#05 How to Harness the Power of Social Selling, Amanda and Brandon Kruse, Discount Divas & Comment Sold

Welcome back to episode number five with Brandon and Amanda Cruz of Discount Divas and comments. Sold. You guys are not going to want to miss this episode. Let's talk about your business strategy and the juicy details of what actually works from mainstream fashion to fashion on Main street and the entire ecosystem behind it. How do we scale your company and do it with the balance and the happiness that we all seek? Let's hear from those insiders, experts, and strategists that actually make it happen. I'm your host, Ashley Alderson from the Boutique Hub, and I can't wait to chat. Welcome back to Boutique Chat and welcome to our first official week since launching the show. Thank you so much for being here, guys. Hey, before we even get started talking about the powerhouse guests that are on the show this week, I just want to pause right here and simply say thank you. I already. Your reviews and your comments about the show have been pouring in inside of the Boutique Hub, as well as through your reviews on Apple Podcasts and on our podcast webpage. And you guys have me so inspired to keep going. I really appreciate it. Thank you from the bottom of my heart for your kindness, for your stories of growth, for sharing what the show means to you and also being vulnerable, asking for advice and asking about those questions that you'd love to have answered on the show. I. I also want to thank you for supporting our guests like Laura Benson, Dan Jablins, and Kinsey Fauckler. It means the world to them as well. But most importantly, I want to say thank you for sharing that sacred space in your earbuds with me each episode. That means a lot, and I just want you to know that you matter to me. So we're on a mission to bring you the latest tips, stories and ideas from guests this week and every week with real history, actionable takeaways and and motivation to keep you and your business ready to go to the next level, whatever that might be. Because you and I both know that success is different for everyone and there's so many different types of businesses in this industry. So together, we're on a mission to change the future of independent retail, aren't we? And to build an opportunity that not only means you get to build your business, but also the opportunity to do what you love and allow that to impact your life, your family, your team, and your entire community. This business is about serving above selling. It's about so much more than just those items listed in your website or what you have for sale in the storefront, but it's about Leaving an impact and leaving the world greater than the way that you found it. So this week on the show, I want to take that concept even one step further. This week's guests are going to talk about what it is really like to live community over competition. Together, they built a business from zero to over a million dollars a month in sales. And I want you to hear about this wild ride that's not only impacted their lives, but now so many of yours as well. This week, I am thrilled to introduce you to Brandon and Amanda Cruz. Amanda, the founder of Discount Divas, a booming e commerce boutique that's blossomed through a Facebook group. And it's changed the way that we look at social media, social selling, and I have to add, she's not a diva by any stretch of the imagination. And also, Brandon, her husband, a serial entrepreneur with a history of founding, operating, and exiting multiple successful businesses. Brandon actually started as a programmer at the ripe old age of 15 at a telecom company called Digium. He subsequently founded Dialmax, which was later acquired by MagicJack, if you remember the old MagicJack commercials on TV. And this was all just a month before his 21st birthday. Brandon has since founded several other companies, including Huntsville west, which is a startup incubator, and the one that you probably know him most for, Comment Sold, which is a comment selling platform that has demonstrated success. Together with Amanda and Discount Divas, you're going to hear the generosity and honestly, the genuine nature of these two right through their voices in this interview. And I know that, like me, you guys are about to walk away with a page full of notes. So I can't wait for this week. You guys, please meet Brandon and Amanda in this episode and let's chat. Hey, guys, welcome back to the podcast. I am so excited to bring you the guests that we have this week. Two people who I respect and admire so much as a dynamic duo on a daily basis in our industry. Please help me welcome Amanda Halpin Cruz, founder of Discount Divas, who is an e commerce powerhouse who really pioneered the power of the Facebook group. And her husband, Brandon Cruz, the founder of Comments Sold, which, as you know, is a social selling tool who's really harnessed the power of selling through Facebook groups and a number of other strategies, which we'll talk about in just a little bit. So, guys, welcome back to Boutique Chat.

Hey, Ashley.

Hey.

Thank you for coming on. So we have to start this podcast off in a real dynamic way, right? So the crucial question everyone wants to know right away is dark chocolate or milk chocolate?

Ooh, dark for me, for sure.

Milk Easy. No doubt.

Perfect. So many people in this industry who are listening to the podcast likely already know a little bit about who you are, but I think you have such a unique story to share. So as we get into so many questions that I want to ask you, let's go way back to the beginning and talk about the companies that you guys have been involved with, kind of how you came to meet and how one thing led to the next in the businesses that you have today.

So I've always kind of been interested in technology since I was a little kid. I'm not exactly sure why. I'm just kind of a nerd that has been. Has learned to formulate and talk to people, which is a skill that I've been trying to develop for a long time. It's much easier for me to pick up programming than it is to work and talk to people. But early on in my career, I was again, always interested in technology. And there was a father of one of my friends when I was in middle school that was a programmer, and he was teaching me about programming. And I got really involved and interested, and I was actually just looking around for ways to try to make money during the summer by helping out, doing some computer stuff. Maybe I could work at Geek Squad at Best Buy or something similar. So When I was 15, I applied to this company called Digium and didn't get accepted the first time around. And I started working on a project with my friend. We were working on this website called Sista. Sista. It was a horrible name, especially if, you know, the Disney show. I don't know what we were thinking.

Right, right.

Yeah, we got a lot of experience through that. And I think that's an important lesson, is my failures are probably where I learned the most and worked on that for a while and actually was trying to buy some servers to help host this website. And someone said, oh, you should reach out to Mark, Mark Spencer. He has a couple servers left over. He might be able to sell you or maybe give to you. And so I reached out to him and I told him kind of about who I was. Of course, my resume at that time was like, I'm in middle school and I like computers. Please email me back. And he messaged back. He said, hey, let's go to lunch sometime and just chat. And he really took me under his wing and offered me a job. Kind of a funny story, when I was leaving to go meet him, I just turned 16. I was driving my grandma's car. I had my computer Sound system in the car. It was a whole mess. And I was leaving, I was passing my mom and my mom was like, hey, where are you going? I'm like, oh mom, I just met this guy online and he invited me out to lunch and he's offering me a job. It's gonna be great. And she's like, no, I just saw a 2020 episode about this. You're gonna be kidnapped and you're gonna be shipped overseas and I'll never see you again. Because my mom is very, very protective like that. And I said no, trust me. He's well known in the community. I really think this is going to be something substantial. So went and met with him, worked at Digium, that company for a few years. I left when I was 18 and started my own long distance telecom company called Domex. We ran that for a few years in my parents basement. Grew to a pretty decent size and sold to a company called Matichek, which is a publicly traded telecom company. Moved down to West Palm Beach, Florida and I ran MagicJack for a couple of years. You guys might have seen the annoying late night commercials back in the day when they used to play.

I totally did.

Totally remember if you ever been up late, like past midnight, you've just been spammed with them. But it worked well for a little while. Really learned a lot about being a public company and institutional finance and a whole bunch of interesting things that are kind of boring. I realized that I really loved products. That was kind of the biggest thing is when I sold that company I realized that I thought that was the end game and it was really kind of. I didn't realize that the growing of the company and operating was really my passion and I thought that, you know, getting to the other side would be where I wanted to be. And it really was a grass and greener kind of situation. Sold that, moved to West Palm beach, operated down there for a couple years, moved back to Huntsville and wanted to start an incubator, try to help my friends grow and scale their companies. And I had just started talking to Amanda, oddly enough because we were working together on the Romney campaign, doing some telecom stuff for them. I actually met Amanda when I was 15. They were my first customer right outside of Digium and I had to have my mom drive me down to Orlando, Florida where they were home based.

I was in college at the time, so I'm older than him, but so yeah, at the time he was like 15 and I was in college. So at that point it wasn't good timing. But we'd previously met and then kind of met each other again for the second time.

Yep. 2012.

Yeah.

Made it all legal. That point you.

Yes, that's a good point. Yeah. In Florida, definitely. Alabama is questionable. So we worked together. Romney campaign. She went to fly out of Huntsville and her flight was canceled last minute. Took her to dinner and kind of the rest is history. And that really marks the start of the diva empire, which is. Which pretty crazy. So I. Here I am, I just come off selling my last company. You know, I thought that I really knew what was going on in the startup world, and I don't know anything. And she's like, hey, I had this idea for this company, I want to start this company where I'm going to sell clothes to women weight online. And I'm like, okay, there's literally millions of people doing that. Right. There's nothing special about that, but good luck, you know, like, it's, it's going to be a hard road, but, you know, have fun, babe. Maybe it'll be a good hobby. And she's completely, several times over, proven me wrong.

Amanda, where did that dream all come from? Where did you get the idea that you wanted to start divas and sell clothes online? Was it a love of fashion that you had or something different?

Probably different than what everybody thinks because I didn't have this like, long, like lost love for fashion from when I was little or anything like that. It actually came from a need for me as well at the time that I kind of had this idea. I had been living in Miami, Florida. I'd gone to nursing school. After Orlando, I moved to Miami, went to nursing school, and then I got a contract once I graduated to move to Valdosta, Georgia. And it's like this tiny little place with nothing there, but they paid really well to get nurses there. And so I took a two year contract. And when I got there, I was working Friday, Saturday and Sunday nights and I had nothing to do Monday through Thursday. At the time, I was dating Brandon long distance, but he was working during the week. And so I was really bored out of my mind. There was nothing to do there. I found myself like wanting to go shopping. You know, you want to go to the mall to kill time or just browse around boutiques. I don't know if you guys do that, but I do. And there was nothing there. Like I couldn't find anything to do or anything to, you know, for like a hobby, just to go shop. And so I really sat down and thought, well, why can't I do it like, why can't I buy clothing like these other people do and just keep one for myself and then sell the rest? Like, I'll just buy stuff I like, right? And then I'll just put the rest on a website and get people to buy it. And I really quickly found that that was easier said than done. I would put it. I started a website, I would put these items on the website, and I couldn't get anybody to buy them. It was really difficult. And I also found that what I liked was not what other people liked. Fast forward about a year. I had tried to make that work, and it just wasn't working. And I had originally taken $1,000 from my SA account to start this business. And I told myself that if I couldn't make it work with $1,000, that I would give it up. That was all I had to invest. And so I figured out quickly that it wasn't working, and I trashed the idea. I was like, you know what? This isn't working. I'm not putting any more money into it. And I just kind of threw it away. About that time, I got a job opportunity in Huntsville, closer to Brandon, and I took that opportunity at the emergency department at Huntsville Hospital. I was a nursing in er. I thought, you know what? Why don't I just try to be a little bit more creative and do something different that not other. Like, not everyone's doing? Everybody has a website, and they're all trying to use social media to drive people to that site. But what if I just kept the customer on the platform that they're already on every single day? So instead of trying to get them to look at my Facebook photo and then click a link and get them to go to a website, why don't I just sell to them right there on that platform? And at the time, I didn't have any formal training. I still don't really about between Facebook pages and groups and that sort of thing. But what I knew is that if I added my friends to a group, that they all seem to get the notification that I posted something, and they could add their friends to the group without any question. Like, they didn't have to go through an approval process at the time. You know, like, you could just add your friends in. And so I thought, well, let me just rebrand, like, change the name. I'm gonna do this thing called Discount Divas. Now. I have all these friends that work at the. In the er. I'm just gonna add them all to a group, and I just Told them about it. Like, I was like, hey, I buy clothing wholesale. I'll give you a really good price. I'm gonna keep one for myself. All you have to do is go into the group, look at the picture and comment sold in your size, and I'll send you an invoice. And so that's really how it started. There are a lot of pieces to the puzzle that a lot of people don't know about. In the beginning, you hustled, and I did whatever it took to make the sale. So people didn't want to pay for shipping. And at the time, I couldn't afford to eat that cost. So anyone who lived locally, we did local pickup. But I didn't just do it at one location. I did it at work. I took over, like banks of lockers at work and put combination locks on them and would give people combinations. I went to Chick Fil A and would have a milkshake like twice a week and cover up three booths worth with packages. And then I would go to Starbucks and I would have a coffee and I would cover like the eight person table with all of my packages. And. And I would just do whatever it took to get people to buy my product and to really like however was convenient for them. I just made it super simple for them. And I found that the group grew really quickly. People liked the idea of buying it from me. It was very personal. They liked the ease. They liked that they could see what their friends were buying, which I still feel is a really key component to my business is that you can see what your friends are buying. And they could also kind of see how quickly things were selling. And so I also still feel like that's a really important piece, is to be able to see how quickly things are selling or selling out. And so it grew like crazy. You want to tie it all together with that baseball. Do you remember the baseball game?

My dad's in this old man league and they have like an ambulance on stand, stand by all the time for their baseball games. And we're out there hanging out. And I'm like, yeah, how's your business going, babe? You know you're working on a side hobby. That side hustle. That's cool. And she's like, well, it's going good, it's going good. You know, we hit about a thousand dollars a day in sales last month, so we did about 30 grand. And I was like, what?

It's like I was speaking a foreign language. Ashley. He stopped, looked at me in this weird, like, what did you Just say look. And was like, what? I was like, yeah. Like, you know, I stay up every night when I get home from the ER at 3 in the morning, I stay up and I like, get all these packages together and we're doing like a thousand dollars a day. And he was like, oh, my gosh, are you kidding?

And then I was like, what's your. I just went full into entrepreneur mode where I'm like, what's your biggest pain point? What's taking the most time? Why can't you scale? And she's like, whoa, whoa, whoa. Well, let me start with number one is I'm having to hire somebody. My first employee, which I also think this is really important. She hired her first person while she was still in the ER as a trauma nurse. I thought that was really, really smart. Too many people make the plunge and then it's like, it doesn't exactly work out the way you thought, which is always the case. And you run out of that Runway, you run out of cash too quick. So she's like, yeah, I'm hiring the person to send PayPal invoices, and soon I'll have to hire a second person to send PayPal invoices. I'm like, that's ridiculous. I can write a program to do that in like two hours.

And I just want to stop right there too, because I think that that's really important. People ask a lot, like, what's your biggest piece of advice? And one of my biggest is you can't rob your business. And so I really don't think that my business would have lasted and been successful if I would have relied on it for my sole income. For the first year I was, you know, I continued to work my full time job, and I was still working full time when I hired my first employee because I knew that I could pay someone $8, you know, $8.50 an hour, but I couldn't live off of $8 or $8.50 an hour. And so, you know, I really think it's always important to remember that, not to rob your business and try to pay yourself from the beginning if you can, you know, keep your other job until you like, validate your, your idea. And then I hired someone part time while I was still full time. And I actually had two people full time before I ever left my job at the hospital. And so. Sorry to interrupt.

No, that was perfect.

Did you have to hire someone right off the bat then to help with shipping as well?

So at that point, when I hired someone, I had them creating PayPal invoices and helping me with shipping, because at that time, I was using PayPal, and so I wasn't generating, like, shipping labels through PayPal. For some reason. I don't. You know, you try to think back. But for some reason, I was having to copy and paste a lot in weigh packages. You know, people would buy it, and I would weigh it, and. And so, yeah, at that time, they were also helping me with fulfillment as well. But, yeah, so back to the baseball game. I'm gonna take it back a little bit. Brandon was like, what's your number one pain point? And I said, sending these invoices. And he. He was like, oh, my gosh, why didn't you tell me sooner? I can write a program for that, like, in a day to do that for you. And I was like, are you kidding me? Like, why didn't you do it sooner? Do you know how late I stay up sending these stupid invoices? Here we are, you know, a couple years into it, and Brandon is still working on that system every single day. But, yeah, so I'll let you kind of keep going.

Yeah, yeah, it was. That was definitely the big pain point. But then it really quickly evolved, and I think that's a pretty important part on just in the software side is it was really built from the ground up for this very particular use case where she's like, okay, invoicing is great. That's great. I used to have to manage it all on a spreadsheet, and people would get angry because it took too long for me to respond when I was working. So that's great. But now you have it send an invoice to everybody. But really, I only have five of these, largest. So whenever you get down to zero and you've sent five, you kind of need to wait until someone either pays or doesn't pay to send the next one. I'm like, okay, well, now we got to do inventory management. And that was, like, a really big addition. Then she's like, well, I'm spending time making sure I'm online at the right time six times a day so I can post to Facebook. I'm like, okay, well, we kind of need the ability to schedule posts. It very quickly adapted to what it is today that Divas runs their whole business on and does 1500 orders a day.

At what point did you feel like.

Wow, we've got something here that not only has built this empire at Divas, but now it's something that maybe someone else could use in their business as well. What made you decide to take that leap because, like we were talking about earlier, the hub is all built on this idea of community over competition. And so for some people, that would be a sticking point, and they would never make that leap to share their greatest secret with their competitors.

What made you do that?

That's a really good question. I think for me personally, it was really that I realized a lot of people look at what I call cause and effect. They see someone they want to be like, and they just emulate what they see. Okay, so if he drives this car and he goes to this place, I'm gonna do exactly that, and I can be just like him. But that's. You're really just mimicking the output, and you have to mimic the input, which not a lot of people see. So I realized early on the software was just a tool. You know, it's. It's. Obviously, I'm somewhat biased, but I think it's an awesome tool. But it's really just a tool to enable you to be more efficient and grow, you know? So Amanda was still able to get to $70,000 a month, literally just sending invoices herself through PayPal in a Facebook group with nothing else. No website, no anything. So it's very possible to get at that level, and I would argue that that's the hardest step. It's very hard to get from 0 to 30,000amonth. And then really, we've taken just over 22 boutiques now from 30 to over 300,000amonth. So it's. It's. I would. I know it sounds strange, but I really think that's actually kind of the easy part. And for Amanda, in the very beginning, you know, she didn't really. I think a lot of people get stuck in the paralysis of analysis, where they just think about the business too much, because if she would have came to me and said, hey, I want to do this thing where I'm going to let all my people come pick up things locally, and I'm going to go to three different places around town three times a week, and for my really good customers, I'll actually deliver the packages.

Yeah, I would take it to their.

House in their mailbox. And I'm like, you know, I'm just like, unit economics, that doesn't scale. It's not gonna be profitable. She's like, yeah, I don't care, because these people are buying a lot from me. And there was, like, a very, very real sense of urgency and hustle that I very rarely see on the common sold side, because now we get to look at kind of 2,500 different companies, a lot of those boutiques, and see the averages amongst them. And I will tell you that one of the most common denominators that all of them have was that they started with a group of people, you know, who I know was coined kind of on the last conference too, like super fans. A group of people who really love you and love to interact with you. And once you have that, you can leverage that base and build from it. But getting that initial piece is something that is difficult and you kind of have to go about in your own way.

Yeah. And for me, Ashley, like, I know it seems crazy because I never knew how much of a cutthroat, like, industry this was. I was naive. Like, I didn't. I didn't know any better. And so for me, I really looked at Brandon when we were talking about other people using the software that was built for us, and I said, oh, my gosh, if there are women out there who can benefit from this and you can make it so much easier on them, like, you saw what it did for me. We have to. Right? Why wouldn't we share this? I never viewed it as competition, and a lot of people have laughed at me for that. A lot of people who I really looked up to, and I still really look up to, a lot of huge boutique owners laugh at my, you know, naiveness. Is that even a word?

I don't know.

They laugh and they're like, yeah, you just, you don't know. Like, you don't understand how cutthroat it is, and you're just giving out your kind of secret sauce. And for me, it's. That's not our secret sauce. Like, it's a tool that, you know, allowed us to grow to where we are now. But I think it's so important to remember the point that we got to without the system. You know, I don't think we would be where we are now without it. But I don't think that it is our secret sauce. Do you know what I'm saying? Like, for me, it was like, if we can take other women from $60,000 a month in sales and help them get to $300,000 a month within a two month period just from a program, like, why wouldn't we do it? You know? You know what I mean?

I think you're so spot on. And this is exactly where the industry, I feel like, is headed. And I mean, life in general is not about what you sell. It's about how you Serve. And so I think it says a lot about who you are as a person. And truly, that's the secret sauce, because like you said, it's a tool. And you. You can't replicate who you are. You have to learn to use that tool, but let that speak volumes about who you are. So at what point did you, Amanda, quit your job in the ER and go full time with Divas?

Okay, I'm really bad with dates, which is hilarious because people ask me dates all the time, and I'm like, I don't really know. I know that we had two employees, and I think we were doing probably close to 200, $150,000 a month. $150,000 a month, maybe in sales. When I quit, I did it very progressively. So I went part time, and then I went PRN, which is like 30 hours a month, because I wanted to keep my health benefits, my insurance. And then I left. And so that was, I would say.

I remember it being going part time, and then three months later going prn, and then about six months later quitting completely.

So at that time, were you already starting to offer comments sold to other businesses as well?

Oh, no, I would say that just timeline wise, that was probably around November of 2016, and we didn't launch Comet sold until March of 2017.

Gotcha.

Gotcha.

So what was it like when you first started to offer Comet sold then as a platform to new businesses? What was that learning curve like? You used it to build Divas, but now all of a sudden you're testing a tool with someone else's business. Were there learning curves that you feel like came your way?

Absolutely. I think the big thing is that I really took the Divas for granted and that they dealt with a lot of what I call, like, early adopter software stuff where they would just do a lot of stuff not working and not many other people will. But we've really been able to harden the platform, make it robust. I think one of the big things I took for granted was how efficient DIVAS is, which is a really important piece, I think, to their success and keeping money in the bank. Not just running money through the bank, they really had hit a level of efficiency compared to their payroll, number of packages fulfilled per person per hour, gross margins. You know, they really hit a good stride there. And when we were kind of starting out with a lot of these other boutiques and Comet sold around this time, maybe a little later last year, about 11 months ago, there were people that were doing a good amount of sales, but they were very inefficient organizations. And there's like, there's a balance, you know, between like sometimes Diva's a little too lean, sometimes they're a little too heavy. But the vast majority of them were very heavy and they had a lot of costs. So they were. Overall, it was surprising to see boutiques with a similar amount of sales dropping way less dollars to the bottom line.

Let's talk about some of those metrics for a second because I think where you guys are so unique is yes, your pricing is like in the boutique hub, let's say if we're talking about a three times markup or hitting certain margin numbers, you guys will run a little bit under that. But you're doing money by volume and running a leaner, tighter operation. Talk about like other boutiques who may be listening to this right now that are wondering, like, where do I even focus? What metrics should I be looking at? Where would you tell them to get started to lean up their operation?

I'll let Brandon.

One of the, one of the interesting things is when we were pulling a lot of people over from Shopify, Shopify does not track cost of goods sold. I was like, how in the world are you supposed to figure out how well you're doing if you're not tracking cost of goods sold? You can't. In an inventory based business, you really cannot look at the cash balance of your bank account and determine how well you're doing. If anything, you actually have a pretty low cash balance if you're growing pretty consistently and at a good pace because you're constantly dumping that cash back into inventory. I think a lot of people use that as an excuse for when they're not generating profit, but they're not actually really growing. So I know that. And Amanda hates this, I think, just as much as everybody else does. She's like, yeah, yeah, I don't really want to know the numbers. I just want to sell clothes. And that's why it's important that there are a couple numbers now that she's really learned to love and watch. But for the most part, that was where comments Sold really came in is let us be the back end kind of efficient component of the company. And then you just go and sell clothes. Right? Because that's something that is very difficult to do and only a handful of people in the United States do it really well. And that's just a unique skill. There's accountants like on every corner of every city. Right. That's not a super rare skill. But selling lots and Lots of clothes to women is difficult. I always just thought, well, that's just an easy equation. Then let us figure out the accounting piece and help you become better, faster, stronger. But you just keep focusing on growing the top line, keep growing sales.

So as far as, like, markups and things go, I watch the posts obviously in the groups for the Hub all the time, and I get a lot of feedback, actually from other boutique owners. They message me and they're like, I just don't understand how you can afford to not mark up your items. And I even get messages that, you're killing us. How are we supposed to be able to mark up three times when you're not doing that and you're selling to everyone? And so we had to make a decision at some point whether it was going to be. And I think there was a post recently about this, whether it's going to be volume, you know, or not. Are we going to try to sell 100 of each item? Are we going to sell 10? And we're just going to have to mark it up more? And for us, we quickly realized that one of the number one reasons that our customers continue to come back to us is the price. We know our customers really well and we know how much they'll pay for a top versus a dress. And I, you know, I know that sometimes it's like, oh, but the quality on this dress, and that's great, but it's not our customer. Our customer is looking for. They can't touch and feel the item and they want the price. I mean, I'm an open book and I tell everyone, but, you know, if we get an item for $12, it's probably, I'm going to list it for 24. And I know that goes against everything that you teach Ashley, so I'm sorry. We in turn have to run a really lean operation. And so our fulfillment, thanks to Brandon and you know, the system, our fulfillment is so efficient. Our, you know, everything is just efficient because we don't have a choice. Right? Like, we just have to be.

I'll tell you where a lot of this comes from is I really feel like a lot of people that are on common sold in the boutique world started in the retail world, and they're, they're growing online or they have a good presence online, but they really cut their teeth in retail. And divas is very different than they really never had a retail operation at all. And you just, you learn things differently, I think. Grow up in the online world versus brick and mortar. Brick and mortar. Prices have been depressing in general over time. Even like, you know, the boutique world of two or three years ago. There are several, I mean, regional boutiques that have 15, 20 stores that used to do 60 and under and then 50 and under and now 42 and under. Right. And it's like all the same products. So you can see that those margins kind of getting thinner. So my philosophy was we're not. We're going to be like Walmart and not in the sense of the Walmart experience, but Walmart is this logistics monster. Right. Where no matter what happens, they will always be able to win because they are the most efficient. And on the retail side, I think it's kind of tough because if you do have great margins, that's fantastic. But you shouldn't use those margins to create mistakes. And I think that's important. Right? It's because when you're in that world and you do have really good margins, that's the time where you need to be storing cash away like a squirrel instead of. It's easier to make mistakes and things just kind of continue to roll. And again, in the retail world, someone can come and open up a boutique right next to you in the shopping center and there's like this real, actual competition where you're literally fighting over feet to get in one store or the other online. That's just not the case. Again, we have 2,500 customers now. We can see amongst all of our top customers, you know, even with divas compared to others, that they just don't share any customers. You know, the online platform and serving a lot of these rural areas, there's like a 240 million person reach in the United States for women that are interested in boutique clothing. You know, when you're in a mall and you're fighting over 100 people walking by your store, that is a real fight. But online, it's almost kind of ridiculous that we're really not competing against each other. All of us together are competing against the future of Amazon and the future of Alibaba and the future of players that will eventually come into the space. That's who we should be fighting and we should be banding together to do that.

Absolutely. I think you make so many great points and everything you guys just said. I think one distinction I want to make, though, I want people to hear what you're saying in terms of you have to know your numbers first and foremost to make these kinds of decisions. And you have to know your numbers in a way that allows you to be leaning right you have to have good logistics. You have to understand your margin and how to be a better buyer. All these things all together. I don't think it's efficient to start a boutique tomorrow and run zero margin and then have a goal to become brick and mortar. You have to be comfortable in your own skin and who know who your customer is first. Would you agree?

I completely agree with that.

And I think there's still, like, the same $12 top is still in the 36, 38 realm in the retail world, and that's great. And, you know, you have to cover the cost of that retail differently. It's like you should take advantage of that while you have it now. And no matter where your margin is, you always. There's always room for improvement to become more efficient. And that's something that Amanda's just learned a little bit over time. We've tried to implement a lot of that into comments sold. So right now, like, the default comments sold package will include your cost of goods sold, your gross profit, your average margin, your return percentage per vendor, just to help make. Help let you make better decisions.

I love that. So let's talk about some of the other stores now that have come on the platform. Do you think that there's identifiers among, like those 22 stores you were talking about that have been the most successful? What do those stores have in common?

That's a great question. I think that number one by far is that they all started with an audience, so they all had something to build from. You know, they were all doing around $30,000 a month in sales, which to me is kind of the limit of what you can do by manually invoicing. It's kind of hard to keep up with it after that. They all have this group of people that they were able to leverage to grow from. We see a lot of people come on the platform and they set up all the tools, they watch all the guides, but at the end of the day, they have no one in their group or they don't even have a group. And that's really difficult to start from. You're really starting from square one. It's much, much better from what we've seen to get to that point. The second thing is scarcity is a common denominator amongst the 22. None of them sell out. That's another metric that we have in the reporting and comment sold. It shows you how many people got the item they wanted versus how many people were on the wait list. And there's this interesting book called I want to say it's called habit, but it's basically like how to build habit creating products. And that's one of the pieces, right? It's a little bit of a gamble. Like they have to comment just to see if they're going to be able to get it, and they have to lose a few times to really value the win. I think those two things in particular are ones that we continue to see in the success and growth from the 30,000 ish boutiques into the six figures.

It's such an interesting concept. I think about times that I have commented trying to get something purchased in divas. Same with, I remember the lace cactus when she first got started and really blew up on her platform doing comment selling on her Facebook page. I remember just throwing comments out there just to see if I could, in my mind, win something that I was.

Going to have to pay for.

Right. So so much psychology goes into what you're building, for sure.

And I remember a time when we were smaller, when we were around that $30,000 a month number. And I remember asking our customers, like, if you had to, like, give me one word that sums up, you know, divas, like, give me a word. And all of them by far said addictive. Like, it's an addiction for me. And I think that that, again, is the psychology of it, right? Because they feel like they have to be the first to comment. They have to be, you know, watching their phone for that push notification or for that, you know, Facebook notification, because if they're not paying attention, they might not win. And so it's a little bit of a game. Instead of always having product in stock and never selling out of it. And we do get complaints, you know, that, oh my, you never have anything in stock. And we know that we do. We can see our numbers, right? We see our inventory number. And so there's a very fine line of, you know, it's always sold out or, you know, it's sold out 30% of the time. So we watch those numbers really carefully with our system of what's the percentage of time that someone is waitlisted versus the percentage of time that they're able to add to their cart. And that's how I judge how much I need to buy is I really use that percentage.

Was there ever a time, let's say, when you were going to market or telling someone, explaining this concept, both of Divas and comments sold, where someone looked at you and kind of gave you the side eye, like, I don't understand, how is this happening? Like, did you ever get that wonder from strangers about how, like, crazy unique this is?

Oh, for sure. Like, I remember going to market early, and I did, like, early on in my business, and I didn't know what I was doing at market. And so one of the first questions right, when you go into a booth would be like, oh, are you brick and mortar online? And I would say, online. And they would say, what's your website? And I was like, well, I don't have a website. And there. And I'm like, you can go to Facebook search, discount division. And you kind of would get like, nobody took me seriously. You know what I mean? And rightfully so at that point, because I wasn't really selling that much. I mean, in the grand scheme of things, I wasn't. You know, I was ordering a pack here, a pack there. And so it really was interesting to watch because there were certain wholesalers that really believed in my concept, and they. And they watched me, and they really helped me along the way. And so I always. People ask for recommendations all the time, and I really always recommend those wholesalers because there were. They're not very many, but a few of them, they didn't really care how I was selling it. They just kind of watched me grow and helped me in any way that they could. And so. But yeah, for sure, people looked at me like I was crazy. Like I had no idea what I was doing.

That says a lot, though, that they stuck by you and helped you prove the concept and build a brand. That's pretty sure.

And now we're super loyal to them. You know, I go really deep with them when I'm ordering, and I will sometimes, even if it's a little more expensive, I'll order the same product from them versus someone else because they were so loyal.

If there is a mom that. Or a new entrepreneur, a woman listening right now that has started her boutique already, let's say she's in the middle of the grind and she's just wondering, okay, I've got my Facebook group, but I just need to get traction. I just need to take it to that next level. I need to hit 30 or I need to hit 50 or I want to hit 100. What is the secret sauce to those Facebook groups? And what can that mom that's listening right now do to help build some electricity in that group to get things going again?

Okay, so I'll give you my answer, and then I'll let Brandon answer it, because you might not like my answer. I really. It sounds corny, but it's really just sticking with it and hard work. And I know that sounds like super generic or whatever, but like, I was there. I remember it right? I remember, I don't, I don't have kids, so I, I don't understand that aspect. But I did have a full time job. And so I remember feeling like, like it's just not gonna work. I can't get traction. I'm not getting any comments. And I kept at it and I just, I mean, I did anything that it took. I would call my friends and text my girlfriends and my family members and be like, hey, I know you don't care about this and I know you don't want to buy it, but can you just comment sold? Just pretend. Because I knew that once it got traction on a specific post that someone would bite at it and the more people that would buy, the more people would bite. I don't even know if that makes sense. But like, I literally would call my girlfriends and be like, look, you don't have to buy anything. Just put, like, pretend that you, that you did, right? Like, just say you want it. Just say I want one or oh my God, this is so cute. Or just say something, pretend that you're buying it. And that sounds silly, but it really, you know, perception is everything. And so you. If, if, if we had a thousand people in the group and I could get five people to comment sold. And at that time I didn't know that there was an algorithm like that. Facebook, you know, decided how many people were gonna see. I had no idea. But I kind of figured out, like, if people will just comment on it, then I can get people to buy it. I don't know. And so just keep like pushing forward. Just be creative, Figure it out. Like you can figure it out. If I could figure it out, anybody can, right? I had no idea what I was doing. And then I'll let Brandon answer because he's probably got like a much more sophisticated answer.

No, I would say that we've just seen. I've been able to witness a lot of these from the ground up. It's been really fascinating. And we're constantly changing what we call this comment sold playbook of what we recommend. I think the biggest thing is starting out with the right audience is important. A lot of people that come in, they confuse having numbers in the group with having buyers, and it's completely different. So back in the day, like, add a hundred of your friends to be entered in to win some earrings, and that's way too big of a call to Action for the prize that someone's potentially getting. So we've really changed the idea on that to say, look, start with a group of people that will be buyers of yours because you want the percentage to be really high. You know, we have boutiques that have 200,000 members that are doing 20,000amonth in sales, and we have boutiques that with 15,000 members that are doing 200,000amonth in sales. So it's not about the numbers. And I think people confuse that because with pages, it's like I call them, or I think Eric Reese calls them vanity metrics, right? When it's like, oh, look how many likes I have. It's like it doesn't matter, you know what I mean? Like, how many people are you converting? That's all that matters. On the group side, we've really realized that it's about getting that core audience. And so get those core people, most likely that you're going to have from your friends, like from your friends list to start with. And then from there you're going to ask them to do call to actions for simple giveaways. But the biggest thing is stick to like 2 to 5 in terms of how many people they should add to the group. Because if you ask someone to add two to five fashionistas to the group, it's very realistic for them to go through their comb through their friends list and find someone who that they really think would be a good fit. If you ask for 20 or 50, they're just spamming random people so that they can try to get a prize. Right? So we've seen that be really successful. And then try to break the 10,000 member level is the second one. Because we've seen a pretty substantial amount of engagement above 10,000 members. And we see a drop off over like 100, 110,000 members. So right in between, there is really where your sweet spot is going to be. That's just kind of like our 30,000 foot view. And then we really dive into it on a much more granular level with the individual boutiques. But if you're listening out there now and you have a group, try as hard as you can to get to that 10,000 member mark. But if it takes you nine months to get there, that's totally fine. Right? Because you're building a quality group of people who are going to consistently buy from you. I think the other huge misconception is the relatively small amount of people that make up a large amount of your sales. In Diva's case, they have 160,000 members in the group. 110,000 people across both the app platforms, iOS and Android. And so, like, on a million dollars in sales last month, 300,000 of that came from just 280 people, right out of 150,000 plus. So you really want to cultivate those people and continue. I mean, that's essentially them buying one thing every day. And if you have those people, it doesn't matter how big your group is. You know, Divas could have a group with just those 280 people, and it would be doing more revenue than the majority of groups that are in the world right now. So I think that that's a really important lesson to take away, is you want to build quality over quantity. And it's completely backwards from what you may have learned or been taught in regards to pages where it was really just about, oh, you know, blah, blah, blah, has 3 million page or 3 million likes. I would really encourage you to go to the boutiques that you look up to, go to their page, go to the ones that have hundreds of thousands or millions of likes, and just look at the last 10 things they posted, and look at the tiny amount of engagement that they actually have, especially if it's not a contest. And then go look at some of the groups that we can share that only have 15,000 members and they have 500 comments on a post. I think that's a real big piece. And the very, very last one is if you can build that brand around yourself, then Facebook Live is an incredibly powerful platform to sell product and engage with your customers. I see content developing where a handful of our customers go live every single day and have a very consistent audience that comes in and watches them every day as part of their daily routine. And tapping into someone's daily routine like that and being able to steal five to 30 minutes out of there every day to be able to sell them a product is extremely valuable.

Those are such good takeaways. I feel like we could write a book off of just what you said right there. So many good pieces. Let me follow up with this question because I think it's important. Talking about the power of Facebook groups, which you guys have harnessed and leveraged, but now you've also moved the platform onto apps as well. So talk about not only putting all of your eggs in one basket, but leveraging that audience across a couple platforms.

So I always say, Amanda doesn't like when I use this analogy as much, but I did this all for my wife, and Now I have 2,500 wives. But I kind of in the just to paint a picture, In January of 2017, Divas was doing about 300,000 revenue, all with a single Facebook group. And I was just worried. I said, look, we really need to diversify the revenue. You know, I mean, what's happening in groups is phenomenal, but we don't want to have happen what happened with Pages, where people always talk about how pages changed, but they forget it really changed over like two years. Reach started going down a little bit. Rules started coming into place. Facebook doesn't want those changes to be aggressive because they want you to slowly transition in to give them money, which I understand. And they'll always put value on things they want you to adopt. Like what we're seeing with Facebook Live right now being so invasive. Everyone gets a notification when you go live. I said, let's try to do a few things. Let's try to get Facebook groups, let's try to sell on pages, let's sell on Instagram, let's sell on a site potentially, but not as important. The big thing is let's get an iOS and Android app. Because once they get to the app, we own them, right? I mean, we can send them push notifications every day for free. We can leverage those super fans. About 75% of Diva's customers on the app platform actually came from the Facebook group. So let's essentially acquire those customers as cheaply as we can through the group, but the long term goal is to migrate them to the app platform. And now about 70% of the sales come from the apps. It's been a really interesting transition. So you go from, if Facebook goes away, we're dead. And now it's like, if Facebook goes away, it'll sting, but it's totally fine. We'll survive, we'll grow, we'll be stronger. If anything, if you already have a core group of people now those group of people will be very, very. A lot more difficult to reach from new boutiques. Right. Or new businesses trying to reach them. So I really see that as being a big push in 2018 for Comet sold it just to help diversify that revenue so that if any one channel goes away, you're still okay.

I love that. All right, let's talk about some juicy stuff before we wrap up. You ready for that? All right, so if you didn't own Comet Sold and discount Divas, what would you be doing?

Okay, well, I would be a professional.

Gamer, but I'm too old now, so I'm not. My eyesight's not as good. I would be doing merger and acquisitions for discount Divas if I wasn't doing comments sold because that's so fascinating me.

It's so funny because we talk about this sometimes and I'm like, well, we joke, you know, I'm like, well, if it doesn't work out with divas, I can just work for Comments sold because I know the business decently well and I tell him the same thing. I'm like, if it doesn't work out for Comments sold, you can come to Divas. Always have a job for you, babe.

Fulfillment.

Yeah, I don't know. Like, I think it's a really good question. We have our hands in several other things and one of them is a little bit of real estate. And so I, I think that I would probably be a little bit more involved in real estate and some of the other things that we just kind of have going on in our, in our day to day, like, all the time.

I'm pretty sure.

I'm sure of it. Like, the house would be so clean.

Would you ever go back to the er?

I probably would. I miss it. It's hard work, but it's an adrenaline rush. And so I wouldn't go back to any other kind of nursing, but I would probably go back to the er.

I'll tell you one thing, though. In the worst day of Divas, no one died.

True story.

That's always a little easier for me.

Yeah, I have, like, the best luck with some of the. The employees that we have are like people that worked in the ER or still work in the er. And it's amazing. They're like, this is so nice. It's so calm and laid back and I'm not stressed out. And they, they, you know, I always laugh. I say they walk with purpose. Like, they're quick. They're the fastest fulfillment people you've ever seen in your life.

How about your favorite book and your favorite podcast?

The last podcast that I listened to, could listen to over and over again is it was Sarah Blakely and, well, this probably isn't. It's a very specific episode. It's the Sarah Blakely and James Altucher podcast was like an episode. And it was. I could listen to her story, like, over and over because I really feel like she is the hardest working. She was like, you know what? I can do it if I just put my head down. I'm not going to tell anyone what I'm doing because I don't want anybody to talk me out of it.

I would say I'M trying to find the exact name of this one because I just read it and it was awesome. It's called how to Build Habit Forming Products. Seriously interesting, like an absolutely fascinating book. It's a really good read. I listen to everything on Audible. Favorite podcast, Definitely James Altucher. He has just a crazy variety of characters that come on the show. Everyone from business people to like world class yoga instructors to world class, like violinist that was on last week and then Tim Ferriss and all these kind of crazy characters. And he is very, very good at interviewing in a very weird style.

All right, what scares you the most? Snakes, payroll or Internet trolls?

Snakes.

Definitely not Internet trolls, I think, because I'm probably one of them myself. So we understand each other. Payroll right now is not bad, even though ramping up for a lot of the app stuff is getting a little bit scary.

All right, before we wrap up, I'm.

Dying to know this question myself. What is it like to work with your spouse on a daily basis? Earmuffs. My husband's not going to be listening to this episode, so give me the honest truth.

We really had to work on it. Just like marriage in general. Learn how each other works. For me, when I'm excited about something, I'll cut her off and talk quickly and past what she's talking or thinking about. And to her, that's the most disrespectful thing ever. Right? We just learned that, I think, really early on. And then the other thing is being able to work together, but also work separately is important because sometimes you really want to hammer something out individually and then be able to collaborate on stuff. So I think if we actually shared an office, it would not work well.

Yeah, I think that we work pretty well together. It definitely isn't easy. Sometimes I think that people think that I probably get priority on everything. And I really do my best to be respectful of Brandon's time. And so we don't log a lot of problems or bugs or anything like that because I know that he's so busy with comments. Sold. And so sometimes I try to take. I try to take a backseat and then I rope him in and I'm like, oh my gosh, I need your help right now. And thankfully, he's amazing. And he's like, absolutely, I'm here, what do you need? And he'll put all this time into it, but it's definitely like learning how to do that. Right? It's not, it's not always easy, but I will say that it, you know, I understand what he's working on every day. And I see the phone calls, the conference calls. I see him up at 2 o' clock in the morning answering support questions from comments. Sold. Because nobody else is on at that time. And so it gives me another level of respect for him and what he's doing, why he's so tired the next day. And it really gives me a little bit more understanding and makes it easier. Whereas if he was working at a different office or, you know, I didn't see what he was doing all the time, it might be a little bit more difficult. But, you know, and I think it's the same for him. Like, he sees me, like, in the grind every single day. And so, you know, he knows if I'm having a bad day, he sees that I'm in the middle of it. And so sometimes it makes it a little bit easier to understand and relate on that level.

Yeah, I think every good marriage has complementary strengths for your partner. And. And there's usually one person that pays bills, which is Amanda, and one person that tries to track finances, one person that's planning, one person that's running. And I think that's just kind of natural. And with Divas and Comet Sold, it's been really helpful because for Amanda, it's nice because I can come in, I'm not in the grind of divas, and I can look three months ahead and say, here's what I think would be valuable for us to start working on now. And she'll say, no, that's ridiculous. I need help with this today. And then it's like three months later, oh, that's a good idea. And it's the exact same thing in comments. Sold. I'm like, we're just grinding through the feature list for that week that we're launching. And she's like, you guys might want to think about this. And I'm like, no, no, no, we got to knock this out first. And then, sure enough, three months later, I'm like, man, we really need to do this. We should have been doing this now for three months. So it really works out well. And I think it's extremely rewarding. It's very, very much worth the time and effort, because when it does work, it works really well. And when it doesn't work, we've gotten to the point to where it doesn't affect our relationship at all. And I think the other valuable piece of it is having a spouse that has been in that same startup grind. Because I think before that, Amanda was like, she was very understanding when we were Dating. But sometimes I was like, I really got to focus on this. And, and it's not that work is more important, but right now it does have to take priority because X, Y and Z. And that will happen all the time. And when she started Divas, I remember, you know, six months into it, she's like, I totally get it. You know, because sometimes, you know, ultimately everything really does fall back on you at the end of the day, as the owner operated the company. So I have a lot of respect for Amanda as an operator. She's done a phenomenal job and we've really been able to, I think, complement each other by seeing where those weaknesses are in each other and help improve both companies.

And I try not to ask him to help me set up a printer.

Yeah, yeah, I have got that.

He's like, are you kidding? Like, there's no one else in your 20 person team that can set up the stupid printer? That's like key.

Well, you guys, I just want to acknowledge you for who you both are, for being so transparent and honest. You really live the spirit of the community that we have here at the Hub too. So thank you so much for the time to be on the show today and for what you're doing in this industry. It's definitely not going unnoticed.

Our pleasure. We're looking forward to the next one.

Absolutely. Thank you for having us, Ashley. It's really an honor to even be invited.

Well, you, you guys are doing something awesome, so thank you for being a part of it. Hey guys, did you love this episode? I am so fired up about these two. And if you want a bonus sneak peek that we haven't told anyone else yet, I've got to let you in on this secret. You are going to have a chance to meet Brandon and Amanda in person at the 2018 Boutique Summit this June in Dallas, Texas. And we are just beginning to release the early details this week. So make sure you hop on over to our Facebook page and our groups inside of membership@the boutiquehub.com for all of the early details about the event. If you have questions that you love answered about the show, these guests or others, or if you'd love to share what other guests you'd like to hear, make sure you message me, find me over on Instagram Jalderson and I'll also bring you tons of sneak peeks and behind the scenes along the way. Alright, guys, this week our listener of the week is tklein29, who left us a review on Alex Apple podcast saying, guys, I'm addicted. I just finished episode number two with Laura Benson and I'm definitely going to be listening over again. I've got so many great nuggets of information, not to mention I am inspired and I can't wait for more podcasts to come. Thank you so much tklein29 for your awesome review and for sharing genuine feedback about the show. Guys, thank you for listening to this episode, for your reviews and for being a of part of this community and for this movement. Cheers to living life as a boutique boss and together shaping the future of retail. Hey guys, thank you so much for listening to this episode. We hope that you loved it. Don't forget to hit subscribe and leave a rating and review down below for a chance to be one of our featured listeners each and every week. For more information on our spirit of community over competition and how to access complete show notes and bonus downloads from our guests, head on over to the boutiquehub.com and join the community. We'll see you next week. Sa.