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EXIT Podcast Episode 08: Etsy/Shopify Business
350 Plays3 years ago
Kevin Owens is the owner of gmdice.com, a tabletop gaming website that he bought for $12,500, which now brings in $10-20K a month in revenue. We discuss:
- why buying can be better than starting a business
- how to differentiate in a crowded industry
- loving your product & knowing your customer
- easy products to import & ship
- starting a good idea at the smallest possible scale
Recommended
Transcript
Introducing Kevin Owens and gmdice.com
00:00:17
Speaker
Hey everybody, welcome to the Exit Podcast.
00:00:19
Speaker
This is Dr. Bennett.
00:00:20
Speaker
I'm joined here by Kevin Owens.
00:00:22
Speaker
Kevin Owens is an Exit member.
00:00:24
Speaker
He's a software engineer by day.
00:00:25
Speaker
By night, he is the owner of gmdice.com, where he sells tabletop gaming supplies, dice, figurines, and scented candles, actually.
00:00:34
Speaker
More on that in a minute.
00:00:36
Speaker
He's been extremely successful on Etsy and Shopify, and I wanted to bring him in to talk about how he made all that happen.
00:00:41
Speaker
So welcome to the show, Kevin Owens.
00:00:43
Speaker
Thank you, Dr. Bennett.
00:00:44
Speaker
It's good to be here.
00:00:47
Speaker
So you actually bought this business domain at all.
00:00:51
Speaker
You didn't start from the ground floor and how much did you pay for it?
00:00:55
Speaker
It cost me $12,500.
00:00:55
Speaker
Okay.
00:00:56
Speaker
And then what kind of revenue are you bringing in now on a monthly basis?
00:01:01
Speaker
On a monthly basis, I'd say it's at least, at least $10,000 a month.
00:01:07
Speaker
Sometimes closer to 20, it depends on the month.
00:01:10
Speaker
It tends to be seasonal.
00:01:11
Speaker
So I get more around the Christmas time when people are buying gifts for their friends.
00:01:16
Speaker
Okay.
00:01:17
Speaker
And so like, obviously you're running this business way more effectively than it was being run before, but it sounds like even at the time with the way that it was being run, it was maybe undervalued.
00:01:29
Speaker
So how did you go about looking for a business to start and how did you find this sort of gem?
00:01:36
Speaker
Sure.
The Journey to Acquiring GM Dice
00:01:37
Speaker
Well, it started when I had been doing some website programming jobs on the side just for some extra money.
00:01:42
Speaker
And I
00:01:43
Speaker
finished a job and had some money, I wanted to invest in something that made money on the internet.
00:01:48
Speaker
I already had one website, which I actually made as an English project in school.
00:01:52
Speaker
It was a website about dragons, where I was making money from ad revenue.
00:01:55
Speaker
And so I was looking for something like that.
00:01:58
Speaker
I didn't think I wanted e-commerce at first.
00:02:00
Speaker
I was just trying to get something.
00:02:02
Speaker
And so I was looking at a website brokerage website.
00:02:05
Speaker
This one happened to be flippa.com, which is an Australian run marketplace.
00:02:10
Speaker
And I was just looking for any kind of website that would fit into what I was already doing.
00:02:16
Speaker
And I noticed while I was there, there were a lot of ones that were doing e-commerce.
00:02:19
Speaker
And I thought that'd be kind of fun to get into since I have some experience with e-commerce from my day job and my career there.
00:02:26
Speaker
So I actually was just looking at anything and I wasn't being very picky.
00:02:30
Speaker
And so I was bidding on things like a hammock site that sells hammocks or one that sold beer pong tables.
00:02:37
Speaker
And I don't even drink beer, but I was just trying to get into something.
00:02:42
Speaker
And I saw this listing for GM Dice.
00:02:45
Speaker
It was just two years old.
00:02:46
Speaker
It was started by a guy in Arizona.
00:02:49
Speaker
And since I have enjoyed playing Dungeons and Dragons over the years when I was a teenager or even a young adult, this was right up my alley.
00:02:57
Speaker
And so I made sure I bid everything I could to get it.
00:03:01
Speaker
And I was able to, it was, as I said, $12,500.
00:03:04
Speaker
And that same year, I was able to make all that money back and more.
00:03:09
Speaker
It sounds like they just kind of didn't know what they had or I mean, were they were they already making that kind of revenue or were you just so let me ask you this.
00:03:17
Speaker
Were you actually buying like the business per se or were you just buying sort of their domain and their website.
00:03:27
Speaker
I was buying the whole business.
00:03:28
Speaker
And at that time, the other kind of websites I was looking at that were in the e-commerce space were also being sold for about the same multiple, which was about one year of revenue.
00:03:37
Speaker
And so this was pretty typical.
00:03:39
Speaker
This one seemed like a real gem to me since it was a niche I was passionate about, but the numbers were similar for other businesses as well.
Transition and Initial Operations
00:03:48
Speaker
So when I bought this from the guy, he actually called me a couple of times.
00:03:53
Speaker
We had a few hours of conversation over the phone where he coached me on how to order from the suppliers, how to run the business, how to ship things.
00:04:01
Speaker
And he actually mailed me his existing inventory just through the mail.
00:04:05
Speaker
And so I got like 20 or 30 boxes of the dice that he had.
00:04:10
Speaker
which hadn't got lost in the mail.
00:04:12
Speaker
And for the first few weeks, I was just running the business out of those boxes where someone would place an order and I'd have to go dig through those priority mailboxes to try to find the inventory to sell.
00:04:22
Speaker
Wow.
00:04:23
Speaker
So the whole business came with... So when you were doing the coaching, how did you know what questions to ask?
00:04:32
Speaker
Or do you feel like you missed anything big that sort of bit you afterwards?
00:04:37
Speaker
Well, the main thing I wanted to know was
00:04:40
Speaker
how do you buy this stuff wholesale?
00:04:41
Speaker
Cause I had never bought anything wholesale before.
00:04:44
Speaker
And he was able to give me that information.
00:04:46
Speaker
And for the other things I didn't know, he was able to fill me in because he knew how to run it.
00:04:50
Speaker
And so he knew exactly what I needed to know.
00:04:54
Speaker
So would you recommend buying into a business like this with a good domain with sort of an existing book of customers, or do you think you could have done this kind of on your own, knowing what you know now?
00:05:06
Speaker
It depends on how much capital you have.
00:05:07
Speaker
Obviously, it's cheaper to start it yourself.
00:05:09
Speaker
But when you're buying something that's existing, then you know it has a proven track record.
00:05:14
Speaker
It's already going.
00:05:16
Speaker
For me, I've tried to do some other startups on my own, which I've made some sales, but not as successful as this one.
00:05:22
Speaker
I think mostly because I've been putting so much of my heart into this business and the other ones not as much.
00:05:27
Speaker
But
00:05:28
Speaker
if I were to start over again, I could do it again from scratch.
00:05:31
Speaker
And I probably would just because I, I have so much experience in it now, but I think it was a very good experience for a first time business owner to buy an existing one.
00:05:41
Speaker
Yeah.
00:05:41
Speaker
And you, you clearly identified this underserved market.
00:05:47
Speaker
Cause you know, there's, there's, there's a million dice sellers on eBay, Etsy.
00:05:54
Speaker
Tell us a little bit about your business specifically and sort of what sets it apart.
Innovations and Unique Selling Propositions
00:05:59
Speaker
Sure.
00:06:00
Speaker
It is very competitive.
00:06:01
Speaker
There are lots of people doing the same thing and dice are great because they're cheap and they're lightweight, so it doesn't cost a lot to ship them.
00:06:09
Speaker
But the problem is that since it's such a good product, so many people are doing it.
00:06:13
Speaker
It's hard to make money because Amazon's competing against you.
00:06:16
Speaker
You can buy polyhedral dice in Walmart.
00:06:18
Speaker
and all these other little startups doing it.
00:06:20
Speaker
So for a long time, I wasn't really that special.
00:06:24
Speaker
I was just a me too kind of business where I was doing the same as other people.
00:06:29
Speaker
And I wasn't being that successful, right?
00:06:31
Speaker
I made what for several years, I was making, you know, less than $20,000 a year in profit from it.
00:06:40
Speaker
But a couple of years ago, I decided to get a lot more serious about it.
00:06:46
Speaker
And so I was trying to think of anything I could do to differentiate myself and create something that you couldn't get from these other companies because they all have advantages I don't.
00:06:56
Speaker
And what could I do that would play to my strength that would be unique?
00:06:59
Speaker
And I had this idea of selling D&D themed scented candles because I love the idea of having an immersive experience where you're in a forest and so you can light a candle that smells like a forest or you're in a dungeon or you're visiting this monastery or things like that.
00:07:17
Speaker
I knew nothing about candle making, but I watched some YouTube videos.
00:07:20
Speaker
I spent like $200 on the beginning supplies and I just started making them and immediately they became very popular and the business really blossomed after that.
00:07:32
Speaker
Yeah.
00:07:32
Speaker
I mean, it's interesting because like there are a million dice sellers.
00:07:36
Speaker
There's also a million scented candle makers.
00:07:39
Speaker
but you found this really interesting nexus of like, it's, it's for a purpose.
00:07:43
Speaker
It's not just like a smell good candle.
00:07:45
Speaker
It's like, it's part of this experience that you're selling, um, which is so cool.
00:07:51
Speaker
And, and like, do you feel like that was just sort of a bolt from the blue serendipity that you found that idea?
00:07:57
Speaker
Or did you have like a process where you sort of tried to brainstorm?
00:08:01
Speaker
Um,
00:08:03
Speaker
Well, I gave it a lot of thought and I had lots of different ideas of what I could do.
00:08:08
Speaker
There's another company in Arizona that makes crystal shaped dice.
00:08:10
Speaker
I was thinking of doing something like that.
00:08:12
Speaker
I really wanted to do thermochromic dice that change colors in your hand.
00:08:18
Speaker
I actually
00:08:19
Speaker
applied for a patent for that, which they said was unpatentable.
00:08:21
Speaker
So I guess anyone can do it now.
00:08:23
Speaker
But I really like the idea of manufacturing something that's unique that nobody else has.
00:08:28
Speaker
And I was trying to think of all these things, but when you're getting into plastics manufacturing, the startup costs are very steep because you have to pay for the design and construction of these plastic injection molds.
00:08:41
Speaker
which are very expensive so i was trying to think of something i could make that would have lower startup cost and the candles came to me because it's something i had done before you know i just go to walmart and get when i used to play um more i would go to walmart and just buy candles that were there and um they served the purpose for creating more immersion in the game but um
00:09:03
Speaker
making my own and I was able to really brand them and play to some of my strengths, which among other things are graphic design.
00:09:10
Speaker
I was able to design candles that I think are really nice looking.
00:09:13
Speaker
And I think my customers agree.
00:09:16
Speaker
Tell me a little bit more about that branding element of it, because in conversations you and I have had previously, you mentioned that one of the reasons why you've avoided certain markets is
00:09:29
Speaker
is because you're concerned about copycatting and Amazon Basics type of stealing your thunder.
00:09:37
Speaker
Can you tell me a little bit about how you are working to obviate that problem now or what it would take as far as your branding to be strong enough that you'd be comfortable selling this on Amazon instead of just Etsy and Shopify?
00:09:54
Speaker
Well, branding is a lot of things.
00:09:57
Speaker
One thing is reputation.
00:09:58
Speaker
And so I've been able to develop a reputation over a long period of time.
00:10:01
Speaker
And so people sometimes are familiar with GM dice that they've seen elsewhere, they've seen ads for it.
00:10:05
Speaker
And so they're familiar with the brand.
00:10:08
Speaker
A lot of it also is design, right?
00:10:10
Speaker
Creating beautiful products that create an experience for people when they buy it, and when they receive it as a gift, when they use it, they look at it and it makes them feel good inside.
00:10:19
Speaker
And that's not something you're going to get from just a
00:10:24
Speaker
generic um what's the word commodity from some kind of something that's been commodified right you need to make it so that it's special and a lot of that just comes down to the product design and how you present it uh how you run your social media campaigns that sort of thing yeah i wanted to talk to you about that as well the the uh the marketing aspect of it you clearly have identified like an underserved market here and i think
00:10:50
Speaker
D&D like ambiance products are only going to get more popular as tabletop grows in popularity, specifically among women, because they have a very different sort of aesthetic approach to how they like to play.
00:11:03
Speaker
Do you track demographic data?
00:11:06
Speaker
Who are your customers and how do you target them?
Understanding Customer Dynamics
00:11:12
Speaker
Yeah, some of the advertising platforms, Facebook is one of the best at this, will give you demographic data like that.
00:11:17
Speaker
I was really surprised at how many of my customers are female when I started getting a lot more of these orders in, on Etsy in particular, because I had assumed that most of my customers would be people like me.
00:11:29
Speaker
But there's actually quite a diverse group of people who buy from me and you can get that data.
00:11:34
Speaker
I think running a business like this, it's very important to understand who your customer is and to look at your analytics, see where people are coming from, what they do when they're on your site, what kind of products they're interested in.
00:11:47
Speaker
And actually, one of the best ways to do that is talking to your customers, either in person or through email or messaging, but just to get to know them and what they want from you.
00:11:59
Speaker
Yeah.
00:12:00
Speaker
How have you, how have you facilitated those conversations?
00:12:03
Speaker
Do you, do you ever like talk one on one with your customers?
00:12:08
Speaker
Mostly when they have problems or they want a special request, I get to talk to them.
00:12:13
Speaker
Then I have actually had people contact me sometimes saying, Hey, I, I wonder, I'm looking for some dice that are like this.
00:12:22
Speaker
Do you have those or can you make them?
00:12:23
Speaker
People would say the same thing.
00:12:24
Speaker
I'm looking for a candle that smells like, like this thing or that thing.
00:12:27
Speaker
And so
00:12:28
Speaker
Sometimes they'll come to me and tell me what they want, which is great.
00:12:32
Speaker
Most customers are not that forthright.
00:12:34
Speaker
And so you just kind of have to guess.
00:12:36
Speaker
You create some things and then see how they respond to them.
00:12:40
Speaker
Yeah.
00:12:41
Speaker
So one of those like feedback is a gift type things.
00:12:44
Speaker
Have you in response to that kind of feedback or in response to what you've seen in terms of traffic, are there big changes you've made in your offering that have benefited your sales?
00:12:58
Speaker
I wouldn't say there's been a whole lot that's revolutionary that way.
00:13:01
Speaker
Mostly it's just kind of incremental.
00:13:04
Speaker
Over time, you have to manage your catalog.
00:13:06
Speaker
And so I'll get rid of products that aren't performing well.
00:13:08
Speaker
I will update them if I think they have some potential.
00:13:11
Speaker
And I'll create new ones that I think would sell.
00:13:13
Speaker
What you think is going to work isn't always what works, right?
00:13:16
Speaker
I've had some products I thought would be a great idea that people just didn't care about and other ones that I didn't care that much about, but people were excited about.
00:13:24
Speaker
And so- Can you give me an example?
00:13:27
Speaker
Yeah, for example, I sell a lot of regular polyhedral dyes, right?
00:13:31
Speaker
And they come in all kinds of colors and stuff.
00:13:33
Speaker
And I think some of them are cool, but I have some that I have created a brand for.
00:13:38
Speaker
I created a name and I thought these are really going to
00:13:41
Speaker
take off.
00:13:41
Speaker
People are going to love these and then they get no love at all.
00:13:44
Speaker
I have one of my star products right now is a polyhedral die set called Fairwild Honey, which is I put in a little amber jar and I put a yellow label on it.
00:13:54
Speaker
So it looks kind of like if you were buying honey at the farmer's market or something.
00:13:57
Speaker
And this has become a very, very popular product for me.
00:14:01
Speaker
And I thought it would be good, but I had no idea that it would be such a hit.
00:14:04
Speaker
Yeah, I did notice that.
00:14:06
Speaker
That was one of the first that caught my eye when I was looking at the website.
00:14:09
Speaker
And that sort of, you know, so much of the experience of tabletop gaming is getting into a different world that is maybe more earthy.
00:14:19
Speaker
Well, I mean, there's a reason that it's all sort of medieval themed, or a lot of it is medieval themed.
00:14:23
Speaker
I know there's other settings you can play in.
00:14:25
Speaker
But like,
00:14:26
Speaker
there's a huge segment of that, that fandom or that market that is, that craves that aesthetic.
00:14:33
Speaker
And so if like every little piece of your product conveys that aesthetic, it's, I can see why that's a hit is, is bottom line.
00:14:43
Speaker
That's, but that's genius.
00:14:45
Speaker
Just sort of a little honey jar.
00:14:47
Speaker
Very, very cool.
00:14:48
Speaker
So as far as you know, that's, that's the branding side, as far as the marketing side,
00:14:54
Speaker
How do you target particular, like what do you do with the demographic data as you've learned kind of who you're selling to?
00:15:00
Speaker
What do you do with that information?
00:15:03
Speaker
Well, I don't really do much of anything with it.
00:15:05
Speaker
Unfortunately, I'm not very good at advertising.
00:15:07
Speaker
I've made it this far by doing some Google AdWord campaigns and then the Etsy ads where basically you just say, I want to advertise this listing and then the computer does it automatically.
00:15:19
Speaker
And this is a weird.
00:15:20
Speaker
You're just blasting, basically.
00:15:21
Speaker
Yeah, yeah.
00:15:22
Speaker
And I know there are some businesses that are much better at this and they're very successful.
00:15:27
Speaker
A lot of companies, when they first start out, they immediately start being really successful because they're spending $60,000 a month on Facebook ads that are targeted, right?
00:15:35
Speaker
And I've done just a very little bit of this kind of targeted advertisements where in Facebook, for instance, you can go in and say, I want to show this advertisement to people who like, okay, I have an example of I had a Kickstarter where I did these polyhedral music dice where instead of numbers, they had musical symbols like notes or rests or things like that.
00:15:56
Speaker
And so I targeted people who liked Dungeons and Dragons and who liked music.
00:16:02
Speaker
And so it's much more effective and it's more efficient and you get a better return on investment usually from just a general blast advertisement campaign.
00:16:11
Speaker
Have you noticed a difference?
00:16:13
Speaker
I got to think there's a difference between sort of like you've got your individual demographics that are attracted to your brand in particular, but there's also different demographics that use
00:16:23
Speaker
Etsy versus Shopify versus that are on Facebook.
00:16:27
Speaker
Have you noticed that you get like different traffic, different clientele from the various places that you market it?
00:16:34
Speaker
I have, and I also, I have a different catalog for each platform.
00:16:37
Speaker
So my main website is in Shopify.
00:16:39
Speaker
And so I just sell all kinds of different things, right?
00:16:42
Speaker
Individual dice, weird dice.
00:16:44
Speaker
And I don't sell much of that on Etsy.
00:16:46
Speaker
Etsy is just for like the original kind of crafted stuff that I branded myself or that I make with my own hands.
00:16:52
Speaker
And so I definitely get a different kind of customer who are coming to just the handmade stuff compared to people who are into other stuff, right?
00:16:59
Speaker
Like I have school teachers who will come and they want
00:17:03
Speaker
you know, some of the math operator dice or things like that, which I don't sell elsewhere.
00:17:07
Speaker
So yeah, you definitely do different, you get a different demographic based on the catalog and how you advertise and the platform you're on.
00:17:14
Speaker
So if somebody's interested in getting into a Shopify or an Etsy business, and they're maybe not sure what their sort of passion is yet, how would you recommend them explore the space?
Exploring Business Opportunities and Challenges
00:17:28
Speaker
Well, there are a few ways to do it.
00:17:30
Speaker
Some people are really into a hobby already.
00:17:32
Speaker
Maybe they really like rock climbing.
00:17:34
Speaker
And so they think, well, maybe there's some kind of rock climbing accessory I could sell or whatever.
00:17:39
Speaker
Most people I talk to, when I give them advice about this, they don't really know what they want to sell.
00:17:44
Speaker
And so what I recommend anyone do is go browse through these brokerage websites, flippa.com or Shopify exchange or something like that, and just see what kind of websites people are already running that are successful.
00:17:57
Speaker
And you can get great ideas from that, just not only for what kind of niche of product you might sell, but also these listings tend to have a description about the website.
00:18:06
Speaker
They talk about how long they've been running it.
00:18:08
Speaker
They have numbers about how much revenue they're making, how much they're spending on advertising, how to run the business, how many hours it takes and things like that.
00:18:14
Speaker
And so you can get a very good idea just from browsing these listings.
00:18:17
Speaker
And maybe you want to buy one if you have the capital, or maybe you could just use it as ideas for what you want to create yourself.
00:18:24
Speaker
What was the learning curve like getting set up on Alibaba and finding suppliers?
00:18:28
Speaker
Was that sort of handed to you by the previous owner of the business?
00:18:33
Speaker
No, and I did some Alibaba later on.
00:18:36
Speaker
At the beginning, they were just, it was actually a lot harder to get into back then because there wasn't something like Alibaba, right?
00:18:42
Speaker
There were a few different manufacturers in the world that made polyhedral dyes and you had to order from them.
00:18:47
Speaker
These days, there are lots of different factories in Asia that you can order from directly.
00:18:52
Speaker
And so it's gotten a lot easier
00:18:53
Speaker
and therefore a lot more competitive.
00:18:56
Speaker
But Alibaba is pretty easy to use.
00:18:57
Speaker
You just go there and you search for what you want.
00:18:59
Speaker
And it's hard to mess up.
00:19:03
Speaker
It's easy to succeed at.
00:19:05
Speaker
One thing that I was not prepared for was how difficult importing certain things are.
00:19:14
Speaker
For instance, I bought a large tumbler so I could make some dice, so I could polish the plastic dice that I want to manufacture.
00:19:21
Speaker
And so I bought this industrial-sized tumbler for $10,000 or something from China.
00:19:28
Speaker
And I had a very difficult time getting them to put the right kind of
00:19:34
Speaker
power supply in it so that I could use it on an American electric grid.
00:19:39
Speaker
And then after that, I had to pay all of these different, I call them bribes, to different agencies to get it along here.
00:19:45
Speaker
I had to pay tariffs.
00:19:45
Speaker
I had to pay the port to accept it.
00:19:49
Speaker
I had to pay the port to release it.
00:19:50
Speaker
It was just significantly more difficult than clicking buy now on Amazon.
00:19:57
Speaker
But if you're not buying something that's big like that, if you're just buying like a lot of 100 or 200 ceramic pots or something, it's actually really easy.
00:20:09
Speaker
And I wonder if that's protectionism.
00:20:10
Speaker
I wonder if the Chinese are sort of like, no, don't buy machinery.
00:20:16
Speaker
Just buy end products from us.
00:20:19
Speaker
Well, it's not the Chinese government that's putting that protection.
00:20:22
Speaker
It's the American government.
00:20:23
Speaker
Really?
00:20:24
Speaker
Yeah.
00:20:25
Speaker
Well, yeah, I mean, the tariffs that are put on China are tariffs.
00:20:28
Speaker
They're not Chinese.
00:20:30
Speaker
They would love to sell us everything they can.
00:20:31
Speaker
Now, that's interesting.
00:20:35
Speaker
Is there one Chinese company that supplies all the dice and you're sort of at their mercy, or are there lots of options?
00:20:40
Speaker
There are several, and they all will say that they're direct from the factory, but they're not, right?
00:20:47
Speaker
You can tell that it's like
00:20:49
Speaker
maybe three factories or something that are selling to all of these wholesalers who then sell to the public.
00:20:54
Speaker
So, but they'll tell you that they have a factory and unless you actually go over there and visit, you won't know better.
00:21:01
Speaker
But I get spam emails all the time, all the time from new companies who are like, buy from me, I'll give you the factory direct price.
00:21:08
Speaker
You know, so many of those, I can't keep track of them all.
00:21:11
Speaker
I can't respond to them all.
00:21:12
Speaker
There's just so many of them making products and wanting to sell them to the American or European market.
00:21:19
Speaker
And why don't they sell direct to customer here in the US?
00:21:24
Speaker
Do you know?
00:21:26
Speaker
Well, they're doing more of that now.
00:21:27
Speaker
I think it's just a kind of lag, right?
00:21:30
Speaker
We in America tend to be very good at the consumer branding side of business.
00:21:35
Speaker
And China is better at a lot of the manufacturing and they're getting better, right?
00:21:39
Speaker
I'm seeing some of these companies that are trying to sell wholesale to me also having their own Shopify website where they are selling direct to people.
00:21:46
Speaker
And they're doing that more and more.
00:21:47
Speaker
So yeah.
00:21:48
Speaker
I think that if you're not making something yourself and you're just trying to resell something that was made in a factory in Asia, it's going to get harder to stay competitive because you're competing against the factories themselves more.
00:21:59
Speaker
Yeah.
00:21:59
Speaker
I mean, you know, maybe you've got better sort of English translation skills, but if it's a big enough factory, they're going to find somebody who can do that little piece for them.
00:22:10
Speaker
Yeah, that makes sense.
00:22:11
Speaker
So if there's lots of different suppliers, I would imagine the costs are pretty stable.
00:22:17
Speaker
Have they fluctuated a lot since you started?
00:22:20
Speaker
Yeah, they used to be a lot more expensive.
00:22:22
Speaker
With more competition, they've got cheaper.
00:22:25
Speaker
Chessex, for instance, they sell most of their Chessex dice are made in Germany.
00:22:30
Speaker
And for years, they've sold them for about $10 a set.
00:22:34
Speaker
And so they wholesale for maybe half of that, right?
00:22:36
Speaker
$5 a set.
00:22:39
Speaker
And there are some of these Chinese companies now selling them wholesale for 60
Product Strategy and Market Demand
00:22:43
Speaker
cents a set.
00:22:43
Speaker
It's gotten a lot cheaper.
00:22:45
Speaker
Wow.
00:22:46
Speaker
So then has your sort of asking price had to go down with that?
00:22:51
Speaker
Or is the customer sort of willing to let you have that added margin?
00:22:55
Speaker
Well, a funny thing is I have on some of my products in my catalog, I've lowered the price and people don't buy those ones.
00:23:02
Speaker
They buy the expensive ones.
00:23:04
Speaker
Some of my best selling products are sets of dice that are cut out of gemstones that are made out.
00:23:10
Speaker
You know, they cost, I sell them for $60 or even $90.
00:23:13
Speaker
Those ones sell better than the ones I'm selling for $5.
00:23:17
Speaker
And I think it's because if you wanted to buy the really cheap ones, you'd go on Amazon and you can buy, you know, you can buy a whole lot of them there.
00:23:24
Speaker
But what people are coming to me for is what they can't get on Amazon, the special stuff.
00:23:28
Speaker
Yeah.
00:23:28
Speaker
So you're, you're sort of a luxury, a luxury provider.
00:23:32
Speaker
Exactly.
00:23:33
Speaker
And I think that that's a lot easier to run a business that way because you have, you know, if you're good at creating high quality products and offering excellent service, it's way less work to sell a product to 10 people than to try to sell a product to a hundred people.
00:23:48
Speaker
Sure.
00:23:48
Speaker
So it's a good niche to be in.
00:23:50
Speaker
Sure.
00:23:51
Speaker
So you've got the wholesale cost that you're, that you're, you're buying it from overseas, which everyone's kind of subject to those.
00:23:57
Speaker
You've got
00:23:59
Speaker
some shipping costs, I imagine.
00:24:01
Speaker
What other big costs sort of drive your sort of profit calculus?
00:24:06
Speaker
Sure.
00:24:07
Speaker
The business itself has a very low carrying cost.
00:24:09
Speaker
You can run a website for $20 a month or even for free if you did it on a platform like Etsy.
00:24:16
Speaker
And you can run it from your home.
00:24:18
Speaker
So you don't have to pay like all of these, you know, I have to make my nut of getting a thousand or $2,000 a month before I can start making profit.
00:24:26
Speaker
Your carrying costs are very low, but you have marginal costs for every order you make and for every product you sell.
00:24:32
Speaker
So, of course, the wholesale price of creating or buying a finished product is one of them.
00:24:38
Speaker
The two biggest costs besides that that I have are shipping costs, which everyone expects free shipping now, and so you have to kind of absorb that.
00:24:48
Speaker
It didn't used to be that way.
00:24:50
Speaker
And the other is advertising.
00:24:52
Speaker
Because in order to get noticed in a competitive field, you're going to have to spend a lot of money on advertising.
00:24:56
Speaker
What do you expect to kind of pay per conversion when you advertise?
00:25:00
Speaker
Probably a few dollars in order at least.
00:25:03
Speaker
If you're selling on Amazon, it doesn't make sense to sell a product that's less than $15 or $20 at the cheapest because you have all the Amazon transaction fees.
00:25:11
Speaker
Sure.
00:25:12
Speaker
But if you're on a different platform, it can be cheaper and it depends on what you're selling and how competitive it is.
00:25:17
Speaker
But I would expect at least a few dollars per order in advertising costs.
00:25:22
Speaker
Okay.
00:25:23
Speaker
And so to bring it all together,
00:25:26
Speaker
Like what's a typical day's work for this job as far as, I know that you're, you know, you're working your day job as well, but if you were to scale this to the point that, that it was your, your full-time gig, how would you structure that?
00:25:40
Speaker
And what would a day look like for you?
00:25:42
Speaker
Okay.
00:25:43
Speaker
If I were to do it full-time, I imagine the breakdown would be something like I probably spend
00:25:48
Speaker
I mean, most of the time is spent shipping orders.
00:25:50
Speaker
So I would say probably like four or five hours a day doing that.
00:25:53
Speaker
If you're doing this in an eight hour day, let's say, right?
00:25:56
Speaker
Five hours would be towards shipping things.
00:25:58
Speaker
You might have a half hour towards answering customer emails and things like that.
00:26:03
Speaker
Maybe a half hour towards reordering supplies, including shipping boxes or materials or wholesale products or ingredients for things you're making yourself.
00:26:14
Speaker
And then the rest of the time would be, you could spend on developing the business by
00:26:19
Speaker
inventing new products, taking photographs of them, writing product descriptions and marketing them, managing your marketing campaigns.
00:26:30
Speaker
Yeah.
00:26:30
Speaker
So what is the, what is the sort of the dream going forward for you?
00:26:33
Speaker
What would you like to see this business become?
Future Goals and Manufacturing Plans
00:26:35
Speaker
Well, for the next little while, I'm actually quite happy at my day job, but
00:26:41
Speaker
I would love to someday be able to do this full time.
00:26:45
Speaker
And what I want to be able to do on it mostly is that I'm not able to do much now is give people employment opportunities.
00:26:55
Speaker
I know a lot of people who are underemployed or for some reason can't find work.
00:27:01
Speaker
It'd be great to give some of them, if they're good quality people, to give them a chance and to help other people develop themselves.
00:27:09
Speaker
I had up until recently, when I moved to a different city, I had a girl across the street who would come and help me make candles and she loved the job so much.
00:27:19
Speaker
And she, when she was done, she decided she wanted to start her own candle making company.
00:27:25
Speaker
And so it was really gratifying for me to be able to teach her a skill that now she's going to be able to go out on her own and, you know, have a business for herself for as long as she wants.
00:27:36
Speaker
That's awesome.
00:27:37
Speaker
How long does it take to make a single candle or do you do them in big batches?
00:27:42
Speaker
I do them in small batches and I actually have two sizes.
00:27:44
Speaker
I sell some of them in an eight ounce size and some of them in a two ounce size.
00:27:48
Speaker
The small ones are useful.
00:27:50
Speaker
They don't burn as long, but they're useful kind of to try it out before you commit to a bigger one.
00:27:54
Speaker
And so I sell both of those.
00:27:56
Speaker
If I were to do, I tend to do them in three pound batches.
00:27:59
Speaker
So I'll get nine eight ounce candles or I'll get about 31 of the smaller candles per batch.
00:28:05
Speaker
And it takes me maybe 40 minutes to do a batch.
00:28:10
Speaker
And is that 40 minutes of work or is that 40 minutes including like, you know, let it set and you can go do something else.
00:28:17
Speaker
Well, it's mostly work.
00:28:18
Speaker
The thing that takes me the longest is, you know, gluing the wicks to the tin that I sell them in and then applying labels because I want to be a beautiful product.
00:28:27
Speaker
So I have two labels, one on the side and one on the top.
00:28:30
Speaker
But that probably takes the most time.
00:28:32
Speaker
It actually, it takes an hour or two to cool.
00:28:35
Speaker
So, you know, the full time is about two hours, but it's 40 minutes of labor per batch.
00:28:41
Speaker
And of course, if you have the capital, you can buy machinery that will
00:28:44
Speaker
automate a lot of that away from you.
00:28:46
Speaker
I've seen videos of how Yankee Candle Company makes theirs and it's like completely automated, but it's expensive.
00:28:53
Speaker
It would cost, I think I was looking at on Alibaba again, and you can get like a whole candle making operation for about $25,000 at the cheapest.
00:29:03
Speaker
So, but I guess it's worth it.
00:29:04
Speaker
I mean, if you're moving the kind of volume that it sounds like you're moving, like there's got to be a point at which that makes sense to do.
00:29:12
Speaker
Yeah, if I were going to scale it up, I think I'd probably have to, but there are well-known companies that make and sell candles that I've seen here in my grocery store or whatever they sell here.
00:29:25
Speaker
Big companies where they have 20 or 30 employees and they're still pouring them by hand.
00:29:29
Speaker
So you don't need to automate with machines.
00:29:31
Speaker
If you want to give it a human touch, you still can as long as you want.
00:29:35
Speaker
potentially right now, right now you're enjoying your day job, but potentially the next step would be you're hiring people.
00:29:41
Speaker
You're maybe automating some things.
00:29:43
Speaker
Oh, are you, it looks like you already sell some figurines.
00:29:46
Speaker
Are you looking to move into figurines or are you looking to just expand sort of the candle business?
00:29:52
Speaker
I'm not looking into figurines.
00:29:53
Speaker
I think I actually am going to drop that line because nobody's buying them.
00:29:57
Speaker
Really?
00:29:57
Speaker
Really?
00:29:58
Speaker
Yeah, I actually like selling figurines and Reaper Miniatures makes them.
00:30:02
Speaker
They're my favorite brand.
00:30:03
Speaker
They make the metal ones in Texas.
00:30:05
Speaker
They've outsourced the plastic making to Asia because it's cheaper there.
00:30:09
Speaker
But they've gotten better at selling direct to consumers lately.
00:30:13
Speaker
And so I'm just not getting as much interest in those as I did five or 10 years ago.
00:30:17
Speaker
So I think I'm probably going to sell out of my existing sock and then not restock those.
00:30:22
Speaker
So for me, for the business, I think what I want to do is, of course, keep going and just kind of incrementally expand the candles and dice I'm already selling.
00:30:30
Speaker
What I really want to do is get into manufacturing my own dice.
00:30:33
Speaker
There's nobody in America right now that's mass producing polyhedral dice.
00:30:37
Speaker
There's a company called Game Science that has done some, but they're...
00:30:42
Speaker
they're kind of hit and miss in terms of whether they're able to produce it at a high volume.
00:30:46
Speaker
And so I'd like to do that.
00:30:47
Speaker
I've actually designed some of my own that I'd like to do, but for me, I've gotten some quotes and it's going to cost me about $100,000 just to have the molds made to manufacture them here.
00:30:58
Speaker
But I would like to eventually do that because I love the idea of making things in America and giving them kind of a human touch of
00:31:06
Speaker
a product that's made by people who play the game and who know the customer and who care about it and who are going to create something beautiful.
00:31:12
Speaker
And I'd like to be part of that.
00:31:13
Speaker
I love the idea of making the world a more beautiful place.
00:31:16
Speaker
Yeah, absolutely.
00:31:18
Speaker
And so do you think that you would still be price competitive from a, from like a materials perspective?
00:31:27
Speaker
Like, obviously you could be price competitive given like the strength of your branding and all that stuff, but like just from a
00:31:33
Speaker
like cost to create the dice?
00:31:35
Speaker
Would you be way out of family with what it costs to get it from China?
00:31:38
Speaker
Or would you be kind of in the same range?
00:31:41
Speaker
It's going to be a lot more expensive to do it here.
00:31:44
Speaker
You know, there are a few factories in China that do it.
00:31:46
Speaker
There's
00:31:48
Speaker
one in England and one in Germany.
00:31:49
Speaker
And I feel like one in Poland, if Germany and Poland and England can do it there, it's viable in America as well.
00:31:58
Speaker
But it's not going to have as big of a profit margin as just reselling something that was made in Asia.
00:32:03
Speaker
But by making it yourself here, by making it myself here, I should say, I think I'll be able to get some competitive advantage from people who want to buy an American-made product or who want to buy the unique designs that I've created.
00:32:17
Speaker
Yeah.
00:32:17
Speaker
Do you think that there's a difference also in, I don't even know if you've looked at this, but like I've noticed sometimes that I have particular dice that tend to land one way or the other.
00:32:27
Speaker
And I'm not sure that like, they're not Vegas dice.
00:32:29
Speaker
They're not like precisely weighted and calibrated.
00:32:33
Speaker
Have you looked into that at all?
00:32:34
Speaker
Are there people who care a lot about that who might be more interested in a, in a higher quality die?
00:32:40
Speaker
Yeah, and actually that's the niche that game science, the only American company mass producing, I mean, sometimes mass producing polyhedral dice, that's their niches because they
00:32:50
Speaker
What tends to give them the uneven weight is that you put them in a tumbler in order to deburr them and to... Okay, so here's the process for manufacturing dyes.
00:33:00
Speaker
I'll start there.
00:33:02
Speaker
What you do is you plastic injection mold them.
00:33:04
Speaker
And so you get spews and you get gates.
00:33:06
Speaker
And so you get, I don't know if you've ever had like plastic pieces from a board game, but they have like a little plastic nub on them.
00:33:12
Speaker
Sure.
00:33:13
Speaker
And so you have to deburr them to get rid of that knob.
00:33:15
Speaker
And then after that, you usually will like completely coat them in paint.
00:33:19
Speaker
And then you tumble them again to get the paint off everywhere except where the numbers are indented.
00:33:24
Speaker
And so you're going through this tumbling process twice, which is just you're grinding them against different tumbling material in order to round off the edges and it doesn't round them evenly.
00:33:36
Speaker
And so you end up with dice that are not completely fair.
00:33:40
Speaker
And so what game science does is they don't,
00:33:42
Speaker
they don't paint their dice and they don't deburr them.
00:33:45
Speaker
They just plastic injection them and then they sell them to customers.
00:33:48
Speaker
And so that's worked pretty well for them because they still have a sharp edge and it's, you know, the customer is expected to sand off the little nub and then they're completely fair dice.
00:34:00
Speaker
Unfortunately for them, some of the Chinese factories have lately got into sharp edge dice.
00:34:06
Speaker
And so there are other places you can get them now, which I think is probably going to,
00:34:11
Speaker
be hurting their market.
00:34:14
Speaker
So when you like when you buy your setup, your full manufacturing of the dice, are you planning to do the whole paint and the deburring and all that stuff?
00:34:24
Speaker
Are you going to do the sharp edge dice?
00:34:25
Speaker
I'm going to do the painting and the deburring.
00:34:27
Speaker
I feel like I don't care so much about the sharp edges.
00:34:30
Speaker
I care more about creating a good quality product that looks nice and it rolls well enough.
00:34:36
Speaker
You have to make compromises in any kind of manufacturing.
00:34:38
Speaker
I think that's one I'd be willing to make.
00:34:40
Speaker
Sure.
00:34:40
Speaker
And it looks, you know, it's got that kind of creamy feel because of the paint and it's smooth and yeah.
00:34:48
Speaker
And I've been, you know, I sell...
00:34:50
Speaker
game science dice on my website and I sell other brands as well.
00:34:53
Speaker
And the game science just doesn't sell as well.
00:34:55
Speaker
It's a, it's a particular niche for people who really want sharp edged fair dice.
00:35:00
Speaker
But most people don't care about that much.
00:35:03
Speaker
Yeah.
00:35:03
Speaker
And I would almost think that particularly folks that are, if you, if you're buying like a pirate themed candle for your Dungeons and Dragons game, you're sort of signaling that
00:35:14
Speaker
like this is about narrative this is about story this is an artistic expression uh rather than like an old school war gaming type who's like i want to do the calculus on the arc of all the cannons and i want to like it
00:35:31
Speaker
There's a very mathy type of gamer and there's a very story type of gamer.
00:35:36
Speaker
And it seems like your niche and maybe who you are as a gamer and your preference is more kind of story focused and experience focused aesthetic.
00:35:49
Speaker
Yeah.
00:35:49
Speaker
Yeah, that's exactly what I'm into.
00:35:51
Speaker
When I get a new board game, I love playing the board games that have beautiful art and good quality materials.
00:35:57
Speaker
And I just really like the tangible aesthetic where you get to touch something that's real, especially it was made with good quality and good design.
00:36:06
Speaker
That's the kind of gamer I am.
00:36:09
Speaker
And I think that the math type gamer, more and more they're going towards electronic tools now where you can have the computer do a lot of that math for you.
00:36:17
Speaker
Yeah.
00:36:18
Speaker
If that's what you're into.
00:36:18
Speaker
And so, you know, in the 70s, people would have been using paper and pencil and tables and, you know, polyhedral dice to that.
00:36:27
Speaker
But now that sort of person typically uses electronic tools.
00:36:32
Speaker
Makes sense.
00:36:32
Speaker
And that goes back to, you know, what you've said, which is,
00:36:36
Speaker
You have to find a market that you're already passionate about that you already believe because then you'll then you'll get to know all the ins and outs and you won't leave anything sort of on the table because you you sort of already thinking about it obsessively.
00:36:50
Speaker
Exactly.
00:36:51
Speaker
Your niche needs to come from what you care about and also what you're good at, right?
00:36:55
Speaker
One of my skills, as I mentioned, is graphic design, which I tend to be better at than a lot of these other sellers.
00:37:00
Speaker
And so that's, you know, my products tend to have a nicer design, right?
00:37:05
Speaker
But other people who have different talents that are better than mine are better at those other things.
00:37:10
Speaker
And so there's an ecosystem where everyone gets a niche based on their interest and their aptitude.
00:37:14
Speaker
Absolutely.
00:37:15
Speaker
Absolutely.
00:37:16
Speaker
Is there anything else that you think people should know about this business and what you've learned?
00:37:22
Speaker
Yeah, lots of people have ideas for, they wanna own a business, they wanna do something like that, but almost none of them actually go through with it.
00:37:29
Speaker
And so you've gotta be willing to actually try it and budget aside some money, even if it's like $500, $1,000 to start something and see where it goes.
00:37:40
Speaker
And you learn so much just from the act of actually doing it
00:37:44
Speaker
instead of just sitting in analysis paralysis, thinking about it, researching it, you got to actually do it because the best education you can get is through trial and error and through experience.
00:37:56
Speaker
Absolutely, man.
00:37:57
Speaker
So much of what I've learned from talking to you and other entrepreneurs in the group is just how people are stopped at the most simple level of this.
00:38:11
Speaker
They're stopped at...
00:38:12
Speaker
almost not even wanting to explore the idea, like, or, or worrying that it'll be too hard or too complicated, or they won't know enough.
00:38:22
Speaker
And it's like, you know, none of you guys that I've talked to are like, reinventing the wheel or, or, or, or none of you have like,
00:38:35
Speaker
a Google or a Microsoft or an Amazon type idea.
00:38:39
Speaker
It's something that's simple.
00:38:41
Speaker
And I don't mean to dismiss like, cause the genius of this candle idea, no joke, it blows me away.
00:38:48
Speaker
Like it's such a cool nexus of both your interests and sort of the market, but it's also like you didn't need like a PhD in chemistry to come up with it, right?
Financial Strategy and E-commerce Benefits
00:39:00
Speaker
Right.
00:39:00
Speaker
And in fact, it's actually quite easy to maintain.
00:39:03
Speaker
You know, the big hump is just getting it started.
00:39:07
Speaker
And for most people, I think what holds them back is fear.
00:39:10
Speaker
And maybe some of us just have more natural confidence or something, but a lot of people are afraid of losing something.
00:39:16
Speaker
So just set aside what you're willing to lose, you know, budget something and say, even if I make no money on this or whatever, I'm willing to lose this much and then try it.
00:39:26
Speaker
And you'll find that actually it's probably going to be successful.
00:39:29
Speaker
Yeah, there's another guy in the group who's a financial coach and kind of his purpose in running his business is to help people identify the assets that they would need to start a business and help them to kind of set that aside and get it running.
00:39:45
Speaker
And he's going to be talking to us on our group call on, well, tomorrow, on Tuesday night.
00:39:51
Speaker
And so we're all going to learn a lot from him.
00:39:53
Speaker
And those are the kinds of conversations that we're having here at Exit.
00:39:57
Speaker
And it's just that the level of creative ferment with these guys is just unreal.
00:40:02
Speaker
And a lot of it, like you're saying, is just because they shot their shot.
00:40:05
Speaker
They tried something.
00:40:06
Speaker
And it turns out there's a lot of, I think, Dunning-Kruger effect where there's a lot of smart people that don't think they're smart enough.
00:40:14
Speaker
And it's like, no, you're smart enough.
00:40:15
Speaker
You can do it.
00:40:16
Speaker
You can do it.
00:40:18
Speaker
Yeah.
00:40:18
Speaker
Well, depending on what kind of business you're going into, it doesn't need to have that much startup costs, right?
00:40:22
Speaker
If you're starting a restaurant, which I think is a bad idea, it's going to cost you tens of thousands of dollars at least to get it started.
00:40:29
Speaker
because you have to buy a building, you have to buy equipment, you have to do all this stuff, right?
00:40:33
Speaker
But if you're starting an e-commerce site on the internet, you can literally get it started for like five bucks.
00:40:38
Speaker
It has a very low cost of entry.
00:40:41
Speaker
And so it's very cheap to try it out.
00:40:43
Speaker
And if it doesn't work out, it's no big deal.
00:40:45
Speaker
It's five bucks, right?
00:40:46
Speaker
Just try it.
00:40:47
Speaker
Yeah, there's a, so a lot of our guys that are not in the entrepreneurial space already have told me that they've had sort of big dreams like that.
00:40:55
Speaker
And they're like, it's kind of out of reach.
00:40:57
Speaker
And so what I always try to identify with them is like, is there a way for us to scale that back to like a minimum viable product?
00:41:04
Speaker
So there was one guy who said, you know, I've always thought it would be interesting to be a mechanic and own my own shop.
00:41:14
Speaker
And we were talking about it like, well, you know, the overhead on a mechanic shop is pretty high.
00:41:20
Speaker
There's all kinds of specialized equipment that you need to fix cars.
00:41:23
Speaker
But if you want to like scratch that itch and try to make a little money,
00:41:27
Speaker
You can go on Craigslist and find a riding lawnmower that's on sale or that's even free because it's broken.
00:41:34
Speaker
Like there's something wrong with it.
00:41:35
Speaker
And you go pick it up in a trailer, you take it home, fix it and flip it for, you know, 500, 700, $1,000 in some cases.
00:41:44
Speaker
And, you know, test that out and see like, if you fall in love with that experience of, you
00:41:52
Speaker
fixing something and creating value that way, it's like super low overhead.
00:41:58
Speaker
You know, you don't have to stake, you know, your, your life savings or take out a 401k loan to make it happen.
00:42:05
Speaker
Exactly.
00:42:06
Speaker
And if you, if you take the money you make from that job and then invested in buying more parts and so on and so on, right.
00:42:11
Speaker
You can let the magic of compound interest very quickly, you know, make you quite a lot of money from almost nothing.
00:42:18
Speaker
Yeah, it's fundamentally, it's about people are stopped by the fact that they can't see how to sort of scale that peak.
00:42:28
Speaker
And it's like, well, we got to find a way to scale that peak just one step at a time.
00:42:33
Speaker
You got to find a way up.
00:42:35
Speaker
Yeah, but just try it.
00:42:36
Speaker
Get started.
00:42:37
Speaker
Do the first step.
00:42:38
Speaker
And then you don't need to know 10 steps ahead of you.
00:42:40
Speaker
Just do the one right ahead. 100%.
00:42:45
Speaker
Well, this has been a fascinating conversation, and I'm sure that some of our members will have questions for you moving forward about how they can get into the Etsy and Shopify game.
00:42:58
Speaker
For everybody else, you can find Kevin Owens' business at gmdice.com.
00:43:04
Speaker
These products are really beautiful.
00:43:07
Speaker
They look like they're magic.
00:43:11
Speaker
It's really, really cool.
00:43:12
Speaker
So check him out on gmdice.com.
00:43:14
Speaker
If you're interested in what we do at Exit Group, check us out at patreon.com slash exit underscore org or on Twitter at exit underscore org.
00:43:24
Speaker
Thanks a lot.
00:43:26
Speaker
Thank you, Dr. Bennett.
00:43:26
Speaker
Thank you.