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In this podcast I continue to explore the various sets of circumstances that contribute to epic early traction online.
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Drew: Hey everybody, this is Drew Sanocki with the Nerd Marketing podcast and we are talking about growing an e-commerce retailer to seven figures. Today my guest is an old friend, Josh Manley, who is the founder and CEO of IronFenceShop.com and a number of other businesses. Josh, welcome to the show.
Josh: Thanks, Drew. Glad to be here.
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Drew: Yeah, thanks for coming on. Josh and I worked together a couple of years ago, I’ve known him for a long time. He’s, like, consummate entrepreneur, has started several businesses and the Iron Fence Shop, in particular, is one I wanted to talk about today because he was able to grow that from zero to over a million in revenue. Bootstrapped, right Josh?
Josh: Yeah, a hundred percent self funded.
Drew: Yeah, so where do we start? Maybe you could tell us a little bit about who you are, about how you got the idea to start the business and take it from there.
Josh: Sure. Yeah, so way back in olden days, 2002 … In about 2000, I worked for Kent State University in a division that they called the web center. We designed websites for local businesses as well as teachers before they had software that did that sort of thing. From there, while I was still in college, I got a job with a local fence company. Basically just to build them, review their local website, brick and mortar website, and then maybe start them a website to start selling some fencing online. Once I was there, for about a year, I kind of got thrown into all aspects of the business, not just web design but I was doing sales and purchasing, business decisions like merchant accounts, things like that.
Worked there for about seven years and then at the seven year mark, the past couple years of that I had seen that there was kind of a segment of the market that wasn’t being served and that was iron and aluminum fencing that was much more authentic than what was available at that point in time. Basically, with our brand, what we do is we have a product where we weld sand cast iron finials and aluminum finials to the fence and it just gives it a much more authentic, organic look that just has a much higher value to the customer. That just wasn’t available. At that point in time all the manufacturers had made changes to make the product much easier to manufacture, much faster to manufacture and much easier to install for the actual installers and kind of lost touch with what the consumer wanted. We would get …
Drew: This is all, sort of, inside baseball.
Josh: Correct. Yeah, this was just me watching how our customers reacted to the products that were available at that time. I remember, very vividly, kind of the a-ha moment for me was a customer came in, it was just a local customer and the local sales guy had given them like a ten thousand dollar estimate for an aluminum fence and they were all excited about it and came in to look at it. They walked up to the product that they were spending ten thousand dollars on and they go, “Oh, this is it?” That’s not the reaction you want. It’s just one of those things that just looks different in brochure.
Josh: I had made some inroads and some connections with some manufacturers our there and me and a manufacturer had kind of batted around an idea of working together, kind of creating a partnership with a new brand of fence. We went into it and decided to jump in and they do the manufacturing for me and warehouse it and ship it and I sell it. It’s my own brand of fence, basically ornamental iron and aluminum and driveway gates. We’re shipping it all over the world.
Drew: You’ve got a couple different brands now, right?
Josh: Underneath the Iron Fence Shop brand?
Josh: Correct, yeah. One of the big things I did from the very beginning was focus on our branding and how the product was perceived by the consumer. A big part of that is if you’re going to have two separate lines of fencing, iron and aluminum, you want each one of those customers to kind of buy into that line and what’s special about that line. The iron is called Stronghold Iron and the aluminum is called Infinity Aluminum. There’s a bunch of thought that went into both those names to come up with them, but they’re both doing great.
Drew: You, then, are a couple years out of college, you get the domain name Iron Fence Shop, right?
Drew: Work with a manufacturer to come up with these two proprietary brands, which are basically you, and you leave the fencing installer at that point and just start going direct?
Josh: Yeah. I basically just quit my job in December. From December of 2008 to May 24th of 2009 was our first sell. Basically during that four to five month period, I rented an office space with a little bit of savings I had and then just by myself. My savings ran out and then it was just me and my credit card.
Josh: We just went to work. I have a picture of my whiteboard in my office about a couple months in and I had to write about an inch tall to fit all the things that I had to accomplish [inaudible 00:07:07] on it.
Drew: Yeah, because usually you hear about entrepreneurs who, they don’t quit their day jobs, they want to at least get the site up, get a couple sales, just get some traction before they quit but you kind of went all in.
Josh: Well I did that for a couple reasons. One, I wanted to be a hundred percent focused on what I was doing. This was never something that was going to maybe not work or maybe be a part time thing. I knew from the very beginning that … I basically just trusted my instincts that the market was there and I knew how to sell it.
Drew: Mm-hmm (neutral).
Josh: Also on the flip side, there wasn’t necessarily a conflict with my previous employer because I was doing something that wasn’t available and something that we didn’t sell. I was creating my own brand of fencing but I certainly didn’t want to start my own thing while I was still working for them. For a smaller company, it wasn’t like I was working for the city or some Ford or something where it didn’t matter. I wanted to do right by them from an ethical standpoint.
Drew: You come into the office wearing like IronFenceShop.com t shirts?
Drew: Ball caps.
Josh: That wouldn’t have went over well.
Drew: Just to make clear to the listeners, although you have your own brand, you’ve got a unique relationship here with your manufacturer, so although you have your own brand and it’s only available through IronFenceShop.com, you are still drop shipping. You’re don’t take inventory of all this fence, it’s sort of made on demand, right?
Josh: That’s correct. Honestly, it’s exactly, for all the listeners out there, think about it …
Drew: There’s five of them, there may be six of them at this point.
Josh: Oh, well hopefully I get to know them. Hi mom, hi dad. Think about like this, think about it just like a normal product. If you wanted to make a yo-yo, right? We’ll just use a yo-you as an example. You would go find a manufacturer to build you a yo-yo. You’d give them the specs that you wanted, that sort of thing and they would build it. Now, you would normally have to buy a large amount of it and then warehouse it and ship it. If you didn’t want to do that, then you might do Amazon FBA. It’s your brand, you’re selling and marketing it and then you’re shipping the products that you’re buying to Amazon to fulfill those. That’s pretty much the exact relationship we have in the situation we’re in with Iron Fence Shop it’s just obviously much bigger and much more complicated than a yo-yo.
Drew: Got it, got it. What if we go back to May, when you got your first sale, how did you generate that first sale? Was the site up the whole time or did you go live in May and it kind of just came?
Josh: Yeah, I think we went live, I don’t remember the exact date, I think it was the very end of April maybe …
Drew: Mm-hmm (neutral).
Josh: That we went live and then that first sale was about a month later. Which makes sense with our fence company because it’s a large purchase and there’s a lot of details to figure out with the customer. Our normal sale cycle is about four to six weeks. I made sure that I had everything done. The branding and the marketing wasn’t to the point that it is today but for four to five months, everything that I could possible jam pack into that time period before I turned the site on, I did. I came up with the name, I made sure we had an eight hundred number, made sure that we had everything in stock, a bunch of documentation on the website, photos, the whole nine so if somebody came to that website they thought that we had been operating for ten years not ten days.
Drew: Sure. Easier for you because your background was in web design.
Josh: Correct. Yep, yep, exactly. I had the inside baseball on the fencing and then also the web design as well.
Drew: Yep. That first customer, was that AdWords?
Josh: It was, yeah. All of our customers definitely the first six months, were all a hundred percent Google AdWords, paid for on a credit card.
Drew: Right, and then the sales funnel is you drive them to the site and then they usually have to submit an email form or call in to get a consultation, right?
Josh: Correct. I started, that was 2009, so it’s almost seven years later.
Drew: Mm-hmm (neutral).
Josh: Back then a majority of people would just call. Nowadays it’s shifted more towards our first contact is by email but no matter what the first contact is, we usually send them a [inaudible 00:12:28] form for them to fill out giving us some information about their project that we can then work up a material list to make sure they’re getting the right stuff.
Drew: Right, it’s e-commerce but it’s also LeadGen. You’ve got a CRM on the back end that tracks all these things as I [crosstalk 00:12:48].
Josh: Yeah, we have that on the back end that tracks everything. It is LeadGen, I look at it as … Like, anything, e-commerce has a bunch of different subsets. Obviously a majority have a cart, but if your main acquisition channel is Google or Bing or AdWords or whatever it is and you’re driving somebody to a website and that’s where you’re getting a hundred percent of your customers, you’re an e-commerce company.
Drew: Exactly, yeah. I think so many people forget that, even at my company which was a hundred percent, quote unquote, online, it was still something like fifteen, twenty percent of the orders came over the phone.
Drew: It’s this forgotten part of the business. As an e-commerce guy, you don’t want to deal with it. You just want everything to be automated, I don’t want to touch the customers, I don’t want to talk to anybody, I just want sales to come in.
We found that you put that eight hundred number up on the site and the largest orders always came through the phone.
Josh: Sure and honestly, as a salesperson, I would want to get somebody on the phone.
Josh: If they give me a phone number, I’m calling them. Because I know that if I can get them on the phone, they’re going to be a sale. Whereas, via email, or even chat or whatever, it’s just not as effective.
Drew: Do you have any sense of ballpark what the conversion rate over the phone is versus, I mean email, not email but e-commerce wide the conversion rate’s like one to two percent so over the phone it’s got to be higher than that, right?
Josh: Yeah and I don’t have any exact numbers, that’s something that we definitely working towards is … We’ll open this can of worms, the negative of having a LeadGen e-commerce company is, and we’ve talked about this in the past a little bit, is that circle of information gets broken. In e-commerce, that’s the magic sword that you have is information that you don’t have at a brick and mortar.
Drew: Yeah, you can track up to a goal in Google Analytics but after that it gets a little difficult to get that feedback back to your AdWords campaigns and back to Google Analytics requires a more robust CRM and uploading transactional data back into Google Analytics, which not a lot of people even bother with.
Josh: Correct but, I’ll say now that I’ve recently sold a company and Iron Fence Shop is my main focus now and it’s been on my radar. I’ve had an idea of how to tackle this problem and me and a developer friend of mine, we have a solution and we should have that up and running in the next two months. We’ll be able to track everything back to how the customer was acquired, even if it’s a phone call and whether it was paid or organic and what keyword they searched in and all the stuff that somebody that has a Shopify website takes for granted.
Josh: We’ll finally be able to have those very critical pieces of information.
Drew: Are you making use of any of the AdWords call tracking services out there like Call Rail?
Josh: We are, yeah. We’re using … it’s something that just changed it’s name. I can’t remember off the top of my head.
Drew: We’ll put it in the show notes.
Drew: I totally just tasked my virtual assistant. It’s okay, my VA will put it in the show notes. Anything else you want in the show notes?
Josh: I might, if I think of something, I’ll …
Drew: Yeah, just say, “We’ll put it in the show notes,” and then she has to do it. I’m kind of fascinated because back in the day, 2003, when I started my business, our first sale came off AdWords. At the time, AdWords was probably what Facebook is now. It’s a new channel and because of that it’s cheap. It’s very easy to drive traffic and my life became, over the years it was like, okay, every year, that traffic got more and more expensive and the cost of acquisition went up. Have you found that? Is that the case in fencing?
Josh: No doubt. What we call our money keywords, something like iron fence, that used to cost fifty cents maybe, now it’s three fifty, four dollars.
Josh: It’s crazy but honestly, I look at it as I’m actually very thankful because I have an expensive product where our average sale is three thousand dollars and to pay three dollars and fifty cents for something that’s a super qualified keyword that’s going to lead to a good lead. That’s okay with me. If I was selling yo-yos, that’s a tough pill to swallow.
Drew: The guy who owns yoyo.com was listening to this podcast, is just like, “Stop talking about my business.” Yeah but it also, I think it’s a double edged sword, right? Customer acquisition costs go up but then, in the early days, anybody who starts a business like yours, or like mine, was just like, “This is great, let’s just plow money into traffic and we’re going to make money forever.” Eventually it’s the companies that have the best data that win. This is why I like it, it’s that if you are more sophisticated and contract things like customer acquisition costs and lifetime value, down to the keyword level, you’re head and shoulders above your competitors. I imagine that in your case, you’ve got very different lifetime values. People who buy aluminum fence versus iron fence, maybe even some people, the custom design, you probably have a B to B segment that comes back a lot and has a super high LTV. The more you can integrate that into your acquisition campaigns, the better.
Josh: Yeah. I’ll give you an example of just something that I found a few days ago that I’m very curious to find out the answer to. It’s a thirty thousand dollar question. Whenever I ran my own AdWords campaigns, built my own, picked the keywords, managed them, all the way up until about a year ago. My methodology is way different than somebody that does it for a living. The standard methodology for a pay per click, quote unquote, expert is to cast a very wide net and then use results and data to narrow that down and hone the focus. With me, I didn’t feel comfortable with that but I also know my customers really well so I picked keywords that I just had a gut feeling that were going to convert well and that were really qualified. Well, thirteen months ago, I brought on somebody to handle the pay per click. A smaller company that we could work with one on one, not somebody I was just handing the reins over to. He sent me a keyword report for every search term that has resulted in a click to my website over the past thirteen months. It was like seventy eight hundred search terms.
Josh: It was something like seventy five thousand dollars that we spent on this one channel of pay per click. Thirty thousand dollars of that were longer tail search terms that resulted in less than twenty clicks over thirteen months. That search term had been put in less than twenty times, or had been searched and clicked on and resulted in a visit to our site less than twenty times. Made up thirty thousand dollars of the ad.
Drew: Right, right.
Josh: Whenever I was managing it, I would have never spent that thirty thousand dollars. I would have plowed that thirty thousand dollars budget back into other channels where I could’ve used my money keywords and the ones that I felt comfortable spending money on whether it was Bing or other channels or even to get more impressions with those keywords on Google AdWords. I would have spent that money completely different.
Drew: Mm-hmm (neutral).
Josh: It’ll be very interesting once we get this tracking up, this addition to our CRM to be able to track back what’s actually resulting in physical sale, not just a form completion, which we’re counting as a conversion now. It’ll be very interesting to see whether that thirty thousand dollars is profitable or not.
Drew: Yeah, I think it’s like, if you can convert better than anybody else and usually that comes down to data, why not stay with those fat head keywords instead of the long tail and just drive volume?
Drew: The title of the podcast is getting to a million in a short amount of time.
Drew: To go back to those early days, did you just ride AdWords from zero to seven figures? Was that the name of the game for your first couple years?
Josh: A hundred percent, yeah. Now we did, because of the … This is back in 2009, domain were a little bit more valuable than they are today and I’m in a fairly small niche with not a lot results around say, iron fence, organically.
Drew: Mm-hmm (neutral).
Josh: We did get some organic traffic pretty quickly. I also wrote some really good articles. One was “Iron versus Aluminum Fence” which was number one on Google, for the search term, iron versus aluminum, which is a highly searched phrase, within three months. I did get some organic traffic just with the domain name and some of the content that I wrote but seventy five percent of it, the first year, was just AdWords.
Drew: Right, right. AdWords, a little bit of SCL and I always like asking about retention and email, does that even play a factor for your business?
Josh: Unfortunately not and this was another thing that just makes my business harder to run than that yo-yo company. Who owns the trademark Yoyoy.com.
Drew: I don’t know, we’ve got to get it.
Josh: I’m going to get cease and desist [inaudible 00:24:36]. You send an email with a new color or a new style and you get a repeat customer.
Drew: Yeah, another yo-yo customer.
Josh: With a fence. When I’m doing talks at internet retailer in twenty years, this will be the anecdotal story that I use. When you buy a fence, you put up one fence forever unless you move so our repeat customer base is extremely small.
Drew: How about a B to B segment? Do you have a B to B segment that comes back?
Josh: We do. That’s pretty small as well because of our pricing. We really have straight up retail pricing so anybody that is an installer, that does more than a couple jobs a year, they’re not a very smart business person if they’re buying from us. However, we do get a lot of cities, a lot of government contract work, things like that that are B to B, just not really repeatable business.
Drew: Got it. Looking back at that first year or two, you obviously had a ton of success but was there anything you’d do differently? If you were to give the listeners some advice on getting that early growth, early traction and then growth, like one or two pieces of advice, what would it be?
Josh: Yeah, sure. The main theme is focus. For me, it was my first step in entrepreneurship and my appetite was insatiable. I wanted to be Richard Branson within six months. I started a second company within a year, I started a third company within three months of that and you just can’t focus, and especially in the very beginning, you don’t really know anything. You couple on the fact that you don’t really know anything and you’re still learning with the fact that your focus is split between three or four different things and it’s just a recipe for things to get stagnant. I wish that I could go back and not start those extra companies, or those additional companies, and I wish I could’ve focused on iron fence shop which was the first one I started. It was the one that had the largest potential for growth, the largest potential for profitability. I really wish I would have just, someone would’ve put me in an entrepreneurial straight jacket and not let me start those additional companies. If there’s anybody out there that just loves entrepreneurship, loves watching Shark Tank and The Profit, and reading books and eat, breathe and live wanting to be a business owner and you get the chance to do it, don’t blow it by dividing your focus across multiple different things. Really work on focusing on the thing that you started because you’re going to bleed that one out and that’s not a good thing.
Drew: I completely agree. The thing about e-commerce and online retail is just that it’s, in many ways, boring. If you’re bootstrapping, you don’t hear a lot of stories of companies going from zero to a billion. We’re not on the cover of Fast Company. We’re not inventing Twitter here or some new social network, it’s just a lot of blocking and tackling. Doing one percent better this week than you did last week and working on the process to grow. In many ways, that goes against entrepreneurship, which is to try a bunch of different things and experiment but I agree with you. What wins in e-commerce is pressure over time so that would be my advice too. I totally agree.
Josh: Sticking with that theme of focus, I wish I would have focused on profit more. I really focused on revenue and that coupled with the fact of starting all these additional ventures, it bled the profit out of Iron Fence Shop where that profit could have been plowed back into the company or into a nest egg to still experiment but experiment within Iron Fence Shop. I wish I would have been a lot more profit focused rather than viewing it as an avenue to start a bunch of different things.
Drew: Right, right. That’s great. I agree on both points. Josh, it’s been great talking to you. Great reconnecting, I know it’s been a year or two since we last spoke but it’s great to hear things are really working out.
Josh: Yeah, no it’s been good … getting right on the company and refocusing on the thing that I first started and I really appreciate you having me on and I hope everybody listening can garner a little, might get some information from the mistakes I made.
Drew: Yeah, I would love to have you back to talk about selling a company. I think that’s going to be another hot topic someday.
Josh: Yeah, I’d love to.
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Drew: Great. Well, if anybody wants to get ahold of you, we will put Josh’s information in the show notes task. Thanks for joining us on the Nerd Marketing podcast and we’ve been talking to Josh Manley of the Iron Fence Shop who grew his business from zero to a million in about a year and tune back next week, we’ve got a couple more of these case studies on rapid early growth. Thanks for listening.