In this episode, Josh interviews Norm Lanier, CEO of a long-running Amazon private label business. Norm discusses his journey from side hustles to full-time e-commerce, the challenges of increased competition and inventory management, and insights gained from Josh’s business strategy audit. Key takeaways include focusing on the most profitable products, increasing strategic ad spend, and shifting from “base hit” to “home run” products. The conversation highlights the importance of data-driven decision-making and adapting business strategies to sustain growth and profitability in a rapidly evolving e-commerce landscape.

Chapters:

Introduction & Guest Background (00:00:00)
Josh introduces Norm Lanier, outlines his Amazon business experience, and sets up the episode’s focus on the business audit.

Norm’s E-commerce Journey (00:00:59)
Norm shares how he started in e-commerce, his transition from HP, and his experience across multiple marketplaces.

Challenges in E-commerce (00:02:24)
Norm discusses recent challenges: increased competition, economic downturn, and feeling out of touch with business metrics.

Importance of Data & Inventory Control (00:03:15)
Norm explains the need for granular dashboards, product-level profitability, and efforts to clean up catalog and manage inventory.

Purpose of the Strategy Audit (00:04:15)
Norm describes his motivation for the audit: getting an expert’s perspective and actionable insights beyond what accountants provide.

Key Audit Takeaways: Advertising & Levers (00:05:28)
Norm highlights the realization that increasing advertising spend is a major growth lever, a unique insight from the audit.

Profitability & SKU Management (00:06:00)
Josh and Norm discuss the struggle with profit margins, managing 7000 SKUs, and the need to focus on high-value activities.

Mindset Shift: From Base Hits to Home Runs (00:07:28)
Norm reflects on shifting from launching many small products to focusing on bigger opportunities that can significantly grow the business.

Action Items & 80/20 Focus (00:10:02)
Josh summarizes three action items: prioritizing high-impact levers, simplifying by focusing on top-performing products, and strategic PPC investment.

Keyword Strategy for PPC (00:13:19)
Norm and Josh discuss the importance of identifying and categorizing keywords before increasing PPC spend for maximum impact.

Audit Value & Closing Thoughts (00:14:05)
Norm shares the value of the audit, the benefit of an expert’s perspective, and appreciation for the insights received.

Wrap-up & Future Outlook (00:15:04)
Josh and Norm conclude, expressing interest in a follow-up episode to track progress and encouraging listeners to seek similar audits.

Links and Mentions:

E-commerce Platforms
“Amazon“: “00:01:06”
“Shopify“: “00:01:06”
“Etsy“: “00:01:06”

Business Tools and Evaluation
“Dashboards and Tools for Business Evaluation”: “00:03:15”
“Comprehensive Business Strategy Audit”: “00:00:00”

Marketing and PPC
“PPC (Pay-Per-Click) Management”: “00:10:02”
“Keyword Strategy for PPC”: “00:13:19”

Business Strategy and Mindset
“Mindset Shift for Entrepreneurs”: “00:09:02”
“Identifying Levers for Business Impact”: “00:11:03”
“20/80 Rule (Pareto Principle)”: “00:12:16”
“Simplifying Business by Focusing on Top Products”: “00:12:16”

Transcript:

Josh 00:00:00  Today I am speaking with Norm Lanier. He is the CEO of his own Amazon private label business that he’s been running for over a decade now, and he has lots of experience. In fact, Norm is one of the lucky winners of my comprehensive business strategy audit sessions. And so today, I’m super excited that we’re going to be diving into the conversation, the audit that we just performed on Norm’s business, and he’s going to be sharing his takeaways, the insights that he’s gleaned. he is already doing millions of dollars in business, but he has aspirations to continue to grow his business and to hopefully one day be able to exit that business. And today, that’s the conversation that we had and we talked about. So, Norm, with that introduction, I want you to kind of give us a quick intro about yourself, how you got started into the e-comm world and what you’ve been doing over the last decade.

Norm 00:00:59  Yeah. Thanks, Josh. I appreciate the opportunity to talk with you and your listeners also.

Norm 00:01:06  I’ve been doing, First. e-com business. I kind of, came in the back door and started that in 2004. I started building some side hustles while I was an employee at at HP. I got to the point where I was making more of my side hustles than my real job. So for my 50th anniversary, I 50th birthday, I turned in my resignation. And I’ve been doing Amazon and Shopify, Etsy, a lot of different marketplaces since then full time. And that’s kind of where I’m at today.

Josh 00:01:44  I love it, and Norm and I dance in the same space. Sometimes we might be considered competitors, but there’s such a big marketplace out there that we were able to, you know, really kind of lift up, open the hood today and really dive into each other’s businesses. He was able to ask me a lot of questions, and hopefully I was able to share some valuable insights with you, Norm. And that’s what we’ll talk about. Norm, we first started off by talking about, you know, what is your overall goal in in your business.

Josh 00:02:15  Right. And what are the biggest obstacles that you’re facing. So why don’t you go ahead and kind of reiterate what we started our conversation off with.

Norm 00:02:24  Yeah. So, you know, just taking a look, you know, I think I’m fall into the same category as most people are selling in the e-commerce space right now, dealing with more competition. things are constantly moving. you know, the economy is down to a degree. So I think in our space, we’re, we’re seeing, you know, some pullback on, on spend over the last couple of years. So that’s created challenges, right. And you know, as we as we mentioned, I’ve been doing this for a long time, and I really had gotten to the point where, a couple of years ago and stuff. I really felt like I was out of touch that before. It was pretty easy for me. I really felt like I had it dialed in, and over the past few years, it really felt like I was kind of losing control.

Norm 00:03:15  And a lot of that had to do with not having the proper dashboards and tools to be able to evaluate kind of where we’re at on a very granular level. Right. Because it’s one thing to see your big number and your paychecks and all of those things come in on a monthly basis. But, you know, on a product level, after shipping fees and advertising and all of those refunds and so forth, what is each product actually generating as far as income and what is really driving bottom line growth? And once I got the proper tools in place, really kind of opened my eyes that a lot of products that we had, it’s like, why am I even bothering with this when it’s all said and done? I’m not making any money. It’s certainly not worth the effort on this. So we’ve really have gone in and cleaned up our catalog and eliminated a lot of stuff. A lot of excess inventory. And then we’ve been working on trying to get inventory under control where we’re not running out of inventory, right.

Norm 00:04:12  So we’re constantly playing that game also.

Josh 00:04:15  Yeah. So Norm, what was your intention of signing up for this strategy audit? What was your hopes that you would walk away from this meeting with?

Norm 00:04:25  Yeah. So I don’t think it hurts to ever have another set of eyes from someone, that is, you know, in the same marketplace and, and understands your business, right? Because it’s one thing to talk to a CPA or a bookkeeper or someone about your business and stuff, but they only understand it from the numbers side of things. Right? And so they really don’t understand what what levers do you have at your disposal that you can pull. And so in the conversation, going back and forth between us over the last couple of hours, we really dug into the business and broke things down and I really took away some some key points to start focusing on. you know, just talking about advertising. I’m not spending enough on advertising. That was something that came out of this meeting. there’s like, you know, there’s a lot of headroom there where we could be spending more, on advertising to drive more bottom line growth.

Norm 00:05:28  and that’s probably the biggest lever that that, you know, came out of the conversation. But, I haven’t gotten that insight from anybody else, and I’m certainly not going to get it from a bookkeeper or CPA. So this has been really super valuable of digging into the business and going under the hood. from someone that lives in the same world that I do and understands the, the language and the things that that really can make an impact on the business.

Josh 00:06:00  Yeah. And I think that’s a great summary, Norm, one one thing that you had mentioned at the beginning of the call, You know, if we could wave a magic wand, what would you like to see improved right in your business? Well, that would be the profitability, right? you had mentioned that, you know, you had seen over the last couple of years since Covid, you had seen some pullback in consumer spending. You’ve been struggling with that that profit margin and being able to grow it and maintain it and and identifying like, what are the levers that actually impact that bottom line.

Josh 00:06:36  Now with you, you have over 7000 different SKUs. So you’ve got a lot to to handle. Right? This isn’t just like so I’ve got five SKUs. Here’s where we’re at. Like this is this there’s a lot that you could dig into. One of the things that we talked about is that taxonomy of value, and we talked about focusing on the levers that can provide the outsized returns compared to everything else. I want you to kind of reiterate, you know, maybe to our audience what that means, what your takeaways were as it relates to the levers that you have to pull in your business. And, you know, do we spend time on all 7000 or how do we determine where we’re going to spend our time? Because we have a limited amount of time. My team has a limited amount of time. What’s there? What do I do in order to actually impact the business?

Norm 00:07:28  Yeah, one of one of the big things also was and this was a great insight because my business has always been I’ve never gone after huge products that had a huge amount of competition.

Norm 00:07:42  It was always the, as we refer to them as the bond kit to get to first base sort of thing. Right. And you don’t have to make a huge amount of money on each product when you’ve got 7000 SKUs, right? But that being said, I’ve been in this business long enough to that, you know, that attitude is probably preventing me from reaching the full potential just because at this point, it takes as much time and effort and resources for my employees and myself to launch a product that is not only going to sell a couple of units a day, and instead where I should be focusing is really drilling down and putting more effort into looking at each product or each product idea and which ones could be that, you know, double, triple home run sort of sort of product. because again, each one of these products that we add adds another layer to the business of complication. and so at this point in time, it’s probably I need to shift my mentality from easy base hits to to things that are really going to move the needle much more than, than what I’ve been focusing on.

Josh 00:09:02  Yeah. Norm, you summarized that perfectly. I think that’s a big mindset shift that a lot of entrepreneurs need to have in order to shift and go from seven figures to eight figures and beyond. Because, you know, the saying is, what got you here is not going to get you there, right? And with our business, it’s been that way. We started our business by finding very niche opportunities where it was only maybe 2 or 3 sales a day, right? Lots of bunt hits were flying under the radar. There’s no black hat competition. There’s not a whole lot of competition in general right now. You know, fast forward that’s that originally built a $5 million business that was like, all right, hey, look at this. But then when we wanted to say, hey, how do we go from 7 to 8 figures. We then had to identify, hey, look how many product opportunities are ahead of us. We can’t do all of them. We have a fixed amount of time and resources.

Josh 00:10:02  So why don’t we start focusing on the ones that actually can provide an outsized return? What if we could find products that are doing 20 to 50 to 100 cells a day. What could that do? Because it’s the same amount of time to do keyword research. It’s the same amount of time to do the product copy the same amount of time to do PPC management for something big as it is, relatively speaking, for something that’s small. What are kind of the three takeaways and action items that you are going to be doing in your business based on this audit that we’ve done? Number one, I think we’ve shared a lot of insight into identifying the levers that actually make an impact in your business. And so for our listeners, what what do I mean? When we talk about levers, imagine all the things that you could focus on in your business, right? You could focus on driving external traffic. You could create a blog. You could invest time into, you know, social media content, you could invest time into Shopify.

Josh 00:11:03  The list goes on and on and on. So how do you identify where do I spend my time? we talked about this norm in your annual planning, you kind of need to do your own analysis and create your own hypothesis, right? Going back to science back in elementary school. Create a hypothesis. Right? If I do xyz, I believe it could provide me with this return. And then if you go down all of those action items or ideas at least that will start to help you prioritize what is going to make a bigger impact in your business, whether that hypothesis comes to fruition or not. Go in with an educated guess. So that’s action item number one. Action item number two is overall simplifying your business by focusing on the 20% of those products that are generating 80% of your sales. And Norm talked about all the effort that he’s done getting to this point, which is great, and understanding his numbers better, understanding which products are moving the needle. We had a brief conversation where you even said, maybe I don’t need this other, you know, product side of my business because the margins are low.

Josh 00:12:16  It actually most of my overhead and employee cost is associated with those products. Imagine if those aren’t included in my top 20% of products that are generating 80% of the revenue. Imagine what that could do to simplify the business, right? So for our listeners, apply that to your own business. What’s the 2080 rule in your own business? And last but not least, we talked about the opportunity for PPC spend in Norm’s account. Specifically, he’s got a relatively low tacos percentage in the single digits right now. And if he were to I, I didn’t just tell him, hey, just go spend money just to spend money, but to spend money focusing on those 20% products, right, that are producing the 80% of revenue. And before you dive into that PPC, I said one key thing that’s kind of a prerequisite, norm before you just start spending money on PPC or doubling down on it. What do you have to do first and get really good at?

Norm 00:13:19  You got to figure out exactly what the keywords are that are going to move the needle.

Josh 00:13:23  Yeah, yeah. And I’ve got a whole strategy that I’m sharing with Norm that walks through. How do you categorize those? All the keywords. We’re talking about thousands of keywords into four different buckets and categories of keywords shop, semi shop, browse, browse specific and the specific advertising strategies you should have for each of those keywords. That’s where he’s going to be able to provide an outsized return on his business with minimal amount of investment of his time. So there’s kind of our summary norm. Is there anything else that you want to share with the audience about how this audit went? Was it worth your time to wrap things up here?

Norm 00:14:05  Yeah, definitely worth my time. I appreciate everything that you digging into my business, as we talked about earlier. I think it’s it’s really good to have another set of eyes. Look at your business. Right. Because you see it one way. It’s good to see someone that has the same knowledge base to be able to come in and say, here’s here’s where some opportunities are to either add to or eliminate, you know, from your business.

Norm 00:14:34  So having someone that can can do that, that’s knowledgeable because as I mentioned, having a CPA or a bookkeeper look at your numbers is really going to provide very little insight on how to change the business to improve it. And so and you’ve just been incredibly generous and, the information that you’ve provided. And so I certainly appreciate your time and helping me to gain better insight into my own business.

Josh 00:15:04  Well, no, I’m I’m excited and honored to have this privilege to have worked with you over the last few hours. And I look forward to maybe we do another podcast episode a year after. Right. That’s like. All right, what’s happened in your business? and then hopefully to see the progress that you’ve been able to make there. So hopefully there will be a part two coming down the road. but, Norm, thank you so much for your time and for our listeners. Those of you who are interested in having a similar experience like Norm has had, where you’ve got a third parties, you know, set of eyes that want to come and provide you with insight of things that are going well and seem to be going well in your business, and maybe some areas of weakness.

Josh 00:15:49  from another seller that’s hopefully been there and done that. My my job. And the whole reason why I like doing these is to hopefully help other sellers, like Norm, be able to navigate around many of those obstacles and stumbling blocks that I ran into, help him leapfrog over those, and to crush his business and to continue to expand into that eight figure range. So, Norm, thanks again for your time.

Norm 00:16:15  Yeah. Appreciate your time. Thanks a lot, Josh.