How we built a 7 figure brand in less than a year – Part 1

There aren't many people who can claim that they have built a million dollar business in under a year, so I find myself fortunate to be able to make that claim not only once, or twice, but four times.  Life as an entrepreneur isn't always roses, as I've had my fair share of hard knocks over the years.  However, I've developed a formula to build businesses very quickly when I see an amazing opportunity.

I liken myself to a cheetah, who will hide in the brush until he sees something to pounce on and then runs faster than everyone else to capture its prey.  In other words, I'm constantly surveying opportunities, dipping my toes in the water, and seeing what might work.  I might lose some money along the way on those tests, but once I discover something that works well I go “all in”.  Over the past couple of years, ecommerce has been that opportunity for me.

Background

In the spring of 2015 my wife and I went to visit family back east – to celebrate my grandma's birthday, my birthday, plus see my mom, dad, uncle, aunt, and cousins.  By this time I had already purchased IceWraps.com, turned that business around, and discovered the power of Amazon.

While we were in New Jersey, I wanted to set a day aside to show my cousins the power of Amazon; I knew it was something they could do on the side while working full time and eventually break away from the grind.   I gave them a crash course on how to source products, get them listed on Amazon, and build a viable business.

Over the next couple of months I would get a call from them here and there, about products they were looking at creating.  They had several good ideas that could have been hits on their own, and done quite well for them.

Then, one day, I got a call from my cousin with the idea of doing “Adult Coloring Books”.  When she first mentioned it, my mind immediately went into the gutter as I thought she was talking about making some sort of T&A book.  After a few funny / awkward texts back and forth I finally got the concept… She wanted to create a coloring book that was geared towards adults.  Best of all, her sister-in-law was an artist who already produced a couple amazing test designs.

My first thought was “that's just about the dumbest thing I've ever heard”, but she persisted and said it was a big thing these days.  I relented and did some quick searches on Amazon, Google Keyword Tool, and Google trends and quickly changed my opinion!

Searches for Adult Coloring Books were exploding and 8 of the top 20 selling books on all of Amazon were coloring books for adults.   WOW!

Over the next few minutes I went though my list of things I think about before getting into any ecommerce niche.  I've written about this before on EcomCrew, but the quick and dirty list is:

• The product must be relatively light and easy to ship
• The product cannot have a shelf life
• The product cannot have a battery or plug (IE: NO TECHNOLOGY)
• The product must be hard to damage
• It must sell for more than $15
• It must have good margins
• I need be able to add value / improve upon current products
• It must be something people are passionate about
• It must be something that is consumable, so we get reorders
• It must be viable to SEO for over the long haul
• It needs to be easy to market

Finding products that meet all these criteria is far from easy and coloring books for adults fit the bill across the board.  So, with that my cousin and I banged out a partnership agreement and set out to build the best darn coloring books on the market.

Getting Started

The most important thing before getting started in any niche is to research the competition and see what people don't like about those products.  So, we looked at the best selling coloring books on Amazon like Secret Garden and Balance and started reading all the reviews.  More importantly, we started reading all the negative reviews.  There were a few things that people complained about over and over and over again:

• The quality of the paper
• The paper would bleed with markers and gel pens
• Artwork was printed on both sides
• The center binding
• Pixelation of the drawings
• Flimsy covers

So, it became clear to us that if we were going to break into this market we were going to have to address all these problems and then some.  When entering into a new market like this, I like to take a leapfrog approach; that is to make something that is not only better, but so much better that it blows people away.  I'm also OCD about having a high quality product.  A truly 5 star product will sell itself, while a 4 star or lower product will always be a struggle.

After looking at the price point of all the top books coming in around $8-$9, we knew that we simply couldn't compete in the marketplace if we charged more than 2x the price of those books.  So, we set our target retail price at $15.99.  Knowing that we need to make at least a 100% markup (after shipping), that meant that our price point at wholesale couldn't be above $4.50 per book.

At that point we set out to see if we could produce a book that addressed all of the above concerns.  In other words, a book that had:

• Hardback covers
• Super high quality paper that was thick enough not to bleed
• Spiral bindings so the book could lay flat
• Perforated pages so the artwork could be taken out and framed
• 50 pages so we only had to print on one side
• High quality printing so the artwork wasn't pixelated
• A blotter page to ensure even the darkest of markers wouldn't bleed

This is where my cousin worked some serious magic.  She is in charge of product development and just didn't quit until she found the perfect product at a price that would work for us.  This process took a couple of months, calling around to find the right manufacture, getting tons of samples, and finally settling on the right product.  There were times where it seemed that it might not work out, but persistency paid off.

Once we had a manufacture selected it was time to pick a name for the brand.  It was important to me to have this sorted out before we printed our first book, because we knew that we were going to be working on building a brand from day one.  We looked at dozens of names and it really ended up coming down to 3 of them.  Here is what we were looking for:

• A short name –  10 characters at most.
• A name that we could also get the .com for.  We didn't want a .net, .org, or some other crap
• Something that was less than $5,000.  We felt the brand name was important, but didn't want to spend a fortune
• Something that explained the brand in its name.  IE: COLOR IT

Once we narrowed it down to 3 names we ran a trademark search to ensure that there weren't going to be any issues having a brand with those names.  ColorIt was a bit scary, since it did turn up a trademark, but under something not related to coloring books.  After a chat with our lawyer, they made us comfortable that running ColorIt as a coloring book company, that also sold pencils, markers, cards, journals, and books would not be a problem.

Since I have a lot of experience buying and selling domains names, I took the lead reaching out to the 3 potential candidates we selected.  One never responded and the other two struck up a conversation with me.  The biggest thing with domain names is to seem very patient and be willing to walk away.  We were very close to walking away from ColorIt.com, but at the last second they agreed to come down to my price of $3,000.  With that ColorIt was born!

Now that we had a domain name and brand name it was time to start printing our first book.  We decided to print our first book before getting the trademark because we wanted to test things, spending the least amount possible.  We were willing to spend the $3,000 on the domain and brand name, because it's an asset that we could eventually resell if needed and recover most, or all of our money.  Other things such as trademarks, legal fees, websites, etc, etc are sunk costs.

Our plan was simple:

• Design our first book with 50 original hand drawn designs
• Print 1,000 copies of it
• List it on Amazon and see if it's a viable product

That was it, plan and simple.  In our mind, there was no need to create colorit.com, spend a lot or money on marketing, or anything else until we knew if people liked our product and designs. What came next was spectacular…

Getting Started With Amazon

It took about 30 days from when we placed our order with the manufacture until our books showed up in our California warehouse.

From there we created our first listing and our inaugural title, Calming Doodles was ready to sell.  It was a group effort from my cousin, her husband, my wife and I over the previous 3 months to pull this off.  We were very excited.

Our dream of releasing the highest quality coloring book on the market, at least in our mind, had come to fruition.  Now it was time to see what the general public thought of it and more importantly, would it even sell.

Our standard operating procedure at the time was to solicit 10-20 reviews from a review club like AMZTracker or Snagshot.  The reviews for those started to trickle in over the next couple of weeks and they were nothing short of glowing.  Of course, you kind of expect 5 star reviews from review club members.

I should mention that we do not use review clubs any longer as I'm convinced people who do are setting themselves up for a Penguin or Panda type penalty on Amazon.  I just don't think it's in Amazon's best interest to allow this practice to go on any longer. 

Over the next couple of weeks our sales started to pickup and before you knew it we had a handful of sales each day.  More importantly “real” reviews started to come in.  Here is some of the stuff people were saying about us:

5 Stars

The paper is very thick for use with marker pens, it doesn't go through at all. Using colored pencils is fine also. Most of the lines of the designs are on the thick side so one doesn't have to be too careful to keep within the lines if that is a concern, which I imagine would be for most people. It's easy to color in and is relaxing and enjoyable to use. Most of the designs on each of the pages are similar, there is not a lot of variety but that doesn't bother me because on the whole, I like this book so much. Being spiral bound make this book comfortable and easier to use than a regular paperback, which is a big plus. This is a high quality book I would recommend.

5 Stars

I bought this book for my sister for her birthday and it was by far her most favorite gift out of all the gifts she received. She even loved it more than a diamond ring she got. The quality of this book is outstanding. The paper, the drawings, the spiral binding, just everything about it makes for a wonderful no-stress coloring experience. All I can say is thanks to the creator(s) of this adult coloring book. It is definitely top notch. Looking forward to purchasing the next volume if/when it comes out to add to my sister's collection.

5 Stars

The ColorIt adult coloring book is what sangria is to Kool-aid! I actually purchased this as an early birthday present to myself (trying to ignore the fact that I just ticked off yet another year past 30..), and have nothing but good things to say about this coloring book! The designs are absolutely gorgeous even without color, so even if you aren't the most artistically-inclined, you can still create something beautiful! There is so much detail in every page but all details work themselves into the larger picture, so you can either go crazy and color each section a different color, or you can cover larger areas with one color and the results are still amazing! I was actually surprised by how big this coloring book was when it arrived! It has 50 unique designs and the pages themselves measure about 11inches x 8inches, while the book is about 3/4 of an inch thick. I wouldn't call this “hardcover” like the item description states, but the covers are a nice thick card stock material and it is heavy-duty spiral bound. The pages themselves are thicker than a normal coloring page, which is great if you want to use watercolor pencils with this (I would remove the page first and put it on a clipboard or small easel if you plan to get it wet though!). The pages are also all perforated so you can easily remove them and these would also look gorgeous if you framed a few and grouped them together on a wall when you are done! I absolutely LOVE this coloring book, it is very well constructed, the designs are beautiful, and it makes a fantastic stress-reliever – just be sure to hide it well from your kids!! ;)

Ok, you get the idea….  we were getting a lot of good reviews.  At the time of writing this blog post in mid March 2016, we managed to collect 112 reviews on this product with an average of 4.8 out of 5 stars.  We know we can't make 100% of people happy 100% of the time, especially since we have a product with subjective artwork.  However, we have yet to receive a review that has knocked our quality.  We look at this as a job well done.

Once we had our first title under our belts it was time to expand to title 2 and 3.  From here we developed a title with mandalas and another with flowers.  We went with these two titles based on search volume and interest.

As we released more titles our sales continued to climb. From 5 per day, to 10 per day, and eventually to over 50 per day.  In just our first few months of selling on Amazon we managed to sell 1,000's upon 1000's of books.

While we were racking up sales on Amazon, we were keeping a close eye on our traffic over at colorit.com.  Since we had our URL printed on all our books, it was inevitable that traffic would start to head to colorit.com for more information.  For the time being, we just had a “Coming Soon” page up there, but once we saw more than a handful of visitors coming there, it was time to develop colorit.com into its own sales channel.

At this point we decided to a) get our trademark b) start work on www.colorit.com

In part two of this series I will talk about how we developed ColorIt.com.

Stay tuned!