How to make a success of your online business

A conversation with Joe Reichsfeld

Joe is a talented Amazon veteran and MD of e-commerce Optimizer, one of the most successful SEO companies around. Amazon SEO is his passion.

Joe’s background

Joe, currently located in Scottsdale, Arizona, grew up in New York. When he moved to Arizona, he was in the 8^th grade and already had a couple of businesses. Although he got straight A’s he hated school. The teachers simply couldn’t motivate him.

Joe had started his own business, delivering holiday cards in his neighbourhood by the age of seven. He jokes that he was inadvertently competing with the US Post Office – a federal offense. A postal inspector and marshal showed up at Joe’s house. Joe’s father, a New York policeman, told them to come back some other time as Joe was taking a nap, but he had to relinquish his first business and took to the more conventional tasks of delivering papers and shovelling snow.

In Arizona Joe got into the restaurant business. He loved the work and by the end of college he was running someone’s restaurant for them. He wrote his thesis on a catering business and found many people willing to invest in his concept. By 18 he had started his own catering business – his first real business.

He introduced the concept of sending a chef to private homes to cater for candle lit dinners. It was very successful. By 1996, Joe realized that the future lay in computers. He started emailing information about the area to people moving in. The email included school, real estate and services information. All went well until the Arizona Department of Information started sending out similar information for free.

Seriously online

It was at this stage around 1998 that Joe started to seriously look at Websites. He ventured into e-Commerce to help his wife to sell some of the crafts that she made. They then branched into offering to sell the artworks of other local artists on their website.

He was a beta tested for the first pay per click on their site which now specialised in native American art and custom furniture. At the time he used Amazon and eBay to drive traffic to his website. The rules then allowed it. He used his restaurant business to build a mailing list of people who would buy top quality products online.

He eventually sold the business for $30,000. Joe believes that freestanding websites are the way to go. Marketplaces have their place online, but they cost more, and they have leverage over your business. He prefers not to use Amazon as a marketplace. Jeff Bezos, he says, is a brilliant guy who knows people’s behaviour and how to play. It’s no accident that Amazon has grown into the world’s biggest marketplace. Joe sells on Amazon, but he sees it as a sales channel along with Esty.

Shopify, on the other hand, is a framework for your business. He says that Amazon is like going to the mall while Shopify is like an empty building and you must bring your own customers to the building. People go on their own to a mall, but you must bring the people to a freestanding shop. Shopify is just like a freestanding shop.

At one stage Joe opened a brick and mortar furniture store and discovered just how stressful it could be. He was used to the restaurant industry. When people come to a restaurant, they’re hungry and they plan to spend. On the other hand, many customers may walk into a furniture stall to browse and spend nothing. Fortunately, Joe still had his online business to keep him busy.

He found the packing and distribution of large items quite challenging, but he learnt fast. Using his background in consulting to the restaurant industry, he started to help other sellers in e-commerce and corporates to start moving into online marketing. That was 2001 and many corporates still didn’t see the value of online marketing. The 2002 projection for e-commerce sales in 2003 was $8 billion globally.

If you want sales you must market your brand

The beauty of online shopping is that it’s borderless. Sellers can sell across the globe and buy in their own currency and language. This is particularly true using Shopify. They give you the tools to sell in a truly borderless way with no constraints.

Joe feels strongly that marketplace sellers are not being taught the importance of contingency plans, of the necessity of planning safety stocks. The result is that many of these businesspeople lose sales because they don’t have the stocks to fulfil orders. People lost out big time when they couldn’t get stocks during the Covid-19 lockdowns.

According to Joe 95 out of 100 Amazon sellers have not made a single sale in 12 months. The barriers to entry on Amazon are very low. All you need to be a seller on Amazon is an Amazon account. Because there is no investment required to sell on Amazon people come into the business with unrealistic expectations. They think of online selling as a “get rich quick” scheme. Many of them have never run a business, they’ve no experience selling, and they’ve never managed anyone, not even themselves. Yet, they think that launching a product should bring them riches. 

Sellers don’t seem to understand that you must do the marketing first. People should be waiting in anticipation of the product launch. Sellers incorrectly assume that because they’re in a marketplace, buyers will automatically find them. Sellers with freestanding websites are under no such misconception.

Sellers seem willing to invest their life’s savings before doing any work. They need to understand that they’re launching a business and they must learn everything that there is to learn about marketing and launching products online.

Learning to source products

Sourcing products to sell is another such issue that requires a lot of knowledge. Sellers often travel halfway across the globe to source product in countries they don’t know and where they don’t understand the spoken language. The sellers end up picking products from a catalogue and many end up with products that have been sold to thousands of other sellers.

Sourcing must start with a need in mind. Products must fill that need. The Indian artworks that we spoke of earlier filled such a need for tourists who wanted to take home something that had cultural value.

Joe says that he hasn’t sourced anything from China since 2008. He prefers to sell rattlesnake steak in his restaurant in Arizona as it has the intrinsic value of local for those visiting the state. He says he wants to be able to drive to the place where his product is being made. Building relationships with his suppliers is important to him. He’s been going to south and central America to source his products. He points out that as wages rise in China, manufacturing is moving out of China into South East Asia and South America.

Finding your audience

Joe goes on to describe how one of his competitor’s sharpened the images on his advertising and managed to sell the same product at a significantly higher cost. The result is that his competitor made more than Joe did selling less of the same product. For Joe this was insightful. He realized that selling was all about finding your audience.

Joe sees Amazon as America’s cashier stand. People go to Amazon knowing what they need. Sellers need to find their audience on the various social media platforms. They’re on Google, and the various forums on the internet.

Sellers on marketplaces take for granted that they will get buyers, but six times as many people as belong to the Amazon’s worldwide membership will sign on to Facebook in a single day. If you’re only selling on a marketplace, advertising on Facebook is a waste of advertising expenditure. What you should do is include a strike button for people that don’t buy on that marketplace and have it lead them to spot where you sell on Shopify or Facebook.

People using Facebook or Instagram are, no doubt scrolling and your job as a marketer is to catch their eye so that they stop and read what you have posted. People don’t log onto Facebook to buy. They go there to connect with their friends or post pictures. To catch their attention, you need to aim at the problems that they have. Then have a conversation with them to help them solve the problem.

Even in a pandemic, there are opportunities

Even during the pandemic there are opportunities for businessmen looking for an audience. Joe sees all the shops closed or waiting for foot traffic that doesn’t come. As a marketer Joe could offer to sell their goods online and give them a third of the profit for example or buy their stock at bargain basement prices and sell them himself. Take the example of indigenous art, Joe knows that he could sell these works at a good price because he has contact information of people with money to spend.

You don’t even have to make an investment in inventory. You can pay for the goods once they’re sold, financing your business with other people’s money. You must be so much more than a seller; a successful entrepreneur must be an excellent marketer.

Joe concedes that Amazon is a great marketplace, but he argues that a serious seller must diversify and sell from more than one place.

Amazon can be difficult, but you must stand your ground. A lot of people are being suspended now for having multiple associated accounts. Many have been in operation for several years, but suddenly it has become a problem because Amazon is doing what they always do. They do nothing until it becomes a problem and then they overcompensate.

Survival of the fittest

On Amazon, it’s all about the fittest sellers surviving. According to the spin, Amazon have been recruiting a million sellers a year for ten years and yet there are currently only three million Amazon sellers. Where have they all gone? If a seller learned to stop being a seller and started to market instead, there would be real competition out there.

Marketers know how to build demand. They know where to find their audience. A good marketer ensures that their product is in the buyer’s mind before he even enters the store. It’s all about selling your brand. A buyer who trusts your brand is seldom distracted by someone else’s rebate or discount.

That’s how Joe works. He doesn’t market on Amazon. He has a client that sells multi-millions of dollars every year. He’s been on Amazon for ten years and never spent a cent on Amazon marketing and yet he makes $200,000 in sales on Amazon every week. He focuses on marketing before Amazon driving traffic to Amazon. Because Amazon rewards off Amazon traffic better than it does PPC, the sales lift their rank on Amazon listings.

Learning to Market

Marketing is not difficult. You can pick up a book on marketing and then apply your learning to eCommerce. Marketing principles have been working for over one hundred years. Build a community, provide value to businesses, offer solutions. Treat people the way you’d like to be treated. Treat them the way you would your best friend. People like acknowledgement and recognition. It’s all about emotions and encouragement.

If you sell a hammer don’t sell the rubber handle. Sell the house that the hammer will build. If you’re selling a hammock the 500-thread weave isn’t going to sell it, the tropical destination will.

Use Helium 10

You can find out everything that you need to know about the competition using Helium 10. Don’t reinvent the wheel learn from your competitors. There’s no reason why anyone should launch a product until they know their keywords. There’s no reason that you should enter the market and not understand the listings and how to improve on them. Unless you know what, the top sellers are doing you can’t know for sure that your listing is optimized. If your listing doesn’t convert, it isn’t optimised. Don’t just look at the marketplace that you’re in, look at the listings on other marketplaces too.

If you’re thinking of finding a coach or a mentor, understand your learning style first and then match the mentor with your learning style. Before you start ask them about their experience. Get references and make sure that you call them because getting a reference and not checking it is stupid.