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MBP #3: Steve Chou explains how a total ecommerce novice launched a six-figure online store

Steve Chou, My Wife Quit Her JobWhat if your future wife to be wanted a beautiful hankerchief on her wedding day and none of the ones you two found would do? If your name is Steve Chou, then you and your future wife would order twenty dozen from a manufacturer in China.

And then sell the ones you didn’t use on eBay. That’s how Bumblebee Linens got its start. (more detail in the podcast of course)

And if you thought that Steve was a software whiz who was able to build up the ecommerce business on his own, you’d be wrong. He’s an electrical engineer, he had to teach himself all the code necessary to integrate the parts of his store. Then he had to learn advertising. And marketing. And shopping carts.

Then he codified all of that into a comprehensive online course that teaches you how to start a profitable online store!

Oh, and he works full-time (by choice, he enjoys his job) and they have two lovely kids.

Wondering what’s involved in opening an ecommerce store? Why you may or may not want to drop ship? We cover it.

Debating opening an online store, or currently have one, and want to know how Steve did it? We discuss a multitude of topics from advertising to email to conversions to finding supplies. This was the first time we’ve talked about ecommerce stores and I was amazed at how much he knew.

What will you learn in this episode:

  • Learn how Steve and his wife started a business selling linens (it’ll surprise you why they chose linens… and it has to do with their wedding)
  • How they used eBay (and the Google Keyword Tool) to conduct market research
  • The importance of “niching down” – focusing on handkerchiefs
  • How he kludged together several open source solutions to build the prototype for the site, all self-taught
  • How he tried everything to get customers, including pretending to be a woman on forums… until he got banned.
  • How content marketing became a big part of their marketing strategy
  • How comparison shopping sites and cold calling service providers have boosted sales to Bumblebee Linens
  • How he got on the Today Show (and how he prepared his site for the deluge)
  • How they are able to limit customer service costs
  • How they diversity their traffic sources so that no one source is dominant

This particular podcast was tricky to coordinate given Steve’s busy schedule, which is why I thanked him so much, but if you want to show him some love please click to tweet @mywifequit and tell him how much you liked the podcast!

Resources and links mentioned in this chat:

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Raw Transcript

Jim Wang: This is the Microblogger podcast, episode three.

Announcer: Welcome to the Microblogger podcast. If you’re looking to build
a business you can be proud of, you’re in the right place.
Here’s your host, Jim Wang.

Jim: Hello. Thanks for joining us. Today I get a chance to sit down with
Steve Chou of MyWifeQuitHerJob.com. Hear a story about how he and
his wife started Bumblebee Linens, an online store that sells,
you guessed it, linens. Hear about how they got their start,
some strategies to get customers-some are very surprising-as
well as their successes getting on Today for 12 seconds and what
that meant for their business. I’ll be back at the end to fill
in anything we missed. I hope you enjoy it.

Hey, Steve. How’s it going?

Steve Chou: Pretty good, Jim. How are you?

Jim: I’m doing great. Just want to thank you for coming on the
Microblogger podcast and sharing your awesome story with us.

Steve: Just wanted to say glad to be here.

Jim: Yeah, glad to have you. I mean, if you just want to get right into it
and tell people all about yourself, what you do, and we can go
from there.

Steve: Yeah. I run an online store. It’s called BumblebeeLinens.com,
where I sell wedding handkerchiefs. I also run a blog called
MyWifeQuitHerJob.com, and also a course that teaches other
people how to start an e-commerce store.

Were you asking about the background of the online store, or
where did you want me to start?

Jim: I remember back in the day how we first sort of-we didn’t really know
each other, but interacted with one another was on StumbleUpon,
because I would see you constantly sharing stories from “My Wife
Quit Her Job.”

Steve: Yeah. You used to call that spamming if I recall.

Jim: Because it was spamming. You were spamming me all the time. But, no,
here was this guy. I mean, and I saw back in the day, even then,
you still had pictures, I’m pretty sure, of your kids up in the
header and all that. I thought it was great. I just didn’t
really understand the e-commerce business and anything like
that. Here you were.

At that point, I didn’t even know that you had the whole e-
commerce thing going on at the same time, which is awesome. But
I wanted you to just share the story of how you created
Bumblebee Linens, the origin story of how that went down.

Steve: Yeah, sure. When my wife became pregnant with our first child;
she really wanted to stay at home to take care of the kids. At
the time, she had a full-time job where she was making six
figures. We live in an area where if you want to buy a house in
a good school district and live a pretty comfortable lifestyle,
you kind of need two incomes.

So when my wife told me that she wanted to quit her job to stay
at home with the kids, that meant that we were losing,
effectively, a six-figure salary. I, at least, didn’t really
want to reduce our lifestyle, and I wanted to get a nice house
in a good school district and that sort of thing. We decided
that we were going to look for ways to basically replace her
lost income.

We stumbled upon selling handkerchiefs online. The story behind
that was when my wife and I first got engaged to be married, she
actually wanted to take a handkerchief to the altar. She didn’t
want to use some tissue, because she knew she was going to cry.
She gets kind of emotional at large events, and she didn’t want
to be seen up there dabbing up her makeup with ratty tissues.

We desperately wanted to find a handkerchief, and we found that
we could not find those anywhere. So what ended up happening was
that we just scoured the Internet. We found this manufacturer in
China that actually made handkerchiefs, but they wouldn’t sell
them one by one. Instead, you had to buy a whole bunch and then
get them shipped over. So what we did is we ended up buying a
pretty large shipment of handkerchiefs. We used a couple of them
and then we sold off the rest on eBay.

Jim: How many were in the order?

Steve: Yeah, I think it was like 20 dozen or something like that.

Jim: Oh my God!

Steve: And we only needed six.

Jim: You needed six, so you bought…!

Steve: But get that it was really inexpensive for those 20 dozen.

Jim: Okay. I mean, there are still 240.

Steve: Yeah. It’s still a lot of handkerchiefs. We sold those on eBay,
and they actually went like hotcakes. That was all fine and
good.

Then three years later when she became pregnant, we were like,
“Hey, why don’t we go back and see if selling handkerchiefs is
going to be a viable business model?” We got in touch with that
first vendor where we bought handkerchiefs. We did some back of
the envelope calculations to see…at the time our goal was
actually just to make $60,000. We did some calculations to see
whether the demand was good enough based on searches, based on
eBay completed auctions. We basically just decided to launch the
store. It ended up doing pretty well. It ended up supplanting
her entire salary within the first year.

Jim: You started with the handkerchiefs, just because you had a history
with it. You had a supplier that you knew could deliver at least
some of the product. How did you do research on eBay to figure
out if there was a broader market for you to even open a store
to sell all these?

Steve: Yeah, so we basically went on eBay and we looked at the
completed listings just to get an idea of which styles were
selling, which styles were popular, and basically what
percentage of the auctions were actually closing.

Then we got an idea of how much people were willing to pay for
these handkerchiefs. Just keep in mind that people who shop on
eBay tend to be a little cheaper than the people who shop online
in general, so we knew that we could actually charge more for
the handkerchiefs than the prices we were actually seeing on
eBay.

Jim: That’s interesting. When you were doing the research, did you have
tools that you were using or were you just eyeballing it? How
did it go?

Steve: For eBay, that was pretty much eyeballing. For the keyword
research, we were just using the Adwords tools and the Google
keyword tool back then. It wasn’t nearly as mature as it is
today, so a lot of it was more hand waving in nature and just
making a guess on what the conversion rate would be and the
average amount per sale. Just kind of taking all those numbers
and making a rough calculation of how much we thought we could
make.

Just keep in mind, also, at the time, we were pretty much the
only people selling ladies handkerchiefs online, so when we
first started out, we bought a lot of Adwords ads. Since we were
pretty much the only ones who were selling a large variety of
handkerchiefs, those ads converted really well for us.

Jim: What year was this? Was it 2007?

Steve: This was 2007, yeah.

Jim: Interesting. How have you seen the marketplace change? Has there
been a lot more competition now for ladies handkerchiefs?

Steve: Yeah. I mean, there have been a lot of competitors that have
popped up. A lot of guys, actually, from overseas. I see
websites pop up, in the wedding space, I’m starting to see some
of the bigger names starting to carry them now.

But we still carry the largest variety of handkerchiefs. I don’t
think that the demand is so large that the really big guys want
to focus a whole lot of effort on it. We kind of sit in that
little in-between space, where it makes enough money for us and
a small number of smaller players, but it’s probably not
lucrative enough for the big guys to really go whole hog into
it.

Jim: When you think about the entire product line of Bumblebee Linens,
does it extend beyond women’s handkerchiefs, or is that the
core? And then you have a bunch of different products around it?

Steve: The handkerchiefs niche in itself has a lot of different parts
of it. There’s the printed collection. We also personalize and
monogram these handkerchiefs, which is actually a big product
for us. The way that works is someone comes onto our website and
they can write down the bride and the groom and the wedding
date. They can have anything they want stitched on the
handkerchief, essentially. We can charge a premium for those, so
we make a lot of money there.

Our turnaround times are actually really fast, so we can usually
beat almost any other store in terms of turnaround time, because
we do all that stuff in-house.

Jim: You want to hear something funny? Do you remember back in the day
when Apple used to give out free engraving?

Steve: No, I didn’t…

Jim: On iPads.

Steve: Oh, on iPads. Yeah, yeah. I remember that.

Jim: They did that so that people couldn’t return. Once you engraved it,
it was personalized. It was yours. You couldn’t return it back
to the store.

Steve: Yeah. We have that same policy.

Jim: Yeah. I mean, once it’s personalized, there’s no way to return it.
They would be giving it away, because they knew based on the
numbers that this would save them on returns, so it was worth it
to give out free engraving. I don’t know if you’ve ever looked
into that or what that might mean.

Steve: That’s interesting. Do you think that was their only purpose in
doing it? I think that would be kind of a value add, right?

Jim: It’s a value add. I’m sure they have a bunch of other different
factors involved, but just the fact that you can’t return it
probably saves a tremendous amount, way beyond how much it costs
for them to engrave at the size and scope that they do it at,
I’m sure.

Steve: Oh, yeah. I’m sure. I’m sure.

Jim: You were saying the different types of handkerchiefs?

Steve: Yeah. We have a low-end, a medium-end and a high-end. All of
the higher-end stuff tends to be made in Germany and Italy.
They’re very intricate, very fancy and intricate. On the low
end, we have some of the stuff that comes from Asia and that
sort of thing. We basically cover the entire gamut of price
points.

Jim: It’s interesting. Like right now-I guess, now, it’s almost seven
years later. You seem to be very savvy about both linens and the
e-commerce thing to the point where you have a course, or you’ve
had a course for several years now, teaching other people how to
do it. But I imagine initially you guys probably went into this
just sort of spitballing it. Can you tell us about that whole
process?

Steve: Yeah. When we first started, we actually knew nothing about e-
commerce. We had never run a business. I actually didn’t know
anything about web programming or websites and that sort of
thing. In that respect, at least, the learning curve was very
steep.

When we were looking at websites, I remember I just happened to
stumble upon and talk to my buddy who just launched an online
photography site where he’s selling his photos. I asked him. I
was surprised, because I didn’t think that he could code that
well either, so I asked him. “How did you put up this great
looking site in such a short amount of time?” Basically he told
me that he used an open source shopping cart. I asked him, “How
much is that?” He’s like, “Oh, it’s open source, so it’s free.”

At that point I immediately looked around at all the offerings
that were free. I ended choosing the most popular shopping cart
at the time, which was called osCommerce. I found that you could
actually just launch a site with very little code modifications.
The only thing that you really needed to worry about was the
aesthetics of your website. In that respect, going the open
source route saved me a tremendous amount of time during the
launch phase.

Jim: What’s your background?

Steve: My background, I’m an electrical engineer. I actually design
processor hardware for a living. But I’m not really a software
guy.

Jim: Got you. But through the open source and I guess, maybe, the support
of the community and documentation, you were able to figure it
out and launch.

Steve: Yeah. I ended up picking a whole bunch of books on PHP, MySQL,
HTML and CSS. So I just self-taught my way through it. It took
me a long time, but it was good to have that knowledge, because
now I’m pretty much self-sufficient. When there’s something
that’s wrong with the website, I can go and fix it myself. If I
need to adjust any of the aesthetics, I can go in and do it
myself. In that respect, it saved a lot of time and money,
because I can manage the site by myself.

Jim: Got you. How soon after you guys started was your wife able to
realize her goal of doing Bumblebee Linens full time?

Steve: Yeah, that’s a good question. I remember when we first
launched. It was very slow. We weren’t exactly sure how we were
going to get customers in the door, so we basically tried
everything. A couple things I tried in the beginning. I
pretended to be a girl and I went on the wedding forums and
tried to get people to our site.

Jim: Did that work?

Steve: It did, actually, in the beginning, until I got banned. I kept
getting banned, and then finally I found a nice subtle way of
doing it where I would kind of ingratiate myself within the
wedding community, help others and then just very occasionally
slip in the referral to come to our site for handkerchiefs.
That’s one thing we did early on.

We also tried to steer a bunch of our eBay-we were selling on
eBay at the same time, because we weren’t sure what was going to
stick-we would steer a bunch of our eBay people over to our
store. Whenever we made a sale, we’d include our URL and that
sort of thing. On our auctions, within our photos, we would put
the URL for our site. Basically just try to guide people over.

We also contacted wedding planners, event planners, basically
anyone who had purchasing power that could potentially buy our
stuff in bulk. It was a lot of legwork early on.

Jim: You said you were also doing Adwords?

Steve: Yeah. We ended up doing Adwords early on, too, because I had a
friend who was working at Google who just happened to tell me
about it. I was like, “Oh, okay. I’ll give it a try.”

What ended up happening is I tried a couple ads. Actually, I got
our first sale through Adwords. It was really exciting. It was
just my first introduction into the world of pay-per-click. Back
then, Adwords was a lot less competitive than it is today. You
could get a lot more bang for your buck. That just converted
really well for us. We ended up just maxing out our Adwords
accounts that first year.

Jim: That’s awesome. What was the first thing that someone bought?

Steve: I think it was just a set of three handkerchiefs. It was a very
small sale. We probably blew hundreds of dollars to get that
first sale, just because I didn’t know what I was doing. I was
bidding on Adwords like crazy and just wasting lots of money.
But it was exciting.

Jim: I’m sure it was. I mean, it’s the first time. You know, you take that
dollar and tape it on your wall like a restaurant, right?

Steve: Yeah. What’s funny about Adwords is it’s really addictive,
because you go from zero traffic and then you start buying it.
Then people are coming to your site and inserting stuff in their
shopping cart. And it’s addictive. Unless you track exactly how
much you’re making from these ads, you can easily overspend and
get overzealous with it.

Jim: Yeah, there are plenty of horror stories of people that didn’t put a
limit on their budget. Back then, it was just so much easier to
spend, spend, spend and just not realize it, because there
weren’t as many horror stories as there are now. People now are
a lot more aware that you have to keep an eye on it or you’re
going to get eaten alive.

If you were to go back and think about any of the big things
that you did that were breakthroughs for the store, are there
any that stick out in your mind?

Steve: Yeah, I can think of a couple things. First thing was pay-per-
click, which we already talked about. The second thing was
actually contacting the event planners and the wedding planners.
Early on, before search engine optimization for our site even
kicked in, we were actually getting a decent amount of bulk
orders from just cold calling a lot of these planners, people
with purchasing power, people willing to buy in bulk.

Without those guys, it would have been a lot slower, because
even though we were getting good traction with pay-per-click,
there’s only so much traffic that you can pay for in pay-per-
click. It still wasn’t a huge percentage of our overall sales.

The next breakthrough that we found was that we started writing
content featuring our product. My wife, who’s pretty crafty, she
ended up writing all of these craft tutorials, fun things that
you can make with the products that we sold. We basically posted
those on our site.

We did this actually before WordPress was around, so I kind of
threw together this really poor man’s CMS and we started posting
these craft ideas. Those actually started ranking. People would
find us through these crafts and then they’d want to buy the
materials for these crafts. There were links on those pages.
They’d just come and buy our products that way.

That ended up generating a lot of traffic. For our first year at
least, for the first six months, it was event planners, pay-per-
click and then these content pages that my wife threw up that
guided people to our products.

Then after the six month mark, we started actually ranking in
the search engines. After that, a lot more orders started coming
in. So it was a combination of all those factors.

Jim: The beginning it sounds like you did a lot of legwork to not make up
for it, but to supplement the fact that you weren’t getting the
organic search traffic that you would find come six months
later.

Steve: Yeah, absolutely. I mean, also in the beginning, we didn’t
really know what we were doing. We didn’t know the best use of
our time because we were just so new to it.

But I do believe that a lot of people who start their businesses
today, especially online, they don’t expect to have to do the
legwork. I’m actually a big believer in legwork, because I think
it’s a necessary step to generate that early traffic for your
site. You can’t really just launch your website and hope that
these customers are just going to find your store naturally.

Jim: Yeah, that’s so true. Back in 2007, you didn’t really have the mature
social media networks they have now, especially Pinterest. I can
only imagine Pinterest and all the linen tutorials that you’re
doing, how well those can and probably are doing on there now.
If you were starting it right now, knowing what you do, how
would your strategy change? Or how would you supplement it?

Steve: Yeah. Certainly within the last year or so, Pinterest has been
a huge source of traffic. The fact that people can actually see
the products being posted before they actually click on them,
the conversion rate in terms of social media is actually quite
good for Pinterest.

The other thing that has actually proved to be a very big
converter for us has been the comparison shopping engines. These
are sites like Google Shopping, Nextag, Shopzilla, Amazon
Product Ads. Basically places where you can list your products
online, and people go to these sites to do comparison shopping
essentially.

The reason why it converts so well is because on these
comparison shopping sites, there’s a nice picture of your
product and then the price underneath. So by the time someone
actually clicks on the product, they already know that they want
to buy it. As a result, the conversion rate is very high for
these services.

Jim: I’m sure. So how do you get in to the comparison engines?

Steve: It’s pay-per-click, just like Google Adwords. What you need to
do is you need to create a product feed of all the products in
your store. Basically, the item name, the URL and image, a
description and a whole bunch of other parameters that help
categorize your products within these comparison shopping
engines. Then you just end up uploading this gigantic text file
with all the products in your shop to these comparison shopping
engines, and then they get listed.

One of the biggest pains about all this is every single
comparison shopping engine has a different file format, so it
can get kind of tedious. You really need someone there to either
code it up or you can find someone or a service that will do
this for you.

Jim: Do you find that a significant percentage of your sales come from
that? Or is it large enough that you do it because you should,
not necessarily because you have to?

Steve: We actually don’t have a dominant revenue source any more. Back
in the day, a large portion of that was search. These days, it’s
actually quite evenly split between direct traffic, search, pay-
per-click and the comparison shopping engines. But I think that
every store should at least give the comparison shopping engines
a try, because it actually doesn’t cost that much and the
conversion rate is actually very high.

Jim: If you were to group together the revenue sources…we’ve talked
about pay-per-click and paid ads and this comparison shopping.
You have search, you have direct, people that know about you
type, and social media. Are there any other traffic sources that
are significant that we’ve missed?

Steve: Was word of mouth in one of your…?

Jim: Word of mouth. I didn’t list it.

Steve: Word of mouth is actually a very big one, surprisingly. Over
the years, our direct traffic has really grown to the point
where I think the last time I checked-someone asked me about
this earlier-and I think it was something like 30% of our sales
are from direct traffic. Direct type-in of our URL.

Jim: That’s awesome.

Steve: Let’s see. What else do we say? We said pay-per-click,
comparison shopping engines, social media. In terms of social
media, Pinterest is probably the best, followed by Facebook,
although lately Facebook has changed their exposure so to speak.
Kind of influencing you to pay more in order to get more
exposure to you followers. Our Facebook presence has actually
dropped a little bit since they’ve made those changes. Let’s
see. What else is there? Then, of course, the cold calling of
event planners, which I think is very important.

Then within our niche, actually, which is within the wedding
industry, we actually advertise on services that aggregate all
the wedding vendors together. Places like Wedding Wire, which in
turn will post your ads on popular magazines like “Brides,”
“Martha Stewart Weddings” and that sort of thing.

We actually also have been in the media. As part of writing
articles and craft ideas for weddings and that sort of thing,
we’ve actually been picked up by a lot of larger publications
that have wanted to feature our products. Since they’re in
magazines, it’s kind of hard to correlate the exact conversions
that have resulted from that exposure, but I have this feeling-
whenever we get featured in a major magazine, we actually
broadcast it all over our store, so it kind of lends to the
credibility of our store, compared to our competitors.

Jim: Actually, the one thing I did want to ask you about was you were
recently on the Today show.

Steve: Yeah, that was actually very exciting. Most people ask me how
that happened, and my response was, “It was complete luck.” I
think the lady who is doing the show on the Today show, she
actually does a lot of these. She specializes in gift-giving.
She kind of stumbled upon our site. I asked her, and she said
she just found us on the web somehow. She fell in love with our
product. She noticed that we were featured in some of the
magazines and she asked for us to send her some product,
basically, for the Today show.

We ended up sending her a whole bunch of different products from
our store, more than she asked for. She ended up picking us up.
We made the Today show. We were only on for actually 12 seconds
on TV, but just in those 12 seconds, the traffic to our online
store totally exploded that day. I remember that day distinctly,
because my wife told me that the orders were coming in faster
than she could actually print out the invoices, so it was really
exciting. TV is just an amazing medium to advertise.

Jim: Can I ask how the sales were that day? Like the sales numbers?

Steve: Yeah. We ended up seven times the average daily order
volume.

Jim: Wow! Off 12 seconds.

Steve: Off of 12 seconds of being on TV. Yeah, it’s crazy.

Jim: That must have been…that’s the other thing. You still work a full
time job, right?

Steve: Yeah. I work a full time job, but my wife obviously has quit
and she runs the store full time. We have two employees in an
office. She just goes in to supervise. The employees do most of
the heavy lifting, like the packing of the orders, the shipping
and that sort of thing.

My wife takes care more of the content, the buying of the
products, deciding what to carry in the store and that sort of
thing.

Jim: That’s great. You guys aren’t a drop shipping business. You have the
handkerchiefs and all the other linens in a warehouse somewhere?

Steve: That’s correct, yes. Our office is actually a warehouse as
well. We carry all of our own things. At first, when we first
started the store, we were debating whether to do drop shipping.
Drop shipping at the time was actually very new. Very few people
were doing it, but we found that the profit margins weren’t that
great at all. We would have had to sell a lot more to make an
equivalent level of profit. We decided to carry inventory
because the margins are much higher. And you have a much tighter
control over your customer service.

One of our value adds is our very fast turnaround times and our
customer service. If someone doesn’t like a product, chances are
we just let them keep it and then we refund them their money.
These are things that we probably wouldn’t be able to do as
easily if we were drop shipping or if we didn’t have full
control over the entire delivery process.

Jim: With customer service, do you find that it takes a tremendous amount
of time? How have you taken steps to limit that, because you
only have three people?

Steve: Yeah. We actually get that many calls or complaints, so it
hasn’t really been a problem for us. We actually do a lot of
quality control before the product actually goes out, which has
probably helped in that department. But I really think it just
depends on what you sell.

Jim: Linens, I mean, they can see it on the site. They’re good photos.
They have an expectation, and you pretty much meet it. So there
really hasn’t been too much of an issue there. That’s always
fortunate, because you always hear about those stories about
stores or any sort of business, and customer service is a huge
expense, because maybe they don’t communicate their product as
well.

Steve: I think it really depends on what you sell. For example,
electronics, anything to do with computers is a major pain in
the butt, because you have to support them.

Anything that involves sizing, like clothes and that sort of
thing, will tend to have a higher return rate. Our stuff is
essentially a piece of fabric and we put the measurements out
there. We take detailed photos, so what you see, chances are,
will be what you get, so there’s less ambiguity in that
department.

Jim: That’s great. I know that you have the profitable online store course
that you’ve been doing for a while now, where you teach all the
lessons learned and coach and guide students through. You sort
of talked about with you don’t really want to do technology and
sizing’s a problem. Are there certain areas that are
particularly good to get into?

Steve: In terms of selling product online?

Jim: Selling product online. If you were to open up an e-commerce store,
what areas would you generally say are better balanced compared
to others?

Steve: Yeah. I can tell you what not to sell and some guidelines that
I give my students. I tend to tell them to avoid electronics or
anything that can go obsolete.

Jim: Because they might be holding inventory and then some new product
come out.

Steve: Exactly. Yeah, exactly.

Jim: Okay. That makes sense.

Steve: Along the same vein, I tend to tell them to avoid products that
get upgraded very often. Electronics kind of falls in that
category.

Jim: Yeah, same idea.

Steve: Because then you constantly have to update your listings and
that sort of thing. I like things that are not fragile and very
easy to ship.

Jim: Yeah.

Steve: That’s if you decide to carry inventory. In the course, I have
a set of guidelines in terms of demand, what the demand numbers
should be. Then I actually walk them through analyzing the
competitors on the front page of search, and basically making
sure that they have some sort of value add before they begin.

Jim: Got you. Okay.

Steve: Yeah, those are some of the guidelines just off the top of
my head.

Jim: You know, it’s funny. Back in college I used to sell stuff on eBay
just for a little bit of extra money. Your story about selling
the handkerchiefs and searching through the completed listings
reminded me of my days back then. I actually wrote a scraper
that would scrape the completed listings and give me averages
and deviations and percentage sales. It was fun, but a lot of
the things that you’re talking about now about what to avoid,
sizing and things like that, I picked up. It’s funny that they
still apply years later.

Steve: Yeah, I actually did the eBay thing as well. I used to sell
electronics on eBay. I used to buy computers and then break them
apart and sell off the parts for more.

Jim: Whoa! That’s a little more hardcore than me. What did I sell? My
favorite story is when I used to buy John Deere hats. I went to
school in Pennsylvania. There were these John Deere
distributors. They were doing the tractors and maintenance of
all that stuff. And you know how all those have stores where
they sell clothing and things at super high margins. Remember
Punk’d with Ashton Kutcher?

Steve: Yeah.

Jim: He used to wear those trucker hats, those mesh trucker hats, the Von
Dutch and things like that. Well, one episode he wore a John
Deere hat. So I started looking around, and on eBay people were
paying $20, $30, $40 because they were paying Von Dutch prices
for what was essentially a $7 John Deere mesh hat.

So I bought a ton of those. I just called up all the John Deere
distributors around me and said, “I want all your John Deere
hats.” Like, “Why? Why do you want them?” “Don’t worry about it.
I just want them.” I would sell them on eBay and it was great.
They stored well. They didn’t go obsolete and I made a little
bit of extra beer money for me.

Steve: Wow! I think your operation was much more intricate than
mine.

Jim: You called China. You said, “Hello, China. I want some of your
linens.” Then you had the guts to buy 240 of them. You said two
dozen or 20 dozen?

Steve: Twenty dozen, yeah.

Jim: Yeah, yeah. So 240. Granted, they might have been cheap, but they
still weren’t…how cheap were they?

Steve: They were pretty cheap. I think at the time they were between
$2 and $4 a dozen, so it wasn’t a huge outlay.

Jim: Oh, oh. Okay. I thought they might be like $2 or $4 apiece.

Steve: No, no, no. We ended up selling it for $2 to $4 apiece on
eBay.

Jim: Those are great margins.

Steve: They are, yeah. Unfortunately, these days the prices have gone
up as Asia has become more industrialized, their prices have
gone up. We’ve actually had to look in other places for vendors.

Jim: Wow. I mean, have you found other places that are where China was
seven years ago?

Steve: Yeah, absolutely. Places like Indonesia or Pakistan. Different
parts of South America.

Jim: When you say that I was more sophisticated or whatever, certainly I
wasn’t calling other countries. I was calling other counties at
best.

It sounds like-you were telling me earlier or before we started
recording-that you’ve had double-digit growth every single year.
It just sounds like the store started, other than in the
beginning not having a ton of traffic, which is expected, it’s
been growing pretty well. Are there any challenges that you
faced that go against the narrative that everything’s been
perfect and great?

Steve: It’s been challenging every year. Because I’ve documented our
experiences on my blog, I feel pressured now to show growth with
the store. If you look at some of the income reports on my blog,
every year it was something different.

It’s been quite a few years now, but one year, it was the
comparison shopping engines. One year it was about having a
mobile site, because the mobile traffic to our store was
increasing so dramatically. One year it was maxing out on
Adwords. Another year, it was doing retargeting and Facebook
advertising and that sort of thing. Pretty much every year we’ve
had to find something to maintain that double-digit growth. It’s
been just kind of a struggle and just finding new ways to grow
our store.

Another struggle that we’ve had also has been just within the
last couple years, Google has been reshuffling all of their
search results and that sort of thing. We’ve been affected a
little bit by that as well. As a result of that happening, we’ve
started trying to diversify all of our traffic sources to make
us less dependent on Google.

Jim: It sounds like it’s working, because earlier you were saying that you
don’t have a dominant referral source necessarily for revenue.
It’s a mix of everything.

Steve: Yeah, that’s today. Last year, our project was to
diversify everything.

Jim: Got you. Cool. Great! Steve, I just want to say thank you for coming
on the show. Our time is nearing its end. If people wanted to
find you, where would they go?

Steve: You can find me on my blog, which is MyWifeQuitHerJob.com. If
you’re engaged to be married or if you want to just check out
our products, our store is at BumblebeeLinens.com. If you’re
interested in learning how to start your own e-commerce store,
you can go on ProfitableOnlineStore.com and just check out some
of the free material I have on there and see if it’s something
that floats your boat.

Jim: Great, Steve. Well, I hope everyone goes and checks out Bumblebee
Linens and MyWifeQuitHerJob.com and, of course, Profitable
Online Store. Thanks for sharing your story, man.

Steve: Yeah, thanks for having me, Jim.

Jim: All right. Take care.

Steve: All right. Take care.

Jim: I always love chatting with Steve. He has a ton of knowledge about e-
commerce sites, and all of it’s self-taught, so you know he’s
done it from the ground up. He actually covers it all in a
course called “Profitable Online Store,” which I’ve seen and it
just blows my mind how much stuff is in there.

For the show notes, go to microblogger.com/3 and you’ll see
links, things that we talk about, all that good stuff will be
there.

Also, if you have a minute, it would really help us out a lot if
you could leave a review or rating on iTunes and then tell all
your friends about this awesome new podcast you discovered. It
would help us out a ton. I would thank you so, so much.

As always, if you want to reach me you can hit me up at
Jim@microblogger.com or if you’re on Twitter, look for me at
@wangarific. And we’ll see you next time.

Thanks for listening!

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Jim

In 2005, I founded a personal finance blog (Bargaineering.com) that became successful enough that I quit my career as a software developer in the defense industry. It is my goal to share everything I learned so that you can do the same - build an online business that let's you pursue your passion.

4 responses to “MBP #3: Steve Chou explains how a total ecommerce novice launched a six-figure online store”

  1. Judy says:

    Enjoyed the podcast. Steve’s story is very inspiring.

  2. Forest Parks says:

    I’ve been in contact with Steve for some time and it’s recently his expertise are really starting to be exposed to a very wide audience. He is a wise man with a lot to say and is extremely humble about his and his wife’s huge success. So this episode was really enjoyable to listen too.

    • Jim says:

      Thanks Forest!

      Steve is on top of his game when it comes to ecommerce stores (and everything around it, like marketing, promotion, etc.), it was a pleasure to chat with him about all those things.

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