Ecommerce Checkout, Payments, and Subscription Strategy

Introduction to Merchant Account Challenges

0:00getting poor traffic on a new merchant account whether you're building a brand or whatever if you're getting poor traffic out of the gate you're going to have bad transactions that simple many times people don't know what the wrong way is and if we got a lot of entrepreneurs here that are trying to start a brand or something along that line the one thing I will tell you guys is get Merchant depth you need to make sure you have more than just a few payment gateways we'll call it you either position yourself as I guess quote unquote Walmart or whole food yeah do you want to be competing with everybody discounting constantly or do you want to just raise your price become a luxury brand kind of repurpose your branding and take advantage of an entirely different market and I think all is leading to the fact that a lot of people aren't spending money right now there is going to be a group of people that is and they're willing to spend more for the products that they really

0:49want especially if they perceive them to have higher value you get what you pay for yeah [Music] good job Brian Tim Matt and Steve this this

Panel Introduction and Setup

1:07these photos must have been 42 years ago God you guys look good you guys haven't aged a [Music] bit let's check these mics let make sure we're we're able to speak into it all right stop it Brock already this is going to get Rowdy over here I need like an anti anxiety I'll give you a beer I'll give you a breeze who do we who do we have on stage and what are we doing today brother what what are we doing we're we're just going to get real right having some regular conversation I think we'll all learn from it but we'll see where it goes from there but I will introduce the panel if you're good with it are you ready to roll let's rock it all right let's rock and roll all right so first of all my name is Brian bjack I am the Vice President of Sales for checkout champ I like long walks on the beach and sharing drinks at Bill Cosby's house those are my favorite things but I'm going to introduce a panel this is

2:12where it gets good man on the end he's the most famous ex Lucha Libre wrestle that can wrestler that can still fit in his outfit ladies and gentlemen multi store owner Steve baitman yeah well yep right you got some lovers there and then we're going to move on to probably the most famous guy on the panel he still drives a 97 Honda Accord with 300,000 miles on it ladies and gentlemen the owner of Trinity payments Tim vent stop it stop it you got fans now we're going to move on to the other guy this one's kind of sh Shady so he built a proven system to pull strippers out of the strip club without spending a dollar ladies and gentlemen the Yes man and he owns yes Feelgood drinks Matt Kellum ah true story all right so what I felt like doing is is we

Discussing Business Failures and Lessons Learned

3:08all want to learn at these things right maybe we come to these things and we take one or two things away maybe just a little tidbit here and there so I think the main thing is failures I feel like I've learned a lot from failures over the year which actually brings you success if if you can teach someone to not hit those stumbling blocks that's where I think we should probably start so the fun stuff failures I want to hit each one of you up and ask you what do you think you could tell the crowd to kind of help them avoid those stumbling blocks what failures have you had in the last year or a couple years and why don't we start with the wrestler on the end following the chats today

Insights on Brand Building and Market Shifts

3:49following the speakers the last couple days we're dealing with the same thing they are I think the in our world I run offers I don't run a brand I'm moving to a brand I'm really hoping to have a decent brand up and running shortly but we did $15 million last year in offers keto that kind of thing you know the stuff that nobody in this room wants to talk about but the market shifts underneath you and you don't know where it goes so it's something you have to be mindful of we're probably in the tube for about 400k this year so far in loss in traffic loss in refunds have gone way up so if there's anyone in the room that start starting a brand or starting to just kind of get out of the hole be very careful as you launch try to launch in this environment I think as organically as possible try to really measure your Roi your well really not just your Roi your your positioning

4:47where are you where you're going to attract your customer what your customer looks like and I just said to the guys before we walked up on the stage I said I know one thing after leaving this show I'm going to call up at at least 50 if not 100 of our recent cancellations and find out what's triggering that where we drop the ball we can assume a few things but in our world we measure everything and we are currently trying to understand where exactly we're bleeding so that some of our traffic sources are refunding at a rate of 38% so it could speak to we could we could assume it's product quality we could assume it's slow fulfillment we could assume a lot of things but unless we get deep into it talk to the customer and find out just like the last panel said what's really going on we won't know but we know it's correctable and we think we can move forward coming out of this and this is done on the customer

5:40service side so let's say no we'll do that internally at the management level we're not that big a company if I hand that to a customer service agent I'm going to get very cookie cutter meaningless kind of data maybe some check boxes and so forth I think you know the CMO and the and the the marketing team that I kind of head up are going to be who takes that on I can to use customer service they're great but I so if they disposition they disposition all the cancellations then obviously it gives you a a good idea of what that coal is going to look like when you make it as yeah yeah our our product can refund at 20% all day long and in in the world we're in running offers we can still make a really strong margin when that refund rate goes to 38% that just took out 18% of our profit yeah so it makes the it makes the offer quite ugly awesome so we'll fix that that's what I'm getting how about

6:30you yes man what problems have you had

Challenges in Manufacturing and Fulfillment

6:32the biggest problem I've had in the last year is I've typically always run info offers and digital products and I moved into manufacturing and creating an actual consumable and I think lacking patience and not understanding that it's a totally different business really hurt us early on yeah and we kind of jumped a little too quickly with certain manufacturers with certain fulfillment agencies and just didn't really vet them properly to make sure that they could do the things that we really wanted the right way the the first time and that set us back quite a bit it it actually ate up a lot of our last year 2023 was was pretty rough because we were basically playing from behind the whole time cuz we didn't do the things right the first time we thought we could just jump in and hey it's not going to be any different we know how to write copy we know how to sell something but it's really not up to us there's so many other factors when you start manufacturing a consumable

7:32product that you really need to dial in exactly what you want and you need to be very clear on that with them from the very beginning or you can get stuck with a lot of definitely different from an info product having that initial fulfillment manufacturing I thought hey I'll just write a vssl sales page whatever we'll put this thing up and we'll find a manufacturer and be ready to go in 2 months yeah well that's not the case at all you know there's a lot of processes they have to go through when you're selling something that people are consuming in their bodies there's got to be approval there's got to be third party testing and everything takes a lot longer than you think sure and it it's and not only does it take longer things come up and they're like hey you know one of your ingredients made the drink a little too bitter so we went ahead and just added sucrose I said well that's not something I wanted I don't want to sell sucos and

8:24they're like well it's a little too late now if you want to restart the whole process and spend three more months testing new things we can do that but I don't want to do that so it puts you in a really kind of Pi like a pickle you don't know how to get out of it and you paint yourself in a corner so it's really important that you have these conversations up front and you tell them exactly where your lines are and not to cross them and you set things up properly and you don't want to compromise the quality of your product especially if you're using that brand and they want to throw something in there that you're like yeah I don't then you're associated with that compromise all the you might sell all those customers on the front end but now they're not going to come back yeah and that's a problem later on you know you have a you leave a bad taste in your mouth with the customers you do have and

9:03it's really hard to kind of expand and scale from there because now you have to start fresh every time you do it that makes a lot of sense yeah and then this

Payment Processing Issues and AI Impact

9:11can be a little bit different on the payment side so I'm kind of curious to hear this what kind of failures you think they can learn from on the payments side Tim oh boy so this year actually probably the last 18 months off ratios so these guys along with probably most the people sitting in the room here that run a brand or or run a website of any kind you know you spent a lot of money to get a conversion you spent a lot of money to get a customer to your site that makes a transaction the last thing you need is some AI software on the back which is managed by the issuing side of the banking system so you're coming to a merchant processor like myself you think you have you know 700 conversions and boom all of a sudden your 700 conversions turns out to be 400 conversions and if you're running you're you're running the subscription model a month later you're at 40

10:13conversions 2 months later you're at 20 conversions so you know at the end of the day it's it's been a cat and mouse game so we've kind of identified some ways to get ahead of the AI That's managing and and tracking a lot of the activity that's happening on the front end but it's been it's been a fun challenge well you you've had some success cuz I've seen some of our clients that are using you that started having a a lesser of a decline rate so I'm going to shift into that really quickly CU I want to focus on you for this piece in fact I I got I got a short story actually he was trying to order Matt's product last night and he looks over at me and he's like I'm getting declined like why am I getting declined I got money on my card so it it kind of proved itself in real time when we were talking about the declines of what AI can do to essentially block you

11:10from buying a product when you're not a fake customer he he was and think about this if he was legitimately a customer that just found Matt's product yes Feelgood drink yes man he would literally have left he would not have tried three different times and ended up paying through venmo cuz he couldn't get the transaction to go through because the new that's in there so I'm so kudos to you don't know the secret sauce but I'm Lov that we got a little taste of it because you you've been able to see some success there so I'm not going to make you dive into that okay cuz I don't want you to have the the secret sauce given up so

Subscription Models and Customer Retention

11:44I I want to move on to subscriptions right so one of the best things that that I've seen some of the larger brands that are on our platform since our our platform is built to manage subscriptions and subscription management I think it's probably the best best way on the planet to generate new customers cuz you're not spending those additional dollars to bring a customer in they're already in you already sold them they're in they love you they're a member right hopefully they love you so with that being said I know I think I'm going to start with Matt on this one because I know that you were thinking about starting a subscription aspect to your product coming up how do you see that looking in the future and how do you think that could probably how it's going to help your business yeah I think it's going to just h X our business over the next couple years the reason why we didn't do it to start I told you a month ago we just launched we just

12:36had some ad some some organic posts on Tik Tok go viral I started seeing the sales come in going into the hundreds a day and I was like this is probably not the right time to go subscription because we do not have the manufacturing ready to crank out another few hundred thousand of these products so sure we purposely did not offer it at the start and we did sell out we're gone now but when the new stuff comes in and we have the Fulfillment process in order and this is go this goes back to what I just said a few minutes ago having that relationship with the right company is a huge deal knowing that at any moment you can say hey I need another 500,000 of these like in two weeks it's really important so we're moving to the subscription based model we're starting La we're going to be launching stick packs in the next you know 6 to 8 weeks and I think it's going to just really Elevate the brand

13:28to to another level because like you said you don't have to spend the money to acquire the customer again and that's a huge deal and right now we're doing that we're spending money to acquire customers we're profitable on the front end it's doing really well but if I could just have those guys recurring every every single two weeks sure I mean we can start compounding and and scaling like crazy so I'm really excited for for that to happen and building those relationships is key how long did it take you to sell out 33 days awesome I like that all right Steve what about your subscriptions talk subscriptions you want to find out how to see a offer deg grade you get into a business where the product is the customer is delighted with the product they'll reorder from you you've got a strong brand you've got strong Imaging whatever you've got that that tells the story I think customers customers will come back earlier today when Taylor spoke in the morning he showed a graph

14:27at one point that showed a large gray area of customers by volume at the top and he said those relationships are burned those relationships are done and in our world that's what happens we have a tremendous amount of data when you run offers that are not really brand Centric and that's why we're shifting we're shifting to something where and we're not sure what we're going to do right there's different things out there in the world I live in we know like gummy based you CBD based like things that most of the people at this show are not really promoting you know you got pet products you got other things that where where customers you hope will love your product when you bank on something like what Matt is banking on and you you know that's your that's your nest egg that's what you're building as your brand Equity yeah then you've got something to work for and you should do everything you can to keep that customer what we find when you run offers and

15:22that offer is somewhere where someone makes an Impulse buy the Snuggie for example how many Snuggies were you going to buy if you bought the first one I love are you delighted with the first snuggy I love Snuggies I'm at some point you hit a critical mass yeah one for me and one for nanao that's it after you buy one after you want buy one for Nana you know and a bunch of other people you're not going to buy anymore so what I'm getting at is you exhaust that customer like lifetime value Equity yeah and what we're finding now and it's changed in the last 3 years even a year ago we could get what we would call a couple of turns out of a customer so if we bought a th000 customers 500 of them might rebuild might renew yeah and again we use checkout champ for that reason right we use the rebuild systems and everything that are inherent to that process now we're not seeing that that ratio returning people are people

16:19are getting upset with with certain products if they don't love them quicker so I think for the the message to people that are in the room is if you can get your tribe the people that are buying your product to love your product to enjoy using it and reorder so I was just talking to Matt before we came up and said I got to move to consumables consumables at the level where people love it they want it they can't get it anywhere else yeah that's what I want to go to and whether that's pet consumables consumables for people whatever you can you can Target elderly something along that line you know what different people at different phases in life even my wife you know showed me something a little while ago she said she had jewelry that was just basically cheap costume jewelry but because sometimes she wears the real thing it looks like people assume it's the real deal and she says don't worry I I burn through it within 60 days I just

17:10order more of it off of Amazon if it breaks or if it discolors I but I can wear it to the gym and I I'm like you you are the primary customer you're you are a pure customer of what I want so just keeps ordering that same necklace or that same you know wristband over and over again it's only 20 bucks but the LTV on that custom if it's my wife is like $880 to $300 yeah so that's what we're seeing the rebuilds in the world we came from that that you know started in the let's say 2021 because everyone keeps going back to that just aren't there anymore and brand loyalty quad product quality building that tribe I learned a lot this week just by about how to like really make sure you reconnect with the customers yeah and and you can use some tools I mean even even if it does create cancellations from the customer calling in or cancelling through email or whatever there are some tools that you can use

18:02like the Recycled billing tool where you're you know like our platform and I think others have it too but you know you can set it to if if they're if they decline due to insufficient funds you can keep that customer active and push through a reattempt a couple days later so if ins decline Salvage decline Salvage I don't know the people here are running this kind of volume or not but if we weren't doing decline Salvage we wouldn't make enough money to even make the ad spend worth it yeah that's why just to get us there yeah and an account updator so expired cards and obviously you want to make sure that you're not trying to build an expired card you're automatically getting that expiration date there the nuts I'll jump in here the nuts and bolts on how to run these businesses is a lot different than just having a really cool dog bed you know if you sell a nice dog bed on Amazon you might have a product there that's quite sticky that people love but

18:52they'll probably only buy the dog bed from you once maybe twice you know they you'd be better off in that product maybe sending out referal discounts and all those sort of some things to monetize those customers but you want to get that first payment like what happened to Tim the other night right in front of all of us yeah you know declining on a product he wants on a product the customer wants you got to find a tool that will allow you to go back 24 hours later or whatever and tell the customer we're trying going to try and run this again tomorrow yeah you know and whether that's over your your landing page or over an SMS campaign something where it says don't worry customer we got you we're going to try shows a lot of loyalty to the customer too so like even a send Lane sequence right you can set up a send Lane sequence for those follow-ups which which definitely helps but shout out Sun Lan so I want to swing back to something

19:39really quickly you mentioned it earlier but I'm looking at you again Matt and I'm going to get to you Tim relax don't touch he's a bank he's a bank he'll be there no so Matt was talking earlier I

TikTok as a Marketing Tool

19:49asked him about Tik Tok and it it's it seems like in the room at least through the entire two days so far I feel like some people like the Tik Tok shop and some people don't right so I didn't really know how I felt about it I asked Matt he said he loves it why do you love it Matt yeah so I love Tik Tok shop specifically because they're a new they're kind of a new addition to Tik Tok and they're really pushing traffic but I love Tik Tok more and the reason isn't just a shop I I get why people dislike it and say you have to do massive discounts to compete you know all the customers on there like the the main demographic really is 18 to 25-year-old women sure that's who's buying the most products so if you're not selling something directly to that it can be difficult you need to Discount a lot but for me it's not necessarily about that for me Tik Tok is a once in a

20:40generation platform that's allowing me to test so many different pieces of Copy in ads quickly quickly for free so every ad that I run I I start as an organic post on Tik Tok I post it five different times with different intros different 4C intros different Hooks and the one that performs the best if it if it really performs well I'll immediately put it on Facebook as an ad and for some reason if it works on Tik Tok organic it is going to work on Facebook and YouTube is what I've found and it's not necessarily the same when it's the other way around something like I when I started I was like oh I've been doing Facebook ads for 10 years I know what I'm doing I'll just put this on Tik Tok and make a bunch of money not the case never worked same with YouTube but from Tik Tok to the other platforms the things that perform organically they scale really well on on meta and and Google and I just don't think

21:33there's a better place and easier place to test things for free at that level of scale no I agree it's crazy and I love it I'm going to use it until it's burnt out completely yeah it completely gives you a kind of a ground level how is this going to perform on other platforms cuz it's so easy and quick to test it on Tik Tok shop so I kind of agree with you on that but I'm I'm on the fence too so I need more conven listen talk to more people and see if somebody can convince me but you're pretty close we we Brian Brian we have friends in our industry that there's an entire ecosystem out there that runs offers similar to what I do as opposed to the really sexy and cool branded type stuff that you guys are into and they have run Tik Tock product in that very valuable 18 to 25 demographic female in that jewelry Type U world that we talked about to the tune I mean of very quick scaling to you know

22:25six seven figures very fast and the they're they're they're getting repeat business in that world so don't count it out I mean I'm going to look it out I'm a Canadian by the way so I said out yeah you guys heard out out it's not your fault man he's out in a boat I said the word out and I call it a niche I dare you to mispronounce what is it Montreal Montreal I dare you to try that in front of Steve don't do it it's a foyer not a foyer they call call me there are three people in the back that actually can understand him yeah good point yeah there's maybe three people understand Canadian so now last thing for Tim I think I want to go over you guys are doing a lot of Merchant applications at least for our customers I don't know I mean I'm sure you're doing it for a lot of people but you know once somebody gets that approval what is the best few things

23:16that somebody could do to make sure they keep those Merchant accounts live and active how can they keep them healthy right is there something that you would literally grab one of your your clients and shake the hat off their head and say if you had just listened to me about this you'd be fine what is this what is that thing well couple things is well

Understanding Chargebacks and Refunds

23:35there's actually a lot but big two one of the one of the one of the main things is the last thing you want is you know you're going to get chargebacks you're going to get refunds you don't want your chargeback reason code to be fraud you don't want it to be non- receeded Goods those are things that essentially stick in the algorithm of of the AI okay so your objective is is to be as clean as you can up front obviously mcc's are important but getting poor traffic on a new merchant account you know whether you're building a brand or whatever if you're getting poor traffic out of the gate you're going to have bad transactions it's that simple so watching the traffic watching the analytics making sure your decline rates aren't spiking checking your fraud tools your your your best bet is to utilize a platform like checkout champ to make sure that your products are being fulfilled right because you have your

24:37it's pretty good yeah but you know at the end of the day it's it's really about that initial month because Merchant deterioration we call it mid deterioration happens very rapidly if you run your business the wrong way out of the gate sure and and and many times people don't know what the wrong way is and if we got a lot of entrepreneurs here that are trying to start a brand or something along that

Importance of Merchant Depth

25:04line the one thing I will tell you guys is get Merchant depth you need to make sure you have more than more than just a few payment gateways we'll call it you know Merchant accounts Visa masterg guard accounts the reason is it sounds great to put everything in one merchant account and ramp that merchant account up to let's say $4 or5 million a month until one day it closes and you don't know why and you don't and unannounced and you don't know why or even worse you had a really strong Black Friday cuz we're going into Q4 and that merchant account closed after you just sold $200,000 in product sure which is now being shipped and you're not getting the revenue deposited yeah and you don't know why the bank did that and sometimes the bank will release that money sometimes the bank will open up I can speak to this for days it's crushed many an entrepreneur because you think you know it's a bank I'm just doing my job I'm selling my regular product my

26:02dog beds like I talked about and sometimes the bank will lock down on that saying well you've never done 50,000 in dog bed sales in one day before so we assume that's fraud and that's the way the bank and I don't mean Tim at the level his company is but at the risk level of certain Banks they get a little skitso and what I found a lot of the people that talked at the show the last two days very much on the marketing and the sales side of the business but not that many of them on the pain points of the of the banking side of the business and making sure you get paid yeah and these are important conversations to have because you need depth you need you need backup you need you need if you've got five Merchant accounts you can't just leave one on the Shelf very long you got to sprinkle sales into all five of those for example

Managing Multiple Merchant Accounts

26:49you can get five Merchant accounts under one LLC under your corporation under your name and that's where a guy like Tim comes into play and that's where he can help you because if you close a an LLC for example or you can't bill on a merchant account let's say you've only got one Chase I mean let's say you're foolish enough to work just with Bank of America and they give you your your one merchant account and everything's going great for 6 months now you got momentum everything's going really well and boa as I call them decides to close and constrict on your account yeah you you will have a hard time going to another bank and saying I need a merchant account fast well they'll say let's see your statements what's going on with the one you've got already see looks here like you've been shut down you got to get all of that built out ahead of time if you're a small business even for no reason even if it's no for no reason even if you don't use them

27:44they don't cost you anything to have them set them up build some depth into your organization if your brand takes off and it's really sexy and it does really well you may never need them you might only need one or two merchant accounts in your entire career back in the day I'm a little bit older than the average bear in this room guys would run 50 million a year through one merchant account that doesn't usually happen anymore yeah so you need processing depth if you're going to go out there build something that's exciting and you need to have your ducks in a row so what Tim talked about you can set up strategies and there's people that can help you with this where you sprinkle a little bit of sales into each of the merchant accounts and you warm them up together through a month or through a series of months and you have a backup that you just don't use yet and when the bank says why aren't you using that one we're going to

28:33use it soon don't worry yeah so and that's a good point accounts don't always get shut down but what Tim was trying to tell you that most of you don't know is if you keep attempting people that didn't process like Tim did the other day that decline over and over again starts to degrade and we call it merchant account Decay it will Decay your your ability to process new transactions yes you get I don't know why I got all weird real deep there but that's the kind of that will happen to you as you scale your business and not not a lot of that got talked about this show this show is all about the the you know it's all about Black Friday it's about going out there and grabbing the biggest piece of the pie getting the sales smaller businesses need to have it all covered just like Matt said fulfillment needs to be covered fulfillment cost me at least 200,000 this year by shipping 18 days late and I didn't know that until about day 35 it

29:23took us a while to do an investigation and find out why this the the chargebacks and the cancellations just biked and our product you know I pay somebody it's you have one job ship on just ship the product and so there's a lot of F I know could have fixed that yeah correct what I know a product that could have fixed that I know one could have checked it I'm going to get a little greedy real quick

Strategies for Increasing Average Order Value

29:48I want to talk about my favorite topic I want to talk about upsells I want to talk about increasing the average order value so we we had a conversation and I'm I I pushed this a lot I push it a lot and I say you know if you're not doing order bumps I think it's crazy if you're not doing one click upsell postp purchase stuff I think it's insane because basically those are those are things that increase your average order value without affecting your conversion rate so we were having this discussion and said you know Matt what are you doing for you know order bump basically he said well I I put I used to offer a what was it Priority Shipping right he he had a priority shipping free priority shipping right on the page right what he ended up doing was taking out the free part and adding a check box autop populated by the by the button which so it's compliant but it was there he was just giving away this product

30:38right cuz it's priority shipping it's a product yeah so all of a sudden it's $4.95 and it's pre-populated everybody wants priority shipping so essentially you just raised your average order value by $5 by doing literally nothing not adding a new skew nothing right what the charge what was the up charge on the on the priority shipping $4.95 right I tested multiple things right now we're at $7 for the cans and and $4.95 for powder sweet but by adding that it really helped because cans are not not not cheap to ship and I offer free shipping no matter what so adding that $7 really helped kind of expand our margin when it comes to meta ads and believe it or not just a simple thing as adding a $7 part of shipping adding a few dollars aov or sorry yeah aov really helped our buying power on getting a customer and if if we're not losing money up front and people are reing and re buying and re buying that

31:42tremendously helps us scale so yeah that was I mean that's it's a very small tweak that is a huge impact oh absolutely and I mean you can do those certain things like we had people that were doing like a you know 60-day money back guarantee right and we were like just put a checkbox there and run a split test cuz you know like with our system you can run the you know four-way split test ABC and D which is insane so you'll go in here and say all right we're going to we're going to test this price point we're going to test this upsell we're going to test this one and we notice that most of the tests and when I say most I don't want to say all because let's say it might be 99.8% if they add that little check box there people want that money back guarantee right let's say they're ordering a gadget right they want that 60-day money back guarantee charge them $3.99 there reason why ins is a mlion

32:30huge business right so that's that's kind of what it is so I appreciate that so I'm going to move on to this is this is not going to be a fun one for anybody but the current state of Economics right we I want to I

Economic Impact on Conversions and Price Points

32:42want to see how you guys feel about how that's affecting conversions right now and also price points cuz we know you know the economy is where it is right now I think everybody is aware so do you feel like that's affecting your conversion rate when I think I think the I think the meta environment and in the verticals that we reside in got hammered this year by demand on on traffic yeah our our our our guarantee in some case we had to guarantee earnings per click for some of the pubs that we were working with oh yeah and never works well when you guarantee earnings per click by the way in our world anyway we do a CPA model I'll pay you X if you deliver X the minute I start paying for your traffic nonsense and the things that you're playing with and you're not really accountable anymore you just create clicks well you're moving organic anyway it doesn't matter that it doesn't it doesn't amount to anything we in in

33:44the world of aov let's talk about it because that's what it really came down to our our aov is not doing bad it's actually crept up in 2024 crept up from I think an average of I want to say todtling around 230 5 on one of our product lines at the beginning of the year to to then breaking 240 and 250 but our cancellation rate went up with it sure so it was very interesting to like I'm a old school entrepreneur when it comes to stuff I'm 54 years old so and I've been doing this stuff since I was about 21 I don't mean online I mean we did it back in the old days with a rock and a hammer maybe not that bad but it felt that way before technology took off so before you were a wrestler right before I went to chill so the point was though the aov has gone up chargeback started to go up re not really as bad bit more because our fulfillment

34:39nightmare we had but we had an idea we need more we need more revenue on our average order so we added order flow upsells and some of them we own internally but a couple we don't and my concern being around the amount of time I have been is what's that pressure putting on the wallet right if I can get that aov it sounds great if you can get the average order value to go from 235 all the way up to 270 a lot of people on my internal teams and marketing would think wow that's a win and I'll sit back and say let's see how it floats let's see how that works out for the next 30 60 days and that's a problem it takes us that long to really see whether things were a win or not so how it affects the customer's wallet oh yeah how it affects the long-term you know life of that customer whether you get that that rebu out of them or not it triggers an early cancellation

35:30there's a lot of brains on this panel last couple days and they were talking about how they track this stuff some of those companies are pretty decent in size when you're a smaller company it's hard to know as fast as you want to know whether something's going to work out or not yeah but we got our aov up to like 265 so you know 30 bucks but you saw you saw more of the effect from the economy on the back end where the cancellations happened right not on the initial something happened this year I really paid close attention to the speakers that have talked over the last couple days and something has gone on this year I think we're in a much tighter economic State than anybody wants to talk about I know in Canada where I'm from they the government's doing everything it can to hide the real the real impact of an economic downturn you know they're hiring internally our our civil servant volume exploded while the private sector shrunk yeah

36:24so I'm mindful of that right we're looking at Tim and I were talking earlier today saying you know should you increase spend right now on this kind of thing or should you pull back you know what should you do there was guys that got up earlier today that said right sizing of the company there is a right sizing of every coration absolutely where where where added spend does not equate my voice is going does not equate to increased volume so anyway those are for do you have anything to add or do you want me to go to the payments guy I'll just say I I do think we have a unique opportunity to kind of reexamine what our brands are in in this state of the economy because you either position yourself is I guess quote unquote Walmart or Whole Foods yeah you know do you want to be competing with everybody discounting constantly or do you want to just raise your price become a luxury brand kind of repurpose your branding and take advantage of an

37:19entirely different market and I think if if it all is leading to the fact that a lot of people aren't spending money right now there is going to be a group of people that is and they're willing to spend more for the products that they really want especially if they perceive them to have higher value you get what you pay for type so there's an opportunity to reposition as more of a luxury brand and and still be successful in the current market it's actually a really good point I mean I like I like the price point talk you know you do get what you pay for so a lot of people do want the premium product so on the on

Navigating Merchant Account Approvals

37:49the payment side how have you seen this affect approvals or I'm talking like Merchant approval like have you seen you know a lot more poor credit out there when people are coming to get lot more poor credit you know in all reality we are at the highest personal Consumer Debt on the planet that we've ever had and it's growing at exponential rates interestingly enough you know talking about some of the you know let's call it the 20 2020 to 2023 purchasers most of those people don't have any limit on their credit cards anymore so The Big Spenders that would just buy on anything they would see on am you know Facebook or Tik Tok or whatever the big bulk of those people are broke yeah so you know that kind of minimizes the ability I I loved what I heard earlier about you know the high-end versus the the low-end product Set because just to tell quick story a friend of ours dog walker here in San

39:01Diego price point of $60 to walk your dogs for the day wasn't too busy you know not not a ton of ton of activity raised the price point to $250 and is busy all day long because people think you're a high-end experienced dog walker dog you have made yourself Premier right and even though it's the same person walking the same dogs just it it's a mindset so the people that still have the money that are willing to spend are going to spend on what they want to spend on right and so that's kind of the the the target is is to figure out what the people that still have the money are wanting to spend it on because if you're if you're focused on that same group from 2020 that was just given a bunch of free money that group's broke you know they they just they don't have the same Financial capacity that they once did so Co money's gone right the co money's gone yeah it's been spent agreed so well

40:02I I I mean we can wrap up now I want to thank you guys for joining me on the panel I know I just met you guys out front half you guys were begging for change but anyway no this was cool I like it I think it was good information so I appreciate all the input from all you guys and then I guess Nick you want to open up for

Q&A Session: Mitigating Risks and Fraud

40:19questions absolutely if we have any oh we got two hands up here on the left all right firework boy here we go not Josh Royal not that guy hey guys not so much a question just compliment Steve what you said about mitigating your risk across multiple Merchant accounts I'm really surprised that more people don't know about that and more people don't do that we've been through the ringer on that I think we have like three layers of protection right now and if one of the merchant accounts falls through you literally just plug in the API code into your Shopify payment setting flip the switch and you're live in 30 seconds so you know anyone that has any risk there and I think that's probably anyone selling online right now crucial point that you made and I would just Echo that to anybody who you know would have any risk behind their payment process or falling out on them their merchant account falling out on them oh I appreciate that my wife watched me have

41:14the first anxiety attack of my life I'm not kidding I was debilitated I thought I was going to die when one of our first merchant accounts locked down on 50 Grand and didn't settle I get it and I I I that do you mean it wasn't yours I said it wasn't mine yeah it wasn't one of Tim's merchant account we had one just fall out like right in the middle of peak season and it's like midnight and we're sitting there going why do the orders just fall off right and of course it's me on the phone like calling authorized.net calling the merchant account what the hell's going on nobody knows cuz it's all a graveyard shift but ultimately we had a built-in redundancy just flip the switch and you're back in business and you're doing a great job like you're selling a good product the bank doesn't always know that and what I think we're getting at here is this AI environment as we're heading these algorithms they might misinterpret your behavior they they actually lump you with other

42:06businesses that look like your business and and it's terrifying because you may be running really well but somebody else that just looks like you is running really poorly and that AI confuses and gets you know a little eager to shut you down as well tot thank you to the front hey guys first question for Brian does checkout champ integrate with big Commerce we do yeah we have a big Commerce Shopify woo Commerce and Magento even though not a huge fan of Magento oh perfect I got a book a called then my second question is we're a jewelry brand we're on big Commerce one one thing we've noticed the past 3 months is the number of declined payments has gone up significantly and the number of people trying to place fraudulent orders have went up significantly as well yep what are some ways we can combat against these types of activities that's actually a really good question so we have a tool and I'm trying to look at you but not be

43:12weird so we have a tool that you can actually put in it's called Atri so it's it stands for advanced transaction routing interface and basically what you can do on those initial transactions is we can actually scroll them through to your point if you have four Merchant mer accounts in there six Merchant accounts or 20 Merchant accounts I don't care if you're going through and you're trying to get that approval and let's say one of the merchant accounts is set to decline it I can automatically spin it between these other Merchant accounts even on the initial transactions to make sure that I give you the highest probable approval rate right so that tool is pretty awesome oh wow so if my first merchant account let's say it's has a bad score or it's getting there so the likelihood of the likelihood of a decline is cling is pretty high then if I have a second one that's like fresh and primed so we can spin it oh okay damn that's really cool okay I cool

44:06right I want to I want to jump in really quick there are and not everybody understands this especially when you're coming into the industry Merchant accounts the actual account itself might might be judged by the same algorithm across the board who you gain that merchant account through who the bank is that you're using is very important when you're an online marketer if you go into your bank branch and you get a merchant account that thing will have fraud two different ways they might look at it no fraud alerts at all and it might allow you to do all kinds of weird things till someday it just shuts down and you won't know why or you work with a what we call an ISO type bank and that's what Tim is part of and they control the risk of your account internally they're able to kind of foster it and hang on to the account and they they take a lot of the risk internally themselves on you as a merchant so they might keep you up in

45:03most cases in my world they keep us up much longer than what a let's say a bricks and mortar Bank might do yeah and I see I sit here thinking everyone knows that but then it occurred to me maybe they don't and so who you again if you're going to do a 30 million plus brand then you'll end you could probably end up in a bricks and mortar Bank eventually or maybe from the beginning and you'll get lucky but if you're going while you're going to scale a brand to that level you might be very well advised to have multiple banking Solutions all under the same Corp through different types of solution providers avoid aggregator accounts avoid what are called payf facts don't get sucked into Brokers sending you to really obscure Solutions get a hold of Nick get a hold of me find out what banks are proficient at and get a hold of Tim at at banking you know a new solopreneur type person that's going to run their own brand and build something

45:57up cuz you're going to hit hiccups you're going to get people online saying your product's crap even when it was great you know in some cases buyers are liars and they beat you up so that that's that but a lot lots of breath with your banking all right thank you you're welcome good question gentlemen thank you thanks for having us thanks for having [Music] us all right outside Bring It On in for

Final Thoughts and Panel Conclusion

46:24the final this is the grand I've been waiting 3 years to get this panel together do agencies suck you five people get your butts on stage let's close this in vent out