EP 44 - Jamie Birch - Using Affiliate Marketing to Reach and Influence Consumers Worldwide
|Awesomers Origin - We'll talk to an Awesomer about where they came from, the triumphs and tribulations they have faced and how they are doing today. An Awesomer Origin story is the chance to hear the backstory about the journey our guest took on their road to become awesomer. These stories are incredibly varied and the takeaway is that awesomers come in all shapes, sizes, backgrounds, creeds, colors and every other variation possible. On your awesomer road you will face adversity. That’s just part of life. The question as always is how YOU choose to deal with it.
|At heart, I’m a father, a teacher, and an entrepreneur. I am also an affiliate manager and the founder and CEO of JEBCommerce, LLC. I started in the online marketing arena in 1999, working as a search engine guru for a dot com in the resort town of Coeur d'Alene, Idaho. I worked my way up to managing a multi-million dollar affiliate program and search campaigns for Coldwater Creek, a top five national women's apparel retailer, growing the affiliate channel from several thousand dollars a month to $35 million a year. As a manager for the SEO and SEM campaigns, I also pioneered performance-based relationships outside of affiliate network, negotiating long term profitable relationships inside and outside of the affiliate channel. In 2004, I founded JEBCommerce, using these proven processes to build a large client base.
My focus now is growing profitable and incremental affiliate programs by focusing on deep and comprehensive analytics inside and outside of the affiliate networks. We work with all technology providers to take advantage of amazing technologies to ensure that our clients incur costs only for sales they should.
In addition to JEBCommerce, I’ve launched two other companies (so far): ChloeWorks, LLC and Renewed Horizons, LLC.
Follow me on Twitter: http://twitter.com/JamieEBirch
Check our JEBCommerce at www.jebcommerce.com
Affiliate marketing is a powerful channel that reaches and influences consumers worldwide.
On this episode, Steve introduces a special guest, Jamie Birch. Jamie is a world class expert in digital and affiliate marketing. He founded JEBCommerce and is constantly negotiating long-term profitable relationships inside and outside of the affiliate channel. Here are more awesome tidbits on today’s episode:
How the book E-Myth Revisited influenced his entrepreneurship journey.
Why affiliate marketing is not dead.
What is a cash flow statement, how to fill it out and what is a P&L.
The biggest thing Jamie learned in his business and how it has helped him grow his company.
There are a lot of amazing lessons on this episode, so be sure to listen to know more about affiliate marketing and how it can help your business.
Welcome to the Awesomers.com podcast. If you love to learn and if you're motivated to expand your mind and heck if you desire to break through those traditional paradigms and find your own version of success, you are in the right place. Awesomers around the world are on a journey to improve their lives and the lives of those around them. We believe in paying it forward and we fundamentally try to live up to the great Zig Ziglar quote where he said, "You can have everything in your life you want if you help enough other people get what they want." It doesn't matter where you came from. It only matters where you're going. My name is Steve Simonson and I hope that you will join me on this Awesomer journey.
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01:15 (Steve introduces today’s guest, Jamie Birch)
Steve: You are listening to Episode number 44 of the Awesomers.com podcast and, as always, you can just go to Awesomers.com/44 to find relevant show notes, details and even, sometimes, a link or two. Now, today, my very special guest is Jamie Birch and he is an absolute professional in digital marketing. I've known Jamie for a long, long time and we get into some of that story and his origin story in today's episode. But a little bit about Jamie is really, he describes himself as a father, a teacher and an entrepreneur. He's also kind of an affiliate manager at heart. That's kind of how we got a start. But he founded over time a company called, JEBCommerce, and that has led him into all kinds of activities. When Jamie first started at Coldwater Creek, which is a top five national women's apparel retailer, he took it to an affiliate channel, was doing several thousand dollars a month to a thirty-five million dollar a year channel for them. That's how powerful affiliate marketing can be when it's done right. Over time, as the Manager for SEO and SEM campaigns, he pioneered performance-based relationship outside of even affiliate marketing and he's always been about negotiating long-term profitable relationships inside and outside of the affiliate channel; and, that basis of philosophy and experience is what he built JEBCommerce. Now, he's all about helping his clients and building the company. You're going to find out lots of fun, facts and details about how that channel works. I can't wait for you to get a listen to this episode. Thanks for joining us today!
Steve: Hey Awesomers! Welcome back. It’s Steve Simonson and guess what? Today, I've got one of my old friends and somebody I think an awful lot of. Jamie Birch is joining us. Jamie, how are you, pal?
Jamie: I am doing great and honored to be here. Thank you, Steve!
Steve: Well, it's certainly a pleasure, for myself and the artists, to get a chance to learn from you. I've already read in your bio and some of the things that we have learned about you and I already know about you so the audience kind of has a little bit of a context for what we're going to talk about. But, maybe, you could just tell us - kind of where you live, and, in general, terms, what you do today.
Jamie: Yes! So, I live in the resort town of Coeur d'Alene, Idaho and so I'm an entrepreneur and a business owner. I own two businesses. The first that I started 14 years ago is JEB Commerce. We are a digital marketing agency, specializing in affiliate marketing and, the second business, I started with a co-founder, three years ago, called Renewed Horizons and that one is totally unrelated to marketing in anyway. Although there's some marketing of it but that is an agency that works with adults with developmental disabilities. So, it has been an interesting journey of seeing what I learned in that first business in those 14 years; and, how quickly those learnings, when deployed now and something new, and completely unrelated can help that grow exponentially faster than my first business.
Steve: Well, that's a very important point for the Awesomers out there listening. You know, our experience, actually, becomes that intellectual equity that I like to talk about. It becomes something that is leverageable. Ideally, we won't, we don't make the same mistakes over and over and over again. Now, full disclosure. I've definitely made you know, the same mistake more than once. But the key, the ultimate payoff, is when you learn to not make that mistake again and again and those lessons learned can be leverageable. So, for the Awesomers out there, listen, I think I met Jamie in 1999. Get your time machines out millennial. Millennials, I think, we were at a Commission Junction event. My brother, Brian Simonson, was there, as well.
Steve: And we saw you speak. We saw you just in passing and we were so impressed with what you were doing at the time. You didn't have your own business at that time.
Steve: Operating for other people or in some other company and we just thought, man, oh man, this guy has his act together. We got to stay in touch with this guy and here we are, you know, 19 or, you know, some odd years later and we still follow along with what you do because that's how impressive you are so kudos!
Jamie: What? I must have pulled it off because I didn't know what I was doing back then.
Steve: Well, you know, it's the blind leading the blind. We knew less than you, so guess who was the expert in that room so...
Jamie: I was going to say if you read the bio you're one of a few people who would know all the things I didn't include in that. There you go, yes, there you go.
Steve: So alright, listen, I'm going to dive into your origin story and then bring them to the present. Talk a little bit about this category which I find fascinating. Well, I hate to be the bearer of bad news, Jamie, but, you know, people have told me that affiliate marketing is no longer viable and I hate to show that but ...
Steve: Have you had time to let that sit in and, you know, did you agree with that? What are you doing about it?
06:14 (Jamie on why Affiliate Marketing is not dead.)
Jamie: You know - I've been letting that scene sit in since 1999, and that's the, you know, you've heard SEO is dead, you've heard email is dead, you've heard, you know, Twitter is dead, and all these stuff. I think for the first five years of my career, I probably reacted to those things. It was like, oh no, my whole life is coming to an end. What do I do? Things change and that's, honestly, when I started this agency, I didn't think it'd be around. I didn't think the industry would be around for 15 years. Things were changing so fast back then, that and still now. Through all those changes, the one thing, one thing, many things I've made the same but one of them is people sell other people's things.
Steve: So just for the Awesomers out there listening in this particular context. When we talked about affiliate marketing, we're more or less talking about somebody who's representing somebody else's physical products, its items, that they actually say, “Hey, this is an interesting item to me and perhaps, my audience, and instead of me selling this item we're developing this item myself. I see this other brand or this other company offers this, I'm going to marry up through either a third party platform or perhaps even directly and I'm going to be an affiliate for these guys.”
Steve: This is different than kind of the internet marketing affiliate, not that the concept is different, but just the execution,
Steve: This is about physical products and selling physical products and I have to say, you know, not unlike yourself, I'm always amused every time somebody pronounces something that works really well dead.
Steve: Affiliate marketing is one of the best ways to do on a cost per acquisition basis to manage your marketing and grow to scale and is it fair to say that these big platforms are still fostering, you know, millions, tens of millions, maybe hundreds of millions of dollars worth of sales every year on behalf of brands and affiliates?
Jamie: So there was a report that came out in 2014 from Forrester that said I think in 2015 the revenue generated through affiliate programs, sales of real products through affiliate programs, was 4.6 billion and going up. So, this concept has been around, you know, since money, since before currency and it's not going away anytime soon; and, you know, it is essentially, many of your listeners are, probably, building product, sourcing it, creating it, selling it and then there's the other side of that where people are developing an audience and so, a lot of the affiliates - that's what they do. They develop an audience and that may be a very simple coupon, you know, they offer promotions and offers. Then - there may be others, who they're building - an audience of backpackers. They're building an audience of mothers, of stay-at-home dads, of whatever it is. And once they have the audience, then, they're saying - Okay, how can I monetize this and, a lot of times, that's through affiliate marketing. And for people who make physical products and there are digital product affiliate programs that are wildly successful as well, including courses and educational things like that. But that allows the advertiser, merchant, producer to do is get access to every single internet digital marketing channel with one budget item and without having to become experts in email, in social, in search; and, in any of the channels that are out there. You can find affiliates that are reaching that audience and that's what it's about. So, yes, everyone says it's dead. They always say it's dead; and, so is SEO; and, so is email and I'm sure, they'll declare Amazon dead at some point and well who are working in those areas will giggle a little bit and keep doing our work, yes, that's for sure.
Steve: Well, typically those headlines are clickbait for someone who's selling a competing idea or somebody who's just plain ignorant. I'll be honest with you,
Steve: Often, they just simply don't know what they're talking about or they're just trying to, you know, throw some hyperbole out there and I get some attention but I want to stay out there to the Awesomers listening, we're going to dive into this topic a little bit more after we talk about some of Jamie's origin story; and, the reality is, affiliate marketing is alive and well. That is one of the key basis points of how Amazon built their business. Yes, the most successful affiliate program of all time, probably, and it continues to this day to be an extraordinarily powerful program. So, stay tuned, we're going to talk more about this and Jamie's origin story right after the break.
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Steve: Hey! Yes. Steve Simonson here and we're back again and today we're talking with Jamie Birch, an expert in the affiliate marketing space and really digital marketing in general if you want to know the truth. But we're going to dive into to the very beginning. Jamie, if you will tell us where you were born.
11:50 (Jamie shares his origin story.)
Jamie: Allentown Pennsylvania. I'm an East Coast boy.
Steve: How about that? That surprises me. How about your parents? Were they entrepreneurial nature? What kind of business or trade were they involved in?
Jamie: So both of my parents were in manufacturing. My dad and my mom put my dad through school and he stayed in manufacturing so he ran the operations for Nali's; worked at Olan Mills, Litehouse Dressings in the Northwest and now he's an Energy Efficiency Consultant for those big plants. My mom worked in manufacturing as well. She was one of the first women, I believe it was, Line Supervisors at Kraft and so learned about work ethics from those two. Definitely, the importance of education, and, I think, you know, the importance of your career is yours to own and they taught me that.
Steve: Very smart, obviously it's worked out very well. How about any siblings?
Jamie: Yes, I have two and they're very successful. My sisters Buffy and Megan. One owns a development house in, is part owner in a development house, Portland; and, the other manages Urgent Care Centers for a very large company. I think she has the whole Northwest. So amazingly successful women, a hard group to keep up with and they are phenomenal and they just did a great job so I have a really great family support group; especially, when it comes to, you know, business learnings and being an entrepreneur. You know, we always think that you can be an entrepreneur and not start a business forever or a really long time but that concept of ‘your destiny is yours’ and ‘your career is yours’ is a very entrepreneurial mindset. My career isn't going to happen to me. I'm going to go out and carve it. I'm going to create it. I'm going to intentionally find a path and that's what, you know, my whole family does and we do different things. My younger sister and I do similar things, at least, in the web. But my older sister is nothing like that, you know, I went into or my younger sister so but that same thread through all, you know, my whole family.
Steve: That is fascinating. It really is quite a testament to see such a diverse, you know, series of, you know, expertise there right - from manufacturing, the Urgent Care Management and so on and and yet, you know, the entrepreneurial bend of kind of carving your own path and all that seems to be at that common thread you referred to. So how about that? You mentioned education now did you attend university?
Jamie: I did. I went to Central Washington University - it was the only one that would take me. So, you know, like maybe many entrepreneurs, school I wasn't great in high school. I was off doing other things; and, I always worked but I was ready to get out and I was just trying to get out and then I spent a couple years working and then life did not work well - just kind of coasting through and I got kicked out of my parents house and they said, “Look - we'll help you do a couple of things. Leave.”
Steve: I like that, they love
Jamie: You're out. That's happening. We'll take you down to the recruiters, get you in the service or we'll help you get into school. And I didn't really want to go into the service at that time. I'm pretty independent and that wasn't the option. I knew who I was leaving so I figured well you know what - I should probably stop screwing around. Let's get in the school and so I applied to every school in Washington, every state school and sometimes, I heard them laugh when they open that application but Central said, “You know we want to know why do you want to come back? You didn't do well. Why do you want to come back?” And so I wrote a letter and basically telling them that I was an idiot and, I really, I want to get in and get out. I don't want to spend seven years there and I spent like three and a half so I loved it. I had a great time and, yes...
Steve: That's fascinating. So, I also did a little stint at Central Washington. Although I was still in high school at something called Business Week and maybe we'll do another bonus episode on that one time and I'll tell you the story of how I got kicked out of Business Week. It was amazing, I do love that program though, for anybody who's in high school or has kids in high school or what have you. That program, Business Week, really did teach me a lot and it happened to be hosted by Central Washington University.
Jamie: So awesome, I didn't know, we had that in common.
Steve: Yes, I've spent one week in the dormitories at Central Washington and that's probably the most successful part of my university experience. So how about your first job, a proper job, as I like to say maybe as before after University but you know just kind of where did you get your first shingle hung down?
Jamie: Yes. Well you know I had worked full-time, almost since I was 12, so my first job out of college I had no idea what I wanted to do in 99. I really didn't and, you know, my dad and older sister and my mom what they, you know, kind of taught is, “This is your job - is to find a job.” And we used to do this with him you know when he was looking for work. I, you know, created a list of places I wanted to work. I went and I took every interview opportunity I could. I interviewed with Target’s Management Program which is a really good management program. I took and I got an offer there. I got an offer for Blockbuster.
Steve: Boy, you missed the train there.
Jamie: I miss you know I think I maybe I could have turned that around. I interviewed for finance companies. I was really interested in corporate finance. So I had, you know in manufacturing, so I had an offer at Jeld-Wen for their door and window company and that one looked the most attractive and but it was like a five-year or ten-year, it may have been a one-year but it seemed so long to get to the role and responsibilities I felt that I wanted and deserved and that’s maybe arrogance of a 23 year old. But then my dad sent me a note, the dot-com thing was still like really picking up steam and my dad sent me this article. The kid who had I think of Bugatti and he was younger than me and he was making lots of money and I'm like, “I love cars and I love that car.” And I think I'm way smarter than that guy had millions of dollars and so I said, “What's he doing?” and it's this dotcom thing and I really had to ask other people what it was, at that time. I, you know, I could email through the system at school but I really wasn't you know, I have a computer all through my life but I wasn't like into it, like, it wasn't my thing. So, then, I started interviewing again and I landed at a place - asked me three questions in the interview - How was your drive? Do you think you can do this? When can you start? I think it was, maybe, just two questions. So, I had spent pretty much all my beer money for that weekend on gas to get over to this place and left upset. I was like you guys and it was a search engine guru, was the job and I had to ask my computer sci roommate what that was and he had to show me what a search engine was on my way out the door but the answer to the first question was like yes, it was long, the drive was long but the second was, “Oh yes, I can do this!” Not knowing really, what that was at all. So they offered me the job. On my way out of town, he called me back and my parents had moved from Seattle to Sandpoint, Idaho. So I thought well, you know what, this is a pretty good move. It's not too far from College where I still have a whole lot of friends. So I took that job and it was a medical E-commerce company and a political - they did political products so it was really weird that there was absolutely no tie between those two and that's where I cut my teeth in digital marketing. They sat me in a big conference room where everyone did kickboxing three days a week. On a big card table and said, “Okay - we want the top three listings for medical books and stethoscopes and stuff like that. When do you think we can get it?” And I'm like I'm on it and I had to learn what all those words meant. My, I really had no idea and so then I just, yes, so that was my first job and it was nobody knew in the company what it was. Nobody knew how to measure it but that's why I took the job I could see like, “Man this - this industry is emerging and I could go to this other industry and it'd take me 10 - 15 years to have any responsibility and to make the money that I want to make.” Or I could come into this thing, take a huge risk but if I show ability to succeed in this thing, then there's going to be all these other things no one knows about and they'll give it to the young kid who's showing a propensity to able to do the work and that's exactly what happened. So when I left - I had email, I had affiliate, I had search. I was doing stuff that I had no reason or right to be doing and then the dotcom bubble started to deflate. That company, I was employee number 170, there were three of us - four of us when I left. Wow! And I was a webmaster. I was doing all the marketing, I mean everything. So that was the first one and I learned a lot. It was great.
Steve: Yes, that dotcom boom for everybody who wasn't a part of it or wasn't directly connected to it, was an extraordinary time. It really, you know, often people talk about Amazon in the gold rush and I can get you know why that is really not even close to a related parallel. By the way, but just this idea of stampeding, that was definitely happening in 99, and valuations were insane. I remember getting, you know, magazines. I think there's one called Business 2.0 and maybe Fast Company - these types of things, yes, the back of one of them; they would just have all the companies and their valuations and many of these are already public and it's like 80 times revenue right. They're doing 2 million dollars a year but they're somehow worth you know 80 times revenue which would be 160 million bucks or whatever the case may be. So extraordinary times and then of course that fantasy land that had been created they've deflated in a big way and everybody, every major stock took hits most companies and the dotcom boom went out of business. It's only the guys like Amazon or Ebay that had a big war chest that were able to kind of stay steady on and carry on. So it's a really interesting time. You know I'm interested maybe if you had a defining moment not necessarily something from that experience but just from the start of your career till today. Any defining moment that put you on the road where you're at now?
Jamie: Well, I can't I can't answer that question without talking about you.
Steve: Oh, nerd.
Jamie: And and that is you know there are I would say you know up until I left and hung my own shingle you know there were small learnings. I learned that the money that I'm bringing in through the affiliate channel has this multiplicative effect on the lives of people around me. We went through, you know, two jobs after that first one. I was at Coldwater Creek, well, we went through recessions. My team and the team I was on, we never laid off anybody but every other department was experiencing that. And so that was a big learning of like you know I was trying to chase my dollar and I don't think there's anything wrong with that but there was a greater effect on that when I brought that money in, people kept their jobs and you know there were people who now have better careers because of that money that we all brought in and we were able to continue to do our work and so that was a really big thing and that's what prompted me to, one of the reasons I wanted to leave that company was, man it's not taking all my time to have this effect on this company. I can bet I could do this for two or three and impact just a ton of lives and impact mine but you know starting the business was awesome. But one of the big moments is you were a client of mine and we went out to be not to lunch we came over to give you an update of where we are at playing strategy for a while for the next year and on our way out you were walking with me and he said, “Hey I got to talk to you.” And he said why don’t you let your team go up and tell him to go to the car and I was like, “Ahh... this is where it happens. This is how I get fired. Dang it!” And you said look ‘You're doing a great job! I love working with you and you have big wins.” But the words you said were, “I don't feel like you are methodically moving the ball down the field.” And then you said you got to go read this book and so I left right from there. My team drove home. I left from there and went and got the E-myth Revisited and one - I was just happy I didn't lose a client and two - I was like, “You know what - I really respect this guy.” Because one of the things I've always admired - you are an entrepreneur, you have, I think at the time you said yes, ”I own 18 businesses or I run 18.” Or something like that. I'm like, “That's what I want to do.” And so that was a big moment because, before that, you saw a hundred percent what was the main problem in my business. We knew how to do the work and we did it really well. But we didn't have a process, we didn't have a repeatable process that, our clients could feel, there was structure, purpose, and intent and so at times, it would probably be like, ‘What's going to happen?’ Oh, touchdown!” but I had no idea and so now, you know, we teach, before that, we were the Brett Farr gunslinger like yes and we did better than most but sometimes watching him as the coach is just like, “Oh that's not the play.” You know and now we try to be, you know, Belichick and Brady. There's a process and one of the things like without Brett Favre how's the team do? Seattle's kind of going through that, you know, Russell Wilson goes down what happens to our chief. But you know you look at the Patriots and that having a process sometimes they plug people in and they win and you've never heard of them before. So that was probably what got us down, on a road of like just looking at ourselves critically, as well as, making processes in the business. And I took that book, we went camping for a weekend. I read it three times in three days. First I just read it and I was like I was looking actually. You said there's some hippy dippy stuff in there and I couldn't find it. I'm like well I must be missing something and then I went through and read it again with a notebook and I still had the legal pad and I filled the legal pad with, “oh we need processes for this.” Then I read it to my wife camping because it's not a dry business book you know there's a story to it. She helped me come up with some things then I sequestered myself in the office for six work days and came up with our first playbook and actually I have one of them right here.
Steve: Let's take a close look at that. I've got to get the camera to get back on you. Say something.
Jamie: So yes, so this is our very first playbook all right. This is probably the third iteration and it got pretty big and so then we went online after this and now we use Process Street which I actually heard from in your Catalyst88 group. Morgan, I think presented it and I'm forever grateful it's been great. So yes, so you know I think it's like 150 pages, 152 pages of things that came out from that and that enabled us to grow from you know like a quarter-million dollars in revenue and really was a catalyst to get up to 2 million in revenue.
Steve: I love it so first of all. Thank you for that story. I actually had, I didn't remember that encounter until you recounted a couple years back at a Catalyst88 masterminded and it's true that I've referred this book out a lot. I think you're probably one of the finest examples of somebody who took the advice and I generally tee it up in a similar way especially when I see the viability of the team. Right as we talked about. Yes, it can get stuff done it's just not a predictable outcome. Yes, I'm at that early point now. This is many years later and you guys have the playbook and have developed it even further and further along and Morgan is also quite brilliant. One of these days we'll get him on on the line here too. What I love is just the idea of this evolution right? We were doing business together. We networked and I was able to give you some little piece of advice that you were able to take and make into something useful. Morgan was able to help you later. All this is just a virtuous circle and that's one of the things I love about being entrepreneurs. We can help each other. None of us lose anything as a result. So it's not like I gave you a secret and now my bank account is lower.
Jamie: Totally. Yes, it's not a zero-sum game.
Steve: Completely right. So that abundance mentality I definitely appreciate you recounting a story. It is something that I am fond of and I feel fortunate to be involved in this story. But the best thing and for the audio listeners out there you know, Jamie just held up a bound book with a hundred fifty-two pages in there. That was process and procedure and when you have zero pages that seems like impossible. Jamie, he just figured it out he heard the story. It is interesting so I often tell people there are some things about the E-myth Revisited that are a little on the hippie side, little soft-touch side and obviously it's my own perception of things but the fact that you didn't run into any, that is hilarious to me.
Jamie: I couldn't figure it out but I think I know what you're talking about and there was a part of that called “the game worthy of playing” or something and I didn't get that part of it for like seven years. And now the game we play is we want to delight and surprise our customers, how can we do that? The game I play as a CEO is I want to help my staff reach like some performance level or personal understanding that just blows them away and helps them become a better version of themselves. And they look back and they're like, “How the hell did that happen?” And I get to be a part of that so now I kind of you know I understand the whole book but it's been I mean, I don't even know how long ago. It had to be at least a decade.
Steve: Yes probably more than a decade, to be honest. But you know it's one of those things and I want to remind the Awesomers out there listening. I'm a pretty consistent guy at the end of the day. The fact that I talk about the same things, I just did the E-myth episode for the Awesomers out there listening, not long ago recommending it still again even after all this time. It still is relevant and because of that consistency, I talk about strategy, systems and scale right. Jamie had a great strategy, his affiliate marketing agency to help people manage it and help deliver expertise in relationships and we're going to talk about some of that. That's something that is viable, that's a good strategy and then to deliver systems, that was the thing that was lacking. And he was able to 10x his business at the end of the day. And either way the secret of scale - a lot of people don't fully understand this, but it's people right. Jamie's already alluded to this fact that now as the CEO, he's in the business of making his people successful and that's the kind of the culmination of strategy, system, scale. I'm loving the whole journey and watching it.
Jamie: And there's two other things can I share, two other pivot points. One, was financials so I went to school for Finance. I got a degree in it with two classes shy of an economics double major and I wanted just to get out and start my life. And also I couldn't find an economics job that wasn't me sitting in a room thinking about stuff and that sounded awful but I had no real understanding of corporate finance or how important a cash flow statement is and how important cash flow is and a P&L and all those things. And so I'm gonna be pretty vulnerable for a long time. I ran my business and it was just another checking account and I'm fairly certain a lot of entrepreneurs, if they're listening to this, they're like - what's wrong with that?
Steve: I hear you. Keep going.
Jamie: There were gut-wrenching moments of I never missed a payroll in 14 years but I was minutes away. I've had to borrow money to cover bills. I'll never ever do that again. I borrowed money to cover payroll for people that I didn't have six months later but it all came from - I didn't understand how those reports and how finance impacted things. And when we did, we went from, our sales actually declined during that year and we were twice as profitable. So understanding those financials and spending the time, making that a priority, it changed us from always having enough - now we have months and months and months of operating capital in the bank and if Google makes a change and it affects all the affiliates and that affects our revenue, okay, we've got months and months to figure it out. And there is a lightness to how I walk now that I can't describe and it came from just a, you know, getting I had to get to a bottom with that. I had to get to a point where we were going to miss payroll if I didn't take a loan from a friend. And I just didn't want to miss payroll and then just seemed like, okay we make a ton of money. The company makes a ton of money. We do really good work. Why in the world am I here? And then I hired a coach. Actually, I watched an email seminar on financials and I really had to admit to myself that I wouldn't. I would not look at the financials because I knew I didn't understand them and damn it I should I have a degree in this and until then I was like well it's not working. I watched this webinar and in there I was like, “Okay I got to just admit I don't know what I'm doing here.” I hired the coach and we walked through all of those and once that changed, you make decisions based on reality. Not on what you think is happening, not on... We used to make decisions, “Hey, we just landed a new client. It's X amount of revenue. I can spend half of that on this. No you can't” You don't know if you can and so now the decisions we're making are great and the retained earnings, we talked about retained earnings for the first ten years. that word, you know that phrase never existed. Now we do and it's phenomenal. So that like admitting to myself that I didn't know something even though in my head, the story was I should and that thing being financed like you got to get a hold of your finances and frankly you know, even now I look every month and go where do I not have a hold on my finances. What report, what part of this report do I not understand? And that led to another one I won't put this too close because it has actual numbers but this is my dashboard, my financial dashboard I get once a week.
Steve: I love it.
Jamie: And it has cash on hand, what's outstanding, late coming in, incomes over the month profit cash position, revenue, totals - it has every key performance indicator that I can think of that answers the question where are we and where do I need to spend my time.
Steve: So let me ask you this Jamie because I think that you know so many CEOs say, “I don't even have a finance degree and I don't necessarily understand finance to the level I need to.” So there's a big intimidation factor. Not everybody wants to admit that or not everybody knows what to do about it. Although again I'm sharing some of these resources for many many people. Today it's so much easier. You can plug in outside services that will handle some of the stuff and producing reports but my question is how many hours did you spend building that dashboard?
Jamie: The first one I spent about 40 hours building it personally. Now, I have an assistant and I will review it every week and I ask three questions ‘What is it telling me? What is it not telling me? and What do I need to do? And from those, I'll see, “Oh I need this data.” and I'll say ‘Hey can you go grab this data?” But the first one was awful like it was really really bad. It didn't show me anything I needed to do and so what I did was I just stopped and I said what is a cash flow statement? Like in my head, what is that? Well, I need to know what's coming in, when it's coming in, what's going out and when it's going out so I just developed a spreadsheet that has:
‘what is expected to come in this week’
‘what cash position do I start with’
‘what's expected to come in’
‘what's expected to come out’
‘what's my ending cash position’
And then I would do that for three months at a time. In the new business, we started that from the first day and that business will eclipse my first business revenue, probably in 2019. In year four, not year 15. So that first one, it was the coach walked me through and the E-myth has a really good process for key strategic indicators but it didn't go into exactly and that may have been just the coach and I were working on other things, but that didn't go into exactly - What is a cash flow statement look like? How to fill it out? What is a P&L like? I know I remember taking classes on P&L and in accounting but I didn't know what they were until the last two years.
Steve: And until they matter. Honestly, I tell you the problem is we can all say I need a financial statement but until we know how to read them and this I went through the same evolution you did, by the way. Until I understood that, well how to read it and what the ramifications were of it, like the revenues off the charts woohoo. And then somebody goes, “Take a look at the gross margin.” I'm like okay, yes, thirty percent or whatever the number was, it's like you have it for the last two years to spend forty percent and then you start asking questions. It's like, “Well, can we get this report showing month over month variations and year-over-year variations and growth and line-by-line percent to revenue kind of ratios?” Because your brain will automatically just start lining up the pieces once you start to learn and understand. So obviously a huge defining moment to get you on a system road path and a big lesson learned in terms of getting a financial house in order, that's still paying dividends today. But I want to approach this question one more time because even though you had to build this dashboard initially today, week to week, do you have to put in the data yourself or does somebody else your assistant or other person gather the data?
Jamie: Zero data and really I had this information in disparate systems and what it led to was I didn't look at it because it was so hard but then I watched, I was at the Catalyst88 thing and someone brought up the grow program and I think it was Morgan.
Steve: It was Morgan. Yes, Morgan, it's a couple of shout outs this week.
Jamie: Thank You, Morgan. I hope I was able to help him in any way compared to what he's helped me and probably he doesn't know it. It was what, three or four years ago? Maybe two, three, four something like that but I saw that you could put it all in one place and then that began like, “Okay it could go work for me.” It didn't really work for us. Well, I don't need, I have people and they can put this together so I spend zero time putting the data together. The first initial dashboard my assistant put together took her two weeks of focused work on getting it done and now she tells me takes about three hours to gather all the data from disparate places. But I can run through that dashboard in 20 minutes. Having the data is 25% of it. The other 75% is having a system to go through it and what do you do with it. I have last week's dashboard right here. If it sits there it doesn't help me. I have an Evernote that has what it is telling me and sometimes it's like I have X amount in the bank, I have X I'm waiting for, X amount of checks are going to clear and other times it's like there's a gross margin problem or this one client their invoices have continued to go down. What's going on? It's telling me there's a problem there and so that process up to make sure you go through it, that can take 20 minutes. The first one, man the first probably 10 weeks I was learning so much that I'd spend like half a day or more on the dashboard. But now I understand we have ways to verify that the data is accurate very quickly. Some spot checks I have. And so now I can see where we are financially, where we are at sales, where we are with our clients in a half an hour or less per week and that'll tell me, Jamie, you need to focus on this team, all their campaigns are down. You need to go see what's going on with that team. You don't have to go check and micromanage everybody. But this little thing is showing - you need to go here and oh late receivables went up by sixty percent last month. Okay, let's meet with the CFO. Let's find out what our collection process is. Why do we have so much lately that we didn't before? And just those simple questions like - where are we on these three accounts? They owe us a lot of money. What's going on? And then sometimes we'll find like, “Oh they didn't get the invoice.” or the process broke or I didn't manage the process and that allows me to spend time on the things that matter. Allows me to spend a little more time with that other business and kind of prepare for, lets you know when both of these businesses kind of run with me on a chairman role where I don't have to be here day-to-day. I get to kind of figure out - okay what am I gonna do?
Steve: It's a Cadillac problem out there. And by the way, so many people have heard of this concept of a business that you know kind of run systemically and has a potential to run without you know the founder as the day-to-day operator but I think a lot of people think it's one of those urban legends. It doesn't really exist, it’s another Bigfoot and the reality is it does exist. It can't happen so I'd love what we've done so far. Before we cut to the break, we talked a little bit more about affiliate marketing in detail. Was there ever a time in your career, so far, where you just wanted to give up and kind of pack up the tent and maybe go back to, whatever you know, factory work, finance work well, you know, whatever the fallback plan is? Have you ever wanted to give up?
46:25 (Jamie talks about a time he almost gave up on his entrepreneurial journey.)
Jamie: Yes, I'm trying to think which time I want to talk about. I remember for a period when we didn't have our financial house in order, personally or corporately, that my wife and I, every week or every two weeks, would alternate fetal positions. So one time I was strong and I'm like, “No we're going to carry through.” and she would, I mean, really start crying like we have all this to pay and we can't do it, just go get a job. And then other times I would crumble and she would be strong and it really did boil down to we didn't have the right people. We didn't have any systems and we were not, I was not, managing our finances the way that we do now. I'm not beating myself up. I didn't know. I love Central Washington. I got a three seven in Finance. I was there, they didn't, that degree did not acquit me to run my own business. So though - there were many moments where we were thinking about like, what would just getting a job look like? What would that look like for our lifestyle? Gosh! Could I work for someone else? After you do it for a while, I think right now I'd be an awful employee because someone would come find me and I’d just be working from somewhere else or I wouldn't be working. I'd be doing whatever I wanted to do.
Steve: Okay I'm over here thinking about big picture things and they're like, “Hey you get over here.” I appreciate you sharing that kind of reflection back and this is again just a reminder for Awesomers out there that sometimes the journey has these ebb and flow of positives and negatives and you just kind of get a cope and you got to push on through and it's just part of the process at the end of the day until you learn how to put the financial house in order. Until you learn how to manage a team or put systems into place, you can just expect it to solve more problems and ultimately if each day you go, I solved a few less problems today. Certainly not the same as ideally, that means you're making progress day today, is that how you kind of see it?
Jamie: Yes and those moments were my biggest learnings. Like it really was darkest before the dawn and if I would have quit, I would still be that person that life was trying to tell me that needed to learn this thing. And so now and granted 15 years almost 20 years of this type of stuff. I look at those things, “Okay we're hitting the wall. I don't want to do this anymore. What am I not seeing that I need to learn?” Because sometimes it's like hey sometimes stuff sucks and you don't have to stress about it. It just does and you have to get better at just being okay with like, this is difficult. Other times, it's like man your P&L is trying to teach you something. Your debtors are trying to teach you something. Life is just trying to show you that you aren't taking care of this or there's a skill you need to add or there's someone you need to bring in to help you. And so I would say in those moments and if you can just get some separation from yourself in it and just go okay - what am I? What do I need to learn?
Steve: Yes, I think that's a really sage wisdom. Awesomers, when we come right back after this break, we're going to talk a little bit more, in depth, about physical product affiliates and how they work today. A lot of people who are just focused on Amazon don't even know that this is such a widespread, very large business but we're going to dive into it with a world-class expert right after this.
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Steve: Okay Awesomers. Steve Simonson back here again with Jamie Birch and as we kind of come to the conclusion of the show, I wanted to really give some time to talk a little bit about a typical affiliate type of client that JEBCommerce interfaces with. Now, I'll let you set the stage. I'll ask you questions but what's a typical customer who approaches JEB look like?
51:39 (Jamie talks about JEBCommerce and the type of clients they take on.)
Jamie: Well, they do offer a physical good, so clothing, electronics, beauty are big areas for us. And travel, travel is a huge aspect as well a huge client base. They come to us and they want to broaden their exposure to new customers and to get their products in front of more people and sell more money, sell more product, make more money. And so they're usually, there's a size that they need to be, where our fees are appropriate for them but usually it's in those categories - health, travel, beauty, fitness, clothing, apparel.
Steve: And one of the reasons I'm suspecting and just from my own experience, I know that the reason they approach you is a couple reasons. Technically, a company could do this themselves, couldn't they?
Jamie: They could. Yes, there's no reason they couldn't.
Steve: Yes, it's not a matter of the skill set. What do you think that JEB brings that these guys don't have kind of in-house? It's not necessarily the skillset, always
Jamie: Well, it's really tough to find people who do what we do and have the experience and have the relationships. So unlike SEO, unlike email, and I'm not speaking down to those channels. A lot of those you can increase, you can pull a lever things change and you can see, you can increase your budget in an ad group, you can change the copy and you can see today what's happening with that. There are levers to pull in affiliate marketing but it really is relationship building. Who have you been working with four, five years that you can call? They'll put an offer up today without any testing and give you that opportunity. You really are dealing with someone on the other end of that phone or in the email and you're trying to convince them that this is good for them to promote - this offer, this product, this company. And we have that. I've been doing this for almost 20 years. A lot of my staff has been doing this for almost a decade. We bring that ability. One, we know how to do this. Two, We have the relationships to get this done and that that makes a whole difference. Throughout our time, working on systems, we've built our own coaching program that gets people who have never heard of affiliate marketing into good affiliate managers in like 12 weeks. So, that allows us to train people quickly; that's difficult and there's not a pool of affiliate managers, advertisers you can go pull from. You know, they're not teaching it in college, so it's really difficult to find that skill set.
Steve: Well and this is one of the points that I want to get across to, particularly, those that are trying to build offline or off Amazon channel. So, E-commerce is a big business. So many people that I interface with are what I call the Amazon cornerstone business owner. Right? They've set their foundational cornerstone on Amazon. It's going great right. There's a lot of upsides to it. There's always you know challenges in any channel but as they start to look at setting that next foundation stone, some of them just don't believe that you can have a website make sales of a substantial nature and that the reality is I guess that most of your clients are big E-commerce sellers and they have a big business in their own right. Right?
Jamie: Yes, yes, I would say 99 percent of them. We manage their digital marketing, their affiliate programs for their own site and they may or may not participate in Amazon or any of the marketplaces at all. Last year, we drove a hundred and forty million dollars in retail sales for our clients and this year, probably, another fifty seventy percent more than that. So that's just us, right.
Steve: Yes, just one part of the ecosystem and an excellent part as well and this is really the point for the Awesomers out there listening. If you have your own website, it's not just how many Facebook ads that you run. It's not just how many Google ads you run. It's not just how well you can do SEO or how well you can email right? Jamie's kind of talked to us in the channels you have to kind of do all of these pieces but don't forget one of the most important things. I think it’s the idea of interfacing with people who are influencers and have audiences using traditional affiliate marketing for physical products. It really is extraordinarily effective.
Jamie: Yes and look at it this way, you have an ideal customer and then there are these
audience pockets that people have developed. You want access to as many of those pockets of audience that match your ideal customer. So go get them. If that means you're going to do paid search through Adwords, awesome! Do do that. If you're going to create email campaigns or buy emails or do your email marketing, do that. You're going to be on Instagram, Facebook Ads, all that stuff. Go do those things. An affiliate is that to those affiliates have spent some sometimes longer than I've been doing this in building an audience and they know who their audience is. And a lot of times that's where that audience shops. So if you want access to that, that's where you have to be. And so don't look at it as something, I don't know, just get basic. You want access to as many audiences as possible, guess what? Amazon has a lot of people in that audience. Awesome you're there now. Where is the next audience? So you want to make sure you get some diversification. One of the things that affiliate marketing brings is that diversification. Because you can work with the loyalty partner and a lot of times for smaller brands that are cornerstone Amazon places, they don't have the brand and that pose or someone you know a Coca-Cola has. You're going to have to work overtime to build that brand and these the affiliates can expose you to different pockets of that big audience that you may not have access to or maybe you only have one budget item. You only have enough to do one thing. I can go do that because that's going to, you're going to find a paid search affiliate, you're going to find an SEO affiliate, affiliate influencers. You're going to find coupon and discount shoppers. You're going to find the exact audience you need through that channel now.
Steve: There's so much in this particular segment, affiliate marketing that we could dive into. And I just want to share with Awesomers out there that this is just a thumbnail sketch. This is just the beginning. This is certainly not the end and the opportunity is still extraordinarily valuable and fundamentally one of the best parts of it that I like is that it is a cost per acquisition. It's a performance-based methodology versus the I'm gonna throw a bunch of money in the sky and hope something works and that's you know that's to me is one of the best benefits. Jamie’s worked against the clock here. We’ll probably have you back out of one of these times or maybe somebody from your team to dive a little bit more into detail and then an authority episode. But do you have any final words of wisdom for the Awesomers out there who are listening?
59:05 (We hear final words of wisdom from Jamie.)
Jamie: Final words of wisdom is, I guess, the biggest thing for me that I've learned in this business, I'm my biggest bottleneck and our immense growth and the success that my wife and I have had through multiple businesses. We have a good life but we're always, we're still paycheck to paycheck. Going to, that's not the case. That has been looking inward and finding where am I being the bottleneck? What things do I not even realize that I'm doing that's inhibiting my personal professional growth and the revenue of my organization? And so I would say, you know, grab the E-myth book is definitely one of them and the other is to start looking inward and observe yourself in action. So I don't know maybe that's a little too hippie-dippy?
Steve: Yes, we were expecting some kind of hippie-dippie and it didn't go under the wire. No, that's actually quite good advice and really this is consistent with the same things that I talk about on a regular basis. Figure out how to, you know, get your ducks in a row both you know financially, personally, as a business. All of this is just about organizing things. So I think that's really sage wisdom and I thank you again for your time and giving back to the Awesomers out there. Awesomers, if you're listening, we’ll definitely put the links into Jamie's company and let you reach out and figure out how to learn a little bit more about this. And Jamie, thank you for your time today.
Jamie: You're welcome. It was an honor always. Great to speak with you.
Steve: Certainly my pleasure. Awesomers, we'll be right back after this.
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Steve: Boy, as always, I'm just so excited to hang out with Awesomers. Jamie is a world-class Awesomer in every possible way and he's somebody that is really just always trying to do better for himself and do better for people in this company and his clients. It's a really positive type of atmosphere to be around and he's always an inspiring guide to me. You know one of the things I want to really dive in on is the fact that you know, we discussed this within the episode. But if you're trying to build your own website, affiliate marketing is probably second only to email in terms of effectiveness. And, too often, people miss affiliate marketing or they get confused about, you know, digital marketing. Our digital products, being the only thing, that affiliates work on but physical products and affiliates go way back to the very origin days of the internet. And at one point, we had, this was back in the old days, but we had a sales channel of affiliates that was built up and we were... in fact, I think we were larger than major league baseball, in terms of affiliate sales. At the time this is when they were first getting started. I'm sure they could kick the crap out of me today. But the point is affiliate marketing has huge values. It's a cost per acquisition channel which is all performance based. This is not as you know, I'm going to spend $10,000 on this marketing channel. I hope something comes through. You only spend money when you get a sale. It's really, really, really effective and I know that the Empowery E-commerce cooperative is working on an affiliate program that members can join and get a special break on and enjoy some of the benefits of driving traffic to your own website. Such an important thing I just can't stress it enough. I don't like the idea of people just being in a single channel whether it's your own or anybody else's on the marketplace or what-have-you and without some other opportunity to make sales and find customers wherever they want to be in terms of their online behaviors. Not everybody goes to eBay or Etsy or Amazon or Jet or whomever. So these are very important marketing concepts and I really appreciate that. You know, Jamie came in and took the time to hang out with this. So, to find show notes and details, things that we've talked about. Go ahead on over to Awesomers.com/44. Don't forget that newsletter over there is probably worth you signing up for. We don't spam. We send you lots of fun and I think valuable things at no cost. That's a pretty good deal.
Well, we've done it again everybody. We have another episode of the Awesomers podcast ready for the world. Thank you for joining us and we hope that you've enjoyed our program today. Now is a good time to take a moment to subscribe, like and share this podcast. Heck, you can even leave a review if you wanted. Awesomers around you will appreciate your help. It's only with your participation and sharing that we'll be able to achieve our goals. Our success is literally in your hands. Thank you again for joining us. We are at your service. Find out more about me, Steve Simonson, our guest, team and all the other Awesomers involved at Awesomers.com. Thank you again.