This blog post has been created by Teikametrics: The world leader in leveraging data science and machine learning to automate advertising on Amazon. They’re offering Bright Ideas followers exclusive, early access to their new Retail Optimization Platform, Flywheel.
What the Attraction to Amazon Sponsored Products?
Amazon Sponsored Products are one of the most effective ways to advertise. These pay-per-click (PPC) ads help you gain visibility, generate sales momentum, and increase brand awareness. They can create a powerful flywheel effect for your business, increasing your opportunities for long-term growth and scalability.
But how can I be sure I’m doing what’s necessary to optimize my advertising efforts? Data, data, data!
Business guru Peter Drucker famously said, “You can’t manage what you don’t measure.” That idea is fundamental to a data-driven optimization strategy, especially when it comes to campaign creation and keyword refinement. Amazon does this when advertising for its proprietary brands, and you should too.
Sold! I want a data-driven workflow to optimize my Sponsored Products advertising. But where do I start?
No need to sign up for data science classes. There is a simple playbook and solution that allows you to optimize your campaigns, and we’re breaking it down for you here.
It all starts with campaign structure, specifically, a mirrored campaign structure. The basic premise is to utilize coinciding automatic and manual campaigns: this will allow you to explore and exploit data throughout your workflow.
Transition Top-Performing Search Terms
It’s really hard to predict what your customers are typing into the search bar to find your products, so think of automatic campaigns as your trusty compass, pointing you in the right direction for exploration. Utilizing automatic campaigns is a great way to work smarter and not harder.
With automatic campaigns, Amazon serves your ads and does the heavy lifting for you. Use this opportunity to discover which search terms are worth investing in, and then systematically exploit those opportunities by adding them as keywords into your manual campaigns. Soon you can exert more control in manual campaigns, and that’s when the fun really starts.
Refine Keyword Match Types
At this stage, you know which search terms are working, and you’ve transferred them into a corresponding manual campaign. The next step is to refine them further. As your campaigns gain traction, you’ll have enough data to zero in on exact match keywords. How does data help you meet this goal?
Measure impressions, clicks, and sales as you watch your broad and phrase match keywords evolve into fully optimized, exact phrase matches. At this point, your data-driven approach begins to pay off. You are investing in extremely targeted keywords with the confidence that you’re spending money wisely! These refinements are the unsung heroes of your PPC campaigns.
Reduce Inefficient Ad Spend with Negative Keywords
So now you have a solid foundation with automatic campaigns discovering top performing search terms and manual campaigns that are capitalizing on those opportunities. Life is good, but it could be better.
Automatic campaigns cast a wide net to explore search term opportunities; however, this means you might be bidding on generic, broad, and often expensive terms. It’s time to home in on underperforming keywords.
The strategy is simple: identify and remove search terms that are generating clicks but not sales, then add them as negative exact match keywords. This reduces wasteful spending and ensures your product appears for the most relevant and efficient searches.
Use your metrics to kick underperforming search terms to the curb and focus on the winners. This approach to optimizing keywords will keep your flywheel spinning at full tilt.
And stay vigilant! Even the best campaigns don’t work optimally in “set-and-forget” mode. You should be monitoring and evaluating your keywords over the short and long term.
Now you have a simple playbook to run the most efficient Amazon PPC ads. Create campaigns with a structure that emphasises exploring customer data, doubling down on your top performers, and reducing your inefficient spend. If you’re feeling overwhelmed, Teikametrics Flywheel is a Retail Optimization Platform that can do this for you.
It automates this process by using machine learning to identify top search terms, convert them into keywords with the click of a button, and highlight where you’re spending money without generating sales.
On top of that, Flywheel gives you unprecedented visibility into your campaign performance and profitability. Its dynamic algorithm ensures that you’re bidding on the right keywords at the right cost. To discuss your business and guarantee that you’re maximizing a data-driven approach, sign up for a free account audit by a Teikametrics expert and get exclusive access to Flywheel.
Want to learn more about succeeding with eCommerce?
Click the image below to get access to the Bright Ideas eCommerce Fast Track.
The benefit of achieving some level of success is that it has put me in a position to pursue additional opportunities – and I’m extremely grateful for that.
Unfortunately, too many pies in the oven can also lead to overwhelm, dilution, and a number of other undesirable outcomes.
In today’s post, I’m going to share with you my plans for all my companies over the next 6 months. My hope is that writing about it will help me to clarify my own thinking – and ideally, you will pick up a few ideas along the way, too!
Overview of My Companies
As of this writing, the companies I own include:
- My Amazon wholesale business (which I will simply call Amz 3P for short)
- My Bright Ideas business (including my Wholesale eCommerce Business Sytems)
- My software company
- My motorsports brand
Of these companies, the only ones with revenue today are #1 and #2 and combined, they will generate somewhere north of $3.5 million in 2018 with profits of somewhere north of $600,000.
In 2019, I expect to see significant growth with total revenue in the $5-7 million neighborhood. The challenge for me will be how to best allocate the resources I have available to me (my time, money, and team) to ensure that I get the greatest results possible.
So, with that in mind, here’s how I think my plan needs to look.
My 6 Month Strategic Plan
The primary objective of my 6 month plan is to get all my businesses performing without my day-to-day involvement – which means that I’m going to have to create enough cash flow to be able to afford to hire more people.
Fortunately, we’ve just purchased an 18,000 commercial building with a 3,000 square foot office space, so we’ll have plenty of room for new hires.
Oh…and just in case you were wondering, we don’t need all 18,000 feet. The building has 6 tenants in it, and the rent they pay more than makes the $8,000/mo mortgage payment.
The key to achieving my six month plan lies in making good decisions about resource allocation during each month during that time.
Months 1 to 3
- Devote my time to pursuing new accounts in my Amz 3P business
- Ensure the next WEBS launch goes well
- Launch my software company
Over the last year, My Amz 3P business has grown at 20% per quarter – without my barely lifting a finger, thanks to the team that I have in place.
Unfortunately, over the last 90 days, revenue was actually down to $605,299 from $722,422 in the prior 90 days.
The reason for this is that we didn’t land any new wholesale accounts – which, I have come to learn, was the result of one of my employees (who handled sourcing) mentally checking out while he was looking for a new job.
During this same period, we also lost one major account worth about $50,000 per month in revenue.
Shame on me for not paying closer attention to my sourcing agent’s level of production.
As a result of his departure, I will need to put my “sourcing agent” hat back on for long enough to get things back on track. Once I do that, I will then hire two more salespeople to handle our search for new accounts.
Until I am in a position to hire these two new employees, the activities that I (with the help of my staff) will use to pursue new accounts will include:
- Email outreach (carpet bombing)
- Telephone outreach (Dream 100 List)
- Podcast interviews (with CEOs of companies we’d like to land as suppliers)
WEBS / Flowster
Since coming out just shy of a year ago, my WEBS product has continued to surpass even my most optimistic expectations. In our first six months, we sold $850,000 worth of it.
In case you are new to my blog and don’t know what WEBS is, let me explain.
Back when I started my Amz 3P business, I set out to create a Standard Operating Procedure (SOP) for absolutely everything we did so that I could easily delegate all the grunt work to a team of virtual assistants.
Thanks to all the help from my VA team, my Amz 3P did $1.1 million in its first year which put me in a position to hire a number of full time US employees to help me to continue to grow the business – and that was key to being able to delegate myself out of a job within a year of starting the business.
As word got out about what I had created and the results we’d achieved, I was repeatedly approached by other Amazon sellers who all asked me the same thing: would I be willing to sell them a copy of my SOPs?
Ultimately, I decided to try it, and my Wholesale eCommerce Business System (WEBS) was born.
This October we will be releasing the latest version of WEBS and based upon increased affiliate support and product improvements, I’m confident that this release will be our biggest yet.
To ensure that we are able to continue to innovate and develop the product more fully, approximately 6 months ago, I formed a new software company in a partnership with another entrepreneur and we’ve had a team of developers coding ever since.
For the next release, the WEBS product will now reside in our own software platform, instead of a 3rd party platform.
So, until this next release is completed – which I estimate will be the end of October – in addition to putting my product sourcing hat back on, I will also be the one quarterbacking the upcoming WEBS release as well as the launch of the software company in which WEBS will now reside.
Months 4 to 6
Since returning to product sourcing, I have rapidly filled our pipeline with new opportunities and I expect that it won’t take me much longer than 60 to 90 days to land enough new accounts to replace the lost revenue and profits – and then some.
If all goes well, our monthly run rate will climb to over $300,000 and that will provide enough additional cash flow to hire two salespeople.
Thanks to our focus on SOPs, I don’t anticipate that it will take long for these folks to come up to speed – though you can bet I will be paying close attention to their progress!
Once I have successfully delegated myself back out of day-to-day operations at Amz 3P, I intend to put my focus on launching my motorsports brand.
The National Motorsports Owners Association (NMOA)
I have grand plans for this new brand and I’m looking forward to being able to devote the resources (my attention + startup capital) to it.
Why do this?
Before I get into what we are planning to do, let me first share the reason why I’m planning to start this business…
As things stand today, my income is heavily dependent on the success of my Amz 3P business. If that were to fail, WEBS would also fail and my income would take a massive hit.
Obviously, this would be horrible, and the way to avoid it is to create additional streams of income.
Flowster will provide one new stream from its subscription fees, but I don’t think that stream will grow fast enough without another way to attract customers.
By launching a non-Amazon business, and the SOPs that go with it, I will, in effect, be creating two new streams of income.
Stream #1 will be from the motorsports brand itself.
Stream #2 will be when I create another SOP offering like WEBS…but instead this one would be called EBS (eCommerce Business Systems) because it won’t have anything to do with wholesale on Amazon.
Assuming we succeed with the motorsports business, I will have the following 7 different streams of income:
- Amz 3P
- Bright Ideas
- Real estate investments
How I plan to grow the NMOA
Initially, the focus will be on building a large email list, and we are going to use sweepstakes to accomplish this goal. Look for upcoming posts and videos on just how we are doing.
Given that this process will be relatively simple and highly repetitive, my hope is to be able to avoid any significant day-to-day activity in our pursuit of contest sponsors.
As I mentioned, I’ll be creating a bunch more SOPs for this company – which at some point in the future, will also be for sale like WEBS is today.
To recruit sponsors, there are two methods that we’ll be testing.
Method #1 is to hire two salespeople to make calls. (I prefer to hire two instead of one so that they will compete with each other.)
Method #2 is to launch a new podcast in the motorsports space and then use that podcast to build relationships with potential sponsors. I have zero doubt that this will work – the only downside is that being the host of the show will take more of my time.
Armed with a rapidly growing email list, we’ll easily be able to monetize that list by making motorsports-specific offers on a daily basis (think daily deals).
The catch is that running the email marketing will require yet another full-time US employee.
Thanks to my need for US employees, I think it is extremely unlikely that the NMOA will generate any profits in its first 3 to 4 months. In fact, we’ll probably lose a good chunk on our way to break even, so this is one of the areas where I will be investing the proceeds from WEBS.
As the NMOA gains momentum, our portfolio of SOPs that reside in Flowster (for our internal use) will continue to expand, and at some point, once we have enough social proof from our results, this will allow me to launch EBS which will attract more users to Flowster.
In addition, I have a few other strategic partnership ideas that I plan to test.
Should any one of these ideas prove viable, we’ll be able to offer an ever increasing number of “done for you” SOPs in a variety of niches – and that will put us in a position to acquire large numbers of customers at a time like we have done with WEBS.
To make this happen, I will personally be involved in forming these partnerships.
Bright Ideas Blog
Last, but surely not least, is this blog. Excluding WEBS, over the last year, the blog generated close to $40,000 in revenue and that is a far cry from its true potential.
Much like I have been doing for years, I will continue to create the most helpful content I can. Thanks to my foray into the world of non-Amazon eCommerce – as well as launching a software company – I will have not one, but two test labs to work on and write about!
As my marketing experiments play out, you can bet I will be sharing like crazy, which should result in the blog’s audience increasing in size.
As the size of the audience increases, I will have all sorts of opportunities to monetize the audience in the following ways:
- Sales of my own digital products
- Revenue from my eCommerce Fast Track mastermind group
- Affiliate commissions
- Podcast sponsorship income
As you might guess, I greatly enjoy sharing what works for me (as well as what didn’t), so my blog will always receive my personal attention, and it’s not something I plan to delegate myself out of – at least not for some time yet!
So there you have it. Now you (and I) are clear on how I plan to invest my time and resources over the next 3 to 6 months.
While I’d love to have everything I’ve written about pan out perfectly, I doubt that will actually happen due to unforeseen events, overestimations of my talent, availability of capital, etc…
What I can tell you for sure is that it’s going to be one heck of an adventure, and I hope you choose to follow along, ask questions, and share your thoughts with me.
Want to learn more about succeeding with eCommerce?
Click the image below to get access to the Bright Ideas eCommerce Fast Track.
Today I’m going to teach you how to write a Standard Operating Procedure (SOP)… and not just any SOP. Today, we are going to examine the process that my team and I use to create truly epic SOPs.
But first we are going to talk about Bob and his floundering eCommerce business…
Bob owns an eCommerce business that does $3M a year with a 4% net profit margin.
Bob is frustrated that his revenue has plateaued, his employee turnover is too high, and his profits are too low.
Each day, Bob is involved in virtually every decision. He considers his employees to be a liability and wonders why they don’t just step up to the plate.
Most days, Bob loathes going to work because he knows that is going to be yet another day of putting out fires, dealing with employee drama, managing unhappy customers, and receiving not nearly enough profits to justify all the BS he has to put up with.
For the last two years Bob’s business has been in a rut, his staff is unhappy, and Bob is starting to think about selling his company because he now hates his job.
No matter what Bob tries, nothing changes and he’s ready to throw in the towel.
Sadly, what Bob doesn’t realize is that he is the architect of this entire mess.
What is Bob Missing?
The reason that Bob’s business is such a poor performer is that now that it is large enough to need a team of people to do the work, Bob has become the bottleneck.
Bob is the bottleneck because he’s never taken the time to document any of the processes for all the things that need to be done every day – day in, and day out. This fact, combined with the high employee turnover that is the byproduct of Bob’s approach, means that Bob is the only person on his team who knows how to do everything.
Sure, Bob can train his employees to do the work and hope they remember it correctly, but as soon as one leaves, he’s got to start all over again and invest heaps of his own time in training the new person.
Bob’s business has become a never ending hamster wheel of mediocrity and Bob wants it to end!
What Bob doesn’t realize is that if he had documented processes for product sourcing, advertising, shipping, product prep, etc… his company would completely transform itself into a highly efficient, more profitable enterprise that would then continue to prosper without Bob having to be involved in absolutely everything, all the time.
With documented processes in place, Bob wouldn’t have to be involved in every decision and most every task on a daily basis, and that would free up Bob to invest time in working on his business, instead of drowning working in his business every single day.
Why SOPs Are So Critical
Thankfully, in my own career as an entrepreneur, I was never Bob.
Fortunately for me, many years ago, shortly after starting my first company, someone told me about a book called the eMyth and reading that book completely changed my idea of how to run a company.
Now, each time I have started a new company, the first thing I do is begin to document our business processes and the results have been nothing short of amazing.
Thanks to having documented processes in place, I was able to spend all my time working on (not in) my first company – which made it much more valuable to another owner – and I was able to sell that business for 7 figures.
More recently, my obsession with SOPs allowed my Amazon wholesale business to grow from zero to over $100,000 per month – and if that wasn’t enough, I was also able to completely delegate myself out of that business’ day to day operations in under a year. Today, it continues to flourish without any of my day to day involvement.
As a business owner, you should be obsessed with SOPs for the following reasons:
- Having them in place increases the value of your company to the next owner because it doesn’t rely on you
- SOPs help to increase growth and profits
- SOPs makes team building far easier and reduces turnover
- Having SOPs ensures consistent execution and reduces errors
- Having SOPs makes outsourcing to virtual assistants far easier and that saves big money (vs hiring US based employees)
- With SOPs in place, you will spend far less time working in your business fighting fires
- With SOPs in place, you will attain a level of freedom that you never though possible
How Many SOPs Do You Need?
In my company, we have SOPs for everything. In fact, the going joke around the office is that if you are going to fart, you’d better have an SOP for it.
But what if you are just starting out? How many SOPs do you need?
The answer is that you need only one. The first one.
After that, you can create another, and another, and another.
Over time, you will end up having them for every process on which your company relies. But the thought of that is probably overwhelming (I don’t have time for this!) so I suggest you start with just one.
In my company, I started with product sourcing because in the very beginning that was the most important activity – and it was the thing that I needed the most help with. Oddly enough, product sourcing is still our most important activity because it is the thing that causes growth – and if you aren’t growing, you are dying – simple as that.
What Format Should You Use for SOPs?
When it comes to creating SOPs there are two popular methods.
The first method is to simply shoot a screencast video with you explaining how to do the thing you are doing. The advantage of the method is that SOPs can be created quickly.
Unfortunately, video-based SOPs come with some serious drawbacks, and that is the reason we don’t use them.
For example, over time, as your library of SOPs grows (which it will), you are going to have an every increasing volume of out of date SOPs and you will need to invest significant time in re-shooting or editing your videos. As a result, you are most likely going to let things slip – which defeats the purpose entirely.
The second major drawback of video is that they can’t be turned into a workflow (a checklist) and as a result, you will not be able to turn portions of the workflow into semi-automations that will save your employees time and reduce errors. More on this later.
So now that I’ve pooped on video-based SOPs, let me introduce you to the only other obvious method: text + images.
In my company, all our SOPs are documents that consist of text, images, checkboxes, and so forth.
Here’s an example. In the image below is a screenshot of just one of the ten steps that make up our podcast production SOP.
As you can see in the screenshot above, there is text, and image, and a checkbox. Hopefully you noticed that there is also to buttons at the top to assign this step to someone else, as well as give it a due date.
The only drawback of text + image SOPs like ours is that they take longer to create. However, the major benefits of our approach far outweigh this one drawback.
With text-based SOPs, you will realize the following significant benefits:
- Keeping all your SOPs up to date requires dramatically less time than if they were video based because you can easily change any small portion of the SOP (vs re-shooting the entire video)
- You can turn your SOPs into workflows where your staff can literally check off each step as they go through the SOP; thereby ensuring that nothing is skipped
- You can easily delegate the entire SOP, or just portions of it, to whoever on your team you like, and then give them a due date
- You can easily create semi-automations where a adding a check or completing a step of the SOP automatically causes something to happen in another one of the applications you use (which saves you mouse clicks and reduces errors)
How to Create Your First SOP
Creating SOPs this way is actually far simpler that you might think.
All we do is this: we perform the task in question, and as we are doing that, we are taking screenshots and simultaneously creating the SOP.
In other words, just perform the task and document it as you go. That way, you will ensure that you haven’t missed anything.
Mistakes to Avoid
While creating SOPs is a pretty simple process, there are still some mistakes to avoid.
Not enough detail: This is by far the biggest mistake. Just because you have done this task a zillion times, doesn’t mean the next person has, and as such, you need to ensure that your SOPs leaves nothing to chance.
Every step must include absolutely every last detail. If you include a screenshot, it should have red arrows and text on it that make it totally obvious what the click path is.
Too few screenshots: People are visual creatures and screenshots are free. We use a lot of screenshots in our SOPs and I strongly recommend you use as many as you can.
Non-binary decisions: A binary decision is a decision that is either a yes or a no and making that decision requires as little prior experience (judgement) as possible. Ideally, making that decision requires zero prior experience.
If a process requires the person doing the job to have extensive experience and then rely on that experience to decide what to do, in my experience, that makes for a less-effective SOP.
When it comes to creating SOPs for a virtual assistant, we focus on making them as binary as possible. If a process requires more non-binary decisions, our SOP will reflect that, and it will mostly likely never be assigned to a VA.
No due date: This one isn’t as obvious in the beginning, but take my word for it. As the size of your team grows, and the volume of processes increases, being able to assign a due date that will trigger an email alert to you and whoever you assigned the task to is going to be absolutely critical to your ability to maintain a smooth operation.
Creating SOPs in a Google doc: While better than nothing, creating your SOPs in a google doc actually comes with all sorts of limitations.
For example, how do you assign a due date? You could use Trello, which would be better than nothing, but wouldn’t it be better to put them in an app that is specifically designed to house SOPs instead of using yet another app?
As your SOPs get longer, being able to assign various sub-steps of the SOPs to various people on your team using Trello would become something of a nightmare to manage.
If you put your SOPs in a Google doc, how are you going to trigger actions in the other apps you use? How are you going to upload files and images that are required for the specific instance of that workflow?
For example, each time we produce a podcast episode, the guest bio and headshot change and our SOP software easily allows us to upload these items to the workflow as we are running it.
If you put your SOPs in a Google doc, your ability to create semi-automated workflows is going to be zero and zero is bad. Stay away from zero. :)
The Benefits of Using Dedicated SOP Software
Unlike a static Google doc, dedicated SOP software will allow provide a set of features that will allow you to realize some pretty significant benefits.
Semi-Automation – Whenever I build an SOP, I’m constantly looking for ways to eliminate extra mouse clicks as doing so not only saves me time, but it will also reduce errors.
For example, if a given step of a process requires that the user switch over to Hubspot or Trello to either update a field on a contact record or create a new Trello card, instead of simply adding a static checkbox in the SOP that tells them to do that, I prefer to use Zapier to make a zap that connects my SOP software to these applications so that when the user puts a check in the check box, the desired action is automatically completed (all thanks to the zap), and voila, my SOP just became semi-automated!
Data Collection – In my businesses, certain SOPs require data to be entered by the person who is executing the SOP. An example of this is the SOP for my podcast. Each time we execute this SOP, the associated data (guest’s email address, phone number, headshot, bio, link to website, show notes, etc…) changes and we need a way to store all this data right within the SOP.
This is yet another way that the SOP software we use has significantly streamlined our operations because it allows a user to create data entry fields right within the SOP template and then determine if these fields are mandatory or optional. That way the person executing the SOP can’t forget to enter the data!
Embed Video – Often times, embedding a short video in an SOP template makes it far easier to provide instructions to the people who are going to use the SOP on an ongoing basis and while it is definitely possible to insert a link to a video into a Google doc, with the SOP software we use, we can now easily embed the video file direction into the SOP so that the user doesn’t have to leave the app in order to view the video.
Delegation – In my books, the primary reason to have SOPs is so that I can delegate my work to someone else on my team as well as to ensure that they perform the task in the exact way that I want it done.
Whenever I delegate a task, two important questions must be answered: who am I delegating this to, and when is it due? Back when we used to keep our SOPs in Google docs, I relied on Trello to manage this process so that both myself and the person I delegated the task to would receive an email reminder when the task was due.
The problem with this approach is that it required the use of another app. These days, the SOP software we use provides this functionality right in the app so there is no need to take the extra step of creating a Trello card. Not only that, with the app that we use, users can @mention each other in the comments section as well as upload any files (such as screenshots) that might be required to facilitate the discussion.
Team Management – Once you start to delegate tasks to your team, you will soon realize that you need a way to keep on top of all the tasks that have been delegated to all the various people on your team. When we used Google docs, this was very challenging. Now, thanks to the SOP software that we use, I can easily see all the tasks I’ve assigned to my team, their various due dates, as well as how close they are to completion; all in a nice visual dashboard. Suffice to say, this makes it far easier for me to ensure that nothing falls through the cracks.
Now that you’ve read about how we create an SOP and all the benefits of using them in your business, you might be thinking that you’d like to get started using them.
If that is the case, the app that we created for our internal operations is now ready for customers to sign up.
Want to learn more about succeeding with eCommerce?
Click the image below to get access to the Bright Ideas eCommerce Fast Track.
Who is Trent Dyrsmid?
Trent Dyrsmid is a serial entrepreneur, husband, and father. In addition to hosting the Bright Ideas podcast, he is Founder of Flowster; a business process improvement application used by thousands of businesses around the globe. His company ranked 254 on the 2019 Inc 5000 of America’s Fastest Growing Companies.