Dr. Weisz: [00:00:14] Dr. Jeremy Weisz here. I’m the founder of inspiredinsider.com, where I talk with inspirational entrepreneurs and leaders, like the founders of P90X, Baby Einstein, Atari, many more, how they overcome big challenges in life and business. This is part of the Skubana e-commerce mastery series where top sellers and experts teach you what really works to boost your e-commerce business. Skubana is a software platform to manage your entire e-commerce operation.[00:00:39] Today I’m excited, I’m talking to Eddie Lichstein, he’s co-founder of autoplicity.com with Sean McWherter, which sells car parts. They took the company from 0 to $50 million in 4 years. I suggest anyone follow his Quora post, they’re very in-depth. He’s also the founder of thmotorsports.com that sells car parts. It celebrated 10 years and over 100,000 customers. And is also co-founder of rejoiner.com, with Mike Arsenault, which is an email marketing automation software for e-commerce companies.
[00:01:13] Eddie, thanks for joining me.
Eddie: [00:01:15] Hey, thanks very much for having me. That’s like a big, big mouthful of stuff.
Dr. Weisz: [00:01:19] Yeah, it is.
Eddie: [00:01:20] I realize my LinkedIn profile must be way too long. I’ll cut it down.
Dr. Weisz: [00:01:26] No, I do a lot of research, there’s probably 10 of those sites that you own that I didn’t find. But, I always like to start with a fun fact. And, a fun fact about you, before we get into some of the basically how you got from 0 to 50 million in 4 years, which we want to talk about, is you’re an avid lover of feel good movies of the ’90s and you could re-watch movies unlimited times. What’s the movie that you’ve watched the most amount of times?
Eddie: [00:01:56] I think the two contenders are “Ferris Bueller’s Day Off” and then “My Cousin Vinny.” Each watched in their own segments. “Ferris Bueller’s Day Off” is more of a Saturday morning show and then [inaudible 00:02:07]. I even call it a show because of how many times I’ve actually watched it. And then “My Cousin Vinny,” I used to work in New York and I’d watch it almost every single day and eat my lunch. It would just play on my laptop over and over.
Dr. Weisz: [00:02:24] Before we hit play, I wanted to know what’s top of mind, what you want to discuss, what you think is most important. You said something really interesting, and you talked about building a legacy, building a brand. Talk about that.
Eddie: [00:02:41] So you and I kind of touched upon that. A lot of what I contribute on Quora is guiding people, especially the newbies in the entrepreneurship world or the e-commerce world, is to build something that helps others. So, just kind of coming out and regurgitating the same things, whether you’re making a product or re-selling something else, coming out and just making the exact same thing for a buck less, you’re not really helping anyone out. You’re not really helping the market out. You’re just trying to kind of steal them.
Dr. Weisz: [00:03:11] Yeah, you use the phrase on your Quora post a bunch of times “race to the bottom,” which I like.
Eddie: [00:03:17] Yes. So, that’s the old AT&T MCI game where you’re gonna just keep cutting down, cutting down, until there’s nothing left. And you see that a lot on Amazon. You see that a lot with people who are competing on building a product where they may have the same type of like, I don’t know, slicer of some sort, and the next guy’s just looking to make it for a dollar less in China. And it doesn’t really help the consumer, but people know how to game the system to get reviews and grow the products up. That’s one thing that I always advocate. Try to make something new, and then when you build your own brand, it’s really easy in e-commerce off the bat to make money. Buy low, sell high. Pretty simple mentality. But what happens after that is more difficult, and if you continuously just do that, let’s say you’ve built your entire business on Amazon, no one really knows who you are. So after 10 years the only thing you can do is shut down. Some people claim that you can sell for a huge multiple, I’ve seen that. I don’t believe in the same. I’ve been in some shoes of the VC guys and it just is not really appealing.
Dr. Weisz: [00:04:29] So, yeah, talk about that for a second. I find this interesting you say that because, so how do you differentiate yourself with car parts?
Eddie: [00:04:38] So, we today, so we have two entities. We have THMotorsports and Autoplicity, which are both ran separately. THMotorsports is now 13 years old, maybe even 14. No, 13, 13 years old. And its basis was social marketing. So everything that you know about social, we were doing way, way back in the day, and it was started in a really simple manner where…
Dr. Weisz: [00:05:04] Why did you start it in the first place?
Eddie: [00:05:07] I love cars. So, I’m a huge automotive aficionado, and I was on forums. That was the first place that I could find information. I wasn’t a mechanic, there wasn’t really many places to go on. But, there was this great group. Specifically I had a 2001 Honda Civic, was car number one for it…
Dr. Weisz: [00:05:28] I had a 2000 Honda Accord. Yeah.
Eddie: [00:05:31] Yeah, like a lot people just had a Honda at some point in there life. And yeah, I just got this knack to do something unique with it. I didn’t want to drive the exact same car that everyone else did, so the only place that I found was the forum. And on the forum it was just alive, people were chatting, going back and forth in parts…
Dr. Weisz: [00:05:49] So you wanted to soup it up?
Eddie: [00:05:51] Absolutely. That was the time where “Fast & Furious” came out too. So this is like hand-in-hand. I’ve loved cars since I was a little kid. But, this is exactly the same time, and the school that I went to, high school wise, we were a really automotive driven school. A lot of kids drag raced, stuff like that…
Dr Weisz: [00:06:07] Really? You used to drag race in high school?
Eddie: [00:06:10] Oh yeah, I can’t legally say that, right?
Dr. Weisz: [00:06:12] I don’t know actually. You plead the fifth on that one. So what’s the fastest you’ve ever driven a car?
Eddie: [00:06:24] Legally on a track, probably about 170, 180 miles an hour. Something of that nature. I’m not really huge on top line speed, more on circular track or something with multiple turns would be the more fun part. But anyways, kind of circling back to where we were, just kind of got this knack to actually modify the car. At the same time, I just started college. I was in the entrepreneurship club. I went to University of Illinois in Chicago. And a very small entrepreneurship club. Within like half a year I became the president of it. Most people just signed up for credits. I actually thought it was an interesting thing to take part of. And there was a, once a year it’s kind of like a seminar. I think it still goes on. If you’re a Chicago native, for whoever is listening, it was at Navy Pier. And the bug bit me. I wanted to do something. And I was already selling books for a few people, I sold a lot of stuff on eBay. That was how I made money on the side. So I thought, okay, why don’t I try this in the car part world? And my first supplier was actually a competitor who I was buying from on the forum. So, that’s THMotorsports. That’s how it differentiates. It still to this day is a really big presence on the social side. And that extends outside of just forums, that could be on Facebook.
[00:07:53] What we do is we try to help people. So, what our big differentiator is from the Amazons of the world, a lot of people could say is, we are gear heads. We employ ASE techs. It’s people who know the nuts and bolts who can help you with a huge $10,000, $20,000 engine build and get you on the track, or they can help you with something simple. Autoplicity is a little bit different of a play. So, Autoplicity’s value at is, you have the largest aggregation of automotive parts. Online, in one spot. So, it is kind of like the Amazon of automotive. It’s a site that works really well, fluid, fast, easy to find stuff. And you can go on and buy a bumper, a distributor, you can get floor mats and if it’s a truck you can get a lynch for it all at the same time. So, that’s kind of our value added to the world when it comes to Autoplicity.
Dr. Weisz: [00:08:47] At what point did you start Autoplicity?
Eddie: [00:08:50] Autoplicity is now four years old. It was kind of the brain child of wanting to expand. So, THMotorsports focuses on sport compact. That’s again back to the “Fast & Furious” old school days. It now does a little bit more than that, but that’s its roots. And I just really wanted to expand. I remember going to the SEMA convention and every year I would kinda hang out with all the sport compact companies in areas. And then I saw that they were just minute in comparison to the rest of the market. Then I started doing research. It was a $300 billion market. I said, “Okay, we need to scale up. Quick.” And that’s where I met Sean.
Dr. Weisz: [00:09:35] So, THMotorsports, what did it look like e-commerce wise 10 years ago? What were some of the things that worked then and then what started to work as the internet grew? Ten years ago is like stone ages of the internet.
Eddie: [00:09:51] Yeah, sometimes I’ll jump on Wayback Time Machine. So THMotorsports originally was called truehonda.com, hence the T and the H. There was a period of time…
Dr. Weisz: [00:10:03] Ah, I was wondering what the TH was for, yeah.
Eddie: [00:10:05] Yeah, there was a time where everyone had a very unique name, and then they use a trademark of some kind of automotive brand. And somewhere around year two of running True Honda, we got the letter from the manufacturer that said you cannot use the name. Because you know, they were kind of new to the internet too, so they let it slide for a little bit. So whatever I did, is you just conjugated the names. You just took whatever you had and added a “Motorsports.” Wouldn’t recommend that to people. Not very SEO friendly. People with blank blank Motorsports.
Dr. Weisz: [00:10:39] Right. So what did it look like? What were you doing to sell then?
Eddie: [00:10:45] That’s a very interesting question, and that’s something that is kind of part of our company credo. You hear a guy that was on my bucket list, Gary Vaynerchuk speak too. He speaks about running it like a 1950’s butcher shop where you know who’s coming through the door. Service, service, service. That’s what we started with. We were on forums or, let me rephrase, when I always say “we” it was just “I” at the time. I was on the forums and a few other people joined on there after. We would just help people out. It was like honest to goodness help. We wanted people to persevere with their cars. I love having anyone take my advice and be able to mod their car, be happy with it, send me a smiley, chat me up. I had a lot of random e-friends that I’ve never spoken to, but I knew everyone really, really well. And throughout the years, we kind of…I was 19 when I started, so I kind of fell into the hole of let me just kind of take a wad of spaghetti and throw it at the wall and see what sticks. So, I said, “Let’s work on SEO.” One year we employed an SEO company and worked on that. Didn’t get very far. Then another year I said, “Okay, we need a race team.” So, in 2010 we had like a full-blown race team. There was a TV series that unfortunately never aired. It had the director from Jersey Shore on it. It was a full production thing. I didn’t know anything about TV. Clearly it didn’t go anywhere. It was piloted once on Speed Channel and then it died.
Dr. Weisz: [00:12:27] It sounds cool though.
Eddie: [00:12:28] It was cool to take part of. It was really expensive and very nerve-racking…
Dr. Weisz: [00:12:34] Expensive and a waste of your time, but it sounds cool.
Eddie: [00:12:35] If anyone listening is into automotive racing and wants to get into it, I think aside from airplane racing and maybe rocket ship racing, that is the most cost intensive sport. It is really easy to lose a couple hundred thousand dollars a year without even flinching about it. If you’re pro, get that checkbook out because it’s all millions. But, anyways, racing aside, we would do some other things like we would work just one year straight on conversion, nothing else. And what I realized is that took our focus away from the core value of the company, which was service. So, we’ve done a full 360 and today we are still very active on social, want to focus even more on helping people out with car parts, with advice on their car. And that becomes now even more prevalent for things like Facebook marketing. Now we’re in this time where people talk about the quality of content. And it’s not just about the length of your content, it’s how good it is and how much you can help. Contributing to Quora is no different than what we were doing when we were contributing to the automotive world. So that’s what still works.
Dr. Weisz: [00:13:47] That’s true, because when I read your posts I’m like, “This guy writes.” You’re writing paragraphs and paragraphs and paragraphs of helping someone that you don’t know.
Eddie: [00:13:56] It’s literally all that we ever did, was we just really wanted to help people out.
Dr. Weisz: [00:14:01] So right now with the THMotorsports, what works is going back to your roots and going on social media and helping people. What is your process for that? Do you go, “Okay, from this time to this time, we’re gonna go on Facebook.” I’m sure you have a process set up that allows you to respond. So, for people that are like, “This seems overwhelming.” There’s a million social media, what do you do to actually hone in on the people who need your help and then actually respond so you’re not spending the whole day, which you could probably spend the whole day responding to people.
Eddie: [00:14:38] Well, I used to, probably about six or seven years ago. We have now three full time staff, bringing in a fourth. And, they spend all day on social media. Whether it be forums or Facebook, but they are social selling as well, and they are taking phone calls. So, if you want to knock that part out, if you knock out the phone call side, your best bet for someone who’s starting out who wants to contribute on social is find something that you’re good at. So that’s the first part. Hands down, make sure that you’re in some way, shape, or form a specialist. If you are great at whittling wood, contribute at whittling wood.
[00:15:24] The best thing to do is actually answer questions for people, rather than just writing up your own blog posts. You see a lot of people today sit and write blog posts, then they have to market them. That’s a really big effort. That’s basically you creating your own online consulting business. If you can answer people’s questions, go on forums. If they’re still around…
Dr. Weisz: [00:15:45] It sounds so simple but it’s so true, yeah.
Eddie: [00:15:48] Go to the section that you’re really good at and just become the authority there. Be the guy that answers everyone’s questions and just continuously do that. You will pick up traction. It is an organic way of succeeding. It is not short, there’s no shortcuts to it. You have to be likable. If you’re in no way, shape, and form kind of like the personality of a people pleaser, you probably won’t like it because you won’t really get that gratitude where someone says, “Thank you.” You probably won’t get thank yous for a long time. But you’ll get followers, if you’re gonna be on something like a Twitter or a Facebook. If you’re on a forum, people will directly respond to you. Forums are no longer as prevalent, they’re more of just knowledge bases. But, that’s a perfect opportunity for the person who’s starting out to be able to actually give that knowledge to the world, and then have it be indexable. Which is really huge, that is your little SEO play. That can come back with that.
Dr. Weisz: [00:16:48] Eddie, when did you first start to get traction? Like you said, you could go years without a thank you. When did you first start getting traction for THMotorsports?
>> E [00:16:57] If you contribute…one of the things that we were doing, we were selling right away as well.
Dr. Weisz: [00:17:03] So what were some of the initial products that you were selling?
Eddie: [00:17:06] Oh, I can remember this very well. The very first product we were ever sold was, I wanted something that was unique that no one could sell, and I wanted to find a pain point in the market. The most popular thing for that car at the time was this turbo kit. It was very expensive. You gotta figure, this was a car hat was brand new $16,000, $17,000 in 2001. So, call it like a $25,000 car of today. That turbo kit which made the car quite more powerful was around $3,500. Call it 4,500 today.
Dr. Weisz: [00:17:40] Like 20% of the cost of the car-ish.
Eddie: [00:17:42] Yeah, exactly. It was sold by two guys. It was called Stafford Fabrications. Two Mikes, Mike and Mike. And I think it was either Mike and Mike, or they were both Stafford brothers. One of the two. But they were horrible about customer service. So, it would take like a year to build one. The production time was awful. So I said, “Okay, what can I do? Where can I be of value at?” I can take this turbo kit and then I can be the service liaison. So, I can keep people updated, I will be the one stop shop. So, if you want to buy it, you buy it through me. And then I’ll keep you updated through the whole process and make sure that you have that warm and fuzzy feeling at the end of the day. And that was the first product that we ever sold. We probably sold about 35 of them or 40 of them in the first year. All payments were taken by check. It was super old school. And it was a lot of years of agonizing updates because I dealt with a very, very bad supplier.
Dr. Weisz: [00:18:49] What was the next major milestone for you? So, that was the first product. What was the next milestone in the business?
Eddie: [00:18:56] So, we were only in Honda, it was truehonda.com. The website was built by a guy at school, at UIC, University of Illinois at Chicago. I followed that traditional make a flyer and staple it all over, all over school. And someone will pick it up, and this guy did. He literally built a platform from scratch.
Dr. Weisz: [00:19:19] Really?
Eddie: [00:19:20] Yeah, I don’t even know what it was coded on. I have no clue to this day. He just kind of built it, set it, and forget it. He actually had an interesting story where he got caught by the FBI. He used the same server that we were on to hack the D.A.R.E. website.
Dr. Weisz: [00:19:34] Are you serious?
Eddie: [00:19:36] Yeah, apparently…
Dr. Weisz: [00:19:36] He was like a major hacker?
Eddie: [00:19:39] Yeah, really strange. But, he hacked, he used that, and then off of that he got arrested. He got kicked out of school and then he got picked up by Apple. So, that’s what I heard. It could all be completely BS.
Dr. Weisz: [00:19:59] So he put this site together and then what happened next?
Eddie: [00:20:04] It had 300 products, it was impossible to manage them. I remember this backend, it was horrific.
Dr. Weisz: [00:20:12] How many suppliers did you have at the time for the 300 products? Oh there was one, the one with the bad customer service?
Eddie: [00:20:18] We had one with the bad customer service, and then for a few of the other parts that we sold, the other 299 of them, I used our competitor. So, he would compete directly against me, actually usually selling at a lower price. He’d sell to me at like 5% below cost. And I was unfortunately that guy in the market who was like the kid in his basement who was making five points, just happy to do it, and buying from his competitor. And the first time the big epiphany came was I figured out what a distributor was, and that was like an official supply chain channel. So when that came on, we grew with our distributor. who we’re still really great partners with today, and they introduced us to new markets. So then True Honda started to become True Nissan and a few others. It didn’t really hold that name. We switched the name to THMotorsports at the time and started breaking in different markets…
Dr. Weisz: [00:21:12] You owned all those sites at one point, like True Honda, True Nissan?
Eddie: [00:21:16] No, it was just…
Dr. Weisz: [00:21:16] Oh, I gotcha, okay.
Eddie: [00:21:18] The rest were all under the THMotorsports brand. But it gave us the ability to be in the social world, other places. So, it taught me that the approach that we had was packageable to different markets in the automotive segment. And that’s how we grew.
Dr. Weisz: [00:21:36] So how did you get traction? Now you have these 300 products on your site. Now how do you get people to buy the products?
Eddie: [00:21:44] It was all off forums. We had…[inaudible 00:21:47]. We ran, when we expanded markets to Nissan, to Subaru, our website still had 300 Honda products. We actually ran two years without having an official website to support those products. Only you’d have the picture on the forum posts, and then people would pay us through PayPal. Google Checkout used to have this cool thing where you could send an invoice and they can pay by credit card, so it was like a virtual shopping cart. And we didn’t really exist…
Dr. Weisz: [00:22:19] Talk about minimum viable product, right? You don’t even need a website.
Eddie: [00:22:24] Yeah, it was an interesting time. That stuff doesn’t fly today…
Dr. Weisz: [00:22:28] It’s very personal though, it’s almost like Craigslist where you’re selling a car and you’re just like, take a couple pictures, except you do it virtually. So when was the next major milestone of the business where you’re like, “Wow, this is a business.” You went from your basement making 5% to the next level. When was that point?
Eddie: [00:22:51] So, once we brought on our distributor, we understood that there was more distribution in line. At that time, we launched a website that had 100,000 products versus just 300. That really changed the game very quickly. That’s when I started to understand you need to build a site properly, what conversion’s about, the world of CRO. A lot of those things to me at the time didn’t have a specific name, just marketing in general. So, that’s when things started to change around.
Dr. Weisz: [00:23:22] Yeah, how do you manage, I mean you said it was hard to manage 300 products. Then how do you manage 100,000 products?
Eddie: [00:23:30] It’s market demand. So, we would still focus, it’s that 80/20 rule, but in this case it was the 90/10 rule. So we would definitely focus more on the products that we would sell, and then we kind of had like this split in two, so from the social side it was very specific, you knew exactly what we were selling. When it came to the website, big driver at the time was Google Shopping, when it was free. And you can pretty much put up everything, so that’s what we did. We just said, “We have a supplier, we have our products, we’re gonna put them up on Google Shopping, there’s our marketing.” Aside with maybe, what else did we do throughout the time? We did some affiliate stuff, we did some other automotive-only CSEs, comparison to shopping engines. And that’s pretty much it. So they kinda ran like side by side. That’s how we gained traction for it.
Dr. Weisz: [00:24:25] So Eddie, what should people know about increasing conversion on their site? What do you do that works?
Eddie: [00:24:34] I am a big believer of trust. So, prove who you are first and foremost.
Dr. Weisz: [00:24:43] Because I was studying your site, and I’m like, obviously this guy’s been doing it for a long time. He knows what he’s doing. So, what things should people have on that page, because I see, if you go to your site the trust is there, right? You have “As Seen On NBC Sports.” Immediately, you know what NBC is. You have “10 Year Anniversary.” Right? So, like those of things are what you’re talking about, or what else?
Eddie: [00:25:06] Yeah, those trust symbols are usually a really great factor to have someone get, again, that warm and fuzzy feeling inside when it comes to actually wanting to buy. Proper reviews off-site, so there’s a myriad of sites that can collect reviews and collect reviews honestly. You really want to do that, whether it be like a ResellerRating or, I think there’s PowerReviews. There’s a whole bunch of them. That’s a big driver for conversion, where I see it from my side. You can go as deep as colors of buttons…
Dr. Weisz: [00:25:42] Yeah, talk about a little bit of…geek out for a second on conversion.
Eddie: [00:25:47] Like minutiae?
Dr. Weisz: [00:25:48] Yeah, whatever you think is important. If you don’t think it’s important, don’t worry about it. But I was having a conversation this morning with a big e-commerce owner and this was the exact conversation. He was like, “I have this product page, I want to optimize it.” And that’s what he’s looking at doing. So what advice would you give him to look at without…obviously you have to look at the individual page, but…
Eddie: [00:26:10] So big winners to me, if you ever look at a site that does this really well, you could look at some of our friends like at americanmuscle.com. Every single page that they have is really rich in content. So, capture the person on the page. Abandonment rate is huge, right? In today’s world, 70% plus, 80%, you’re on mobile it’s even worse.
Dr. Weisz: [00:26:36] Hence rejoin, right?
Eddie: [00:26:40] Yeah, you’re jumping on a page, if you’re coming off of like a CSE, you’re landing directly on the product page already. You have just one chance to tell an entire story and help convert that person, all at the same time.
Dr. Weisz: [00:26:53] In two seconds, right?
Eddie: [00:26:55] Two seconds, before they click back and check another price or something like that. So, in today’s world, I see conversion as engage the customer as much as you can. So start solving pain points for them. Why is a person going on your page? Do they just need a price? Cool. If they’re just looking for a price, display on your pages the prices of some of your other competitors. If you legally can. That way they don’t need to bounce out. There is one thing that you can do.
[00:27:21] If you want to, if you’re having a customer come to your page because they’re interested in the product itself, get a video up there. Show it in full. A huge write up is great but people run out of gusto. They’re not gonna have the time to read 40 paragraphs on exactly what this product does. Give the key points, put on a video. If you have something that is applicable where you have the product in hand, do an opening box video. Show people what it’s like. Hold it, twist it around by the camera. Give people an idea. That will inherently give you authority. If you really want to go a step above and beyond, if you’re reselling someone else’s product, have someone at the manufacturer either film the video if you can do that, or have the manufacturer contribute directly onto the page. Once again, co-branding with more authority.
[00:28:15] Once you do that, and you put it out there that you have this great service level, the person doesn’t really need to leave, and then they’re more price elastic. They’re happy to pay a little bit more with you because they see that you are a specialist. You have all this knowledge in the product. You’ll be able to help them out. And that’s what you can do with one page. That’s my big part of conversion. When you’re going on to the checkout sign, I think on the show you had before, you had Neil Patel on the show. Neil’s company does work for Amazon. I’m pretty sure they’re in the CRO space for Amazon with them. And if you ever want to see what one one of the best checkouts looks like, look at Amazon. Start studying where you can hit the homepage, where the link deactivates, colors, time, size of pictures…
Dr. Weisz: [00:29:14] Right, they’ve done all the testing and spent tons of money doing that.
Eddie: [00:29:18] Yeah, when you get into the really, really, really detailed aspects, that’s where you want to look at the big sites that compete against you, just so that you can take away from them.
Dr. Weisz: [00:29:30] Now, I like how you keep highlighting, Eddie, pain points. From choosing a product to on the page, what is a pain point that you saw, only because you’re in the industry, that you saw that you needed to highlight in a particular page because you knew the customer that maybe most people wouldn’t have thought about? What are some pain points?
Eddie: [00:29:51] So that was the biggest one. This is something that we do on Autoplicity is, we thought, “Okay, why do people go on a CSE?” Comparison Shopping Engine. So, call it Google Shopping. We’ll go back to that. Sorted by price, you’re stuck with a really hard choice, right? Like I’m trying to buy a PlayStation and there’s five places that sell a PlayStation. All 5 of them have over 2,000 reviews. They’re between a four and a five. Where do I choose? Okay, their prices are decently similar. Some of these are gonna have MAP pricing, so it’s all gonna be the same. But, you’re within…let’s say all the pricing is the same, or it’s off by a little bit. How do you differentiate the players?
[00:30:37] So, you click on each site, you have to go through the value adds. If the prices are different, why would you want people to click back and forth through all of them? We got people onto our site, and we show people the top competitors and their pricing. There’s no reason to leave. You can see, if you’re just going on price, here’s the competition, go for it. So that was kind of like a pain point that we took away, that we run with as of today.
[00:31:08] On the THMotorsports side, I’m sure we’ve done things that were in regards to fitment. So, fitment for automotive vehicles is a very important thing. You get things like clutch kits, which have a spline count. And that spline count has to be exact. And there’s a car that’s made in the same year, but halfway through the year they switched it so there’s one spline count, one has another. If you can have that detailed information, you are instantly branded expert…
Dr. Weisz: [00:31:39] Oh, for sure. I don’t even know what a spline count is. I’d be like, “These people know what they’re talking about.” I’m sold just on that word. I don’t even know what that is. Yeah, that’s really interesting. What are some of the big challenges? What were some of the big challenges of THMotorsports?
Eddie: [00:31:56] I could tell you that THMotorsports had a very interesting challenge that it had a bulk of its business in Google Shopping. And, that used to be free. And then in, I think May, April or May of 2012 Google said that, “We’re gonna be charging for the platform.” And that kind of flipped our world upside down. Because it’s not a huge company, it’s as of today $10 million a year e-comm. And having just come in with a big bill from Google every single month that we never had before, that was a huge challenge.
Dr. Weisz: [00:32:33] Eats into your profits, yeah.
Eddie: [00:32:34] Understanding how to raise prices intelligently while not losing the consumers, still having a good amount of CRO onto the site. So we had to just change our focus on what we were doing, rather than just being able to live off of Google Shopping. I can remember, that was a nice time. It was free, it just brought all this business that…
Dr. Weisz: [00:32:56] They sucked you in, then you had to keep using them after…
Eddie: [00:32:59] …sale, we kind of like set back, hung out, things were great. And then we really needed to get serious. And the same thing happened for Autoplicity as well. So, we had a little bit change of what we were doing from our core values as a company. And we changed stuff around and we are where we are today.
Dr. Weisz: [00:33:20] So Eddie, what about when you are dealing with these expensive products, how do you manage the cash flow side of things? Do you have to get outside financing, or is it drop shipped? How does that work?
Eddie: [00:33:33] So we are primarily drop ship. We do use fulfillment centers. We also do hold our own inventory, just something that we’ve built over time that’s been reinvested into the company. For those who are starting out, your AmEx Plum is still a very viable way to start a business. I don’t particularly suggest to go into debt yourself. After doing this for so long, I’m a big proponent of build a proper…
Dr. Weisz: [00:33:59] Did you start it on a credit card? How did you…
Eddie: [00:34:01] Absolutely. Absolutely, not exactly proud of it. If we can go back in time, I would build a plan, raise money…
Dr. Weisz: [00:34:10] You would?
Eddie: [00:34:11] Yeah, your biggest constraint in any business is cash flow and lack of funds. So, I want to be able to raise money and make big plays. You know, when you don’t raise money, most people run an experiment for a month, right? Or you need at least a thousand results. We would do things within a day, an hour, you’d watch and go, “Is it working? Is it not?” You can’t afford to have it go any longer because you lose too much money if the experiment is going haywire.
Dr. Weisz: [00:34:44] What’s an experiment that you were scared to do? That you thought could be a big play?
Eddie: [00:34:50] A million times. A million times we ran pricing algorithms and what would work, what would not, to raise margin. And we would sit there for hours thinking of something up, and then put it in play. And then literally the next morning I would have my partner call me and go, “Okay yeah, this isn’t working.” I would look at it too and go, “Okay, we need something new.” So we would do that for about a month. We came up with at least 30 different approaches within one month time. You test like up to a hundred things, a hundred events at most. Just because you didn’t have the ability to do anything else. So that was a really stressful time. Some crazy things to do. Well from the perspective of marketing, look what I did with THMotorsports. We sunk in a ton of money into racing. It brought no ROI. The show never went live.
Dr. Weisz: [00:35:45] That’s painful.
Eddie: [00:35:46] Oh yeah, we got into magazines. Magazines were pretty much dead. No one looked at them. We had like a six page spread in the coolest magazine for a sport compact. Nothing.
Dr. Weisz: [00:35:56] It’s good for social proof I guess. That’s about it, right?
Eddie: [00:35:59] No, we have a plaque hanging on the wall that we got sent with like pictures…
Dr. Weisz: [00:36:04] It’s an expensive plaque, right?
Eddie: [00:36:07] Yeah, it’s a very expensive plaque.
Dr. Weisz: [00:36:10] What paid advertising works well? What should people try out?
Eddie: [00:36:17] First and foremost, your strongest thing if you’re reselling products, try PLA/Google Shopping. If it’s your own product, CPC. That’s your numero uno. If you want to mimic the same thing, the Amazons of the world, including Amazon and Ebay are gonna be your two strongest, then trailing off to like Rakuten/buy.com…
Dr. Weisz: [00:36:44] You have some opinions on that on Quora. You say you don’t love by that common Rakuten.
Eddie: [00:36:53] I don’t love that you took one of the best names, one of the best URLs that would ever exist, and change it to a name that no one in the U.S. would know.
Dr. Weisz: [00:37:04] What do you mean?
Eddie: [00:37:06] Just kind of a difficult thing where, buy.com, so easy to remember…
Dr. Weisz: [00:37:15] Oh, Rakuten you mean?
Eddie: [00:37:16] Yeah, and then you change it to Rakuten. And I know they did that, they have Japanese ownership, right? That’s the background of it.
Dr. Weisz: [00:37:23] Ah, I see what you mean, yes.
Eddie: [00:37:25] And I get it from an honorary perspective and I’m sure Rakuten makes a lot of sense in Japan, it just doesn’t make any sense in the U.S. versus buy.com. It was just a name type thing.
Dr. Weisz: [00:37:38] I can keep going for three hours, I hear footsteps, so how much time do we have before someone’s not late for work?
Eddie: [00:37:46] I think we have about another 10, 15.
Dr. Weisz: [00:37:50] Okay. You just tell me. So, challenges with Autoplicity, because it seems like on that trajectory I’m thinking what challenges could someone have going from 0 to 50 million…
Eddie: [00:38:05] Data. Data, data, data. And then, managing a supply chain that large. So, Autoplicity has 8 million parts available.
Dr. Weisz: [00:38:16] That’s crazy.
Eddie: [00:38:17] Out of them, about 1.2 or 1.3 million are physically in stock somewhere unique, and then we have a lot of product as well that you can purchase that comes directly as like a build from the manufacturer. Which is a pretty standard thing in this industry. Suppliers will make only 10% of their products readily available. The rest they build on order.
[00:38:43] The big challenge was for us kind of on a two-fold. So, getting the data is really hard. Automotive is a very old guard industry. So, a lot of these manufacturers, they don’t have box sizing, so they haven’t CubiScanned anything ever. They don’t know what fitments they have for their parts. When new stuff comes out they don’t update you. So, for us to build a catalog where the number one most important thing you can have for an automotive site is a vehicle configurator. Someone needs to jump on the site say I have car X Y Z…
Dr. Weisz: [00:39:19] I have the year, I have the make, I have the model…
Eddie: [00:39:22] Exactly. Show me what works with this car. And that’s where you run into a big issue. Just because, a lot of times customers think that it’s our inadequacy that we have bad data or we lead them in the wrong direction, but in reality the manufacturers don’t even know. And the manufacturers a lot of times are just supplying from China, or from somewhere overseas. They’re getting this giant catalog of stuff that has bad fitment on it. So, canning that images’ descriptions, you’re putting together this massive catalog which has been a huge undertaking. It’s a challenge of our company. That’s one of the things that sets us aside from the rest of the competition. You can get into the automotive world but to build the size of a catalog that we have is very hard. We sell to Amazon and Amazon asks us for data, that’s one of the very interesting things that we were talking at the beginning about building your own brand. Companies like Amazon have this beautiful model where they have the marketing power so they tell you, “Hey, give us the data. You’ll be the unique seller for it.” And you are for a little bit of time, until someone else matches up with that ASN or SKU on your side. And that’s it.
Dr. Weisz: [00:40:37] Then you’re competing on price.
Eddie: [00:40:39] Then you’re competing on price, and you [inaudible 00:40:41] the data up that was unique to you that you bought out.
Dr. Weisz: [00:40:46] So does that end up being a good thing?
Eddie: [00:40:48] I think at the end of the day it’s gonna come out one way or the other.
Dr. Weisz: [00:40:52] It’s gonna happen, so you might as well just be the first.
Eddie: [00:40:54] Yeah, hoarding it is not really gonna be the big driver. Just be on the cusp yourself. With 8 million products we have tons of room for improvement. So that was the big challenge when it came to Autoplicity on the data side. And then on the flip side you had management. So coming from THMotorsports we were in four different platforms. Four to five. You know, like, the Subaru WRX, Nissan 350Z, which coupled with an Infiniti G35. Now there’s the 37 and, Nissan 370Z, etc, etc. Hondas, and some Mitsubishis. So we were pretty much specialists. Now you’re throwing at us 8 million parts, and we have to be specialists in everything. So we’re a parts counter.
[00:41:43] With that, just on the side of helping people out, that’s already a difficult aspect. But then you have a lot of different suppliers. And the suppliers are different sizes. So some use a very rudimentary form of order processing. So we’d have to tailor our own custom software to make sure it worked with them. Everyone has a different EDI software passed on those orders, get tracking numbers back, automating.
[00:42:09] Everyone works in a different way, so you’re really managing, it’s kind of like baby sitting a lot of different people and making all of that work. So that was a huge challenge and an undertaking. I suggest for someone who is bootstrapped, raise some cash before you can do something like that because if you don’t have a really talented team on board, which we were very lucky to do so, being bootstrapped, it would have never worked.
Dr. Weisz: [00:42:36] Talk about that for a second, Eddie, the talented team, right? You have a team of people, how many people does it take to manage and run Autoplicity?
Eddie: [00:42:48] Sure, so we are currently in with some contractors in the mid-30s for employee size. We don’t warehouse that much so we only have a couple people there. What you usually see in automotive companies, they have just somewhere around our size of like 80 to 100 employees. Most of that you see is just in the warehouse if they’re building something out there. From the management perspective, I have my fantastic partner. He is our CTO and CEO or CO-CEO all at the same time.
Dr. Weisz: [00:43:21] That’s Sean?
Eddie: [00:43:23] Yep, and then I’m more on the biz dev procurement side so, I’ve loved that side of the business forever. I love dealing with people. And the rest of our team…
Dr. Weisz: [00:43:34] How did you meet Sean?
Eddie: [00:43:36] Ooh, we have a cool story about that. I know we’re running low on time but, when I was running THMotorsports, he actually had an e-comm that was competing against us.
Dr. Weisz: [00:43:44] Ah, and so what happened?
Eddie: [00:43:46] We thought we were really, pretty much kind of…
Dr. Weisz: [00:43;48] So you hated each other, you were enemies.
Eddie: [00:43:50] Well, they were kicking our butts. And it came out of nowhere, and I’m always the first person to partner with my enemy technically, rather than…so, I contacted him and asked him. It was on Facebook back in the day when you can just message anyone you want and it doesn’t go into some filtered inbox. And I just said, “I’m really humbled by what you guys are doing there at your company.” And I found them on like page 17 at Google on some forum. He had his own blog post about going off-roading. And, what was it, a Discovery. Yeah, it was a Land Rover Discovery. And I messaged him and I said, “Hey, do you have any software that maybe you could share with us? We’d love to lease it. You guys are doing great.” And he actually responded to me and said, “You know, I just left this company, and I’m kind of in limbo right now looking what to do.” And I knew it right there, I gotta get this guy. So, I flew him down to Chicago.
Dr. Weisz: [00:44:53] Where is he from?
Eddie: [00:44:55] So he’s an Orange County guy.
Dr. Weisz: [00:44:56] Okay.
Eddie: [00:44:58] So he’s a California side. And flew him down and we had just a ton of fun.
Dr. Weisz: [00:45:04] So tell me about the brainstorms. So you’re brainstorming at this point, right, what you can do together.
Eddie: [00:45:09] Yeah we took the model of what they had, so I saw that he was very heavy on the software side. He comes from a technical background. There’s a site called Rain Depot. They’re pretty much the leader as far as I know in anything that has to do with fish. Aquariums, things of that nature. And he was pretty much their IT director. I don’t remember if he had like a VP or CTO role that was executive level. But their auto parts site was great and it was closing down. It had the ability to span in every single type of market, so we said, “Why don’t we take your knowledge base and start building data. You know where to get data from, and I know suppliers.” So we’ll merge those suppliers. I’m gonna bring, what was it at the time, seven years of buying power with a person and in an entity who was able to build something out all from brand new unique data. And that’s it, we kind of merged the two. We became a powerhouse…
Dr. Weisz: [00:46:13] You took your two top strengths and just combined them.
Eddie: [00:46:17] Yeah, and even still to this day, we still work in that unison. So, anyone again listening, if you find a partner, make sure that partner compliments you. If you both do the same thing, it is not good.
Dr. Weisz: [00:46:28] Yeah, what’s the toughest part about managing and leading staff, now that you have like, in the 30s?
Eddie: [00:46:36] Sure, specifically that, never being acquainted with the prior. I was never groomed as a manager, I never worked anywhere. I literally went from valet parking and selling random stuff. I worked for a couple years as a runner, or a clerk at the New York Mercantile Exchange.
Dr. Weisz: [00:46:58] In New York, yeah.
Eddie: [00:46:59] Yeah, learned a little bit of grit there. Basically learned not to make mistakes. Ever. We can’t make mathematical mistakes. And then afterwards just running my business. So I’ve never had the ability to manage a staff. It’s difficult and…
Dr. Weisz: [00:47:19] What works for you? What’s your style?
Eddie: [00:47:23] Lead by example. So, to me that’s the easiest one. It’s the one that I know the most. I’m in the midst of actually trying to read up a little bit more on becoming either a better project manager or just a better leader overall.
Dr. Weisz: [00:47:37] Your skill set has to change when your company goes…
Eddie: [00:47:40] It has to change really quickly. Again, that’s why I like raising capital, because if you do that, you can hire people who are more talented than you in specific areas right away. If you need to be the brainchild, be the brainchild. You know, it’s very hard to find a lot of Zuckerbergs in the world who can do from zero to multi-billions. And, that is the same with us. At some point you’re gonna want to hire a weathered CEO, some ex-Mckenzie [inaudible 00:48:12] who has ran a big company or something of that nature.
Dr. Weisz: [00:48:16] Now I know we’re at some point gonna run out of time so there’re two things I want to talk about. One is the obvious question, what are some of those key things you did to get from 0 to 50 million in 4 years? And two, the software that you use. There’s no way without software you can manage 8 million different parts in different ways. So, what are some of the key steps or milestones that you saw with the 0 to 50 million, which is a huge trajectory in just 4 years?
Eddie: [00:48:48] So, since we are pretty close on time, I’ll kind of wrap that and package it up. The biggest milestones is data. So, when we were talking originally about content, content, fitment, and data in our world is the most important. So, when we get really good data for a brand that we sell, and then we can give specific descriptions, when the customer goes on the site, and if they have a video on our site, or they have a really good description, all the different details of what they need, that’s when your convergence starts to go up.
[00:49:25] So, as we keep improving data and keep sourcing it from different suppliers, in that factor we kept on growing. And I could talk about site speed for conversion. We’ve revamped the look of it multiple times. We’re really strong from an algorithmic perspective on a pricing model of what we do internally, how we go to market when we bid for Google Shopping or PLA, CPC.
[00:49:57] There’s just this whole myriad of things. We would need another, like hours. Hours and hours to discuss of how you kind of wrap that up. In regards to some of the software that we use, this is where I want to kind of inject and plug in software like Rejoiner. I love that software. I came on board as a late co-founder to that company, specifically because I liked it. It was like the Hair Club for men. If anyone remembers the Hair Club for men commercials, where the guy at the end goes, “I’m not only the President, I’m also a client.” That was exactly it. I was the client of the company, it was tiny when we started. It was all self-serve, and I loved the team. And the team was just the co-founder at the time. There were a few others that are no longer there, but that was the person who I interacted with. He was such a great guy, and I loved the person and the product. The product was easy to install. I think we got up and running in like 10 minutes. It was literally just Java.
Dr. Weisz: [00:50:58] That helps capture abandonment.
Eddie: [00:51:00] Originally yeah. Originally the business was based on just abandonment side. So we went, capture at the cart level, and then do a drip campaign and re-market to the customer via email. Now we’ve transformed the company completely, we do pre and post purchase marketing. We are bringing on just like full blown lists if you want to do it with us, and we’re full service. So, we take all the CRO knowledge and put it together between all of us, a bigger team originally than when we started. And what I love doing with using the Rejoiner software on our site is that we can always trigger based appeal to our clients and send them that specific email that they need. Rather than doing just a giant blast that’s pretty traditional in today’s day and world, and works pretty well. But, if you have a high volume, and with so many different products, you need to hire just hundreds of people in every segment to write content. This way we’re able to systematically approach people and get them to shop with us, and have that good feeling. Whether it be before the purchase, or afterwards.
Dr. Weisz: [00:52:14] Yeah, well you guys will have to chat with Skubana at some point because I think you have similar customers, because they do more the automation in between managements, sku profitability, that kind of thing. What other software do you use that you like for the business?
Eddie: [00:52:27] So to be honest with you we’re, I think it’s maybe because we’re Midwest boys, we’re very not just frugal when it comes to software third-party Sass, but being in the industry itself, I know there’s a lot of fluff, so we actually build a lot of it ourselves.
Dr. Weisz: [00:52:44] Internally?
Eddie: [00:52:46] Yeah, our OFS is built…
Dr. Weisz: [00:52:49] Well, because you have a good CTO, right?
Eddie: [00:52:52] Yes, we do, we have a fantastic CTO. So that’s why we’re able to build a lot of things in-house. And I don’t always recommend it to everyone.
Dr. Weisz: [00:52:59] Well what’s a key thing, the type of thing that you’ve built in house? That you’re like, “We need this.” Because that’s a lot of time and resources for an important person in your company.
Eddie: [00:53:13] Our OMS is probably one of the most important things we’ve ever built. For order management, you can’t get anymore detailed than that. We needed it to be customizable as I was saying. We have so many different…
Dr. Weisz: [00:53:25] You built that from scratch?
Eddie: [00:53:26] Yeah, we have a lot of vendors who request a lot of different types of data, a lot of different types of communication, and we have different service levels that work with each one of them. So we have to have something that’s custom tailored to us. Having that in as powerful of a state that it is, I’m not gonna get into the details of it, it really just makes our lives amazing when it comes to day to day process. That’s about it, if you want to [inaudible 00:53:56] something up, because I do have to go.
Dr. Weisz: [00:53:56] Yeah, hey do your thing. Where can we point people to, where should they check you out online?
Eddie: [00:54:02] Go on Quora. I’m always, yeah, you’re welcome to visit our sites, but check out, I’m sure a lot of people on this blog…
Dr. Weisz: [00:54:08] We have rejoiner.com, autoplicity.com, thmotorsports.com, but you have some really rich, content rich posts that you’ve answered on Quora.
Eddie: [00:54:20] Take a look at that, if you want to see my point of view, I’m a big proponent of Rejoiner. It’s really cool.
Dr. Weisz: [00:54:31] Eddie, absolute pleasure, thanks so much.
Eddie: [00:54:32] Jeremy, thanks a lot man. You enjoy your time.