TVs, but let’s say you want to buy, I don’t know…
Jeremy: A router.
Eytan: …A router, and you see someone, and then we’re working with a vendor, and they give us video content. We pull some public content from YouTube or Dailymotion, and we pull some content from some guy in his basement doing a review.
Sometimes that will convert better, because it’s a real unbiased…
Jeremy: It’s authentic.
Eytan: …Review, unboxing.
But the beauty of the software is we can tell which is best, because we see what converts and what doesn’t. The real value of that is we can often go back to the vendor and tell them, “Hey, this video converted better than the other one.”
They’re, like, “Thanks for telling me, because I spent five million dollars on video. I had no idea of the ROI, return on investment…”
Jeremy: Wow.
Eytan: “…Because I have no audience. There’s no rating, like a TV rating. It’s all based on experience.”
It’s a really cool win-win for the vendor and us to promote products in this new age way, and that’s one of the things we’re really working hard on now.
Jeremy: Yeah. What surprised you? What has worked that you have seen with conversions in certain sales videos?
Eytan: The unboxings are good. It allows detailed explanations and descriptions.
It kind of depends. I mean, it depends on the sector. So I’m more into electronics type stuff. If it’s apparel or clothing, and you’re–
Jeremy: No, yeah. The disclaimer is, this is your expertise.
Eytan: I know. I’m saying, if it’s apparel and clothing… I mean, I know in other E-Commerce sectors a lot of it is about image and brand, or if it’s luxury, sometimes a video with someone on a first class flight holding it is appealing to the person, but if it’s a router sometimes it has to be a very detailed explanation, or to show someone, hey, this is really not so hard to use.
So it really depends on the product. Some of the products we sell are gadgety Kickstarter up and coming companies, where you want to sell the idea and the image, and some are just straight up hardware. We want to say what it does and how, and what.
So it really depends.
Jeremy: What’s one that surprised you?
Eytan: That being said, there’s metrics.
What surprised me as far as conversion?
Jeremy: Yeah. Like, why did this even convert? Maybe an unboxing.
Eytan: Yeah. The problem on the web nowadays is that the data is very fragmented, so when you get content from a product, whether you get it from a manufacturer or you write your own content, or get it from an aggregator, or a distributor of the product, everyone seems to have the same content on their website, which is also not so good for search. It’s just the reality.
So what happens is, it gets very…
Jeremy: Crowded?
Eytan: …Fragmented and often incorrect. So you have listings on Amazon or on websites that don’t even have the right content.
So by doing videos and showing exactly what’s included in the box, and exactly what’s in there, these unboxing videos convert very well.
Especially if you will post an unbiased review, I mean, sometimes the guy will say, “Hey, this is a great product, but the battery life is not good.”
So you don’t want to be shy about that. I mean, the Amazon review. If there’s a bad review, there’s a bad review. If there’s a good review, that’s okay too. So it’s not biased in any way. People appreciate that.
The vendor videos with all of the fancy graphics and stuff, that’s good for a sales drive, or a call to action. But the true, honest reviews seem to do very well.
Jeremy: Yeah. So someone in their basement just unboxing it and explaining it, and telling you what they liked and didn’t like?
Eytan: The reality is, people search YouTube a second after Google. YouTube is the biggest search engine. [inaudible 00:19:42] YouTUbe into a product video generator, research, that’s where people are going anyways. So why not just put that on your website?
It’s easier said than done. The way we’re doing it with these advanced algorithms and testing, and cross selling items and different videos per channel, per category, is quite advanced, and it’s almost mixing a retail experience on the internet.
Jeremy: Right, right. So now that you’re going back to your roots, Eytan, what else is working for the website for sales and conversion?
Eytan: Good question.
So, what else is working? The video conversion helps. I mean, I started the E-Commerce thing. Magento was a new thing then. Like, people with their own site.
We kind of do a lot of that in house now. I don’t like when I outsource things. I mean, I like to outsource things if I can, but a lot of what we do is very…
Jeremy: Custom?
Eytan: …Home brewed. Custom.
It has to be scalable skill, but [inaudible 00:20:46] little tricks and things like that.
So one of the things we mentioned is the video that we’re doing. Even the design of the site and appealing to a certain crowd, or a certain demographic, versus just being open ended… One of the difficulties is that we sell a lot of different products. Some are tech based, but some are just gadgets, or cool.
So how do you present it on one website, and not [inaudible 00:21:14]
Jeremy: It’s a different audience, you’re saying.
Eytan: What are you about? What is the website about? Are we tech sellers? Are we gadget sellers? Are we experts in this or that?
So it’s hard to have one website create the messages. So a lot of these technologies that [inaudible 00:21:30], like responsive pages to the consumer, seem to win. So Amazon will tell you, “Oh, if you like this, you’re gonna like that. You’re in this zip code, you’re gonna want this deal. You recently viewed this, that.”
Those kind of automated, algorithmic things seem to be much, much more efficient in converting than just AB testing and manual types of things that were more prevalent when I started. Now there’s technologies that know everything about the user when they log on your page. They track all these different things that most people don’t even realize. A little spooky.
I’m not saying I’d do anything in the wrong way, but there’s so much data you can get about a person when they sign up with Google or Facebook, and this and that, and cater to them, that it’s almost an easier sell than when they are in the store.
[crosstalk]
Jeremy: You know more about that.
Eytan: Yeah. Personalized experience.
Jeremy: So how do you do that? When someone hits your page, it’s quantum-wireless.com.
Eytan: That’s our current event. We’re gonna launch our new domain, hopefully, in the next three to four weeks. We could do maybe an update to the video.
Jeremy: What is it gonna be?
Eytan: We haven’t announced it yet.
Jeremy: Oh, you haven’t? Okay.
Eytan: Maybe we could do a follow-up announcement. Yeah.
I mean, we’re beta testing.
Jeremy: Yeah. When will it come out? I wont’ hold you to it.
Eytan: I would say in three or four weeks.
Jeremy: Okay. Yeah. I just wanted to know, because I’ll put it on the actual lower third for you and have the correct one. So maybe we won’t release it until four weeks after you release it.
But, yeah. So how do you..? I guess you’re releasing the new site. So talk about the checkout. Early on you mentioned the checkout process. What do you do to optimize the checkout process?
Eytan: It has to be very easy. It could become a little crowded as well. So if you go to a popular site, I mean, Amazon is the king of it. But if you go to a NewEgg, for example, it would give you 40 options, which is good ad [inaudible 00:23:45]
So it used to just be, like, you could check out with a credit card, you could pay with PayPal, and then there’s Google Checkout.
Now there’s Visa pay, Amex pay, Discover pay and Chase and MasterCard pay, where they actually verify, which is good for protection, and that’s a whole other discussion.
But the key to checkout is guaranteeing someone that they are safe, that this is a real site, that we’re gonna deliver…
Jeremy: Security.
Eytan: …You have the return policy there, you have all of your trust symbols. You try to do the appropriate up-sells or cross sells in the card, and leave no questions unanswered so they don’t have to browse out of it. You really want someone to buy. Most people abandon the cart 97%.
Jeremy: Right.
Eytan: So there’s following up with the people who abandoned via email. There’s optimizing the checkout page where there’s very little data entry, whether you use your Facebook profile or your Google, or your PayPal, and just buy it. Obviously, if you want to make a profile and sign up, that’s great.
But people don’t like doing that. So always offer guest checkout. I don’t like when people don’t do that, because it’s kind of annoying and people avoid it.
Jeremy: Make it easier. Don’t put up another barrier for someone.
Eytan: Right. Make it easy. I mean, you still want the customer. You want them to sign up for the newsletter and constantly be able to reach out to them in an ethical way, via [inaudible 00:24:58] marketing and sending them new deals. “Hey, you bought this. Maybe you’d like that.”
But the checkout has to be very, very simple. Now that things are mobile, it’s more difficult.
The screens are smaller. It’s a little more clumsy. People are a little more worried about the security.
I was at a mobile summit. It was a research summit / trade show in California.
Jeremy: You were speaking at ThinkGlobal too, right? You spoke at ThinkGlobal?
Eytan: Yeah. That’s something else. That’s international commerce.
Jeremy: Okay.
Eytan: I didn’t speak at this other event. It was just a mobile commerce thing, so it was like 70 delegates. I was one of them. Like, internet retailer 500 or Fortune 500 retailers, and the whole thing was mobile. Like StubHub and PayPal, and Adidas. Very big companies. All companies that [inaudible 00:25:59] were not as large. I was honored to be there. I had interesting, I guess, insight on my own right.
But that’s what these companies are struggling with, keeping the mobile customer, tracking them across devices, which is what I spoke about before. So how do you get them to check out on a mobile device?
Jeremy: So what did people say?
Eytan: It’s all very new, and it’s very exciting. But things like Apple pay, where, if it’s integrated into your mobile app, you can just press your button. You can just swipe your finger, [inaudible 00:36:31] pay or Samsung pay, or Google Checkout. Those are the ways that should convert the best, although it doesn’t always, and there’s a lot of different integrations.
Apple pay works with this vendor on this site, in this browser. It’s not so straightforward, because you have the app, and someone doesn’t want to download the app.
But being able to login to your profile with your saved information on a popular site that you trust, and just checkout. There was even a company there that was advertising, where you just enter your email and they ship your order.
Then, later on, they send you an invoice.
Jeremy: Really?
Eytan: Yeah.
You pay. If you don’t, they charge you interest. They make more money on interest. Like, a pay me later thing.
But the point is…
Jeremy: Wow.
Eytan: …The reason why they are able to do that is because they are almost the bank in themselves, and they have the tools.
Jeremy: They could finance it.
Eytan: They could finance it and they could prevent fraud. So they can, in a millisecond, calculate the chances that this fraud or not based on your IP and your email address.
Jeremy: Right.
Eytan: With this data they have.
It’s usually not forward, and even if it is…
Jeremy: That’s really interesting.
Eytan: …The fees are hedged by all the profit they make from, let’s say, the interest. If you want to take a loan on it, you can.
But the reason is, a lot of times you’ll do research on your phone. I do this sometimes. Like, on the bus I want to buy a wallet, or example. I needed a new wallet. So I was looking on my phone this morning, or wallet on Amazon and on some sites, or Nordstrom, or whatever.
But to actually go buy it on my phone, it seems like my wife likes to do that. I don’t really like to do that so much.
Then I’ll go to the computer and really buy it. So that’s the idea. Finding it on the phone, edit the cart and then go into your online profile there and have it be in your cart.
So this company is, like, “No, don’t even do that. Just send it to your email and complete the transaction.
Jeremy: Really interesting.
Eytan: So it triggers you.
That, I think on the mobile level, we’re getting a little deep here. That’s the right way to… Even less, less friction than a computer. There’s very little real estate. People are all over their phone getting texts and this, and WhatsApp. If you really want to sell them, it has to be as simple as possible, and we’re working on that as well on our new rollout.
Jeremy: Yeah. No, thanks for sharing that.
You said you had some unique insights at that conference. What were your insights?
Eytan: As far as..?
Jeremy: The mobile.
Eytan: As far as what I learned?
Jeremy: No. I don’t know. You said you brought some unique, or maybe you gained, some unique insights from..?
Eytan: No, just how big mobile is. Numbers. I mean, eBay as a company is not doing as great as they were. But 63%, I think, of their seals are mobile.
Jeremy: Wow.
Eytan: Some of the companies displaying, they were showing how big mobile is, yet how undeveloped it is. The top 20 or 30 internet retailers, only within the last year or two, developed mobile friendly responsive sites. You just have these clumsy sites where you would have to zoom in and buy it. It was almost impossible. Now it’s dominating and it’s quick, and it’s impulsive. It’s great.
The great is, it’s very fragmented, like all these new technologies.
Who will win the war of mobile payments, blah, blah, blah, and how does that effect your conversion?
I was very intrigued, I guess, with [inaudible 00:29:53] about how important that is.
Now, you have to have built up a site and a base and have a good product to sell to even play in the mobile space, but once you do have that, how do you capitalize on those customers?
Jeremy: Yeah. So what do you go home and do with the business after hearing all that?
Eytan: That’s a good question. So it’s actually a good time for me. Since we’re redoing our site, I have the luxury of building in that as well. So let’s say my Magento developer would build the responsive design as well. Instead of doing it twice, a lot of times people build the site [inaudible 00:30:31] the mobile version of the site, or they host the mobile version, or they send the traffic to a server, which does the checkout.
There’s really 15 different ways, they were saying, and some ways are clearly not the way to do it. But it’s a question [inaudible 00:30:43] the top four or five, what to do it… So we have a responsive site, and we will have a mobile app. But you don’t also want to cannibalize yourself. Sometimes you have a mobile app and a site, and you can’t always know what’s going on.
Jeremy: Right.
Eytan: One of the interesting topics was, how do you track a user across platforms? These big companies like StubHub want to know every user. So let’s say you go onto StubHub, right, to buy Clubs tickets on your computer, but you don’t check out. Then you go onto your iPad, or whatever, how do they know you’re the same user?
So obviously, if you login, they could track you and give you suggestions. But if you don’t login and everyone is using six devices a day, and your wife and kid, they have no idea who you are. So there’s a lot of technology now with beacons and location and IP matching to say, “Hey, this is the same user based on these actions.”
If you can master that, which is quite mathematical, you can really convert a lot better. It’s almost a little scary, that whole Facebook obsession of, how much data do these retailers and these cookies and these retailers have about you?
Jeremy: Yeah. So were there some leading companies that do that, that cross platform tracking?
Eytan: Actually, the gentleman from StubHub was talking about that. He was saying, like, “We track all of our users if they login. But if they don’t login, how do I know that this is this same person? Even if it’s the same IP address, it could be someone on the same router.”
So there are ways… [inaudible 00:32:13] one company at a different show, at [inaudible 00:32:17], they use some kind of advanced algorithms to track behavior and track location. I forgot the name of the company, but that’s the next…
Jeremy: Yeah. I feel like I talked to someone, who, that’s exactly what their company does. Now I can’t remember what the company is called.
Eytan: …Yeah. It’s quite obscure, but there’s ways to do it. It’s definitely not a perfect science.
But a couple ways… I spoke to the gentleman about it, and they are working on it.
But there’s so many different platforms and devices that, like, as you said, how do you convert? But how do you know where the person is coming from? There’s so many sources. It becomes an enormous task.
Jeremy: Right.
You could have been looking at your… For the wallet on your mobile, but then you go to your desktop, and they don’t know it’s the same person.
Eytan: Yeah. I think his example was, you go on your mobile in the morning, you’re checking out work on your desktop, and then you go home while you’re watching a show on your iPad, look at it again. Then you buy it on your computer at home, but you don’t get it delivered. You do in store pickup, which is another interface.
Jeremy: Basically, the most complicated scenario you could…
[crosstalk]
Eytan: But it was, like, touching 10 different devices and 15 servers, and it’s amazing how these big companies are able to aggregate that data and actually take action on it. It’s quite amazing.
I don’t think people realize… I know people don’t realize a lot of that.
Jeremy: What would you have done, Eytan, if you came… You weren’t redeveloping the whole site, but you knew mobile is this important. If 63% of people on eBay are purchasing out mobile, what do you go back and do if you’re not redoing the whole site?
Eytan: So there’s two thoughts on that. responsive is more, like… There’s responsive and adaptive. So responsive has become the more common way to go. Adaptive is, like, if I pull up your site on my phone, it will just shrink a little.
Jeremy: It squeezes it [inaudible 00:34:21]
Yeah.
Eytan: It will squeeze a little based on the rendering of my thing, of the pixels in my frame.
That’s the old school way of doing it, but some big sellers still have that. Responsive is almost, like, dynamic. So it knows. It’ll render it iPhone friendly.
There’s even device specific. So there’s some companies where you have the checkout run through them. So they go to my site. They can read the user ID. They know he’s on a Samsung Galaxy S3 in Madagascar. So the site won’t load.
Given the most minimalist approach just to do checkout. But if you’re in South Korea on two gigabit Ethernet, they will flood you with 4K video. So that’s really…
Jeremy: Very sophisticated.
Eytan: …Sophisticated.
Jeremy: Yeah.
Eytan: So those are the things that you could implement, knowing the trend.
Although, yeah. Interesting.
Jeremy: It’s really interesting.
Eytan: The trend is growing. I mean, obviously a lot of people are buying on a computer. But since people are using their phones so much, they are using it for everything. Yeah. Some of the numbers blew my mind.
Jeremy: So software-wise, what kind of things do you use to run the business? You mentioned Magento. Like, what kind of shopping cart..? Do you use a certain [inaudible 00:45:41] is this in house, custom? What things do you use for re-targeting?
Eytan: So the website is mostly the traditional type of tools, like re-marketing tools, email marketing, cart abandonment software, analytics, AB testing, conversation. A lot of these things are becoming very commoditized. There’s the [inaudible 00:36:07] that will do it all, or Google [inaudible 00:36:08] that does it. A lot of the shopping [sp] feats, offers, where you can load your products into Google, get the feature there, and it’s a whole big trend now.
Jeremy: Yeah. So what do you use for those things?
Eytan: A lot of it is just third party software. So a balance [inaudible 00:36:25] or something like that for email, or… We’ve outsourced some paid search. Sometimes we use some software that combines different paid search engines to manage in one.
The SEO and all of the content we do here.
The video and some of the technology. We have some strategic partners. But a lot of what we do is unique. We try to be a little different in that regard. I don’t want to use the typical off the shelf email program that everyone else is using. I want to do it differently, and try to get a better result.
Some people don’t like that, because it’s a lot more cost and risk. But it has worked so far for us.
Jeremy: What about shopping cart? What do you use?
Eytan: We use a Magento cart. There’s good and [crosstalk]
Jeremy: Yeah. What do you like in that?
Eytan: It’s very feature rich. It’s a very heavy program. So a lot of times when you’re doing coding, or if things go wrong the whole site can crash. There’s a lot of files to be involved. Some of these new Shopify, big commerce are easier to roll out, but they are not as feature rich.
So there’s plusses and minuses. A lot of the software that we use, also, is for a lot of the channels and other sales places. Overselling on Amazon, overselling on NewEgg or whatnot, different repricing strategies. You can automate how you price products base don demand, based on sell price. We have ways of indexing different sites and seeing what’s popular to identify products… There’s so much data out there. Scrape is not the best word to say… Parsed, or identify.
[crosstalk]
Jeremy: It sounds less black hat, right.
Eytan: Yeah. You could do research on products and know what to sell just based on the lack of the offering, or the lack of competition. So we have a whole buying team that identifies products with different web tools that we build based on product reviews on popular sites, based on, can we support the margin or the price? Where will we offer it?
That’s on the product scouting side, and then as far as internally, logistics, we have a whole system. Like, from when we bring a product in to when it ships, aging, reporting, all this stuff. We’re trying to do it quite unique.
Jeremy: Automated. Yeah.
Eytan: Automated and unique, where there’s different buyers in the company that are responsible for different lines, and things like that, and everything is transparent and open.
Jeremy: So repricing-wise, do you sue something internal, or do you use something external? Or, if you use something internal, what tool should people be looking at?
Eytan: Right now we’re transitioning. We’ve used Appeagle, which is a general Amazon pricer. There’s a company called fee advisor that we’ve used. They do it in different ways. There’s a lot of them. It’s almost become very popular, and each has its own value. But we have a very unique way of pricing products and selling products. So my partner, Jonathan Goldman, he’s quite adept at knowing how to price a product, and what to buy, and when and how to sell it. So we’re rewriting our own repricing rules…
Jeremy: I see.
Eytan: …Building an engine around that, and that’s a lot of the proprietary data. How to price, where to list. Maybe it’s cheaper on Best Buy, so we should list our price on our site at X.
So there’s definitely tools that do it, but there’s so many variables to teach–
Jeremy: Right. There’s a million different variables.
Eytan: Yeah. We try to automate as much as we can, but a lot of it is really up to the head buyers, or the salespeople.
Jeremy: Yeah. It could be time of year will effect it, or besides anything else.
Eytan: There’s [sp] themality. There’s the Black Friday effect, and they have this Amazon Prime day effect, which is this new fad. There’s products that go end of life. There are things that get recalled. You can’t perfectly define it, but whatever we can, we try to implement without making it too complex for someone to understand.
Jeremy: Yeah. I’m wondering, because I know that some people don’t use repricing tools. So I’m wondering, what’s the advantage and disadvantages? What are people’s reasons for using or not using these repricing tools?
Eytan: Yeah. We used to not use repricing as much, because we didn’t really trust it.
Jeremy: Right.
Eytan: Sometimes you were losing money and you weren’t really being able to capitalize. They are much more advanced now.
That being said, with all of these variables and changes to APIs and channels, they don’t always work like they should. But if you have thousands of SKUs to manually do it, you may be making a couple more dollars…
Jeremy: It’s hard.
Eytan: …But, long term, it doesn’t make any sense efficiency-wise. So it’s all about speed and efficiency for us.
There are some things you have to do manual. But if you can program those rules to the best of your ability, maybe it will be perfect.
But it will be pretty good. You could focus your time on other things, and don’t have to be so worried about every single penny of a reprice, what another vendor is selling at, but adding value with customer service or the other tools I spoke about… Improving checkout and things like that, which actually proved to be more lucrative than making another 2% on one random SKU.
Jeremy: Yeah.
Eytan, what is your proudest automation that was so manual that you were just so proud you actually… Whatever it set up, rules, and things that you can automate this process that was taking your company forever manually?
Eytan: That’s a toughie. We’re doing a lot of it now.
Jeremy: Yeah. Maybe name a few. I’m just curious. I know you seem to be…
Eytan: A lot of our browsing. So we used to run this warehouse with a lot of overhead and employees, and HR.
We have a lot of custom ways that we ship, whether we are shipping to Amazon, Amazon Fulfillment, shipping to Europe, shipping to retailers, shipping to Walmarts or Amazons of the world, or small business or government, and it was very unique. I didn’t really think the warehouse would be able to handle it. But I spoke to a buddy of mine and he’s, like, “Why are you doing warehouse? That’s not your business. Let someone who knows how to do it, do it.”
So for all the E-Commerce stuff, like the tools, that is our business. But for logistics, why do I have to be a diagnostics person? So not only did I save probably half of a bill a month, probably 50% of my warehouse fees…
Jeremy: Wow.
Eytan: …I didn’t have to deal with all of the drama of the warehouse, and the potential accidents, the workers comp and issues, late shipments, etcetera. I can hold the third party warehouse accountable. I was able to trade them within our own, let’s say, special sauce [crosstalk]
Jeremy: Systems, yeah.
Eytan: That freed up all the time of managing them, and we could focus on sales.
That’s kind of what we try and do on all fronts, so that people don’t have to spend so much time. A really good buyer or procurement person wants to just find products all day. Not worry about how to deal with returns, how to restock the right amount.
So we have a lot of data people, even data analyst on board that just focus on that with different software. Almost like engineers.
Jeremy: You’re talking about identifying products to buy?
Eytan: Identifying, and then, when you have them, how much should you reorder? When should you reorder? What price should you pay? What type of shipping should you use? All these things take so much time, and we automate a lot of that flow so that, once the product is brought on, it could continue and do as well as it can, based on all the rules that are built into the system.
Jeremy: Yeah.
Eytan: That’s very powerful.
Jeremy: Yeah, because you don’t want to have tons of product and inventory just sitting there.
Eytan: That’s the first thing, and the second thing is, you don’t want someone who is a sales person dealing with logistics and returns and forecasting. Let them just do sales, right? That’s what you’re good at, is do that.
So that’s the thing we learned. Maybe we did it the hard way. Find the skill of a person within the organization, and have them focus on what they are good at, and the things that they may not be good at, or they are okay at, but it just shouldn’t be their core. Give it to someone who can do it much better, or have the software help them with it.
So a lot of our purchasing department was spending so much time worrying about how to buy more and when to buy more. That really shouldn’t be their concern.
It just took us awhile to figure out the puzzle.
Jeremy: So how did you take it off their plate?
Eytan: Slowly building bubbles, and trying and failing and ordering too much, or too little, and realizing why, and understanding the return rate. There are so many variables.
Jeremy: So many moving parts here.
Eytan: Yeah. Cost, shipping, international, VAT. It’s very, very multilayered.
And it’s always improving, but yeah. There’s definitely a lot of moving parts, and a lot of the off the shelf offers… It does something, but not everything. That’s why people tend to want to do custom things.
The problem is, when you do custom software, you’re addicted to it. You just [inaudible 00:45:44] a patch and a patch and a patch. Same thing with Magento. There’s a big community, so if you have a problem, you can ask the community. If you go with a custom solution when your programmer is not around…
Jeremy: If something goes down, you’re up a creek.
Eytan: It’s a big problem, and I’d rather have a community.
So what we do is a hybrid. We have a community open sourced software, but we also have some customizations to it that are documented, so we know what’s going on and we understand how to build it and how to enhance upon it.
Jeremy: Eytan, that’s another thing that I’ve heard a lot of people talk about, is identifying products. They want to keep expanding the product line. What are some things you look for in what to sell next?
Eytan: Good question.
There’s different sites to look at. I mean, Amazon is great just as a data source. Whether you’re selling there or not, you can see what’s popular. So you can see, X product is popular, or is Amazon carrying it? If not, you can carry it on your website and list it on Google, or list it on eBay, or list it on Amazon.
Or, what we’re trying to do and what a lot of companies do, is I’ll just make my own product like that, and that’s a whole different conversation. I know you had that. You had a discussion with, was it Tech Armor?
Jeremy: Yeah.
Eytan: I mean, he’s making his own…
Jeremy: Your brand versus selling other brands.
Eytan: …Yeah. Brand [inaudible 00:41:05]. They do a great job.
They do an amazing job, and we’re getting into that level of advancement. So we sell other people’s stuff.
That’s great. You can sell a lot of other people’s stuff and you can make money. That’s what most retailers do. But the next level is, what if you private labeled something, right? So I sell a router, but I call it the Eytan router, and then the next level is [inaudible 00:47:32] my own Eytan router, or it’s my own chip set or my own patents, or my own IP. So I create a lot of value in my company. I’m not just reselling and turning revenue. I have my own patent and sell my own products and my own ideas, and my own licenses.
So we’re slowly getting into that. Proprietary bundles, diversifying products, up sells to it, adding in accessories, all these little tricks that we learned along the way.
A lot failed, but we’re trying to implement. There’s just not enough time in the day.
Jeremy: Right. What makes you decide to… This is just too much of a hassle. Let’s just sell the brand, versus private labeling it, or creating your own product?
Eytan: That’s a good question. A lot of the private label stuff that does well on these sites is cheap items. Like, a power bank, or the cell protector cases. To make your own… The things that we like to sell, like routers or range extenders, or switches. That’s pretty expensive stuff.
To make your own mold, or to make your own hardware, is costly, and a lot of times you find a factory and they don’t really do such a good job, or they sell it to someone else and he just labels it, and there’s a trust factor.
So it’s very hard to decide which product to go about making. We’re trying to do it on a higher level, where not everyone is doing it, and it’s because it’s difficult. But that’s what gives us the one up.
You understand that we’ve tested similar products. We have a lot of vendors. We go to shows all over the world. They have a great product, but they want to sell in the U.S. .
So I could just put my name on their product, but what if we had our own little twist to it, and it was mine? Then, from that, we’ll learn and create our own.
Jeremy: Yeah.
Eytan: So we’re working at that pretty hard. It’s just a very long process, and it’s really interesting.
Jeremy: Yeah. I ask because, Eytan, I’m sure you have tons of data with, through the years, of what sells well and what doesn’t sell well, and you probably have your finger on the pulse of, well, we could do really well with this because we’ve already sold thousands of this one thing.
Eytan: Right. Yeah. I mean, looking at rankings on Amazon, looking at rankings in Google, even at retail, you can see what sells, what’s hot. Everybody knows Fitbits are hot now, and Android watches. Although you try to stay away from that stuff, because it’s almost too competitive.
But the things that are niche markets that are popular, which are really hard to identify. I can’t tell you exactly how we do it. Some of it is proprietary. Some of it is just hard to understand, or explain in a conversation like this. But adding value to some existing products, or modifying products to create a need or to answer a need… So someone has a product. You make a modification to it. You make it just a little bit better than the other guy at a different price point. Something like that.
Jeremy: You mentioned some things that really work, too, which is… I don’t want to breeze over it, but not just your own brand. You mentioned bundles and things like that.
What else works as far as, I guess, seems to increase the dollar value of the customer, who is already coming for something else?
Eytan: Yeah. A lot of it is the cross sells, the up sells. So within the website, suggesting accessories, suggesting warranty, which usually helps the customer at the end of the day, especially if it’s an electronic product.
Suggesting something that maybe they want to upgrade to later on. We talk about bundles and kits. Gift cards. Things like that. Just little things here and there that differentiate you. If everyone is selling the same camera, and you throw it… Which is this classic camera space, everyone [inaudible 00:51:33] oh, I’ll give you a 30 gig ST card. I’ll give you a 40 gig ST card.
That’s how you get the customer.
Jeremy: The pissing match.
Eytan: Yeah. They really don’t make so much money on the camera, because the margins are tiny. But they make money on all of the accessories they sell with it. The margin is great, because they are manufacturing those products, and they always want to one-up the other guy by adding another accessory, or another value add.
Jeremy: Yeah. What’s another example of that, as a value add? Not with cameras, but another product that people do.
Eytan: So one specific one is… Like, how it started, tech support. So a lot of times people call up. Some of the products on our site are just [inaudible 00:52:15] items. We also sell very high end stuff.
They’ll come to us. We’ll explain, and when they buy it, we do installations often, or we’ll outsource [inaudible 00:52:26], or when we do government products, we’ll try to add value by free tech support, 60 day return policy, whatever you can do to make the customer a little more comfortable than the other guy.
Jeremy: For sure. Yeah.
Eytan: Every little thing, from conversion to site speed, to service, to warranty, goes a long way. We actually measure all of these things.
Jeremy: Yeah. I for sure buy things. If someone provides a personalized service or support, I would hands down choose that over anything else. Yeah.
Eytan: Right, and the problem with the channels in the Amazons is that, as I said before regarding data and content, people just buy it because all of the product descriptions are there. But a lot of times it’s wrong, or it’s incomplete.
So if you can’t speak to a person… If you call up Amazon and ask them about one of their two billion products, they are probably not gonna know the answer. The seller usually will know if they’re telling it, or a website owner really must know. Sometimes it’s a big deal. Sometimes you get government or enterprise customers that don’t really care how much something costs.
I mean, obviously they have a budget. They are gonna spend 20% more and trust they are getting what they need. It’s better than buying something cheap and getting in trouble by their boss, or having something fail and the internet be down for…
Jeremy: And their job’s in jeopardy. Yeah.
Eytan: …A week, yes. So that’s a big part of it.
Jeremy: Yeah. In my research, Eytan, I found this was a key differentiator, a huge differentiator, between your company and many other companies out there.
One of the questions I wrote down when I was doing the research was about tech support, and how do you compete when other people have the same router, or the same signal booster, and one of the things you put in was tech support.
How do you dial in that tech support?
What’s your process for actually training the tech support and making sure they are not just doing what they do, but also… Sometimes the techs are a person I’d see as maybe not a sales person.
Eytan: Yeah. That’s kind of the model we developed early on working with those repeater companies. We got trained. So I actually flew to Utah. I used to do it myself… And got certified in this product.
I flew to whatever, and I got certified in this WiMAX product, or this Booster product, or this Cisco product. I would train a lot of the tech guys when we started, and now they go to trainings and we get certifications. So not only do we know a lot about it, but when you do that, the vendor likes it, and they will send you leads.
So a lot of vendors will link to my website, or give you my phone number.
“Oh, I want to do an installation.”
“Oh, call Eytan from Quantum. They could really help you out with your signal booster needs, or your wireless failover solution.”
Jeremy: I see.
Eytan: So we’re experts. We’re certified. We do the training. We have the demo product we can show people, and they will link to our website because they know we’re certified. They don’t want to link to the website of someone who is just selling the product for a 2% margin. They want to link to someone who knows about the product, who can support and help it, and then they don’t have to worry about the sales, because they’re just the manufactures.
All these manufacturers that we represent don’t really know that much. I mean,t hey know. It depends on the size. But the medium to small ones that we find on these up and coming sites, they don’t really know that much about sales.
They made a really cool product. They raised money on Kickstarter. Now what?
How do you sell? How do you fulfill a product? How do you get it into retail? How do you market it, and how do you do tech support?
So we’re able to offer a lot of these things to them, and it’s a turnkey solution to get your products sold anywhere from the internet in the U.S. to the rest of the world, to the government, to retail. Like a one stop shop. That’s newer. Adding on all these different verticals really satisfies a lot of their needs, and they’re just happy making product. We have a lot of exclusive agreements with these.
We’re kind of a quasi distributor.
[crosstalk]
A real value added distributor. Usually you say a value added reseller.
So we don’t want the product… People selling it below a certain price, etcetera. We’re not distributing it in the classical sense, where we grab thousands of brands. But we have a specific type of brand that we look for that does very well. That’s part of that secret sauce I was trying to explain. There’s a lot of factors.
Jeremy: Yeah.
You know what? I’m glad you said that. That was not the answer I was expecting to get. Relationship is huge, and becoming an expert is huge. Then they trust you, and they know that you’re an expert, and so they want to refer people to you who are going to take care of them, because in the end it’s their product.
I was thinking you were gonna say something, like, “Well, we’re experts in the product.”
So the tech support people know, well, at this point in the time, maybe after two years, the router tends to diminish or something. So you, since you’re an expert in the product, there are certain things that person needs to support the product that would be an up-sell, or something like that. That’s what I thought you were gonna say. Yeah.
Eytan: I mean, that’s the case as well, meaning a lot of times people call up four years later.
“Hey, this doesn’t work.”
I’ll be, like, “Yeah. That software doesn’t work anymore. You need to buy this new thing,” or, “We could support it, but we recommend this product.”
That’s a way to keep the customer. But we’ll still help them with the legacy or old products as well. Sure.
Then, after we get the trainings, we have people in house, or sometimes overseas, that really… We make sure that we know whatever detail we need to know.
Jeremy: Yeah. We talked about boosting sales on the website. What about off, on the different platforms?
Are there nay things people should be doing on Amazon, insights into Amazon and eBay?
Eytan: Yeah. That’s a loaded topic.
Yeah. There’s a lot of things. Again, back to my point of product quality. So a lot of the listings were made by other sellers.
Or, sometimes Amazon, they are not really done well. Improving photos, improving content, improving description and keywords is so big. People don’t realize it.
Having five or six really good high res photos of a product… Now they even support video. Having the bullet points very clear. Obviously trying to get product reviews for your own product, or for the vendor’s product, is very important.
Now there’s this whole world of advertising within the channels. So Amazon has sponsored listings, where you can promote your product amongst another… Or when someone searches this router, you can show your router. It’s almost like Google Adwords on Amazon. They used to send traffic to other websites. Now they are doing it internal.
Jeremy: Right.
Eytan: The Neweggs and the [sp] Rackettans, and all those other guys have that as well.
So those are some things you really have to be on top of to stand out.
The classic stuff of good feedback, good customer support. A lot of these channels… As you know, eBay is very, very strict about shipping times and feedback, and Amazon is even more. People get thrown off the channel for silly things that are often not their fault.
You have to really have an insurance policy. You can’t rely… Which I was gonna say in the beginning, on one channel. Which is why you have to have a website. You have to be doing multiple things. Not to be fragmented, but to diversify and ensure your longevity, and be able to pivot as needed.
That’s what we’re working hard to do.
Jeremy: So what about… You talked about boosting sales. What about common mistakes you see other people making, or mistakes that you wish you would have avoided throughout?
Eytan: Yeah. When we stared, to get into s