E220: Making the Transition from Creating Demand to Supplying Demand with Jon Larkin

With the Canton Fair starting in two months, many ecommerce sellers are making plans to go to China. We’ll be heading there ourselves in April to go to the fair and meet-up with members of the EcomCrew community.

Coincidentally, today’s episode was recorded while we were at last year’s Canton Fair. My guest Jon Larkin is an Irishman with an interesting start in the world of ecommerce. Five years ago, he was with a company developing software for ecommerce entrepreneurs. This piqued his interest in the industry and led to him joining Moocall, an ecommerce brand that develops and sells their own calving sensors.

Jon was poised to make another transition when I caught up with him. He was striking out on his own and was in China looking for products that he could improve on and sell under his own brand.

Not many people in the industry are able to transition from creating product demand to purely supplying it. In this light, Jon’s ecommerce experience is something we can all learn from.

Registration to EcomCrew Premium is now closed. But, you can still learn from us through our suite of free courses. You’ll find a total of 20 videos covering ecommerce topics like Importing from China and Building a 7-Figure Business.

Finally, if you enjoyed listening and think this episode has been useful to you, please take a moment to leave us a review on iTunes.

If you have any questions or comments, feel free to leave them below. Happy selling!

Full Audio Transcript

Intro: This is Mike and welcome to episode number 220 of the EcomCrew Podcast. So glad to have you guys along with us today. This is an interesting episode. This is one of these ones where I recorded something a long time ago and somehow it just never made it on our drive and it never became a podcast episode. And a couple of days ago, we are just coming back from Ecommerce Fuel Live and we're talking about my good friend Jon Larkin, Dave Bryant and I, and I was like, yeah, Jon was on the podcast a while ago. And he's like, yeah, what episode was that? And went back and realized that it just never got published.

This was an old interview that we did back at the Canton Fair last year, and since the Canton Fair is coming back up again here in April, I thought this would be a good time to release this. And also Jon's got a lot of cool stuff going on that kind of followed up to this episode. So, at some point, we will record another episode with him, but when we get this one done first. So enjoy this episode. I apologize for the background noise. I like it and I don't at the same time. I think it's cool that you can kind of hear the atmosphere and the ambiance at the Westin at the Canton Fair, but obviously it's kind of annoying at the same time.

But I tell you what; Jon is a really interesting guy. He's one of the first people that I met in person in the e-commerce industry, and I just love the guy to death and wish them all the best. So enjoy this interview. And we'll be back with you right after this Intro.

Mike: Hey Jon, welcome to the EcomCrew Podcast man.

Jon: Thanks very much. Good to be here.

Mike: Yeah. So we're at the Westin right now in Guangzhou at the Canton Fair. For those of you who have been here, you know right attached to the Canton Fair is the Westin Hotel. And I kind of call this the oasis because all the food at the Canton Fair itself is pretty boring, [Inaudible00:02:08] on it, and the air conditioner doesn't work well over there. It's just nice to kind of get over here every now and then. The food is outrageously expensive over here, but besides that, it's a nice getaway. So glad you came over here to have lunch with me today.

Jon: Yeah, I'm delighted to be here. Great tip from you yesterday, so this is my first time at the Canton Fair. And I met you in Hong Kong last week; you gave me a great tip, which was register for my tickets at the Westin where we are right now. And then there's a walkway which gets you into the Canton Fair and that was such great tip. I literally walk straight to the front of the line, there was nobody there, hand them my ID, got my badge, and I was in the Canton fair within five minutes. And I met another friend of mine yesterday afternoon and he had spent I think nearly an hour trying to get his badge at the front, in a huge big queue. So, good tip for anyone who comes here.

Mike: Nice random Canton tips for the win.

Jon: Yeah definitely worked, definitely worked well

Mike: So, let's rewind a couple of years. We've known each other for a while now and just tell people a little bit about our friendship, our journey. We first met at Ecommerce Fuel Live in Nashville.

Jon: Yes.

Mike: I flew in a day early thinking that a lot of other people would fly in a day early. And I was also speaking there so I wanted some time to kind of just clear my head and get on the East Coast time or Central Time, whatever Nashville is. And there was only two people that came early. It was you and Travis.

Jon: Yeah, yeah. And we met for lunch; we hit the bar, and had lunch if I remember? Yeah, a good friendship was born there and lots of drinks.

Mike: We could have had breakfast together too, we chose to do that because that's about how we stayed up, but I think by then we were ready to get some sleep.

Jon: Yeah, yeah.

Mike: Yeah. It was a lot of fun. And at the time, it was my first live event for Ecommerce Fuel. I think that we were maybe doing about a million or a million and a half at that time. And things have changed a lot since then. It's funny to think back and you were doing this whole thing for business. Let's talk about kind of a little bit, how you got in e-commerce and what you were doing with that.

Jon: Yeah. So if you go, let's go back a year prior to that. So, the first Ecommerce Fuel…

Mike: So you were at the one in Austin?

Jon: Yeah.

Mike: Okay, so I didn't go.

Jon: I actually talked at that one.

Mike: You did, I didn’t know that.

Jon: I talked about Facebook ads. So at that time, I had my own business, which was a software company and we were trying to build software for e-commerce guys to sell on Facebook, to advertise on Facebook. But this is like five years ago before the — so Shopify obviously existed, but there was no other apps in the Shopify app store. So we were kind of trying to put the two of them together at the time and build a great product. Unfortunately, I had a funding strategy that didn't quite go to plan so ended up failing I suppose is the best way to say about that business but learned an absolute [inaudible 00:05:04] at that time about how their whole ads platform works, how e-commerce works. And that's why I was there.

And then that's when my interest in e-commerce piqued. And so when I left that company, I joined a company which is in the e-commerce space, which is called Moocall. It's ad tech, it's wearable technology for cows. And I joined them later in their very infancy when we've just got their first product to market.

Mike: I remember when we first met, you were telling me about Moocall. We had kind of talked for like maybe 20 or 30 minutes before discussing business stuff with just like where you're coming, from Ireland, blah, blah, blah. And then we like kind of got into the business thing, you were telling me that I could tell you were a sarcastic person. We hit it right off because we both have the same personality. And I thought you were pulling my leg. I got like okay, yeah, what do you really sell? It's like an awesome product and it makes a lot of sense once you realize what it does. Yeah, you're like, okay yeah right, you track cows birthing habits or whatever.

Jon: Yeah, breeding hardware and software for cows is pretty niche.

Mike: Yeah, but that's defensible, right?

Jon: So it's very defensible.

Mike: So it’s a lot of IP and stuff evolving.

Jon: Yeah.

Mike: That is one of the things I will probably talk a little bit more about in the podcast since we have similar ideas about the future of e-commerce there. But yeah, I really did. I thought you were completely pulling my leg when we were talking about that at first.

Jon: So, our first product was a sensor that goes on a cow's tail and predicts when she is going to give birth. It's essentially a contraction timer, that's tied to a phone at its essence in a protective piece of plastic that is k proof, right? And so when she's about to give birth, it sends a message to the farmer so he could go and help. But I've spent the last 18 months in that company doing stuff that's quite relevant to what you've been talking about lately on your podcast, which is developing new products.

So, we went from a concept which was maybe – well, it actually went from a problem which was how do I know when my cow was in heat which to break that down really simply for the audience, a cow has to get pregnant one day every 21 days. And she comes into heat that day and once she's in heat, she's really active, her bull is really active here and her focus get artificially inseminated rather than impregnated by a bull. So, it's a real problem for a farmer if he doesn't know that day and he's using AI, is artificial insemination [overlapping 00:07:30] the original AI maybe, I don't know.

And so, if he's using that and he doesn't know when she's in heat because it can take a month to get her pregnant and that's months of lost productivity later. So, if it takes three months to get her pregnant, that's three months where he doesn't have a calf where he's not growing a calf if he’s a beef farmer, and if he's a dairy farmer, it's three months where he's not milking. So, there's lost productivity later. So we knew this was a huge problem because everyone who saw our calving sensor said, hey, does that detect heat? We would say, no, no, it's totally different there.

Mike: So your customers give you the idea basically?

Jon: Yeah basically yeah, so we've set out to try and solve the problem and it's a way more competitive market. So, there's loads of legacy products in the market trying to solve this, everything from putting paint on a cow's tail so you can see when she's been mounted by a bull, it’s worn off to there are colors that cows wear that use Bluetooth and accelerometer technology to know when a cow was in heat. But every product on the market looked at the cow to try to determine when the cow was in heat, and we decided, you know what, maybe there's a better way to do this.

So, we developed a product that uses the bull, harnesses the bull’s natural instinct so that we measure what the bull does because the bull actually knows when the cow is in heat. So, we went through a whole process of this is like you're talking about designing from scratch, you're prototyping an idea, you're trying to figure out A, can we put some electronics together that will actually measure what the bull does correctly? So, it was a complicated and difficult process. But amazing to be at the end of that now and I've just launched that product into the market.

Mike: The product is doing well?

Jon: Yeah, really well.

Mike: Awesome.

Jon: And the nice thing is we priced it five times higher than the calving sensor, so we're trying to make some money.

Mike: Nice. That's what it's all about. So that's one of the things we'll talk about more as well is just margin. And one of the things I talk about in the podcast is how to find the perfect product margin like helps with a lot, and we'll talk more about that because we have similar ideas there. But in between all this, you managed to get into one another endeavor which helped with your Facebook ads prowess and expertise.

Jon: Yeah.

Mike: It's really interesting, as you scale up another business, like really, really quickly with Facebook ads, and maybe just talk about that for just a second.

Jon: Yeah, so unfortunately, it’s not my business but a friend of mine started the business a year ago and I was, I still I'm helping him scale it through advertising. So, he's had a phenomenal journey over the course of one year and I've learned so much through that process and how you can use advertising to scale something effectively. But the key things are without products that I’ve made that product successful is that there's enough money to buy customers, there's enough margins to buy customers. So, once you have enough margin to buy customers, it's the old adage of you spend money to make money, but we've literally seen that over a huge amount of volume over the past 12 months.

Mike: Yeah, I think that you're in this awesome spot now because you got a product design background than I, you also happen to be incredibly smart which also helps in all this whole process, and you now have some Facebook ads experience and you know how to scale. I think that whenever you come up with this stuff, it feels like magic thing you're going to be like on a cover of Forbes or something hopefully in the future.

Jon: Yeah. Just to clarify that, so I'm leaving Moocall in the next two weeks to start up my own business or businesses I have. So, I right here in in China looking at a few different products, few different ideas and probably doing well. I'm definitely going to do something; I don't know quite what yet. But I spent the last number of years building demand for products. So, I've never been in the situation where, if I was to source a tooth whitening product idea, which I've seen a few interesting ones and put on Amazon, there's demand for that. Every day there's a ton of people searching for tooth whitening products on Amazon, whereas, go back three years, nobody had heard of a calving sensor and literally nobody was searching for it.

So, it's a real different mindset to go from needing to create demand for your product to finding a product that solves an existing problem where there is existing demand. So, that's kind of a little bit of a shift in mindset that I have to make, but I still love creating demand for a product because you’re a master of your own destiny. So, if you're selling this tooth whitening product on Amazon, you can only sell what Amazon gives you. If they rank you higher you're going to sell more, but if you're number one and you have some number one products, you can actually, it's really hard for you to make people buy it, because it's just how many people are searching for it.

You can improve your listings, you can get better photography, you can maybe make changes and stay ahead of the competition, but you can never really impact how many more people are going to buy it, whereas if you have a product where you can funnel something like Facebook ads into a profitability or other forms of advertising, by the way we’ve done print, we’ve done press, we’ve done all sorts of stuff, radio.

If you can funnel customers at your product and they're going to buy it at profitable level, now all of a sudden, your world and your view of the world totally shifts because instead of selling 1,000 widgets a month on Amazon, you could sell, the world is your oyster. You can literally, if your product appeals to a wider market, there’s no reason why you cannot get mass penetration of that market in quite a rapid period of time which is actually quite exciting.

Mike: Yeah. So that's the kind of thing I think you're looking for I guess?

Jon: Yeah, so I'm definitely looking for something like that and hopefully I find it.

Mike: Yeah. The reason why I even do the podcast, we were just talking and I think both determine the same thing as well here at the Canton Fair walking around, the vast quantities of me too products here like everything is just a me too. I've always felt that way here but we always felt like there were assignments in a row because we’ve sourced a lot of stuff in here, a lot of successful products. But my mind shift over the last three years since we first came here is completely different. Back then it was like customize something that's like less people were selling, it is less competitive but like it’s still a me too product. And even if we modify that me too product and made it better, bundled it and made some improvements, it's hard to find the exact things to do.

I do that with like well looking through the fair really. Well, we recorded another podcast yesterday, Dave and I did, we’ll make it live at some point. We were like walking through the pet product aisle for instance, and how do you differentiate squeaky toys and dog rope, and pet beds? It's all the same thing, it's all commodity product. So, I think it's good. That window is definitely shrinking going and away, but with that there's still like that's an opportunity as like a customization or things that have intellectual property and they’re like a lot of the reason we've had success with our coloring stuff is that we have intellectual property and if people can't copy our designs, and people can't copy our pen names and the things that we've done to make it defensible versus just selling a coloring book because everybody else does that. They are just selling pencils.

So, all right just curious what your take was on that because this is your first time here so you're seeing it for the first time. Do you see anything else here besides me too products or is that.

Jon: Yeah, for me it's been quite eye opening experience and now I see a lot of stuff that I don't want to. So, I also walked that path section yesterday, and like man, there's so much stuff there that everyone else is selling. So, an instant product which is like a bed for cat, but it hangs on a window, right? So it's got like sticky things. You stick it up in a window. It's kind of cool. And I looked it up on Amazon, saw they're selling totally, but it's like, do I really want to be the guy who also sells the cat bed on Amazon? And this is where I find myself conflicted because like I say, no, I don't want to be that guy. But then I say, I look at dollar figure the guy may be making, and I think, but I'd like some of that money.

Mike: And everybody else does too.

Jon: Everyone else does too. And there's no real way to protect yourself from the competition. We've all looked at products where there's like, feels like hundreds of pages of people selling the exact same product. And for every guy at the top who's doing 20 grand a day or a month, there’s 200 guys on the bottom who are doing like zero, because nobody ever sees their listings because it’s just too far down.

So I think that's a real big challenge for anyone today. And I think for me, my goal is to not just think about Amazon, I'm not here to find an Amazon product. I'm here to find maybe a product which will be the cornerstone of a brand so I can build a brand around it. But it's something that I can sell off Amazon as well as on Amazon and that at least gives me the freedom to put it on Amazon and hope that it will succeed but also to build my own assets, build a list, build my own customer base.

Mike: Yeah, I think that’s important.

Jon: Products that work well on both channels. On Amazon, there's already that built in demand, so you have people searching for it let's just use carpets to talk about people already searching for carpets, so you can then sell carpets on Amazon and have a successful product but it's also a product that can somehow also resonate well on Facebook ads or it's like that product that's at the right price point, it's unique enough that you can sell somebody that product with just one view of an ad, it convert them really quickly. And it's also like it's a really hard thing to find.

The thing that always comes up to me we were talking earlier is like something like a makeup product or a cosmetic where if people are searching for that on Amazon or looking for acne, blemishes maneuver in there, that can also sell quickly on a Facebook ad or something. Or maybe it's an aging cream or hair loss; it's some type of thing that's good for all searches on Amazon inherently. But you can also convert that traffic on Facebook and that has like a halo effect on the Amazon listing that allows the rank for these like ultra-competitive words that you otherwise would have no chance on Amazon. To me, that's like the magic key, it’s hard to find a product that meets all those things.

I think there's no way to get rich quick. There's no easy solution here. That type of product, a cosmetic product, I also love the concept right. I mean you can ask my wife how many times I ask her about her creams and I stopped because I care about the cream, it's because I'm impressed by the amount of money she spends on them. I'm kind of saying, this is not the same as this other cheaper product, and of course she's convinced that it's not. I look at the ingredients there, 99% the same. So, it's all about brand and positioning. And the beauty of those types of products is it takes time to build the brand. So, someone like Sisley, so Sisley make creams.

Mike: It must be Irish, I've never heard of them.

Jon: I think they’re actually in US but maybe…

Mike: I'm not sure guy and I…

Jon: Anyway, they’re ultra-high end really expensive, but they’ve spent 30 years with traditional magazine, [inaudible 00:19:01] advertising, TV, all this type of stuff, right? So that's a barrier to entry into that market, right? And then the other barrier to entry is the certifications and all that type of thing. But I actually view that as a challenge to be overcome, which is actually, it's actually a bonus, right? If you can do that, get through that processes, it stops somebody else here.

Mike: Complexity is my opportunity.

Jon: Yeah, big time. And I actually think you could build a brand a lot quicker than people realize today, especially if you can create a product that you can spend money to make money, you can literally build a brand in a year.

Mike: And it works, and that's how it works. People like to get it and they really enjoy it and they want more of it, tell their friends and obviously, you can do that with like you said, the ingredients are 99% the same, go to a co-packer and they can make that thing. It doesn't have to be the exact type of product. There's lots of other things like that too. So yeah, cool. Are you spending phase three here as well?

Jon: So, I'm going home tomorrow evening.

Mike: Okay, so this is going to be it.

Jon: Yeah, I’m looking forward to going home actually. I’ve here I think 10 days between Hong Kong and here and I look forward to going home, seeing the kids and yeah.

Mike: We spent one of those days, you came to our EcomCrew mastermind, what did you think of that?

Jon: Yeah, I loved it. It was a great day, so we spent the whole day just talking. I think there was about, I don't know, 15 people in the room something like that. We took 20 minutes each to talk about a challenge or something similar about our business and how to kind of group discussion around various different topics. I think you learn so much from listening to what other people — the advice that other people give, other entrepreneurs as well as listening to problems that they all have, and we can learn so much from that. And yeah, I know like a super day.

Mike: It's amazing. I love this business for this. It’s is like so many really smart high level thinking great people type entrepreneurs in this. I've been all over the world and done all kinds of businesses in my life. And I don't know what it is about ecommerce, you meet the coolest people. And it was like businesses on every quarter and I'm happy to think of it like to respect people's [femininity and prophecy] [ph], but like it was just like all over the place, every niche you could think of. I mean, it was like some crazy stuff that people were doing in the room. And I mean, it's just like, there's so much leeway and room for people to work together and even if you are a competitor, but most people never even crossed paths on the actual business side and make success in a friendly cool environment.

Jon: Yeah, I think if you look back like 15 years ago, there were all these amazing entrepreneurs out there but they were building local businesses right. And today, all those same people or the same type of personality to those people are thinking national or global, whereas the world was a much bigger place 15 years ago than it is today. That's a huge opportunity for everyone.

Mike: So, one thing I definitely notice when we get together, a recurring theme is that we end up staying on way too late and drinking way too much. So, I think that what we need is a chaperone that like someone with us on a future that like it’s just like at 3am, they'd like cut us off or something 8am, whatever time we were out there in charge of order and Uber.

Jon: Yeah, that's awesome.

Mike: When you enter the car it's like they don't even have a conversation with, they just pick you up, take you off your feet, they do like six of you and just like if there wasn't the car, make sure we go home. It was a lot of fun. We went out Saturday night, I guess it was after the mastermind and everyone was joining us but there was like only five of us left that were crazy enough to be going until 4:30 in the morning. But this is your first time in Hong Kong?

Jon: Hong Kong yes.

Mike: What did you think of the city?

Jon: Yeah, great city, great city. Really nice and it's actually, I prefer to try now actually, it  feels more Western and it's not fun, that's why I feel it just feels really vibrant whereas…

Mike: Yeah, there's an energy there that I’ve never seen anywhere else in the world, every neighborhood it's just like it's so infectious and just like, oh yeah, like sample five o'clock in the morning was actually relatively easy because everyone else's like just going at it and having a good time, yeah it was a lot of fun.

Jon: Yeah always is fun going at it.

Mike: Hopefully we'll see you on this side of the planet again and just as well much more back out here.

Jon: Yeah definitely. Hopefully I can share; hopefully I'll have achieved something to share.

Mike: I think you’d be a great guest to do a follow up with.

Jon: Yeah, yeah.

Mike: In six months to see what you're up to next.

Jon: Yeah.

Mike: I guess either that or I just find out about you on the cover of Forbes?

Jon: Well, hopefully for the right reasons.

Mike: Yeah, I hope so. It was a pleasure. I appreciate you coming and doing this. All right, enjoy the rest of your trip.

Jon: Thanks very much.

Mike: And that's a wrap folks. I hope you guys enjoyed the 220th edition of the EcomCrew Podcast. As always, you can go to EcomCrew.com/220 to get to the show notes for this episode. If you want to leave a comment or read anything in the show notes EcomCrew.com/220. And as always, if you go over to EcomCrew.com/free, check out all the free content we have to offer over there. We have a new free course coming out in just a few more weeks.

So, go over there and check that out and once you sign up, you'll be notified of any new stuff we release. All right guys, that's going to do it for this episode of the EcomCrew Podcast. I want to thank you guys again for supporting us and until the next one, happy selling, and we'll talk to you soon.