Nick Peroni - Ecom Empires
In Episode 30, we shift gears and start exploring another how to make money online money making system. Learn how to build an online business through Shopify, where I interview e-commerce titan Nick Peroni of Ecom Empires.
In this podcast, we start off right from the beginning and learn about the Shopify money making system, how to build/design your store, whether to start off your store as a general store or a niche store and more!
If you don’t have a Shopify store yet, sign up for a 30-day free trial here.
➤ Nick shared his background as an entrepreneur and how he got involved in the world of e-commerce.
➤ I asked Nick about his motivation in starting his business and what drove him to do this.
➤ Nick shared how he chose his first e-commerce store and whether to choose a general store or a niche a niche.
➤ I asked Nick about why he recommends using Shopify to launch your e-commerce store.
➤ Nick discussed his approach to designing a store and how to choose a store theme layout.
➤ I asked Nick if there are any particular common design mistakes he sees from people when creating their stores and how can these be avoided.
➤ Nick discussed the importance of a store’s “About Page” and he gave his advice on how to create an attractive About Page.
➤ Nick gave his thoughts on how to come up with product names and descriptions and what will surely work well.
➤ I asked Nick if writing longer product description works better than shorter descriptions and how he comes up with his descriptions.
➤ Nick gave the list of the apps that are a must have on your site.
➤ I asked Nick if there are apps that one has to have from the very start and how he decides which app to install first, considering the increasing cost of these apps.
➤ Nick shared his way of choosing the number of types of products to test for him to find a target audience.
➤ Nick gave his insights on how he sets a store’s product pricing, expected conversion ration, gross profit and net profit margin.
➤ I asked Nick about how much his cost per Facebook ad acquisition cost typically is.
➤ Nick discussed the biggest mistakes beginners make when starting up a store.
➤ Nick shared his best practices in solving the problems that he encounters with his business and gave the name of the person, place or resource that he consults to get a solution?
➤ I asked Nick to tell my audience a little bit about the video course resource he has to help budding entrepreneurs and what sort of results will they get out of these.
➤ Nick provided the best ways to access his course.
If you don’t have a Shopify store yet, sign up for a 30-day free trial here.
➤ If you don’t have a Shopify store yet, sign up for a 30-day free trial here.
David De Souza: Today I'm here with entrepreneur Nick Peroni. Today we're going to discuss starting your first eCommerce store. Welcome Nick.
Nick Peroni: Hi David. It's a pleasure to be on the call with you today. Thanks for inviting me. I'm looking forward to this.
David De Souza: Man. Thanks for coming on. So, Nick, before we kick off, tell us a little bit about your background as an entrepreneur and how you got involved in the world of eCommerce and what you've achieved.
Nick Peroni: Absolutely. So for me, my story goes back a few years. When I got out of the army, I just had this self-drive. I knew I didn't want to go back into the workforce after my experiences there, and so I just started looking for a way that I could put it together on my own. And like many entrepreneurs, it was really messy. At the beginning, I had no idea about anything. I hadn't really even been introduced to online marketing yet. So I was just out there trying to figure stuff out, working odd jobs to make ends meet. And my first opportunity really was when I met somebody who had an idea for a photo booth company and I was studying online marketing at the time.
I was just getting introduced to it and he came to me with this idea and I was like, “Man that that is a really golden idea. I've been learning all this stuff that I could use to market this online.” We looked at the industry at the time of what it was and it was just like go time. And so that was really where I got my start, in the photo booth industry, it was a service based thing where we were just setting up locations, using Google Maps and basically building out websites and then using Google AdWords and Facebook to market, get traffic, build a brand basically from scratch and using all those online marketing principles. And that was going really well. But as an entrepreneur, as we are, we're driven, I wanted more, I saw the potential here and I'm really condensing this story, but I built that company to $1 million in sales with my partner over the first three years that we did that.
And then I was at a crossroads where I wanted to do something more. I'd been exposed to Facebook ads at this point and really seeing what people were able to accomplish, selling products just through Facebook and the ads platform was really starting to develop. And then that's when this whole Shopify idea came across my desk where people were basically dropshipping products from third party sources, finding like just real unique cool items and using this platform, Shopify that blew my mind because I was used to building websites, and all this complicated stuff with WordPress in the background. And then I saw how you could just really plug and play into a platform like Shopify and you could find products and then just use Facebook ads to get them out there. And that was it for me. That was about two years ago when I discovered that.
And I got involved, I started investing in my education, started building stores and things took off for me pretty quickly from that point on. And I ended up leaving the company I was part of to pursue my own endeavors with eCommerce and just building out stores like that and things have been really great since then. I mean I've been really blessed. I've shared that information with some people and been able to build a community around helping other people use these online marketing principles that I've learned to build a business and sell things online.
David De Souza: That's really cool. And so tell me, so you started off in the army, right? And then you've made this switch somewhere along the line to go ahead and take a concentrated new path into eCommerce and internet marketing, I suppose before all of that and deciding to learn websites, what motivated you to start down this path and were are you hurting? Were you depressed? What caused you to really spend your time studying?
Nick Peroni: I mean, very good question. I mean really, you already hit it with the pain points that I felt, that was really where it started for me. Personally, I've always had as a … like I think to my parents and the things they used to tell me when I was younger, I've always had a problem with authority. I've always been somebody to question everything, not really want to be conventional. I've always had this idea that, we can do whatever we want, and our life can look like whatever we want it to, if we're willing to put in the time and the effort to make it happen. And for most of my life I just didn't know what that was and I was aimless, which is why I joined the army to challenge myself and to really grow as a person.
And then when I got out is when I realized that's when the world of online marketing was introduced to me in the pain point was, I was trying at the time to put it together and I was really broke. I mean in a lot of ways it sounds like a cliche, but I had tried doing my own thing when I got out of the army, just like designing tee shirts, designing my own stuff as an artist because that's always been a like a passion and a skillset of mine in art and it wasn't working. And that's when I was like, “Man, this is just embarrassing.” I was broke, I had all this drive, I was a veteran, I knew what I wanted to do and what I felt like I could accomplish. But I had no vehicle, I had no outlet, I had no system to do that.
And so I just started looking and when I was introduced to the idea of everyday ordinary people being able to leverage the internet to create incredible results, I was hooked immediately. And that really drove me as well because, I was able for the first time to actually see and meet with people that were online, like virtually and see what they were doing and see these business models they were creating. And I just realized, it's like it hit me, I was doing it all wrong. And then from that point forward, as a broke army veteran struggling in Philadelphia, it was just like a hunger inside of me. I was like, “Man, this is it. It's time to either, put up or shut up.” It's time for me to just go all in and make this happen because I don't want to live like this anymore. Just struggling, trying to figure out what makes sense.”
David De Souza: Yeah, wow. And was it at this point when you sort of channeled your energies towards achieving this that you came across the photo booth opportunity? Or was that just like a made or something fortuitous in your life that somebody you knew was trying to do that?
Nick Peroni: Yeah, well with the photo booths that was like … So as I was a designer that came to me originally as like working on designs for the company and when we met and he told me the idea at the time what I recognized, because I had been studying online marketing and I mean this was a few years ago, so it was big, but it wasn't like as mainstream as it's starting to become now, it's really starting to become a buzzword I think. But at the time what I really saw as the opportunity is the photo booth industry was archaic. People didn't know how to do online marketing almost period at all at that point in time. So I saw that and I remember reading like from Jay Abraham, one of the early influencers that I found where he talked about being able to take strategies from other industries and apply them to your industry.
And I recognized that opportunity immediately. And even the guy who had the idea, Josh, he didn't recognize that. That was just something that I saw because I was like online marketing and here's an industry that hasn't really even been touched by proper online marketing yet. And so that immediately was an outlet for me to start learning. But it wasn't enough for me because the company wasn't really mine. I was a partner in the company, but Josh was the majority company … I was broke, he was putting up all the money, he was putting all the financing in, so he was the primary owner. So for me I was still very driven in figuring out a way that I could start leveraging my skill set and my experience to build my own business in my own company and become my own entrepreneur.
David De Souza: And then that was a catalyst for you, I guess looking towards how to start your own business. Would that be right?
Nick Peroni: Exactly. So that's when I discovered eCommerce and I had been studying, for a long time I was building the [inaudible] of team and I was applying all these things that I was learning. In my group I talked to people about this that are struggling sometimes to get started. I tell them, “Look, find an opportunity where you can have your basic needs met and you can be working and learning at the same time and getting paid for it,” which is what I was doing. I was working a free schedule, my own schedule. I wasn't part of a 9:00 to 5:00 or anything. I was just doing my thing, building this company and at the same time that gave me the ability to look at all these ideas that were coming across my screen and when Shopify came across, that's when it clicked.
That's when it hit and I was like, “This is it. This is what I've been waiting for. This is the time for me to make my move because this just makes sense. This is so doable.” This is something that, all the skills that I had, just funnel them right here and you're going to be able to build a business very quickly, which is what happened. I started Shopify at the beginning of 2016 last year. And within that first 90 days of starting my store, I had crossed six figures in sales.
David De Souza: Yeah, crazy. I guess that brings you to the point of starting your first store now. For I guess for listeners out there. Tell us a bit about how you problem solved or what advice you'd have for choosing your first eCommerce store Nick. How did you go about it then? Or perhaps how has your views changed then in terms of maybe deciding … did you just decide to, for want of a better word, choose to start a general store or you actually chose an industry like photo booths?
Nick Peroni: Interestingly enough, I did play around with the photo booth idea a little bit in the beginning, but it was part of a general store concept that I was doing. So when I got started, general stories, the way that I chose to go because I was looking at the overall opportunity of what was available. And Shopify is just the platform, right? So Shopify lets you build a store, Facebook ads lets you reach the audience. And so I looked at it and I didn't have like one niche that I was dead set on, “This is what I want to do.” And so I'd seen the idea of a general store, I can't take credit for it. That was something that I had seen other people doing and I was like, I really like this, but what I did a little bit differently than his, I went out and I started choosing niches and creating a niche fan page for each one of those.
And I started marketing products from those niche fan pages, they all led back to the overall general store. So when I got started, it was really just a matter of looking at other stores that were out there that were already doing this idea successfully. Seeing the types of niches that were working, which I had narrowed in on like really, it was really very much hobby, interest, passion type niches that I wanted to target in the beginning, unique shrink it type of novelty items that were out there and be able to build these niche fan pages that were promoting these products to people. And then all of it was under the umbrella of one general store that was just selling everything.
David De Souza: And when you did that, so you talked about how you just saw interests out there. I mean was there a way that you saw these interests, how did you actually come about that and make that evaluation that they were working?
Nick Peroni: The way that I really look at niches is I try to keep it simple when it comes to eCommerce. And at this point in my … It was a little different then, at this point now I've been able to test a lot, spend a lot of money and build different types of campaigns for different types of products. But for me, when I look at a niche, I generally approach it with a simple perspective that any niche can be profitable. So if I go on any major site like Amazon or Ali Express or eBay or these big giant eCommerce sites that are out there that sell everything and they're very successful, you can see right on their homepage is where they break down categories. And so I always used that.
I'm not trying to reinvent the wheel here, I'm trying to follow in the steps of people that have already proven a model and then create my own model from that. So I've gone and I've looked and I've seen what are the categories that they are splitting out right on their home page. Because those are obviously the most popular shopping categories that are out there because these companies are doing billions of dollars a year. They know what categories make sense to put on the home page. So I would look at that and then I would start breaking down a little bit further. Okay, so you take the category sports and recreation and then you can look inside at that and start breaking it down into subcategories like yoga or football or soccer or baseball.
And I just started choosing the ones that made sense to me that I felt I had a good understanding of the audience and what they would like and what they would appreciate. And then I just went out there and started matching products to those audiences. And that's generally how in my group now advise people is, if you're starting a general store, go out, find two or three big categories that you know are popular, go in within those categories, find two or three small ones and then start finding like two or three best-selling items for each one of those small categories and just start testing and repeating that process.
David De Souza: Okay, that's really cool. And you've shown how you problem solved the general store versus specific store. Now, I noticed you've mentioned this word, Shopify, and I mean you told us that you have a background in website design and development. So tell us a little bit about why you chose Shopify as opposed to maybe like WooCommerce and WordPress.
Nick Peroni: Yeah, absolutely. I did realize that I'd said that before and it's definitely not a plug for Shopify in any means. There's a lot of ways to create an eCommerce store. But for me that was how the idea originally came across me, that creative inspiration, that spark that happened for me came in the form of seeing Shopify and what people were doing with that, that already established Shopify plus Facebook business model. So that's really where it started for me. And I just liked it very much because it was simple. I do know there are the platforms like WooCommerce, like Wix and WordPress, where you can do these kinds of things as well. But for me, I liked Shopify because it was very plug and play, very much just you open a store, you had apps to choose from and then you get them in there and it's just all plug and play.
Like with WordPress for example, that's where a lot of my other experiences in building WordPress sites out. And that's plug and play too. I mean they have plugins and such, but I've always just found it to be a little bit more complicated to get a very clean, very functional, very user friendly site built. There's a lot more that seems to go into it than just selecting a theme with WordPress. With Shopify, I feel like it really is that simple. You can just select a theme right out of the box. It's pretty much ready to go. All you have to do is import your products to it and get your marketing set up. So that's really, I think why I gravitated towards that.
And then, in building a community, what I wanted to do is have a system that was very easily duplicated for other people. And so I stuck with Shopify because again with WordPress it's like there's so many different ways you can go about customizing your site, [inaudible] tell everybody to do it. But with Shopify it's like you can just go sign up, use the same exact app, same exact theme and you can be started and ready to go in a matter of a couple of days.
David De Souza: Yeah. And so on that point you've probably got WordPress, which you could almost say is 100% customizable and say Shopify, they're almost like more out of the box themes. Because of that, do you believe that Shopify firstly gives you everything that you'd want to ensure that the theme, fully really enables conversion and if so, do you have a preferred theme that you use for Shopify?
Nick Peroni: Yes. I still pretty much stick with the free themes. I like to venture in the supply theme on Shopify. I recommend those both tool, a lot of people and I've seen a lot of other people have success with them as well, not just myself. I do think that there are some situations … I recommend Shopify for getting into the physical eCommerce space. Really the most and my group Ecom Empires is about eCommerce in general, not just Shopify. And I have a marketing company that is built on WordPress and we use optimized press as a theme and I built that site out. We use Payworld for our recurring subscription.
So the reason I didn't want to use Shopify for the marketing company, I actually started that out, but I do believe Shopify can be custom. It can be very custom, but it's almost more expensive with Shopify when you want to start getting really custom, in my opinion, because you have to go in and start changing all of their out of the box stuff that they had the way it was, which requires you to either be very skilled in your own development or to start hiring that stuff out. Whereas with WordPress, you start basically with a clean slate. So it's more easy to customize from the ground up without extensive HTML coding knowledge in my opinion.
David De Souza: Yeah, no, I mean I definitely agree with that and I was curious to hear your approach on that. I guess we were talking a bit about design. I mean, is there a common design mistakes that you tend to see people making when they create their stores and if so, how can they be avoided?
Nick Peroni: I changed, I believe over time. In the beginning I felt like the biggest mistake people were making thing is not having enough on their store to make it seem like an established store. That is still a mistake I see a lot of people make, they set something up and they don't think about it from a customer's perspective and realize that subconsciously when somebody visits your store, they're automatically going to be comparing it to stores they've visited in the past. So if your store looks empty or it looks bare bones compared to other stores that look very full, they have a lot of links. They have footers. They have a lot of stuff in them, it's just going to seem like it's not established. And so that can diminish the trust value there.
Now what's happened, what I've noticed as this whole eCommerce wave has really exploded across the marketplace because of its ease of access and low barrier to entry is … Now what I see is that people are overcompensating and I think it because of the massive explosion of Shopify stores that have happened, it's really become something that's been pushed a lot in the online marketing community because of its some low barrier area and low cost to get started. But what people are doing now, all of these courses have come out and people are taking it to an extreme, they're installing all these crazy apps and they're putting all these trust badges everywhere to the point where it looks like it's too much.
It looks like you're trying to prove something and it almost has a sense of a red flag because if you go on Walmart, you go on Amazon, you go on XT, you go on these other sites, they don't have all these crazy badges everywhere. It's a clean site. So, I use a few trust badges on my site like stamps that show, you accept these kinds of cards and you have a guarantee policy, like those types of things. But I just think that the gimmicks have gotten a little out of control nowadays where people are starting to be in love with the gimmicks and the marketing inside of it and forgetting that customers really just want a valuable brand, they feel like they can trust.
David De Souza: Yeah, I guess that totally makes sense. And if I was to ask you … you've got your store design, I mean say something like your store's about page. How important is that? And do you have any advice that you'd give to a beginner in order to create a pimping about page?
Nick Peroni: Yes, absolutely. That's such a great question because it leads into a bigger overall concept I believe is really important. Even if you're just starting a general store that the whole idea of your store is that you sell random items that really have no association with each other. I believe it's very important now to have some type of story, some type of underlying story behind your brand. Even if it's as simple as, “We're here to find you the best items and bring them to you at the lowest cost with the best customer service.” That's still a story, there has to be something, a lot of people are just setting up a site and this is philosophical and subconscious but it's just like … You need to have something there that ties it all together and your about page is really just a representation of that.
People get stuck on the about page, but I personally think that the key to a great about page is having a great story, having a great brand that you've already constructed. And it's not to say that your site has to be elaborate or your store has to be elaborate, but there has to be some kind of story there. You have to have something for people to connect to. Otherwise, that's what social media is all about. And people were marketing over social media, but they're missing this connection that they're marketing on social media, but their store or their site isn't social at all. There's nothing friendly about it, there's no story to it, there's no brand there that has any intrinsic values.
So I do think that's really important. And I think the about page is a representation of that. So if you're doing the work and the foundation ahead of time and figuring out that story, then I think that will naturally flow through in the about page. I know that's not necessarily a mechanical answer to your question, but that's just how I've always approached it.
David De Souza: Yeah. No, that's really cool. And I guess actually I want to explore that a little bit further and maybe shift gears into that. I mean, let's say, you've gone ahead, you found products for your store, you've loaded them onto your store now do you have any thoughts on how to come up with product names and descriptions? What in your experience typically works well and should this be, I guess I can extension of your about page in your store vibe?
Nick Peroni: Yes. I think the product names and descriptions are a great place to be different. That's where I feel like be different than the Amazons and the eBays out there, because you'll see those and they're just very general, they give you the facts about it. But I think that with your title product description, be creative, use good, strong adjectives that describe, that give a feeling, that bring out an emotion. For example, it could be as simple as just adding those adjectives in there that you can find from a thesaurus. You can just look up words that can help make a product seem more exciting and great descriptions that show the benefit. Descriptions that can help a person understand, for example, if you're selling a shirt, this is just an off the cuff example.
Instead of saying, “This type of shirt and here's what's printed on the front. You can say something like, “This shirt was specifically designed with you in mind, has such and such.” Whatever niche it is, like say it's for truckers for example, or something like that. You could specifically say, “If you are in American trucker and you love and have pride in what you do, you're going to love wearing this shirt, you're going to feel great wearing it because not only does it look great, but it's a symbol of what you do and what you're passionate about, and then available in multiple sizes and colors not sold anywhere else. Make sure you get yours here.” Just adding a little bit more in there that is, you have the stuff that they need to understand, there's multiple sizes and colors here and they see that. But also that you're giving some type of description that helps them feel what it would be like to actually purchase that product.
David De Souza: Yeah, that makes total sense. And obviously clearly it demonstrates that it would really resonate with your target market if they read that. So I suppose on that note then, would you say apps like longer copy or perhaps like shorter descriptions works better in your experience?
Nick Peroni: Man, I'm so glad you asked that question because I was just thinking in my head as I was done that there's a major caveat to this and that is [inaudible]. I gave a short example. That's very simple. There's not much to that, very short copy is all you, because what you see is what you get. And if you take the complete opposite side of that spectrum where, with my marketing company, I'm pioneering a new service in the local SEO type of space that requires a lot of copy because I need to explain, I need to really show the business owner the outcome of what they're going to get. I need to explain to them, how it works and what it's going to do for their business and what they're going to [inaudible] what their new businesses going to look like having this service working for them.
So the general rule that I've always stuck to, and this is something that I learned from people before me, is the higher the commitment, the higher the price, the longer your copy needs to be. If you're just doing something very simple like a tee shirt, two, three lines max is all it needs. They see what it is. You just write something cool to make them feel, connected with it and then tell them that the product description and then you're good. But if you have something that's like you're selling an expensive item, then you're going to want to write a little bit more copy to justify the higher price and the higher commitment. Show more examples, show more imagery, show videos to see more in depth and in detail about how that product or that service is going to affect the customer's life.
David De Souza: Okay, and when you are going through this process, I mean how are you problem solving this? How are you actually coming up with your descriptions typically when you decide to enter a new niche?
Nick Peroni: I just look at the value proposition, in anything that I do, I always try to look at it from the value proposition. Again, if it's something as simple as a tee shirt where your proposition is, “You're passionate about this as a customer, you're a trucker, I know you're passionate about being a trucker. Here's a shirt we designed specifically for you so you can feel awesome as a trucker wearing this shirt.” That's a very simple value proposition. So then I just write something to match that. If my value proposition is more complicated, you're business owner, you've got a million things going on at once. You wear a million hats every single day trying to get it all done.
Marketing is an area you need but you don't have time to focus on, so here's a solution that's going to help you get to your goals quicker without taking up more of your time and resources. You know? So I always look at I guess the outcome, the value proposition. So for that situation, “Okay, I have this service and in exchange for you being part of it, your outcome is going to be that your business is functioning better. You don't have to worry about marketing anymore because your customers are coming in. And so I'm going to write something that pertains to that outcome and that value proposition I'm trying to get across.
David De Souza: Okay. I mean yeah, that's quite detailed and comprehensive. Definitely resonates with me. I want to just shift gears a little bit and talk about, say you have stocked your store with products, you've written the descriptions. Now, Shopify, as you mentioned before, is very plug and play. There's a lot of apps out there that you can install. Do you have a go to list of must have apps and if so, what are they? Why do you recommend them?
Nick Peroni: Yes. So some of the money making apps I call them, that I consider must have and I do … I like to keep things simple as possible when I look at that, one of the reasons I love Shopify and eCommerce is because it's a very automated solution to make money. One, it takes a lot of upfront work, but once you get it going, there are ways you can automate and systemize the process, apps are one of those. There's an abandoned cart app and what that does is anybody that abandons a cart, you can set up an email series to automatically go and send emails to them as a followup to try to get them back to complete their purchase. That's a must have for sure that that gives a massive return on investment having that app, I think it's only like eight or 10 bucks a month or something.
And then another one is a retarget app. Now there's a few different types of retargeting apps, but the one that I've used a lot is just called Different Target app. And that is something where it sets up automatic retargeting for you. So anytime somebody visits your store, you set that app up on a campaign and then if they don't purchase it will go follow them around on Facebook and show them an ad saying, “Hey, come back, complete your purchase.” Or whatever you want it to say, “Hey, here's a discount code to come back and finish your purchase.” So those two apps alone are definitely crucial must have for any serious Shopify store because they're going to help you save.
In my experience, I've seen that they have captured 10 to 15% of my overall income. When I looked at it from my Shopify stores last year, 10 to 15% of overall sales was from having those two apps installed. So, that's a massive amount of money that would have been left on the table had I not been doing those things. So I think that those are definitely simple must have apps. And then from there you can take it up by installing your own email, auto responder apps. So you're able to upsell and followup with people long term and you can install SEO apps. I mean, there's definitely a lot of things that can really help you continue to grow and maximize your return. But I always start with those two simple apps for certain on any store.
David De Souza: Okay. And as a piece of advice for new sellers, a lot of these apps, they may be a bit taken back by the fact that they're all additional subscription costs. And when do you decide to install these apps and start paying for them? Do you very much these apps that you've just gone ahead and recommended, would you just put them in like install them from day one as soon as you're ready to start running traffic?
Nick Peroni: That's yes, I believe that if you're going in to it and you're going into it serious, you should at least be expecting a couple months commitment. And it's interesting, I go through this all the time with newer people. Personally right now I'm actually helping my girlfriend build out her first store. She had a really good idea and she wanted to get involved in. I went through this exact conversation with her, because she was very much just looking at it as money out in the beginning and trying to keep the amount of money she's spending down to a minimum. And I told her, I was like, “Look, you're getting traffic and you're saying, ‘Well, I don't want to pay in advance for the these apps, but you want to get a sales.'” You can't put the cart before the horse.
If you want to recapture some of this traffic, you're seeing that you're getting visitors every day, but you're not getting as many sales as you want, well you need to put the apps in to start capturing back some of that traffic. You can't expect to capture back that traffic and continue making sales … continue capturing missed sales, I should say, if you don't install the apps. So it's a circle there, what comes first, the chicken or the egg. But you have to install the apps if you want to see the benefit, which requires putting a little bit of money up out front. I mean we're talking about dollars here, not hundreds of dollars.
David De Souza: Yeah, definitely. I think that's great. Okay, so let's assume that you got your apps sorted and now you're starting to grow your store. Now you're really focusing on trying to get as many sales as possible. How many different products are you typically testing? Say for your girlfriend, we'll use her as an example. What advice are you giving, or do you say typically take a lot of different Facebook interests and start testing one or two products to find the winning audience?
Nick Peroni: Yeah, so with her store, she has a niche store, so I believe it's a little bit of a different strategy based on what you're doing, with the general store approach. I really like the approach of testing a few different products a week at least. I mean ideally if you can, you can test a few different products a day. I believe in an approach where you start on small budgets and you test out a few different products to see what performs and you take the winners and then you scale them, so you're not spending too much money testing and you're not wasting money because you're going into niches where you're pulling that data back and using it.
So like with a general store approach, going back to what I said earlier, I would have picked out two or three main categories and then a couple of niche categories within that that I wanted to pursue. And then I would start testing what appeared to be popular products from each one of those niches that I had chosen. So say for example, I'll put it in numbers as an example. I picked three main categories and I narrow that down to three sub niches. And then with each of those sub niches, I find three to five products that I like. So I have 15 total products that I want to test and split that up and start testing, starting maybe three products a day and spread it out and just start testing them and get into a cycle of launching a few products and then monitoring the data, killing off the ones that aren't working quickly and the ones that are working, pursuing that and scaling them up and finding other audiences that you can promote to.
That's generally my approach with the general store concept, which is a little bit more touch and go. But with the niche store, you're picking a niche and so if you've done your research and you have a large niche, it's evergreen and it's profitable, people are spending money in that niche, then I would start by finding a lot of great products to build out your store and then just start going through from the top to the bottom, which ones you think are the best and start testing them one at a time.
David De Souza: So would you just be then testing each of those products to the same interest or you do a combination of cycling through interests as well?
Nick Peroni: Right. That's definitely one of the variables. So that's why I don't suggest testing too much at once for somebody to handle. Because depending on how many interests in audience you want to build out, it can start to add up quickly. So generally, there is a little bit of just subjective figuring out as you go. But for me, the way I will get it, it's like this. If I have a product and … I only market a product if I've done my research and I believe that product can sell. So if I've gone through a process of finding what I believe is a good product for that niche, then generally I'm probably going to test maybe one to three audiences, but one at a time is how I like to do it.
That's just my opinion. I know there are some people that will go, they'll launch an ad with like 15 different audiences and just see which one works. And I think that can work with a niche store because you're very focused. Like with my marketing company, I know what I'm focused on. There's really one basic, broad audience and so I just figured out like 10 different ways to cut that pie and started testing it out to see which ones were going to be the lowest hanging fruit in the beginning. But with the general store approach, you're a little bit more all over the place. So you have to have rules and a structure to really keep yourself focused, which is why I limit to three audiences.
David De Souza: Nick, if I may just … I'd like to sum up your approach to testing different products in order to maximize sales as I think this is quite crucial. By all means jump in and correct me if I'm wrong, firstly it seems that the approach you take depends on whether you have a niche, a general store, and from what we've touched on, if you have a general store, you should be more structured in your approach and really try and test a few different products a day. Ideally using a small budget and limit yourself to say two or three different audiences to try and find a winning audience with the general store approach, being more focused on cycling through different interests to find the winning audience. Would this be correct?
Nick Peroni: Yes, that is the approach that I have generally taken with a general store and that I've encouraged other people to take that asked me for advice, and I've seen that that works very well as long as people are staying focused and not like just picking 15 different niches to try and market to all at once, but focusing on a few main categories, finding a few great products for each one and then just attacking it that way.
David De Souza: Okay, awesome. And then now on the flip side for the niche, the strategy there is that you've picked a niche and it's probably a more product research based approach where you're looking for that winning product and you're trying to focus on matching a winning product and cycling through different products that you've researched to a pre-identified interest or audience?
Nick Peroni: Yeah, definitely. I think that with a niche that is the biggest difference because with a general store, you don't really know what's going to be your winner yet and that's why it requires so much testing. With a niche store, you're already picking that niche, you're locked in, you know where you're at, so your goal is really to just find as many great unique products as you can start filling your store up and then just start going one by one and have like a strategy of how you want to move through your promotions and start building an audience and getting out there for that niche.
David De Souza: Okay. Awesome. I mean that makes total sense and I think that's probably a great point that we've clarified for beginners. Now one of the things is when you're getting traffic come into your store, you don't always know what a good purchase to traffic unique visitor conversion ratio should be. I mean do you have any guidances to what you'd expect to see?
Nick Peroni: I think that what I've seen for industry standard is for a purchase conversion rate on the store to start with that because I think that's the most important one. I've seen standard is like one to 2%. I have been able to achieve like a four to 5% on some cases. And I've seen some people when you're really dialed in and you have a really niche store where they're able to achieve higher, like maybe in eight, 9%, because there's definitely a difference there. If you're a general store you're going to have a lot of different types of traffic coming in so you have to expect a lower conversion rate.
Whereas if you're a niche store you should really be dialed into one audience and so your conversion rate could be a little bit higher. And then moving back, I guess further up to the conversion funnel, because that's for a purchase and then for an add to cart. I generally, if I'm running a campaign and I'm looking at the traffic to my add to cart conversion for that campaign, like just looking at the product, I generally like to see it around the 10% range. I mean that's what's good. If it's, right now I'm running a store on testing and I have it at like six and a half percent I think is my add to cart percentage. So that's still good, but that, 10% is like where I would really love to be because that means I've really got a great product that the audience is reacting very well to and my product page is converting well from cold traffic to add the cart.
David De Souza: Okay, great. So now we've sort of touched a little bit on what you'd expect to see in terms of conversion ratios, taking it one step back to what we previously talked about. So you've stocked your product into your store and obviously you can purchase it at whatever rate you can get it at Ali Express. Do you have any guidance on how to set pricing? Is there maybe typically asserting gross profit margin or net profit margin that you would tend to look for?
Nick Peroni: One thing that was introduced to me when I got started was a rule of thirds where you want to look at your product costs, your profit margin and your advertising costs and whatever the hole is that each one makes up a third. So as an example, say I find a product on … you say I find a product that I'm sourcing for $6 and I want to sell it for a price that is then going to fit in my advertising costs, which is where a lot of people, I think they don't figure that in. And so in my experience, I've seen through Facebook advertising that a good cost per purchase, like a customer acquisition cost, just standard, is probably going to be anywhere in the five to $10 range. So you want to definitely figure that in.
And so look at, say a product that costs $6 to fulfill for your wholesale costs and then estimate maybe an $8 cost per purchase to get a customer, you're at $14, so you would want to add in enough margin to make it so that you're at 33% profit margin. So you'd want to price it around 20 to $21 that way you're at that rule of three. Hopefully I explained that well because I've used that to be my guiding principle with most of the products I launch. And of course some things are going to be like … if it's a really low priced item that has a very high perceived value, like maybe jewelry that can be sourced really cheap in China, but over here in America has a very high perceived value, then your profit margin could be bigger.
Or on the flip side of that, you may have a product that is really awesome but the profit … or your fulfillment cost is a little bit higher, so you have to take a hit on the profit a little bit to keep it at a good price. But I definitely try to stay within the general principle of the rule of thirds for breaking out my fulfillment, my advertising costs, and my profit margin.
David De Souza: And so when you do that, I mean, do you primarily just stick to that principle or do you also use some form of comparative pricing analysis? Looking at say, I don't know, say you were selling leggings, we'll take, would you go and look at maybe a legging store and see what they're doing as well?
Nick Peroni: Yes, certainly if you're doing, it's more important in some cases if you're running a niche store then absolutely you need to make sure that what you're doing makes sense. If you have some type of license agreement or a wholesale agreement with an actual brand, then of course it needs to make sense because people might go price check you. But a lot of times with Shopify or any store really, if you're using Facebook advertising, it's a very impulse buy type of deal. So if you're selling a real unique item, you're selling something that is very much based around a passionate audience. Sometimes you can set the price because people won't necessarily go price check that. But you do want to make sure that you are sticking within industry standards. So if you're selling shoes, then that there's already like a set type of price that people are willing or expecting to pay for a pair of shoes.
But your branding can have a lot to do with that as well. So not to make it too complicated, but depending on what type of branding you have, if you want to be a high end luxury store, then you certainly need to price yourself as a high end luxury store. People are not going to believe you. If you're a deal thrift store where you're just selling items for cheap and they're really novelty items and your goal is high volume, like some of the stores out there that are doing this really well, then you're going to want to lean on the side of having cheaper prices that undercut the other people out there in the industry. So there's definitely a little bit of subjectiveness to it because it has to do with your brand. Are you general? Are you niche? Are you going high end or low end?
But a lot of times I will get that secondary. I look at, I want to make sure I have a profitable store and I don't want to compromise my business to try and either, make it seem more appealing or not. So I'll try to set the brand to where I feel like I want my prices to be and then I'll look for the items that fit that and give me the right profit margin that I want to use.
David De Souza: Yeah. That's cool. I mean that makes total sense. I guess that leads us onto then mistakes I suppose that you've seen from beginners. What would be the main mistakes they'd make with their store?
Nick Peroni: Well, the biggest mistake that comes to my mind right away is just not approaching it with the right mindset, when it comes to eCommerce, and again, just the way that way that this online marketing community has developed over the last couple of years and online entrepreneur, eCommerce stores, these things are starting to become somewhat of a buzzword. It's getting out. Information is out now. People know for a few hundred dollars you can come to the internet, start a business and be making thousands of dollars a month and have a very time freedom life.
But I think that with that, with the success stories we see out there, with the people out there that are doing this, there's some missing information in there where people feel like you just get started and then overnight you're going to have a success. Or you're just going to be able to find like some cheap, crappy, you put it on a store and you don't need to actually go through the normal traditional process of doing the market research, understanding a value proposition, providing excellent customer service and actually building a brand and building something real, a real asset that you're creating.
People come and they look at it as like a shortcut to the process. And it is in a way, because we have these amazing platforms like Shopify and Facebook and Ali Express and apps that easily allow us to dropship items and import them with very little work. But because of that, because of the technology, I think it's even more important now to understand the mindset, to understand the things that really set you apart and make you unique. Because if everybody's out there creating cookie cutter stores thinking all they have to do is throw ads up on Facebook and they're going to be, living this life of freedom overnight, it just doesn't happen like that.
It takes time and effort. And for me, just in the beginning you heard my story before I found Shopify, I had already put in years of time in my dues, making sure that I knew things like how to build a real brand, how to connect with your audience, how to actually build something of substance and provide value. So when our found Shopify, it happened quickly for me. But that's because there were already years of work in the making behind that, that got me to that point. And I think that's what some people miss is they think that it's going to be easy and it's still a business. Just like any business, it requires time. It requires effort. You have to put in the time and have the dedication and perseverance to stick with it and know that you're not going to be my crazy success over night.
That can happen. Sure. But if you're betting on that, you're probably going to be disappointed because really the people out there that I've seen that are being very successful are the ones that have started, and it took them some time to figure it out, but they stuck with it and eventually they found that winning formula. And once you find that winning formula, it's just a matter of increasing traffic and putting more money into the machine.
David De Souza: Yeah. I mean that's really comprehensive and you actually made me think. So I suppose the question I've got for you, right. One common trait I've noticed for a lot of the successful entrepreneurs that I interviewed is that they tend to actually problem solve in different ways. For you, tell me this, you've obviously … you started off without knowing a whole lot and you've gotten to where you are today. Tell my audiences, when something's not working out for you in your business, is there any person, place or resource or strategy that you do to try and get a solution?
Nick Peroni: Absolutely. For me the best strategy personally that's always worked for me is approaching the challenges in business or in my life and looking at it and saying, “Okay, here's …” Working backwards basically from where I want to get to. I think that's the most important thing, I learned this years ago and it changed my life. I read this in The Principles of Success by Jack Canfield, where he talks about, that if you want to be able to get somewhere, you have to know where you want to go. Just like a GPS, you can only get to the destination if you tell the … You have to put the destination in first to get the directions.
And so it's not a matter of knowing the whole route. You can drive to California in the dark from the East coast to the West coast and only see 200 feet in front of you with your headlights, but you can just keep going because you keep seeing what's in front of you and taking that next step. So for me, it's always been an approach for problem solving. I look at it and I'm just very real with myself and I say, “Okay, this is where I want to get to.” For example, “I want to have a six figures a business, that's allowing me to run my own business. It's making six figures a year.” And then you work backwards, “Well, how do I get to that? Let's break it down into months. I need to be making $8,500 a month in my business.” Okay, let's break it down even further, “I need to have a business that's making around $2,200 a week for me to achieve a six figures business.
And so now what do I not know? What is going to help me get to $2,200 a week? And what are the main things like right now that are in between me and that? Okay, a business model. I need a business model that I know can produce that type of income. I need to understand how to get that type of traffic. I need to understand what type of product …” So you work backwards and you start with the smallest piece that you don't know and then you figure that out and then you just keep adding to it, “Okay, boom. I had my first $1,000 week. Awesome, how do I double it to 2000. I had a $2,000 a week. How do I make it consistent? So I'm doing this every week?”
It's just a constant process. I think that a lot of people feel like they see successful entrepreneurs and like it just happens, because all we see is the success event. We see it when they're successful because nobody cared before you were successful. And so that warps our mind. But really in every story that I've seen and like you do, I've been blessed to talk with a lot of entrepreneurs at this point and connected with a lot of people. I've just seen that common trait that there's always, months or years of work in the making that gets to that point. And people are very strategic about understanding, this is where I want to get to. What are the steps, let's start figuring out in small pieces how I get to that point.
David De Souza: I mean, I love that analogy with the car. And so would you say … To say even yourself, if you look at your own journey, and I'm not going to pretend like I know what your whole journey was, but obviously similar like to yourself, we all have different skillsets, different life paths that may actually give us a natural, I guess advantage relative to the next person that will give us a leg up in the eCommerce game, I.e. for yourself that was having that background with website design and development, but let's say you're somebody who has no background, no prior experience, is there a set way that you'd recommend that they go ahead and tackle this journey?
For example, when you start with Shopify, it's very much about, I guess firstly maybe choosing the platform that you want to sell on, then learning how to find products and learning how to do copywriting, learning how to drive traffic and so on and so forth. Do you have a view on the best way to approach this and how to learn all these different things that you need and skillsets that you need to learn?
Nick Peroni: Yes. Actually that's an interesting question. I mean I do think that when like when I think about it, your timeline to success is probably going to be based on what you discover first and I guess you really can't help that, there's some luck involved in that. For me, I remember where I started is nowhere near where I ended up. I mean I started like most people, I didn't understand online marketing so I just started doing searches and eventually it brought me around to learning what I learned. But there was a lot of trial and error, confusion, failure along the way because I was trying to find the business model that worked for me and put that playbook together on my own. So I do think that if you're able to start with a business model that makes sense.
And that's really what has inspired me to actively go out and try to help people because I see that the eCommerce model is something that does make sense. It's something that regardless of your experience or your background, you can come to this, and you can learn the basic skill sets because all we're doing is using a platform, finding great products and learning how to match them up to an audience and then learning how to run paid traffic on Facebook to reach that audience and get them to your store to buy the product. So at a very simple level, it's easy to understand and then it's just a matter of dissecting the pieces and learn in each piece.
So I don't know if that's a direct answer to the question but that's just how I look at it. And I think eCommerce has presented a big opportunity for a lot of people right now because it is a business model that makes sense and people don't have to shift through network marketing and online opportunities and affiliate marketing and all these other things like what works, what doesn't work, what should I pursue? When you have something like this that I look at as very, very cut and dry with eCommerce you find great products, you find audiences for that product and you learn how to run paid traffic.
David De Souza: I mean it does partially answer the question. I guess maybe was sort of seeking some clarification for our listeners, if they're like looking at this as like their blank slate and they want to know like should they maybe just spend like a month just smashing every single video trying to learn Facebook ads and then maybe learning a bit about copywriting and then figuring out how to choose a niche. Was there a way that you … once you figure out what the major pieces of the puzzle were, did you just learn a little bit of everything at once or how did you break that down?
Nick Peroni: Myself personally, I learned it over time because I learned about the eCommerce business model that we've been discussing far into my journey as an entrepreneur at already been building a business. At that point, the aisle of team had already passed a million in dollars in sales. So I was already a fairly experienced in building a brand from scratch, learning how to manage a team customer … Like all the things that go into a real business. And what I loved about eCommerce and Shopify is the solopreneur idea where you can start and you can really minimize everything.
So for people just getting started, I think that the other stuff can come along the way I've seen people and I guess I wouldn't be able to say this without the experience I have now from the last year of coaching a lot of people is that you really … one of my army buddies is a perfect example of this. We served together. He has no idea about any of this online marketing world and more sort of the point where he couldn't care less. Like it's not a world that he cares about at all. But for him he was looking for a way to make some money on the side, to support his government … what he was getting from being a retired veteran.
And so I showed him this and it took him some time to piece it together, but once he was able to understand how you set up a store, that's the first part. You got to be able to build a store that looks trustworthy and looks established and make sense and you can just mimic other stores to really get a good idea of how to do that. And you don't really need to learn copy or coding or anything because Shopify takes care of all of the out of the box theme stuff. And there's apps you can install and then you can just look at other stores to see how they write copy and just mimic that same thing. Or you can even outsource it on Fiverr.
That's I think the first step. And then the second step really is learning how to do good product research and find great products to sell, which again you can do by just going in the Ali Express and finding free videos on YouTube. There's plenty of them out there where people explain and show how to do this type of research and how to understand the market. And so you're just learning very specific knowledge at each step. And then the last step is understanding the Facebook ads platform. And again, free out there. Facebook has an entire free course called the Blueprint, Facebook blueprint. Very easy to access and you can learn everything about using their ads platform and how to build your brand, get your products out there.
So, I don't want to sugarcoat it and act like there's no learning involved because it's a real business. And if you want to make five figures a month, then you need to run a real legit business. But when you look at the alternative, to going out there and investing in some sort of franchise or building a website or something, you're able to just focus on these very specific key parts. And I really won't even look at it as maybe three or four and get yourself to a good enough position where you're good enough to be making sales, you're good enough to be making a profit. And then you start to analyze the things that you don't know that can help you increase conversions and make more money.
David De Souza: Yeah, no I totally agree with that. And I recently was looking at the Blueprint and I'll echo the thoughts, as well the Facebook Blueprint is actually awesome, but Nick, I know and I understand that, you've been building up a budding resource to help entrepreneurs. Why don't you tell us a little bit about that?
Nick Peroni: Yes, absolutely. I have probably mentioned it a few times already, just because it's so much a part of who I am, but I started … So last year after I started having a lot of success with Shopify, towards the end of the year I was sharing that on Facebook, I'm active, I've always been somebody that wanted to get my story out there, help inspire and motivate others to overcome this struggle and achieve that self-made success. So I was sharing that and I started getting a lot of people looking for help and looking for information and it was too much just to be chatting with everybody on Facebook.
And then, I wanted to do something different and help people and make it different than what I had experienced with all the struggle and all the heartache that I had to go through trying to learn how to build an online business. All the people out there that all they want to do is take your money and provide no real help to you. So I decided to start a group called Ecom Empires. And where it started was with dropshipping and I recorded it live for the group when it got started video by video, building a store from scratch on camera, live all the way and an 18 video courses is what it ended up being, taking that store from zero to five to five figures in sales. And then every step was covered on how I set up the store, how I optimized it, how I ran the traffic, built the pages and all that stuff.
It was all covered all the way through and I just gave it out for free. Anybody that wanted to join the group, they came and we started seeing some amazing results. I mean people started … a couple of people were hitting like 5K, 6K days using this information. Several people were successful making sales and then we even had some go on and make some massive numbers, like six figure success stories and there was no charge, there was nothing for it. So it really started to attract lot of people. And then as it went on I added more stuff like custom merchandise to understand that and the print on demand industry in my own Facebook ads courses. Well because I do more than just dropship, I advertise all kinds of stuff on Facebook.
And again it's all in there for free and we're actually today hitting 20,000 members or like five members short right now of hitting our 20,000 mark. So it's really been exciting. It's been a lot of fun. It's become something that is like interwoven into my life now. I have masterminds coming up next month, I'll be traveling to Southeast Asia to meet with some people in a group and do some mastermind. So it's really become its own worldwide community of entrepreneurs and a lot of people in there, we've attracted some really great entrepreneurs that are in there sharing as well. It's not just about me, it's about promoting this environment of success and opportunity where we all come together and we're not looking to take advantage of each other.
We're looking to help each other and support each other build a successful online business, because mostly I want people to know that this life really is possible. I'm just an average everyday kid from Philadelphia who worked hard and had a dream and now I'm living a life that is pretty amazing and so I want to be able to share that with other people as well. And the group has been really an excellent outlet to do that.
David De Souza: Nick. I'll be the first one to go ahead and endorse that. I actually think what you've done is amazing. I've checked out your course and I think it's phenomenal, but I don't want to like hog the limelight. So by all means, tell my listeners how they can go ahead and actually access that course because I think it's worth it. And what you're doing is phenomenal.
Nick Peroni: Oh well, thank you very much. I appreciate that. Especially coming from another successful entrepreneur who's been out there and built a lot of businesses, it's real easy to access Ecom Empires. You can just go to facebook.com/ecomempires and then that page … there's a page and a group, so they're both linked together. But all you have to do … It is a closed group because I want to make sure that we keep just serious entrepreneurs in there. So when you go, you'll request to approve and then you'll get approved. So that's really it. And all the information is in there for free. There's a pin-post where you can access the free membership training site that I built to house all these videos and all this training in one place for people to be able to come.
It is for eCommerce people, it's for solopreneurs, like whatever part of the industry you might be from. We also have small business owners in there. We have bloggers in there like Facebook ads is a skill set and that's why I wanted to do the Facebook ads course, which shows how to use ads for anything including eCommerce products, but also to generate leads or just to generate traffic or to get your brand out there and build brand awareness because Facebook is a great platform to build any type of business. And once you understand it, it's really not that difficult. Facebook has made it very, very simple to use. It's just a matter of learning the information there.
It's definitely a learning curve because it's a big platform and there's a lot of options, but once you know what the best option is for your business, it really becomes something very powerful to increase your reach and start increasing your sales.
David De Souza: Yeah, definitely agree with that. Although Nick, that does bring us to the end of today's Business Hacker session. I do want to say thank you very much for coming on the show. it's been a massive pleasure having you on and a big thank you to all my listeners. if you've found this useful, please, please, please leave me a review on iTunes.
Nick Peroni: Yeah. David, I want to thank you for inviting me. I want to thank all of your listeners as well for listening to this. It has been a pleasure. I always love being able to meet other great entrepreneurs like yourself, and then as well, being able to share my story and share this incredible opportunity that I really believe is going to help a lot of people over the next few years build successful businesses. So it's been awesome. Thank you very much. I've had a great time.