What is the most competitive product on Amazon? Smartphone cases. What does Matt Altschul’s Smartish company sell? Smartphone cases. And it thrives.
“To even think about competing in an area like cell phone cases,” he told me, “you have to use every Amazon marketing tool at the same time – advertising, coupons, deals of the day, lightning deals, larger campaigns, outside advertising.” in Amazon. “
I recently spoke to Altschul about Amazon, cell phone cases and custom manufacturing, among other things. What follows is the entire audio version of our conversation and a transcript that has been edited for length and clarity.
Eric Bandholz: Tell us about Smartish and yourself.
Matt Altschul: I started Smart I still love it. We are based here in Austin, Texas. We sell many products on Amazon and some directly to consumers. Everything is online. We try to simplify our business for reasons of reason. We don’t have the retail exposure. My life is happy and good.
Band wood: Do you have business partners or investors?
Old school: I have 100% control in the company. We have 14 people – a good team. Some of them manage the operational side or the sales and marketing side. But I oversee the ship.
We originally had co-founders who either died or I bought up.
Band wood: Literally died?
Old school: Yes. It was stressful. But through all of that, I was responsible for everything. It was lonely sometimes. Who are you leaning against? Who are you looking for advice? I worked alone for a long time on one mistake. Whoever hears this does it better than I do. You want to connect with people in the community and learn more about entrepreneurship. I didn’t do that very often right from the start.
About five years ago I was involved in an accelerator called item number, an accelerator for consumer goods here in Austin. Now they are starting to open some stores in the United States. But I got together to engage with like-minded people in our community. And it helped a lot. It helped open my eyes to some of the mistakes I made.
It is an excellent accelerator for any consumer goods company, especially in Austin, that already has a market-validated product. You give them a certain amount of equity for an accelerator program. They offer you access to mentors and capital, or at least an introduction to potential investors.
Band wood: Do you have to forego equity capital for this?
Old school: Some equity, yes. It’s a small stake in the business that’s worth it in the big scheme of things.
Band wood: Employees will never understand the pressure to build a company. It is available around the clock as an entrepreneur or business owner. We don’t turn it off. Have you tempered yourself in this regard over the years?
Old school: I think we as entrepreneurs have dealt with many things. Things that have caused stress over time in the first five or six years do not. It’s a feeling, no matter how bad it looks, we’ll get through it.
State sales tax was one of the things that happened to me a few years ago. I thought, “I’ll find out about the state sales tax thing later.” I didn’t know that I was liable for the tax that I was supposed to levy.
I finally looked into how much money I owe these countries. If I had seen that in my first five years I would have been stressed. But after eight years, I realized that we had had similar problems before, and we’ll get through this.
Band wood: Let’s talk about your sales strategy. You are mainly on Amazon.
Old school: I sold on Amazon before I started Smartish. My previous company sold high-end headphones. I helped a friend start this business. Overall, I’ve been selling Amazon for about 14 years. I’ve seen many iterations of how Amazon works. Based on this experience, I can maneuver and navigate the market pretty well. But there is a new challenge every day. I can predict some things and others completely blind me.
Band wood: My company, Beard mark, doesn’t sell anything on Amazon. I was afraid of the fact that they could snap their fingers and our sales would be gone.
Old school: Yes, that could happen. We might have been the biggest fear on Amazon a few months ago. Our products were depriorized from fulfillment centers and postponed to a month-long delivery on both the seller and seller side – 1P and 3P.
It is certainly a risk that I am trying to water down by expanding our direct-to-consumer market, where we do a pretty good job. But surely a large percentage of our sales are still on Amazon.
Band wood: You seem to have created a brand on Amazon that is different from most Amazon sellers. Talk about this strategy.
Old school: My idea has always been to have a brand where people like, engage and buy products. The downside of an Amazon store is to find a chance in a product and only get it cheaper for a dollar. It’s not that much fun for me. I like product innovations. And we try to stay on our track. Smartish sells cell phone cases and the like. We do not make placemats or pens or CBD oil.
Band wood: From an outsider’s perspective, phone cases seem to be highly standardized. How do you compete?
Old school: Phone cases are probably the second most popular market (after supplements) on Amazon and the most competitive. For a Chinese factory, there is no entry barrier to make an injection mold for an iPhone case and sell it directly on Amazon.
Most of the top 100 sellers come from China. Your products are much cheaper than mine. I have to have a really good product – the more innovative the better. I have to think seriously about functionality, style, colors and every facet. Otherwise, I get bad reviews that can sink a company. You can’t live on Amazon without a really, really good product.
To even think about competing in an area like cell phone cases, you need to use all of Amazon’s marketing tools at the same time – advertising, coupons, deals of the day, lightning deals, larger campaigns, outside advertising on Amazon, a PR team Write-ups and move those write-ups to your website using Vine and Early Review. All of these things must go well at the same time.
But even that won’t get you into the top 100 in some cases because it’s just so competitive. Luckily, so many people buy cell phone cases that you can live outside of this ranking and still have a pretty profitable business.
Band wood: They manufacture in China. This has to be a challenge to manage the relationship with the factory.
Old school: Yes. You can be lazy for sure – about as lazy as you allow. We have a full time team in China. I have an ex-pat who is responsible for product development there. His team is on our payroll full-time. They are in the factory almost every day, working in quality control and shipping – to make sure everything is under control.
Band wood: I wouldn’t be surprised if there were Chinese factories selling their customers’ designs.
Old school: From the back door. It happens. It depends on what kind of factory it is. What is difficult is when you are in the early stages of a business, at the smaller end and dealing with some smaller factories that are sometimes less honest.
Band wood: Can you get pre-production iPhones from Apple so your cases are available on day one?
Old school: That’s a good question. The answer is no.
How do we know what the specifications or details of a new iPhone case look like? We have to start designing six months in advance. We have to start making tools four months in advance. We have to go into production two to three months beforehand, and two months before the phone is even announced, tens of thousands of units are being cranked out. It’s a big risk.
Almost every case manufacturer works with leaked three-dimensional models. If Apple allows it, they know they can’t control it. But almost every case manufacturer has to process rumored designs. We say, “Okay, I think that’s right.” Or: “That is probably 90 percent correct.” Or: “Perhaps that’s 97 percent correct.” And then one day we have to decide: “We will lock ourselves in. We hope that it is correct. “
Band wood: I can not imagine that. I have always assumed that Apple has this relationship with case makers, and I sent them prototypes.
Old school: No, they don’t. Only the two largest case manufacturers have official Apple specifications. But it can also be a disadvantage because you lie in bed with Apple and control when you can produce your products. They say, “You can’t start manufacturing until we tell you.” You can only speak the name of the new iPhone after the announcement. In contrast, everyone else is already putting up the lists and creating inventory. So there are advantages and disadvantages.
Band wood: I enjoyed our time. Where can people learn more about you and your products?
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