PODCAST EP 9
What is Customer Lifetime Value & Why is Conversion Rate Important?
On Episode 9 of the Paper Planes Podcast Simon chats with Simon Bell about what Customer Lifetime Value is and why Conversion Rate is so important.Listen Now
Connor Gillivan is currently a Founder and Owner of OutsourceSchool.com. He was an Owner of FreeUp.net, which he helped scale and was acquired in 2019 by The HOTH. Connor is an expert in hiring and scaling with virtual assistants and shares his business insights on his own blog, ConnorGillivan.com. He currently lives in Denver, Colorado.
You can contact Connor here: https://www.linkedin.com/in/connorgillivan/
Simon Dell: I am joined this week by my very first American guest. His name is Connor Gillivan, and he is at the moment sitting somewhere in Denver, Colorado. So, welcome to the show Connor.
Connor Gillivan: Hey, how’s it going? Thanks for having me on today.
Simon Dell: It’s not too bad. How’s the weather in Denver at this time of year?
Connor Gillivan: So, it’s starting to get nicer. It’s like springish weather, but it’s also a little bit interesting. You’ll still get some days where there’s some snow, but then the Sun comes out and it disappears. You have some good days. You have some back to the winter days, but it’s about to be closer to those summer days, which will be good.
Simon Dell: Are you a skier? Are you a winter sports guy?
Connor Gillivan: I’m not a downhill skier, but I do cross-country. So, I enjoy that and going up to the mountains. I’m definitely more of a summer guy though. I love hiking, love running, love the nice weather.
Simon Dell: And it’s a nice, nice place in Denver to be doing that hiking when the sun comes out.
Connor Gillivan: Exactly. there’s hundreds of hikes within about an hour’s drive, which is great.
Simon Dell: We’ll come to talk about what you’re doing at the moment because the reason for having you on today is your expertise in e-commerce, which I think if anybody gets a chance to have a look at your website, which is ConnorGillivan.com. I’ll put those in the show notes so everyone can see that and click through.
But I just want to get an idea about where you started from. Because you seem to have done a lot of volunteer work. But the first question I like to ask is: What was the first job that you ever did in terms of actually getting paid money to do it?
Connor Gillivan: My first job was working with one of my cousins, actually. And he was about maybe eight years older than I. And he, after studying high school and college, he started his own landscaping business, mowing lawns, cutting hedges, taking down trees, anything to do with a person’s lawn.
And I started working with him when I was about 14 in the summers when I was out of school and during breaks as well. I was way too small to be carrying around big leaf blowers and pushing around big lawn mowers. But that was my first job getting into that business, and seeing him run that, and build his life around it. It was cool to see him do that.
Simon Dell: Smart move on his part, cheap labour and the fact that number one, you were only 14, and number two, you’re a family member. I guess he probably wasn’t paying you good wages at that time, was he?
Connor Gillivan: No. But I mean, to me, it was awesome. I was like, “Wow. I’m making some good money here.”
Simon Dell: What did you learn from that? Watching someone else run a business, was there anything even at age 14 that you picked up from business there?
Connor Gillivan: a couple things. One was he was a hustler, so he was always working his ass off. As were having jobs at places, he would go up to the neighbour’s house, and chit-chat, and start to talk to people, and let them know about his business. So from an early age, I saw how much hard work, it really pays off and what it can lead to.
And then I also loved his relationships that he created with his customers. He had customers that he had been working with for five, six, seven years at a certain point, and it all came down to his relationship he built with them, and making sure they were happy and really trying to create a personal relationship too. Those were two things that really stuck with me from that experience.
Simon Dell: So after working with him and seeing him, did that give you the impetus to be starting your own business? Was that something that was always in the back of your mind moving forward?
Connor Gillivan: Yeah, it really did. And I actually started my own small business in my own neighbourhood while I was working with him. I picked up some lawn-mowing clients that I was able to work with, and mow their lawns, and take care of their lawns during the summers. But then going into the falls, it was a lot of raking leaves and picking those up.
And then after the winters, they would be getting the lawns ready for the spring. So, I was able to build a very small business, maybe 5 to 10 clients, but people that I was able to offer those services too as well.
Simon Dell: So essentially going straight into competition with your cousin in a different part of the country.
Connor Gillivan: Exactly.
Simon Dell: How did he feel about that? Did he know about this?
Connor Gillivan: Oh, yeah.
Simon Dell: He didn’t send some people around to see you, did he?
Connor Gillivan: No, he knew. They were all small accounts so he wasn’t too worried about it.
Simon Dell: Thank god for that. That could’ve been an awful sort of family drama, yeah. There’s a lot of other bits and pieces that you’ve done. One of the ones I wanted to touch on was you went to South Africa for four months. Can you give us a bit of an understanding about what you did there and why you were there?
Connor Gillivan: I was a sophomore in university studying business, and the business school would randomly send out emails from time to time with internships and opportunities that students could look into. And one day one came through with the subject — something along the lines of ‘Travel to South Africa for Your Summer.’ And I was a sucker for traveling. I hadn’t done much of it, but I was always interested in it.
And so, I opened the email and it was talking about this company called ThinkImpact, and their whole philosophy was taking college students from the US and also from other countries to impoverished areas of Africa, putting them into these rural communities, having them live with host families, and teaching them to build social businesses with the people there with the hopes that when you left after those four months, three months, they would be able to take that business, carry it forward, and it would be able to benefit their community. So, I did that in 2010 as an intern, and then I also went back in 2012 and ran the program that I went on in 2010. I had two stints of going on this program with this company.
Simon Dell: What sort of social businesses were they developing there?
Connor Gillivan: There is a number of them. A lot of them focused around the main issues of the communities. So one of the biggest ones there is the HIV/AIDS, and also just the lack of clean water. There were about 12 of us that were on this trip, and then you split up into groups of three or four, and then you worked with some community members.
Some people got together with a group of women from the community, and they set up a farming co-op where they set up farmland, they were starting to grow vegetables, and then they would sell those to the community, and it made them profits, but then it also helped the community eat healthier. So, it had that social aspect, and it brought together women in a place where they are comfortable being with each other and congregating. There was a number of different projects that had to do with those types of things.
Simon Dell: When you’re dealing with those kind of businesses in an impoverished third world… There’s a lot of people that would argue whether South Africa is third world or not third world, but we’re talking to poor, impoverished communities. Aside from the obvious things when it comes to business, were the people that you were talking have a grasp of how to build a business, or were you really just starting from scratch? Did you find people who had that entrepreneurial spirit still within those communities?
Connor Gillivan: There absolutely were. There were definitely some people that stood out after living there who were very interested in building businesses, and there were a number of people who had built their own businesses. There was an individual who, since these communities where I was living, they didn’t have access to running water, there was an individual who had two trucks, and he set up a business where if people paid him, he would bring their jerry cans down to the closest place to get water, he’d fill them up, he’d bring them back, and he’d deliver them.
So there were people that had that entrepreneurial mindset and we were able to help accelerate them, help to give them new ideas, and push them forward with things that they were thinking about.
Simon Dell: Somewhere in that transition, looking at your history, you got an interest in web development. Was that something that you’ve always had? I guess you weren’t doing a whole lot of web development in those communities in South Africa, but where did that spike from?
Connor Gillivan: My father was an engineer. He worked for General Electric for most of his life. And so from a young age, I did have access to a computer, which was awesome. I always loved that. I wasn’t doing programming at a young age, but I would take apart old laptops he would give me, put them back together, download different programs, try to use them. I was always interested in computers and then the internet as it came about, but I didn’t really get into building a business focused on the internet until I was in college about my third year.
And I ran into my business partner who I actually continue to work with today. He was starting to buy textbooks from students on campus and then sell them on Amazon.com here in the United States. This was 2009, so Amazon was really ramping up, but it wasn’t as big as it is today here. And so, there was a big opportunity. He was starting to test it. He invited me to help him out, and we really started to get involved in that whole world.
Simon Dell: That’s one of the basic steps of Amazon, is buying something from someone else and then reselling it onto Amazon. What sort of profit were you making on a textbook?
Connor Gillivan: That’s a good question. I think it was probably between 30 and 40% But it really depended on the actual book, too. We had to haggle with students to try to get a good price. And then we’d go on Amazon. We’d look at what it was being listed at. And usually, we’d put it at a pretty competitive price so we could get the sale. And sometimes, it was closer. Sometimes, the margins were bigger. But on average, I would say between 30 and 40%.
Simon Dell: Were you doing a lot? Was it like a couple of books a week, or were you shipping hundreds of books a week?
Connor Gillivan: It got to hundreds of books a week. It also came in waves. So, one of the big reasons students would sell their textbooks to us is because they would buy them from the bookstore for like $200, and then they’d go back and the bookstore would offer them $10. So we were like, “Alright. We’ll give you $20 and then you have an extra $10.”
Simon Dell: And bookstores are wondering why they went out of business back then.
Connor Gillivan: Right. So it eventually got to a point where our dorm rooms were just piled with all of these textbooks and we were listing them, shipping them out, trying to figure out how to get rid of them.
Simon Dell: What were some of the things that you learned back then in terms of — I mean, I guess that must have been a relatively steep learning curve doing that kind of thing.
Connor Gillivan: Definitely. One thing I remember is, one of the first tasks that I had in managing the Amazon business was understanding how to manage the inventory. So, we’d have all these books in our dorm room. And one of the things you had to do was you had to find the right listing on Amazon where that book was being sold and then list your book onto there to show that it was available for sale and you could ship it to people in the United States.
And so, I would take those. I’d try to put them up. I’d make sure that the inventory was right and manage everything. Like you said, it was a huge learning curve. That was only one tiny bit of the business on top of everything else from shipping, to customer service, to returns, and refunds, and everything that has to do with Amazon. A lot of learning lessons there.
Simon Dell: How do you find Amazon now versus back then? How has it evolved as a platform?
Connor Gillivan: It’s changed a lot. We started in 2009, that’s when we were selling textbooks, and then 2010, 2011, 2013, 2014 we started selling other products. We were selling toys, and baby products, and home goods because a lot of parents were coming onto the site and looking for products and really buying into what Amazon was selling. And so, back then, there was a lot less competition. There wasn’t as many people selling. There wasn’t the Amazon Prime program which allows you to get two-day shipping and it shipped right from Amazon’s warehouse. They didn’t have all those warehouses set up.
So, that wasn’t even really a part of the equation. Whereas today, to run the business model that we were, it’s definitely more difficult because there are so many people that are using Prime that you want to actually ship your products to Amazon’s warehouses, and then they ship it to the customer so that you can take advantage of the two-day shipping and other incentives that they offer. The whole game has really transformed, and there’s a ton more people that are trying to sell as well.
Simon Dell: It’s interesting that you say that because we’re recording this on Friday the 20th of April. I believe Jeff Bezos sent his letter out to his shareholders, his annual letter out yesterday, day before that. I think he announced there was 100 million Prime members now, something like that.
Connor Gillivan: I saw that too.
Simon Dell: Which is insane when you think about it in terms of… Because it’s a subscription service. For those of you — and certainly in Australia, Connor, the Amazon market is very new. Amazon only arrived here about six months ago, just before Christmas, which a lot of people can’t believe. So, the idea of Amazon Prime is quite alien to a lot of people, for people that are listening in Australia. But those numbers are huge. That’s 100 million subscriptions, isn’t it?
Connor Gillivan: Yeah, it’s just wild. They’ve really taken the US by storm. Any person that’s trying to sell online now in the US, you have such high expectations from your customers because of Amazon. It’s like, “Oh, I have to wait a week to get this?” People are pissed off about that.
Simon Dell: It’s funny you say that because I have a friend who lives in San Francisco and he’s originally from Australia. He’s been in San Francisco four or five years now, something like that, but maybe a bit longer. And even he says, “The thing that gets you eventually with Amazon is the two-day shipping.” He said, “It’s not so much the low prices. It’s the fact that you order something on Monday and it’s there on a Wednesday. That is the real attractive part of the business model.” Is that something you’d agree?
Connor Gillivan: I agree. The speed is huge. I would say the prices, when they started, like when we were selling on there, they did definitely undercut a lot more and they were much lower. But you could find better prices at other places today, but it’s really just that reliability of two-day shipping that just blows people out of the water.
Simon Dell: Let’s move onto some of the… I want to look at the big job. You’ve got a few jobs, but the key one is this with Portlight. So, the co-founder, chief executive officer of Portlight. Give us an idea about what Portlight does.
Connor Gillivan: Portlight is what became from us selling textbooks. We moved away from just selling textbooks.
Simon Dell: I’m going to interrupt you there because there was a question I’m meant to ask you last time. You said you moved away from textbooks. How did you then pick your next category? What was it that made you go, “Let’s start selling toys.”
Connor Gillivan: It was really Amazon. They decided to expand into toys and baby products.
Simon Dell: So you went where they went?
Connor Gillivan: We went with them. There wasn’t a lot of competition at all and we were really able to really tap into that market. And especially here during the holidays, toys just fly off the shelves. It could be anything and people are buying it. That was a big reason for those ones.
Simon Dell: Back to the history of Portlight then.
Connor Gillivan: Sure. We decided to stop selling textbooks because we really hated actually having the products. It was really annoying to find the right book that someone had bought, put it into a box, bring it to UPS, ship it to the customer, handle returns as people didn’t want the book or they — whatever it was. That was a lot of a hassle for us. And so, we eventually discovered this new business model of drop shipping, which is where you find a manufacturer or a brand, so someone who’s already building their own product and maybe selling it to a retailer.
You find them and you get them to give you permission to sell the products online somewhere. Ours was obviously through an Amazon store. And then as we get sales, we send them the purchase order. They put it into the box, ship it to the customer, and then we handle any customer service afterwards. So, we discovered that and that was really where we then started to continue to build the business.
Simon Dell: Just on a drop shipping 101 for people out there. I think the world falls into two parts, those who understand drop shipping and those who don’t. What’s the benefit for the manufacturer? Why would the manufacturer allow you to do that?
Connor Gillivan: In our specific case, it was because we had developed a knowledge base and expertise within selling on Amazon, and no one in their current team knew how to do that. It was very new. They were just focused on making the product and selling it to retailers, like physical stores. And so, we almost became like another arm of their business to help them get more sales on Amazon.
Simon Dell: Is that still the same today with drop shipping? Is there still a lot of manufacturers out there who don’t understand how to sell online and just want to palm that off on somebody else?
Connor Gillivan: The landscape has definitely changed. I would say that more manufacturers today have people within their staff that understand e-commerce, and Amazon, and the different channels a lot better. Some of them will even sell directly themselves through Amazon or through their own online store. But there are decent amount of manufacturers who still will drop ship. It very much comes down to the manufacturer’s decision as a business.
Because if you’re taking orders one by one, you need more people on your warehouse to handle that. Whereas if you’re a larger company and you can just demand purchase orders of at least, let’s say 500 units, I think that’s more advantageous to a manufacturer. It depends on where they’re at and what they’re trying to do with their business.
Simon Dell: If you’re working with a drop shipping — let’s say there’s somebody out there listening to this and tomorrow they want to start a drop shipping business, what do they — what margins would they be expecting to make a drop shipping company?
Connor Gillivan: We usually saw between 15 and 30% margins. It’s definitely a little bit lower than normal wholesale margins. That’s because the manufacturer has a little bit more work and you’re not really guaranteeing them any sales. Whereas if you bought 500 units, that’s money in their pocket immediately. It varies between 15 and 30%, I would say.
Simon Dell: But I guess the flip side is that from a manufacturer’s point of view, if they were trying to sell into a retailer, the retailer would probably want to buy their product and double the price before they sold it out at the other end. So, selling to you is probably more profitable — so drop shipping to you is a more profitable business model to them than it is selling to a brick and mortar retailer at the other end.
Connor Gillivan: Exactly. They control the price more because they have control over being able to ship it to the customer, whereas if they were going to go to a retailer, then the retailer has more bargaining power.
Simon Dell: You said in the blurb for Portlight that there’s two distinct models that function on the Amazon marketplace. Is that still the case? What are those two models?
Connor Gillivan: I would say there’s more than two today. Okay back then it was drop shipping and wholesaling. Today, those two still exist, and then there’s also FBA, which is Fulfilment By Amazon. It’s become its own, where you’re buying products in bulk, but you’re then using Amazon to ship the products to the customer. That’s a little bit of a variation. And then there’s another one that’s called private label.
This is like, let’s say you or I have a water bottle we like. We find someone that manufactures water bottles and they give us the permission to put our own name on it, so Connor Gillivan Water Bottles. I then go sell those on Amazon. That’s a slightly different one too, but it still involves either drop shipping or wholesaling at some point.
Simon Dell: So, it’s a combination of a few different models in there.
Connor Gillivan: Yeah.
Simon Dell: What’s the preferred model to you these days?
Connor Gillivan: If I was to start an Amazon business today, I would definitely go with Fulfilment By Amazon as my fulfiller. The biggest thing is to tap into that Prime market, like we just said, 100 million people. Those are the people that are shopping the most. They’re probably repeat customers. They go to Amazon for everything. If you could find a niche in there and really dominate on a niche of products, that could be a great business.
Simon Dell: And talking about those niche products at the moment, where do you think that is at the moment? I don’t want you to give away all your trade secrets, but if there’s people out there going, “I want to start a business. I’ve got the time. I’ve got the energy. I’ve got the money.” Amazon’s a great channel. What’s a good product category for them to be looking at these days?
Connor Gillivan: It’s hard to say a specific product category because you can go so deep within each category. But my suggestion would be, there’s a lot of tools out there that work specifically at researching products through Amazon. So, you can get these tools. Some of them are free. Some of them are maybe like $10 per month, and it gives you access to this big database of all of Amazon’s products.
And then you can really break them down, and niche out different types of products, and see what the competition is like. You can see how many FBA sellers there are. You can see what the prices are. You can see who the actual manufacturer is. So those can be really useful to do your research at first to try to find opportunities through Amazon where you may be able to come in and carve out that niche.
Simon Dell: Are you able to recommend any of those tools, or any one that you might use, or anything like that?
Connor Gillivan: I can’t think of the names of them right now because I haven’t used them in a little while, but I can send them over to once we’re finished and then you can put it on the shownotes.
Simon Dell: Portlight’s still running. You’re still involved in that on a day-to-day basis?
Connor Gillivan: It’s not. We actually decided to stop that business about a year ago as we were transitioning to a new business and we were seeing a lot of success, we decided to really put our full efforts behind that.
Simon Dell: That would be FreeeUp?
Connor Gillivan: Yeah, that one is FreeeUp and we started that one about three years ago.
Simon Dell: I guess FreeeUp was born out of the fact that within Portlight, you used a lot of freelance staff within that or outsource staff?
Connor Gillivan: Exactly. In the five years or so that we were running Portlight, we were growing. We’re working with more suppliers. We’re managing a couple hundred thousand products through our store, and we needed people to help us list those products, manage them, handle the orders, do the customer service, find new suppliers. So, there was a number of tasks that we needed help with in the business.
And we hired some full-time employees. We hired some part-time employees. We had an office set up, and then we discovered this whole world of outsourcing and finding people, some people even from the US that were just on a freelance basis, but also people from the Philippines and other countries where outsourcing is more common.
And we were using websites like… It’s Upwork today, but it used to be oDesk and Elance. There’s Fiverr.com which is a popular one. These are all marketplaces where you could hire freelancers. We were going to them. We were posting the jobs saying we needed someone to help us with Amazon listing. We’d get 10 to 20 applicants and we’d interviewed them. We try to narrow them down and then hire the right person, and we just kept running into a lot of turnover.
We found a great group of people. We had around 35 freelancers at a certain point that we were really happy with, but it took us about three years to find that group of people. And going through that turnover really left a sour taste in our mouth, and that’s when we came up with the idea for FreeeUp. Could we ourselves put together a group of pre-vetted freelancers that could help other Amazon sellers to grow their business so they wouldn’t have to spend so much time like we did?
Simon Dell: Right. I got to say, I’ve used Upwork on and off over the last three ,four years. And I find it a… It’s a needle in the haystack kind of service. There’s good people in there, but it’s finding them that’s the big problem. I guess that’s the major difference for you, is that you’ve already pre-approved all the people working on FreeeUp?
Connor Gillivan: Yeah, exactly. Today, and like I said, it’s been about three years. Today, we have about a thousand freelancers that have gone through our application, interview, and testing process, and they’ve come out as the top 1%. That’s how we do it. Anyone that wants to apply and offer their services… Whereas on Upwork, anyone can create an account. For us, they have to go through this process that usually takes between two and three weeks to get into the network, and then we take the top 1%.
Simon Dell: I’ll tell you what I really like about your platform, is that when you look at the pricing it’s really transparent. For example, if you want a graphic designer, you’re paying a non-U.S. anywhere between $7 and $30, you’ll pay a US person $20 to $35. There’s very little ambiguity there. And I know that’s the same on Upwork, but again, then you’ve got to do all the interviewing and all that yourself. That seems a much more attractive model that I think you’ve generated there. How’s that performing for you at the moment in terms of growth of that business?
Connor Gillivan: We’ve seen really good growth. I mean the first year, I think as with most businesses, we were really figuring everything out, and putting together the pieces, and understanding who’s going to be attracted to this, and how do we actually vet properly and set up a good process? How do we price everything? And all those steps that you have to go through to start a business.
And then in year two, we saw a lot of great growth. We created some awesome relationships with people in the Amazon and e-commerce industry that had large communities of sellers and e-commerce store owners that were looking to hire people, and they came in as clients for us. And so, that was awesome. And then in this past year, we’ve seen a lot of expansion outside of e-commerce as well starting to work with digital marketing agencies, and coaches and, consultants, and software companies, and lawyers, and doctors. It’s been a good ride so far. It’s really been a lot of fun to see where we could take this.
Simon Dell: When you were growing that business day one, maybe that first year, what was working for you in terms of building awareness of the business? What sort of channels were you using to grow that traffic?
Connor Gillivan: So the first year was a lot of trial and error. We honestly use social media a good amount, and we are finding communities where people may be interested in our expertise within Amazon, and then also the idea of hiring Amazon freelancers. And in that first year, we didn’t just have the marketplace. So, that was one thing that we are offering on top of Amazon consulting and also a course of how to sell on Amazon.
So we brought in a lot of our first customers through the consulting and through the course, and we tried to show them a really great experience. We tried to prove our worth and get them to trust us as individuals. And then when we mentioned that we also had this awesome group of Amazon freelancers we had used in the past, people started to get interested. And towards the end of that first year, we really saw the idea start to bloom and a lot of the customers were most interested in hiring the freelancers. And that’s when we fully switched over to just being a marketplace and trying to go in that direction.
Simon Dell: Right, okay. I guess you’ve had a benefit from the fact that you had Portlight and you had a database of clients and customers through that that you could gradually switch over to a different platform.
Connor Gillivan: Yeah, definitely. And just the experience of selling on Amazon, it allowed us the ability to talk to these people, talk their language. We could understand that we had similar experiences; you could create a connection there and show that you’re someone that was in the industry, someone that was looking to build a new business that was helping people, and they could see that we’re really trying to build something good, and they saw our experience and could connect to that. That helped a lot as well.
Simon Dell: What other channels still work well for you? Where do you find the most of your traffic comes from?
Connor Gillivan: One of the biggest ones is our referral network. Right now, we have about 5,000 businesses signed up using the network, and we pay businesses 50 cents for every hour billed to anyone they refer forever. So we’ve seen that’s been huge for us. We show people good experience. They post it out to their communities, their social media. They tell their friends, they tell their business owners, and then those people come in and that referral program just keeps replicating with each person that’s in there, so that’s been awesome for us. We’ve also seen a lot of traffic going on podcasts like yours, talking about our story, sharing the service, and putting ourselves out there as a brand that could be a good solution for people. That’s been really great.
And then another big way has been partnerships. So, we’ll find coaches or businesses that are focused on helping entrepreneurs grow their business either from the ground up or maybe once they’ve reached a certain point. They’re helping them set up different systems and processes, whatever it may be, and we partner up with them and create content with them. So, we’ll maybe create a video about how to outsource, or the important aspects of outsourcing, and then those people refer those customers to us. Those have been probably three of our best traffic generation tactics so far.
Simon Dell: I can’t stress the partners one enough to people. I think your experience there… I have a friend/colleague who built and sold a similar business to FreeeUp called StaffBerry, which was an outsource company finding people in in the Philippines. One of his key channels for growing that business was partners, and he said — and I might be misquoting him slightly here — he said he always had a list of 20 key partners that they were working with.
And if one of those partners stop referring them people or became less interested, they would take them out and try and replace them with another partner. They always had 20 key partners on the whiteboard in their office that said, “These are the people that are going to be referring business to us.” And that was the goal for them, was to have 20 key partners each sending them leads every week or every month, that kind of thing.
Connor Gillivan: That’s awesome. I really like that goal. The partners have been great for us. The secret is you just find companies that you’re not directly competing with but that have the audience that is the perfect target for you. And ideally, your community is perfect for them too and you can just send each other customers and build a relationship as being great partners.
Simon Dell: And for me, this is from my own personal business when it comes to digital marketing for people, working with people that are business strategists or creative people. I’m not stepping on their toes in their business, but they’re happy to refer me and I can refer them back as well — other things like accountants and stuff like that, but that’s a perfect opportunity.
Just as a side note on that, you guys must know the Amazon search engine like the back of your hand. Does Google search engine optimization send you a lot of traffic?
Connor Gillivan: It does. We produce about three blog articles per week and then one guest article per week. I’m always trying to build more links back to the site. So I think right now, about a quarter of our traffic to the site is from organic, from SEO. It’s a good amount. It does a great job for us and we’re always trying to continue to improve it. It’s a long-term consistent game. It’s not something that’s going to blast traffic to your site overnight. But if you’re consistent with it, and you do the right keyword research, it can be really useful over
Simon Dell: For smaller businesses, it’s a struggle to explain because they want results tomorrow because they need sales, or they need bookings, or something like that. The best result I’ve had probably in the last 18 months was with a small IT company that we sort of optimize the pages, got a great website built, it was fast, it was a nice website. We produced not a lot of content, certainly not three articles a week. But to be honest with you, in the IT company space, anyone producing content is a novelty.
IT companies tend to not be the most forward-thinking when it comes to content space. But yeah, just producing like one or two blogs a month and getting those out there, that’s where I find the success. SEO is, at the end of the day, you’re competing against other businesses rather than competing with Google. Who would you be competing with out there in the SEO space? Upwork would be one.
Connor Gillivan: Yeah, Upwork’s a big one.
Simon Dell: Fiverr?
Connor Gillivan: Fiverr, Freelancer.com. There’s a bunch. There’s Guru.com, 99designs, PeoplePerHour. Yeah, there’s a ton out there, yeah.
Simon Dell: Bloody 99designs. Anyway, lots of history with 99designs.
Connor Gillivan: Oh boy. Every time I say that someone, always has some comment like that. It’s very interesting.
Simon Dell: See, I’m not a graphic designer. My father has a background in design, typesetting back in his day. I’m not a graphic designer. Never really used the Adobe products. I could do a bit of Photoshop at a push, but probably the best like change the brightness or the contrast. My photoshopping skills are about as good as my Instagramming skills. That’s the way I can change your photo. But whenever I saw people who were working on 99designs or seeing brands created on 99designs, I used to go, “Every single one of those logos like it’s been produced on 99designs.”
You just know. There’s nothing about it that just goes — there’s like a 99designs farm that’s just producing these logos that all have the same look and feel. They’re fine to a certain degree, but if you want real personality, and if you want a real brand that actually speaks about who you are and who your business is, you need to sit down with someone in front of them and talk to them.
Connor Gillivan: Agreed, and explain to them, “This is what we value. This is what we’re trying to portray.” Completely agree.
Simon Dell: And when I say sit down in front of them, I don’t necessarily say physically sit down in front of them. But whether it’s a Skype call, someone that can really understand who you are. Anyway, there we go. There’s my winch about 99designs.
Connor Gillivan: There’s your bet.
Simon Dell: Okay, so in terms of the growth of FreeeUp, that’s all going well and everything. You’re also an author as well, I saw. It’s my second author in a row. Tell us a little bit about the book that you’ve written.
Connor Gillivan: The book which is called Free Up Your Business: 50 Secrets to Bootstrap Million-Dollar Companies is about a lot of what we discussed today. It follows the story from my beginning and my business partners beginning up to about where we were a year and a half ago, and it offers 50 pieces of advice that we had learned going through building those businesses, how we approach them.
In the book, I give a lot of personal stories of how that lesson applied to us in that business so that people reading could really see it and relate it to their business hopefully as well.
Simon Dell: How long did it take you to write the book?
Connor Gillivan: It took me about 9 months, beginning to end.
Simon Dell: It’s a proper book, then? Sometimes, you download an e-book or a book and you find that it’s got eight pages in it. That’s a bit disappointing.
Connor Gillivan: This has 250 pages, something like that. It’s pretty lengthy.
Simon Dell: Mine was 192 and…
Connor Gillivan: It’s a process, right?
Simon Dell: It certainly is that. I wrote it back in 2013 and I need to go back and rewrite it because a lot of the stuff in it is just completely inapplicable with today’s marketplace. I actually had an email yesterday someone who downloaded it and said, “I’ve read it from start to finish and thought it was wonderful.” And I was like nice, “Jesus. Well, that’s probably the first person in six years that’s actually read it from cover to cover.” Including myself.
I know we’ve spoken about a lot of the things that you’ve experienced, but is there a couple of other key tips that you would say to people who are either — that are either thinking of starting a business already in an e-commerce business space?
Connor Gillivan: A big philosophy of both mine and my business partners has always been to stay focused on what we personally do best. And I think that’s something that business owners and entrepreneurs stray away from at first because there’s so going on and there’s so many things you’re trying to do to grow the business. My encouragement is once you reach a point where your day is full of things on your plate, really start to value your time at a bit of a higher level and figure out which areas of the business you’re most passionate about where you drive the most growth or where you add the most value.
And then try to surround yourself with people that compliment your skill sets and that like the other parts of the business that you don’t necessarily like working on or that you’re not great at. My business partner and I are very different. He’s great at some things that I really don’t like to do, and I do other things that he just has no idea what I’m talking about, but it’s okay because we have a good relationship. We know where we want to head with the business, but we really wouldn’t be able to do it without each other because of our different and complementary skill sets. That’s one of them, one thing to think about.
Simon Dell: Yeah. I totally agree, and I think where I’ve fallen down in the past is working with people who aren’t filling in the gaps that I’ve got because I think that’s a really important part of the business. From an e-commerce point of view, what are some of the tips that you would go out from people running e-commerce businesses?
Connor Gillivan: So for people just starting out, people who are looking to build their first e-commerce business, there’s a few decisions that you have to make as you’re getting started, and those will really determine where the business goes over the first six months or so. One of them is something we were talking about earlier, two of them actually. The first one is, where are you going to sell? There’s so many different places. You could sell on Amazon. You can sell on eBay. You could build your own online store and sell through there.
You need to make a decision on that and then figure out what it takes to do that. And then the second one is: Which business model are you going to use? Are you going to put some money out up front and try to buy some products to sell to your store, or are you going to try to go the dropship way, and not spend too much money up front, and test out some different products, and see what you’re able to sell?
Those two decisions are big and you have to figure those out. And then depending on which way you go, let’s say you’re going to build your own website and sell products through there, in that situation, you need to think about marketing and advertising as well. Whereas if you’re just selling on Amazon, or eBay, or another marketplace, they really handle the marketing for you. They’re bringing customers to their site. You then need to figure out how you can price your products well and keep competing with the other people there to get more sales. It’s really two different worlds within e-commerce depending on which decisions you make at the beginning.
Simon Dell: I’ve got a client who’s an established e-commerce business. We handle their search engine optimization. We handle their AdWords. They’re in a very competitive marketplace, but they also do Amazon and eBay which we’re not involved in helping them. Do you think it’s a good idea that an e-commerce business sells in multiple channels, or do you think they should just be focusing on one channel?
Connor Gillivan: From my experience, I think you should focus on one to start. And once you have a good formula down for that and you’re seeing good profits, you have a team built out and it’s really running at a high level, at that point, you can then try to duplicate the system by going somewhere else. But to try to sell everywhere at first, I think you’re spreading yourself a little too thin.
Simon Dell: I’ve got a technical question. Looking at Amazon, or Ebay, or your own e-commerce, do you find that when you’re working with customers from a technical perspective, that they don’t focus on those technical aspects of their website like the speed of the website or how well written things like descriptions are? Is that a failing you see or is that something that people tend to get right?
Connor Gillivan: I think it’s a factor. Are you asking if customers mind it or if business owners do it right?
Simon Dell: Actually, that’s probably a better one. Do customers mind that things like titles aren’t well-written, or that the descriptions aren’t comprehensive?
Connor Gillivan: I think it does play a factor. I think just because of where the e-commerce industry has gotten to, again, like I was saying earlier, the expectations have risen. So maybe 5 or 10 years ago, you could have gotten away with just having a picture your product, and having a good price, and people would be interested in it. But today, it’s really important to have good titles, have good copy, have multiple pictures, have it all optimized for mobile since a lot of people are on their phones these days.
I think those small details that maybe weren’t as important 5 to 10 years ago can be a big factor today. And it can turn people off because if they see even like a typo, maybe they lose trust just a slight bit and then they don’t want to go through that checkout process. There’s so many like mental things that people go through when they’re buying. You want to try to be as perfect as possible.
Simon Dell: That trust element is really important. I think it’s the more competitive a particular channel gets or the marketplace gets, eroding that trust just for one second can have a devastating effect on the ongoing numbers, especially if you’re dealing with a lot of traffic as well.
Connor Gillivan: Yeah, and that’s another piece of advice. I see a lot of people who just start e-commerce companies or have been doing it for a little bit. They’ll reach out to me through social media and ask me to just take a look at their site and provide some feedback. And I think a big thing that a lot of people miss out on is trying to almost like have a story, have something that people could relate to when they come to your site. E-commerce isn’t just about having products that people can buy. They want to know who’s on the other side of this store.
Show a little bit about yourself. Give them a reason to trust you and to give you their money through the internet and hope that you’re going to actually ship them the product. I think it’s tough if you just go completely anonymous and people can’t really relate or find any way to trust you.
Connor Gillivan: If you go back and have a look at one of my earlier interviews with a company called Vinomofo, who are an online wine-ordering business, they have a mission statement or an about us page that is close to war and peace. It’s a long, long page. There is a lot of information in it. But that was the key for them, was telling that story about who they were. It was so important that that’s how the brand got built and that’s why people love them so much and so on.
One last question in your space before we do the final three questions. Drop shipping sources. I know we could probably have an hour-long, two-hour-long, even longer discussion about whether to buy from China or not to buy from China. What’s your advice to people if they’re looking for those manufacturers and outsourcing? Should they be spending a couple of days in Alibaba? Is there a better way to find manufacturers? What would you suggest?
Connor Gillivan: Great question. I personally don’t have a ton of experience with Alibaba. I know a lot of people have had a lot of success there and it’s definitely become more popular I would say within the past five years since they’ve made their marketplace a lot more accessible and easier to search.
The way that I did it and we did it with our business was, we first went to other websites and found products that we saw an opportunity for and we saw that we wanted to sell. And then usually on other sites, you can see who makes that product. So, you take that person’s name, which is usually the manufacturer. You search it on Google. You find that manufacturers website and then you find their wholesale department. That’s where you want to contact. You reach out to them by phone or by email, and you just shoot them a quick message saying, “Hey, I’m interested in buying your products.” That doesn’t say that you’re trying to drop ship. It doesn’t turn them off from that.
And usually, the wholesale department’s job is to get more sales for their products, so they’re going to respond to you and reach out to you. And then at that point, you can you tell them about yourself, and try to build a little bit of trust, and then see if they’re open to drop shipping. So that’s how we saw the most success, was doing targeted research and then getting in touch with those wholesale departments.
Simon Dell: What categories was that in?
Connor Gillivan: That was like toys, baby products, and home goods.
Simon Dell: Final three questions. What’s a brand that you really like, that you admire, that you buy frequently, that you try and follow?
Connor Gillivan: Nike is a brand that I really love. I liked it growing up just because it was one of the more popular ones. But just recently, I read the book written by Nike’s founder. It’s called Shoe Dog and it’s pretty much a memoir of his whole journey finding the start of Nike, going through all the years of initially building it up, going to Japan, and finding different manufacturers to make the shoes for him, and building it around the United States, and building it into an international brand.
I really respect him as an entrepreneur and all of the grit that he had to build up the brand. That’s one that I really respect and like what they do.
Simon Dell: Any smaller brands that perhaps you might have seen in either Denver or… You’re originally from Florida?
Connor Gillivan: Yeah, I lived in Orlando for about five years.
Simon Dell: Any small brands that you used to like in those areas?
Connor Gillivan: This one is random, but I used a company that was like a clothing company for a number of months. They’re called Five Four, and they’re a subscription model where you give them your sizes, you give them your style and they send you clothes every month based off of what you’re interested in.
I really liked their brand. They built it up to be pretty good, and they had a good following with their customers and everything. That was one that I enjoyed working with and I recommend it to people today, for sure.
Simon Dell: Second to last question. What’s next for you? Obviously, you’re growing FreeeUp. Do you have any side projects? Is there a side hustle for you these days, or does FreeeUp take up all your time?
Connor Gillivan: FreeeUp takes up a lot of time. I’m really excited about continuing to grow the business. I’m very passionate about the whole freelance and gig economy that’s just growing here in the United States but all around the world. And my side hustle for the past couple of years has been my blog where I write a couple articles every week or every month.
But I am also thinking about right now potentially writing another book focused on the history, the present, and the future of the whole freelancing world and the gig economy. So that’s something I might be diving into in the next couple of months, but it’s very much in the discovery phase right now.
Simon Dell: Do you think the gig economy is a good or a bad thing? It gets a lot of press and some of it is not always good because it’s… Certainly here in Australia, people talk about the gig economy as a problem for people, things like saving for their retirement and stuff like that because there’s no forced — we have something here called superannuation, which you wouldn’t have in the US. It’s that forced savings for the future. Do you think it’s still evolving? Do you think the gig economy’s going to change much?
Connor Gillivan: I do think it’s still evolving. I think we’ll see a good amount of changes over the next decade. I personally think it’s a good thing. I think it almost allows people to act as entrepreneurs without having to build out a full-blown company. You can offer a service and find a group of clients that really like you, and work with them at a high level, and build up your own income. In terms of it changing, I think one of the biggest things especially here in the states, and I’m not sure what the laws are in Australia right now, but there’s a very grey line between what is an employee and what is a contractor.
And the laws are just very antiquated, probably written a hundred or so years ago. I think once they actually make new laws to address gig workers and freelancers, it will change things either for the better or for the worse. I’m interested to see what happens there.
Simon Dell: Me too. It is a grey area here. There is a bit more. I think there’s much more clarity here in Australia than there probably is in the US, but there’s still a grey area there. Final question. If people want to come and ask you a question, if they want a piece of advice or just want to chat to you, what’s the best place to track you down?
Connor Gillivan: I’m most active on Facebook and LinkedIn. If anyone wants to connect with me, please do there. I’m pretty active and I manage my own accounts. Like you said earlier, I have my own site, just ConnorGillivan.com. There’s ways that you can contact me there, and the best email is just [email protected]
And then if anyone wants to check out what we’re doing with FreeeUp, visit FreeeUp.com.
Simon Dell: Do you find you have to spell that out to everybody all the time?
Connor Gillivan: I do just in case. I mean, if you didn’t know, you would just type F-R-E-E-U-P.com.
Simon Dell: I was going to say, what’s FreeUp with two E’s, if people accidentally go there? Is that a safe for work website?
Connor Gillivan: It’s not. No one is using it. It’s owned by Verizon, so they just have the domain. Tough one to get for us.
Simon Dell: I bet the bastards want something like seven figures for it as well.
Connor Gillivan: Yeah. We’ve been in talks with them but their demands are a little bit too high for what we want to do.
Simon Dell: I can only imagine. Mate, that’s been absolutely fantastic. I really appreciate your time. It’s this morning here in Australia. It’s this evening in Denver, but I appreciate your time. I appreciate your advice. Thank you very much for coming on the show.
Connor Gillivan: Thank you for having me on. It was fun chatting. I enjoyed it and I’m glad I got to be your first American guest. That’s awesome.
Simon Dell: Thanks very much.
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