Tyler Donahue - How A $30,000 Per Month Product Created An Agency

Hey, how's it going? It's Olly here. Very warm welcome to the Ecommerce Freedom Podcast. So just before we dive in, I've got two special new resources for you. First resource is a PDF with 15 smash hit products on it, ready to go. Examples of products you can sell on Amazon. So you can use this for inspiration or you can just see, you know, what types of products do really, really, really well. I've even included revenue examples so you can see the amount of money that each product is likely to generate. The Amazon Marketplace. If you want to grab this free PDF, just go to ecommercefreedom.com and you'll see a link at the top of the page where you can grab the PDF. The second resource I want to give you is a free Amazon Accelerator call. The whole point of this call is for us to have a quick chat and we'll gather up a little bit of information about your situation and together we'll develop a plan for you to build an Amazon business that either works as a side hustle for you or could replace your job and will take into account your situation, your experience, your background and give you a clear set of action steps to go ahead and build the business. If you want to book one of Those, go to ecommercefreedom.com go to the top of the page and click Amazon Accelerator Call. You fill out a quick form and you can book the call. Alright, thanks so much for joining me for another episode. This one's going to be good and enjoy it. Hey everyone, how's it going? It's Ollie here, so very warm welcome to another episode of the E Commerce Freedom Podcast. So today I have a very exciting guest by the name of Tyler Donahue and he's done some really exciting things in the world of E commerce and also with his agency. So I wanted to have Tyler on today really just to explore his story, his background, give you yet another example of what happens when you have somebody who really commits themselves to building a business, really wants to work for themselves and get started on Amazon and actually makes it happen. It's not just me who does this or some of the clients you've seen. Tons of people are making this happen right now and I think every story you hear will make you more and more inspired. So Tyler, thanks so much for joining me today. How are things with you, man?

Very kind intro, Oliver. Thank you so much. Things are very good over here. Very good.

Awesome. You're very welcome, man. So yeah, we just had a brief chat about your background, but I'd love to start off really by talking about what happened before E Commerce for you and why did you decide to build an E commerce business rather than going into like a different industry?

Yeah, I suppose my answer is probably like a lot of people's. I wanted to, to be able to have freedom of location. And I suppose that it didn't have to be E commerce, but before E Commerce, I was a real estate agent and I was in the real estate industry. I was very focused and I had to be in one location. Right. Meeting with clients, meeting with sellers. I didn't have a big enough business to the point where I could leave and, you know, explore my interests, travel, be a little more creative. And like many of you, probably seen tons of ads on people. Hey, start this Shopify site. Hey, be free with Amazon, fba. All that jazz sounded pretty great to me. And so I made the dive and it happened to work out okay.

Absolutely, man. Yeah, definitely. Definitely okay. More than okay. Right. So you mentioned to me your, your product that you started with, which is really built into the brand that you're launching. So talk to me about how you found the product, why you chose that product, and the story behind that.

Yeah, so when we, when I first started thinking about selling things online, I wanted to provide a product that brought joy and comfort to people on the other end, people buying this product. And so when I originally started thinking about launching the store, I wanted to launch a store focused on anti anxiety, anti stress, things of that nature. So I started looking at products in that space, maybe reinventing Stress Ball, but ultimately came to the decision that we were going to launch a weighted blanket brand. There's a lot of competition in the space when doing the keyword research for Amazon. So we started looking at descriptors, people that were looking for weighted blankets with like a specific niche. So cooling weighted blankets, 25 pound weighted blankets, 7 pound weighted blankets, all these keywords that narrowed down what people were looking for on Amazon so that we could compete. And instead of trying to compete with the broad keywords like just weighted blanket. And so we stumbled across one that we thought was interesting. There were a lot of people searching for lavender weighted blanket, but there weren't any scented blankets when you typed in that keyword lavender weighted blanket, just the color. So we launched, we launched a lavender weighted blanket with literally dried lavender buds inside the blanket. 150 grams. And within a couple weeks of us launching, we were Amazon's choice for the keywords lavender weighted blanket because we were the only one that fit that description specifically. And so I guess Amazon recognized that, and we were able to start selling pretty quickly, ranking pretty high on all the keywords related to lavender weighted blankets.

That's awesome, man. So, weighted blanket. So what is the purpose of a weighted blanket? I understand. Is it just to provide comfort? So if you're lying down, it just feels heavy, feels like it's hugging you? Is that. That's my impression. Is that what.

Yeah, yeah. Yes. Yes, that's. That's pretty much it. They. Before they became popular, they were used a lot in hospitals to come for people after surgery for a variety of reasons. And they were actually popularized by gravity weighted blankets, which is a really big brand now. And they realized that there's some science behind having weight on your chest as you're laying down, that they call it deep pressure touch. Kind of like. Kind of like a hug. It's often described, and it's proven to release endorphins with, like, this weight on you. So it helps you sleep, helps you relax, and. Yeah, they're really nice. Check one out.

Yeah, that sounds great, man. Yeah, I'm always looking for ways to reduce stress. I think, as you know, running a business can sometimes just be crazy, right? Yeah, it's certainly something I'll be interested in. All right, man. So I really like what you were talking about with the keywords, because, you know, on Amazon, what we're always looking for is an opportunity where there's a ton of demand, but obviously we have a way of competing. So you obviously found this kind of niche inside of a niche where it wasn't just a weighted blanket and, you know, the main keyword, but it was a lavender weighted blanket. So you were the only ones who actually had lavender in it, rather than just being the color lavender. So how has that played out? Has anybody else come along with a competing lavender weighted blanket?

Not yet. Not yet?

That's nice. Well, hopefully. Hopefully. I mean, the aim is obviously to establish yourself as the brand.

Right.

Who has lavender.

Yeah, of course. Yeah. Before. Exactly. So when the competitors come in, they'll be knockoffs.

Yeah, exactly. Cool. All right, man. So let's talk about how you launched this product then. So when you first got some stock and you look for a supplier and everything, did you have, like, a rough budget in the beginning that you started off with?

Yeah, we had a credit card for $7,500, and our first inventory buy was about 5,000.

And was that all sourced from Alibaba, China?

Yep. We just contacted a weighted blanket manufacturer who was already making them and asked if they could put lavender inside of it.

Love it. So how many units did you ship over in your first order?

100.

Okay, so you started relatively small, and so it was total 5k for that, for that shipment, Was that right?

A little less, actually thinking about it. Now we Pay with shipping, $32 per unit. So yeah. So just over 3,000 actually, now that I think about it.

All right, and so what was the sale price? Is $32 Cost of landing goods? Is that including shipping and stuff, or is that just a product that was landed? Oh, wow. Okay. And so what was the sale price?

We sell the blanket. Well, when we started, we sell the blanket for $89 on Amazon.

Nice. Slightly more expensive than your average private label where people are charging like $20 and stuff. That's nice. You get quite a decent profit per sale, right?

Yeah, not bad. Yeah. It is a little bit harder because the product is more expensive. Right, so it's a restocking cost, buying lots of inventory. Exactly.

That's great. And do you ship by sea now? Do you just get huge shipments sent over?

Yeah, by sea. Speaking of shipments, just a tip that I think everyone should know when deciding shipping anything from China, get a freight forwarder that you can call and speak to directly. Don't use the freight forwarder that your manufacturer uses. I suggest Flexport. But it's extremely helpful to have 100% visibility on where your units are from the point they leave the port in China to arrival port in the States or UK or wherever you are, and ultimately to your warehouse. It means a ton in the beginning so that you can accurately decide when you're selling, when you're launching your ads and all that jazz. You want to be able to talk to your freight forwarder.

That's such a valuable.

Save you a lot of pain.

There's so many touch points, aren't there, between getting the product from China and the factory, you know, through Chinese customs, on the plane or the boat, all the way your country, through the customer. I mean, there's so many points when something can go wrong. And having that transparency, it's just so. Transparency. Transparency, I guess, is the real word, right?

Exactly.

It's so important. Yeah, that's a really awesome tip. Cool, man. So you got this three grand worth of stock and how quick did it start selling? Was there a delay? Did you turn on the PPC and have to wait for a month or, you know, what happened?

So we reached out to our friends and family in the beginning and we gave them the blanket for the cost that we were paying. So for $32 in exchange for a review. And on Amazon, in order to do that, they have to buy it with their account. So we just had them buy it and then we venmoed them the difference or PayPal or whatever payment system you use so that we would. So that we could get a large influx of reviews right as we launched. So we made all of our friends and family aware that we ran this program with weeks before we launched the product. So that day one, we were able to get lots of reviews coming in.

Nice. And so then did you turn on the advertising and stuff after that?

Yeah, not a ton, though. We still don't advertise a lot. We. We found that the key. Yeah. To be honest, we're. We're still. We're still not great with our Amazon keyword bids and advertising. We're relying a lot on the organic search results. Well, that's landing on free.

Free traffic. Right. The funny thing is, it's just so true. You don't have to be like a ninja of all this stuff. If you have a product that people love, if you have a great product. I mean, that's what we're doing here. We're not, we're not. We're not trying to become SEO ninjas. We're trying to sell products that add value. And you obviously did that, and then that's what carries your company. So shortly after you were selling this product on Amazon and then you decided to expand. Right. And switch over to other platforms as well. So I'm curious, what revenue number did you get to when you decided, okay, now it's time to start to expand?

Yeah, we were about $6,000 a month, six, $7,000 a month on Amazon. Little ad spend before we switched over, or not switched, but added Shopify as a channel for us.

That's awesome. So six grand a month. And you were like, right, we can expand this. And so what was the reason you thought, well, I want to go to Shopify as well?

Yeah, I mean, I. A large, A large reason was us wanting to be able to speak directly with our customers and kind of own the emails and the data so that we could build a brand around the blankets rather than just. Yeah, rather than just be on Amazon. I mean, for Amazon sellers that are currently selling, you know that you don't have access to your seller data or to your. To your customers data. So when we launched on Shopify, the goal was to understand a bit more who our customer was so that we could build a brand and launch new products, speak to our customers as we're launching new products rather than just go solely on what people are searching for on Amazon.

Yeah, that's makes so much sense. You can start to build up an email list, you can keep in touch with them, you can offer them complimentary products. Yeah.

Ask them what they want.

Yeah, well, yeah, yeah. That's really one of the most important parts of a business. And when you're only selling on Amazon they very much don't want you to do that. So it was very clever that you did that so early. I done so much on Amazon and haven't really expanded too much to other platforms so it's really, really good that you did that early. So obviously if you're selling on Shopify, Shopify don't have their own fulfillment service. So how are you, how are you fulfilling orders when you manage to add Amazon? Love it.

Yeah. Amazon has the listeners something called Amazon Multi Channel fulfillment. So if you're selling on Amazon already and want to quickly sell on Shopify, then just Google Amazon multichannel fulfillment and you can fulfill all of your Shopify orders via Amazon and get really quick shipping, you know, three, four day shipping.

This is so nice because you can just ship, when you ship stuff from China, you can send it all to the same place or you can send all your stuff into fba. Yeah, shipped to all these channels. So it's almost like you're just clicking a few buttons really to get the Shopify rather than having to have a whole new warehouse and everything else. But then soon after you switched.

Right, we did make a switch and we were actually forced to switch because a lot of the sellers right now know that Amazon stopped taking warehouse receiving orders, shipping orders for non essential goods for I don't know, maybe 45 days. So we weren't actually able to send new units to Amazon. So when we made a quick pivot and sent them to another three PL called Shipbob and three PL stands for third party logistics.

So shipbob, they're exciting. So I discovered them recently. I saw that one of the. I was almost on the eye out for trending keywords and shipbob was a trending keyword. So it's basically just like FBA but not on Amazon. Right. They do everything but it's just not under Amazon's brand.

Exactly. It's exactly. It's like fba but they don't have a marketplace so they just do shipping logistics.

So cool. You know, it's nice to know that there's another option If FBA for some reason doesn't work out because you know, obviously selling on Amazon, it does have its downsides. I mean if Amazon decides to suspend you, then your whole business is gone. Right. So it's nice that there's another way, you know, you can just continue operating even if you don't have the account. So yeah, Shipbob and companies like that are really encouraging. So you sold this product and then what revenue is this doing now?

This Bankit, it hovers between 20 and $30,000 a month in sales.

That's amazing. So we're talking like a decent six figure business with, with one product which is really exciting and to honest is that shows you as well the size of the US market because a lot of my stuff is done in the UK and I would never expect to have that kind of volume. I have half of that volume on some of my best products in the UK and Europe. So yeah, it really does show the size of the market in the us.

Sounds like you should start listing some of your products in the us.

Yeah, yeah, you're absolutely cheaper.

It's cheaper to ship from China to the US because of the taxes.

Is it really? See, I didn't know that. That's amazing. Yeah, definitely. I've been looking into it for a while, it's been on my to do list but I just haven't pulled the trigger. I'm probably throwing money down the drain. But so shortly after you grew this company, obviously with Shopify you have to handle your customer service. So tell me what happened with that.

Yeah, we, we didn't like handling our customer service. Well one, because it was just me, so I was just sitting here responding to emails, you know, that were coming in. Customers are a lot to deal with and it can, once you start selling a little bit of volume, it can take up a lot of your day just sitting there and responding to customers. And customers are trained to get responses really, really fast. Now with all these big brands that have a lot of money to invest on customer service, Amazon, they're expecting responses really fast and they get really angry if you don't respond fast and give them what they want. Nowadays they can go on your socials and start making comments on your posts telling people not to buy from you because they don't respond to your messages. So it's a really big growing pain that we were experiencing and we noticed a lot of other people were experiencing. So we launched a managed service agency that helped people outsource their customer service and we only charge per ticket. Solved so it's very scalable for people that are looking for different customer service options.

That's such an amazing idea because I've had parts of my e commerce businesses where I had to handle the customer service. I had a big ebay business at one point. Wasn't too big. I think I did about 50k on eBay or something. But it seemed big to me in the beginning. And you have to do all the customer service and the amount of crazies you get, just people who are just plain crazy. Like dealing with that on a day to day basis, you know, it can be exhausting. You need like a weighted blanket.

We were joking about starting a Instagram, like a meme Instagram where we just show like the stuff that people say in customer service and all the characters and how they can go from extremely heated. Like they're reporting you to the bank. You're the worst person ever. You're stealing from people. You should be ashamed of yourself to like, oh my gosh, thank you so much. I know, I got angry. I just really, really wanted the product. You're amazing. And they write you an amazing review. So it's like, it's crazy.

It's funny.

I know, it's like, it's wild. So we were, we were thinking about starting a meme page where we had like, like people, their first email, their last email, like they had different information in terms of their tone.

Yeah, that's brilliant, man. I'd love to see that. Cool. So you started this, you started this agency basically born out of a need that you had in your own company. And now so you help other companies with their customer service. So how is it structured? Like how, let's say, I mean, to be honest, I do have a ton of tickets coming through for my coaching business. I have about, I don't know, 30, maybe 40 a day. Let's say I wanted to use your guys. How would you handle it?

Yeah, so we charge, it's the start, $2 per ticket. When you say ticket, it's like a full exchange. So if someone reaches out to you about a program, respond, and they respond back and then we respond back again. We charge $2 for like a full ticket exchange to close out that inquiry.

It's a great pricing model because, I mean, sometimes you might be tempted to hire somebody like on payroll to do customer service. The thing with customer service is it varies, man. Some weeks you'll have an explosion of tickets and other weeks there'll be nothing. So if you have someone on payroll, it's like well, sometimes they're just going to be doing nothing for like an entire week. So the pay per ticket model is really, really. That's a really good idea. So you mentioned that you've worked with quite a few big YouTube channels. So tell me what happened with that.

Yeah, when we. When we first started this, we. Our first client was a YouTube group called yes Theory, and they have a lifestyle brand called Seek Discomfort that we handle their customer service. And that's kind of what kickstarted our business was finding one YouTube group with an audience and kind of making that our niche. So most of our clients are merchandise brands from influencers.

That's so cool and so funny because I've seen Yes Theory's videos. They're the ones who just like throw a pin on a map and then just go to the country. Right. And they do that kind of thing.

Yeah, yeah. Their slogan is their merchandiser lifestyle brand, Seek Discomfort. So their channel is all about pushing people outside of their comfort zone and then like, you know, illustrating that on their channel, getting outside their own comfort zones. They're incredible group there. If you haven't seen them, check them out.

Yeah. If you're listening, go. Go to YouTube. Type yes, go check them out. It's definitely entertaining. So awesome. So you've been doing a lot of stuff for their merch sales and their clothing sales. So what are the plans? Do you have any plans for the agency you plan to do to grow it in some way or work with different clients?

Yeah, we'd really. This year we're really focusing on growing the agency. We kind of figured out all the systems over the past year since we launched it, and we're really excited to kind of step on the gas and see how big we can grow it. I'm mostly focusing again on influencers that have merch brands.

Love it. Awesome. All right, Tyler, well, it's been so cool hearing your story. It's been really, really inspirational. Love hearing about your agency work as well, which is a really exciting model and quite a fresh take on customer service agency. So if somebody's thinking, you know, I want to. I want to get in touch with Tyler. Maybe I want to use his services or ask him a question or something. Where can we find you?

Yeah, great place is Instagram. I'm just. Tyler's journals. So Tyler's journals. And then my email is just tyler@tylerj donahue.com love to connect with you guys.

Awesome. So what I'll do, guys, is I'll put some links in the show notes as well, so if you just go to ecommercefreedom.com, find Tyler's episode and, yeah, you'll see the links on there and you can check out his stuff as well. Tyler, it's been absolute pleasure. Thanks so much for coming on the show.

Yeah, nice to meet you. Talk to you soon. Take care, mate.