Okay. Hey, so today we have Damon with Natural Cure Labs. Damon, thanks for joining us.
So give us a little background. I looked at your LinkedIn before I hopped on the call today. You worked for Samsung, you've got some unique experience. We'd love to hear how you got started with Natural Cure Labs as the founder and CEO.
Yeah. Happy to walk you through a little bit of the background and history. Um, so Natural Cure Lab is a dietary supplement company. And I will admittedly say that I don't have a long lengthy background in nutrition or wellness, but I do have a long background in marketing, product management and technology. And I think, um, the former lends itself well to the, uh, to the latter. And as you said, I worked for really large tech companies for more than 10 years. I started off at Microsoft. I was in their corporate headquarters in Seattle, Washington. After that I spent a lot of time overseas, so I got transferred to their UK headquarters in London, uh, fell in love with living abroad and the culture and experiences and, and different interactions that you get from living overseas. So I stuck around, I worked for Google for a short period in Germany.
As you said, I moved to Korea for a couple of years, worked for Samsung, at their corporate headquarters. And, yeah, I picked up a lot of these incredible experiences along the way. It really feeds you into the tools and, and ideas that you need to sort of get started with the business. And, uh, so after living overseas, I moved to San Francisco, which was the perfect storm, right? So I was in this melting pot of, uh, of entrepreneurs that are really passionate about starting their own businesses, solving big challenges and, uh, the environment and the climate there is just really infectious. And so after spending a decade working for others, I thought now's the time to try something new.
So walk me through that. So you're working at these great companies, they're all kind of top in their field. You're working at Microsoft, Google, Samsung. Um, how scared were you or were you scared when you made that leap from like, okay, I've got this great job, I have a great career going for me, now I'm going to take the leap and start my own business. What was that like?
Yeah, absolutely. It's very daunting. No matter how much experience you have, or no matter how much confidence you think you have because you have to learn a lot for the very first time. You sort of break a lot of glass, as they say. And I think, you know, for me, I just started very small, very modestly and, and, and built the company from a single product, right. So, as I mentioned at the top, um, you know, working in these big companies provides a lot of structure. It provides a lot of coaching and mentorship that can lend itself very well to any field, really, whether it's health and wellness or, or another. And, uh, I think, you know, the obsession with things like speaking the customer's language, understanding who your ICP is, you know, doing some, you know, market sizing analysis, even at the highest level are these best practices that work really well for large established companies, but it can also be applied to small startups. So that's exactly what I did. I basically had this menu of experiences from these three big companies overseas and domestically, and I borrowed a lot of that, a lot of those ideas, a lot of those concepts, and applied them at a micro level, beginning with a single product.
So it sounds like a lot of your training and the skills that you've developed over the years, that lended really well to making the leap into starting your own company. Um, one thing that I've heard from talking to a lot of founders is they kind of go in two camps, which is obvious either they start the company while they're working the job, or they just cut it, make a clean cut, and then go a hundred percent in. What was that like for you? Did you, uh, cut it clean, or did you work on the company while you were at the job?
You're exposing me now, Joe. I absolutely, I moonlighted you could say so nights and weekends were spent brainstorming and developing out the, the, the business idea and frankly it wasn't until a couple of years later that I cut the cord and went straight to, uh, to focusing a hundred percent on my own businesses. Like you said, it's, it is, it can be pretty scary to go from having a decade of, of very established, very consistent, very predictable support and income and infrastructure to really being on your own, right. And having to build your own retirement plan, and have, manage your own finances, your own accounting, your bookkeeping. It can be pretty scary. So for me, I found a happy balance between, you know, working full time and having that security of having an established job and income. And then in nights and weekends, you know, slowly building the business from a couple thousand bucks a year to, you know, much more than that. And there is this mental inflection point, I think, where you hit, you know, can, is this, is this still a hobby job versus like, okay, now I'm confident this can be a full-time gig.
That's great. So as far as advice goes, um, what would you tell someone who's working at a company right now? Maybe they're thinking about a side hustle or starting their own e-commerce store. What advice would you give them based on your past learnings?
Yeah, go for it, is basically what it comes down to. Um, I do- you know, I get asked this question a lot. I volunteer for some entrepreneurship courses and local universities and things of that nature. And a lot of these young entrepreneurs will labor over a business plan for months and months and try to get every number correct, and every line item within this 60 page plan just right. But I think that those, all those practices are great for honing your vision and, and, uh, and sort of setting a north star. I think being super dynamic and flexible and agile is probably the way to go. So, you know, you don't have to boil the ocean, you know, with your first company or first product. Just start with something small, start with a concept that you feel really interested, you know, about, or, a passion project that you may have and try to, you know, take incremental steps and incremental wins.
Yeah. I like how you started with one product. I think one thing a lot of people don't realize is like, you don't have to do everything. The market's so large for so many things that if you start with just one product, you can kind of scale from there, or you can realize like this isn't working, I need to figure out something else. And also you figure out what skills you need. Can you tell me about when you decided to hone in on that one product, what was going through your head and why you selected just that one product to start with?
Yeah, you bring up a really good point and, so two things are, everyone should consider. Yes, the markets are huge, right? Categories are huge. Industries are huge. Although it may feel like there are a lot of players, there’s often niches that can be explored and exploited, but you have to be pretty careful about that, right? There's, uh, I remember seeing an ad on Facebook or something trying to sell Amazon, get rich, quick courseware, and then like, think about a yoga mat. There are, you know, Amazon sells 10,000 yoga mats a day. It's a multi billion dollar category, maybe a hundred million dollar category. And think about it, if you just get 1% of the yoga mat category you'll make tens of thousands or hundreds of thousands of dollars per year. And while the math may be correct, it's probably a bit misleading, right?
So, sure Amazon sells thousands of yoga mats a day, and it's a multimillion dollar category, but it's dominated by the top two or three sellers. They control 80% of the sales volume flows to the top five or ten people. And it's the remaining, you know, 2000 sellers have to fight over the scraps. And so you may find yourself with like a warehouse full of yoga mats that you can't move. So I think it's about, you know, finding a niche that is not over-saturated that still has relatively good traction and search volume and some interest and where you can properly differentiate, you know, look at what the competition's doing. And maybe more importantly, what they're not doing, Obsess over the reviews, see what people are raving about, see what people are complaining about and see if you can iterate on that and sort of, again, explore the niche, try, you know, carve out a space for yourself and compete on that.
How long have you been selling on Amazon?
Oh, wow. So how have you seen a change in the last six years?
Speaker 3 (08:48):
Quite a bit. It's night and day now than it was in 2015. In 2015, I spent $500 a year on sponsored ads. And if it even existed back in 2015, I don't know. And now I spend 7 to $10,000 a month on sponsored ads. It's crazy. It's horribly competitive. You've seen a lot of the tactics shift, you know, before it was around, you know, goosing reviews with, you know, false and fraudulent reviewers to much more sinister black hat and gray hat techniques. And a lot more external pressures, not just domestically from people feeling really enabled and empowered to sell on Amazon because the barrier to entry is very, very low, but now foreign sellers are really coming in and dominating the space. You know, they have the infrastructure, they have direct access to manufacturing capabilities, and they’re coming in and, you know, deploying some of these black and gray hat techniques and just wiping out the smaller sellers.
You know, it's been tough. And the other thing that I would say has changed quite a bit is Amazon's compliance and enforcement behaviors. It used to be, they could afford the time and discipline to be really surgical about taking products down and applying enforcement. Now it's all bot driven and you can get caught up in these bots sweeps, and you have a very innocent product, like on the seller forms, you see these horror stories. Like I sell socks, like I literally sell athletic socks and they got pulled down as a toxic substance. A pesticide, they got a pesticide sweep. It's like, clearly my socks are not a pesticide, but the bot thought it was, and they were sort of, they're defenseless to do it because you just wake up one morning and that's my biggest fear. I wake up and I check my phone every morning for some sort of phantom suspension notice from Amazon that's no fault of my own.
Yeah. That's wild. I actually heard a rumor that Amazon bought a company that does fake reviews for Amazon products. And the reason why they bought it is because they want it to get a list of all the companies that are selling on Amazon that are using it to get rid of them. And there was a major, I'm going to slaughter this name, but they do like all the electronic, like dongles and cords and all that kind of stuff, I think it was like, AKI, they're huge. And I think they got all their listings removed. It was like a billion dollar company. And I think it was connected, but they're clever. I mean, that's a great idea. Like spin up a new company, buy the review company for a lot and then just clean house with fake reviewers.
Oh my gosh. That's another example of one of these fantastical horror stories that you want to believe are not true, but probably have a seed of truth to it.
Yeah. It's wild. So Amazon is obviously awesome. Like they come up in so many search results. Everyone knows it. You go there when you have high intent, because you want to purchase something through prime memberships. So they're extremely loyal. How do you, or do you diversify outside of Amazon?
Yeah, it's essential. And that's my number one goal for 2021 is diversifying the channels to market and increasing sales velocity outside of Amazon. You're right. Amazon is wonderful. I struggle to provide them with compliments because they make my life so miserable. But they're the only name in the game, right? 52% of all sales come through Amazon or something like that. Like you said, the purchase intent is incredibly high. You know, although my PPC spend on Amazon is quite high. The conversion rate is amazing because people are there to buy right. They’re not there to search and educate themselves. So, you know, being on Amazon is essential, but being off of Amazon is equally as essential. Because again, you can wake up one morning, check your phone and have your entire account suspended. I had my Canada account suspended for having dual accounts or something like that, which is completely wrong.
I've never sold a penny in Canada, but it took me two weeks to navigate the reinstatement process, because it's just so challenging. They must service thousands of these suspension, reinstatement requests, and you're at the bottom of the pile, right? So what can you do if your account is suspended, well, you need to be on other marketplaces or you need to be in other channels, both your own, direct to consumer, and also other marketplaces because customer acquisition is costly and time and energy consuming. And if you can, you know, if you can afford it, great, we use Shopify and we had migrated from Squarespace, uh, in 2020. Uh, I love Squarespace. I'll never have anything bad to say about that company, wonderful company, awesome tools and fantastic user experience. It's just not purpose-built for e-commerce like Shopify is, right? So we switched to Shopify and our sales have improved and the tools that they offer are fantastic. But we're also on like every other major online marketplace from eBay, which is surprisingly the second or third highest trafficked online marketplace, to Wish, which is a big growing, you know, Chinese competitor, to things like Overstock and other specialty online marketplaces. Walmart, of course.
Interesting. Do you have to pay for ads on those sites too?
They offer ad, sponsored ad options. We've toyed with them a little bit on Wish and on eBay and haven't done it on Walmart yet because, well, we're completely consumed with Amazon VPC spend. It's like a full-time battle, optimizing your stand on Amazon. We have a company that does it for us. We have an artificial intelligence software that does it for us. We have a full-time account management service we pay for, it's really, really critical to do that investment on Amazon. And, you know, this year will have to be the year we get more serious about it off Amazon.
So would you recommend someone who's starting an e-commerce business to start with like Shopify? Or would you say like if you can sell on Amazon, start with Amazon and then move off and start your own store?
Yeah, that's a good question. I hadn't considered the sort of order of operation here, whether you do your own and then Amazon or vice versa. I did mine simultaneously, you know, I needed my own website to help educate customers because I don't know, I think a lot of customers, especially in a consumable product category, like health and wellness, trust and safety and quality are really critical. And, you know, really top of mind and without a website, I think that you would lose a lot of that trust and confidence with the consumer. So we had to have a website to begin with, right, to help educate the customer, talk about our quality and safety procedures, et cetera. So that was a, it was a non-starter to go on Amazon without a website to help educate customers. If you're selling another product that maybe doesn't require that degree of trust, maybe it's not as important, but I would still recommend it. You're going to be able to repurpose a lot of the tools and a lot of the outputs that you have to create for Amazon anyway, for your own website, right? Imagery is imagery, you know, lifestyle, background, product shots, videos, you name it, and you can use it on both sites. And so with just a little incremental effort, you can probably set up both sides pretty effectively.
Got it. So this is a tough question, it's very open-ended. Where do you think e-commerce is going over the next few years?
That is a tough question. I mean, it's going to go nowhere but up, right. I did an interview not too long ago and quoted some interesting statistics about the explosion of e-commerce sales in 2020. And I think that that trend is going to continue. 2020 was a forcing moment to educate people on how easy and convenient shopping online is. It's brought a lot of people into the e-commerce space, both from a seller and a buyer perspective, and it's going to continue to grow. I do feel that Amazon is going to continue to dominate without, you know, legislative action. I think that they'll continue to grow and, and snuff out the competition, but I also have a lot of confidence in other big players, like Walmart, like really leaning in, they've acquired, oh, I forget the company.
They acquired an e-commerce company in 2019, or maybe 2018 now. So they brought them into the fold. They have been taking up a lot of great talent and putting a lot of money into building out their infrastructure and you'll see it happen as well. Like Bonanzas is another interesting e-commerce platform. They're very under the radar. They sort of cloak themselves as like a Google native type shopping experience. And I think you'll find more and more of these things coming up and Shopify is having explosive growth. Like a lot of people are trying to go out on their own. The challenge though, is I think that, like we're seeing with subscriptions, like for home entertainment, there's subscription fatigue, right? You have your Hulu subscription and your Netflix subscription, your Disney plus subscription. And now there's like this paramount thing. Subscription is like, how many more subscriptions are we going to have? And I feel that, you know, you buy your t-shirt at one Shopify store and then your electronics at another and your shoes at yet another. And I feel like that fatigue will also begin to set in eventually, it's just not as convenient to go individually to different sites and pages to buy specific items. I think that these marketplaces, Amazon, Wish, Walmart, eBay are going to continue to survive and thrive because of that convenience factor.
Yeah, I think so too. I agree with a lot of that. So obviously we're both very bullish on the category. E-commerce isn't going away. You see a lot of people on the outside who are thinking, okay, I'll just start a new e-commerce store. People are claiming that they make all this money doing drop shipping, they just collect orders, they show everyone on these emails that come in, blah, blah, blah, like, okay, this is easy money. I just have to figure out my customer acquisition strategy and I'm off. What do outsiders who actually haven't done this before, not know about the space?
Oh, well that it's highly competitive that although the barrier to entry is relatively low when it comes to acquiring product to sell, the infrastructure and tools that you require to truly scale are not as cheap as you might think they are. You have to store the product, and move the product, ship the product, prep the product, you know. You have to go, at least in my case, you have to go through compliance, you have to worry about trademarks and copyright protections, you have to worry about, you know, compliance with regulatory bodies that, you know, labeling needs to be done correctly and marketing needs to be done in a compliant manner. Education needs to be done. Again, I think a lot of people get seduced by this fact that they can buy a trinket in China or somewhere overseas for a very affordable price. And they see them being sold online for 3, 4, 5X. What they don't realize is that 3, 4, 5X is very necessary to cover your cost. And like the take home, you know, slice is pretty thin. And after accounting for all the infrastructure that goes into moving that product.
Yeah. That's a great realistic perspective on it. I think one thing that a lot of people think is it's just like, okay, Shopify is 35 bucks a month. I'll go source a product on Alibaba. I'll throw it up on the website. And then they realize like, after two weeks, like, no one's buying anything. Maybe like their mom bought something. And then they're like, what did I do? And then they just quit and they have a ghost store doing nothing for the next couple months. So that's a really helpful perspective. So if someone wanted to seriously get into e-commerce, they start with their one product, they're focusing on an area, they understand how competitive it is, they're going to diversify with maybe a Shopify store with their website and then Amazon. What resources would you recommend they take a look at to make sure that their first kind of few months is off to a good start?
Yeah. It's a lot to take on. And I could probably spend the remainder of our time together and educate the listeners and audience on how they can, you know, become more savvy in this space. You know, I think that, well, there are online courses that claim to do a lot of education and I can't speak for anything cause I haven't attended any of them, but I have to imagine that they probably do a decent job going through the basics, right? And the basics would be like, defining your customer profile. Who is your ideal customer? What do they look like? You know, who are they and why do they care? Like, what problem is your product solving? You know, how do you educate the customer on it and how do you pull them in and convince them that you are different, that you are special, that you offer value that's above and beyond what the competition can do.
And it's a journey, right? It's not something that you do once you become an expert in and then move on. Like I learn every day, I change every day, our tactics, our strategies like obsessing over the competition is really, really key. Like what is the competition doing now? And more importantly, what will they be doing in the future? And what do you need to prepare yourself for? So getting started is really tough, but in summary, you know, get as much education as you can, read a lot, but be highly skeptical, I think, of some of the information out there. Know your customer, obsess over your customer, who they are and where they are and what are they looking for? And then differentiate as much as you can, everything from the brand to the communication, to the tone and manner in which you speak about your own company and brand. And those are the three things I might recommend.
That's great advice. I would question anyone who is considering starting a store, don't spend a lot of money on a course. It's easy to just like think courses are going to solve all your problems. But what happens is a course can give you some basic information, which you could probably figure out online anyway for free, and then once you start, you realize you have a lot of questions that your courses aren’t going to answer for you, and then you have to adapt. And like you mentioned the competition, like they're not going to tell you how to position yourself differently versus your competition. They might tell you like, be aware of the competition because you will have to position yourself differently.
No, Joe, that's a really great call-out and I'm happy that you, you know, further explored and I'm not in any way condoning or advocating for any paid courseware. I think that you're right there. At a very, very high 10,000 foot view level, that's not going to help solve anyone's individual problems. A lot of the courseware is very tired, right? I attended a couple of webinars that were clearly prerecorded. And even though they might have only been 12 to 18 months old, they were very out of date, very irrelevant, very rapidly. This is one of the most rapidly moving spaces. And, you know, potentially, you know, maybe there are peer groups out there that people can get involved in. And I know I'm involved in a lot of, you know, these Facebook e-commerce groups. Again, everything has to be taken with a grain of salt.
Some of the advice out there is not, I don't know if it's deliberately incorrect or it's just, the user has the best intentions, they just don't know. But I think, yeah, explore, explore your education as fully as you can. Don't invest a lot, have a high degree of skepticism and start small, right? Don't overextend yourself by buying a container worth of product and expect that you're going to move it in the timeline that you need. You know, try to start very, very small. When we ran our first production run, we paid about three or four times the price for that small production run than we would eventually pay for larger runs because we bought this micro run, right? We only bought 500 units. Now we're buying, you know, 15, 20,000 units at a time, but like 500 units, you know, was very, very expensive. We sold it at a loss, but just to test the market, to test, to see cause like 500 units, sure, you know, hopefully you can move it. And if you don't, it's not going to destroy your personal finances. But if you buy 20,000 units, you may find yourself in a very different situation. So be very, very modest and realistic, I think when starting out.
Great advice. Yeah. Manage that risk early on, because if it works, you can spend more money and grow after. And if it doesn't work, you know, you didn't waste, you know, thousands of thousands of dollars on something just because you felt like it might work. So test and don't spend too much money. That's great advice. Only a couple more questions. Um, favorite tools, any tools that you cannot live without?
Yeah. I mean, I have a lot of tools that we use every day. Most recently we use a tool, well, it's a service really called Flowspace. Maybe you've heard of it before. It’s like an on demand warehousing space. It's a company that's partnered with a couple of thousand independent warehouses across the United States. And they offer no contract month by month storage. And why this is important for us is that Amazon FBA, we use Amazon FBA. So we used to ship all of our product directly from the manufacturer to FBA warehouses and that's where it stayed until it's sold. And with this explosion of third party sellers on Amazon and with the high interest of utilizing FBA services, FBA warehouses just simply can't accommodate all the products that people want to send. So they're limiting storage and restock rates. And so we found ourselves in a really tough situation where we have four manufacturing facilities.
We have them in New York and New Jersey and Colorado and California. Some warehouses are like, oh, sure, we can manage your product, let’s ship it to Michigan. And so can you imagine like LTLing all your products to Michigan just to send it right back out, you know, a couple of weeks time when Amazon allows you to replenish product. So Flowspace allows us to find warehouses super close to our manufacturing facilities. We can store month to month if we need, you know, some of our products have been stored for several months, some of our products have been stored for a few weeks and that flexibility has been really helpful for us.
That sounds awesome. That flexibility is key. Favorite books, any business books you've read or books that have influenced you or you'd recommend?
Yeah. And, you know, I'm almost hesitant to even say this book's name because it comes with a lot of baggage, but I did read The 4-Hour Workweek by Timothy Ferriss a couple of times. First, as just a pleasure read because it has a very provocative title, but the second time or third time I read it was with some more interesting intent, right? Like, oh, well maybe there's something behind this. And I, again, I caution listeners that The 4-Hour Workweek is not a how-to guide, it's more of a thought starter. Timothy Ferriss is an interesting character who does an amazing job of distilling and simplifying really complex concepts. But it's not for the average person, you could say. I know plenty of people who literally lost their jobs because they tried to follow the advice, it's not a how-to guide. Use it as some interesting inspiration and nothing else. Um, and then there's a book called The Seventh Sense by Josh Cooper Ramo that talks about network effects and the power of networking, which I find is very interesting.
Yeah. Networking is underrated. The one thing I've learned from networking is you better have something of value to offer. And then once you do, networking becomes a hundred times easier. So develop some skills, become interesting and then networking is pretty easy once you can offer something to other people. And then the final question, Damon, how can people find you?
Sure. I have a very unique name so people can find me on LinkedIn through my full name. The company is also easy to find, it’s naturalcurelabs.com. You can find the company on social media, although we are not super active because as a health and wellness company, we need to stay super compliant, which means there’s not a lot we can say, or not a lot we can do to engage on these social media platforms. And also we are, we have a couple brands that we are currently using and will use in the future. So Vita Tails is our pet health brand. So we manufacture multivitamin soft chews for dogs, sorta translating some of our expertise in human supplements to pets. And then we are rebranding our human supplement line to a brand called Palmara health, which will be announced later this month, early next month.
Sounds great. Awesome chatting with you. And thanks for the time.