S5E83
· 28:09
It's Matt. Welcome to Money Lab. I got an email from Scott. Scott, I believe it's it's Cohen. And this is, what he had to say, and I just wanted to react to it and sort of go over each piece of it because it's it's lengthy, but, you know, interesting.
Matt Giovanisci:So he says, first off, I love the format and just wandering around and talking things out. It is very cathartic for me to listen to you as you work your way through issues slash opportunities, so keep it up. I have some thoughts on a couple of topics you have brought up. The first topic, USPS will pick up packages from your house if you ask them to. He was just basically telling me that that's an option.
Matt Giovanisci:Now, I did know this. I've been to the post office a few times when I was dropping off. So we so for context to this, we've been selling our pool care handbook, which we buy from lulu.com. What I do is I buy it in bulk. So I buy about a 100 copies at a time, and it costs me about roughly $1500 with, you know, that that includes shipping to my house.
Matt Giovanisci:So it's roughly $15 a book, and then it cost me about $5 and change to, you know, to ship it media mail through USPS to the customer. So we sell it for 49. We buy you know, it costs us $20 out the door. So we're making, you know, roughly 20 is that right? Hold on.
Matt Giovanisci:25, almost $30 per book. Now what's nice is I just got email today from Lulu because I've been buying so many books from them that they have lowered my pricing. So now I'm getting them for $12 a book. They lowered it by $3. So that's a nice little margin bump there.
Matt Giovanisci:So So, anyway, what I do is I I I have these bubble mailers from, Uline that I buy in packs of 100 or cases of 100. And each morning or each weekday morning, I wake up, see how many books we sold. It's usually, you know, now things are picking up. Like today I packed 10 books, but that was over the weekend. So that was that was, 2 days worth of books.
Matt Giovanisci:Actually, no. That's only Sunday because I did actually pack books on Saturday. So anyway, yeah. We're probably gonna be averaging about 10 books a day, which is pretty good. And I've been, you know, just kinda packing them myself and I print up, you know, I do this all through this is all built into Shopify, by the way.
Matt Giovanisci:You can buy the USPS labels. I print them with a thermal printer. I stick them on the package. I take a book. I stick it in the package, seal it, and then I normally have been driving it to the post office, which is right down the street from my house, not very far at all.
Matt Giovanisci:And I also print up if I have more than if I have about 10 books, I'll usually print a manifest on a sheet of paper, and I'll bring it to them and I'll just they'll just scan the manifest and then that kinda scans them all into the system. So they don't so they they don't they don't have to scan them 1 at a time. Now, I had an issue recently where we were shipping a lot of those empty urine bottles, And I had chose the wrong label, and I had to go there. Actually, I couldn't even go there. Steph had to go there and pay for the different label, and they had to relabel all of them.
Matt Giovanisci:It was a pain in the ass. But when she was there, she was like, why don't you talk to our main office because there's something, you know, if you're gonna be doing this, there's some things that you can do. So I had a call with USPS and they were like, yeah, you can do pickup, which is built into Shopify kind of. There's basically a link in Shopify that says USPS pickup and UPS pickup because they only work with those 2 shipping carriers and DHL, but that's for something else. And so I decided after reading this email that I was gonna do it.
Matt Giovanisci:So all it does is it links you out to the USPS website. You basically just type in your address, schedule a pickup date, tell them, you know, where it's gonna be in your house, and then they'll come pick it up. So today, I I packed 10 books for urine bottles, and I put in a manifest. I put them in a box, and they're gonna come pick them up tomorrow. And I figured it's not you know, I kinda like going to the post office, to be honest.
Matt Giovanisci:Like, I like getting out of the house, take a drive, you you know, maybe pick up something to eat for lunch or something. Like, it's a nice scenic drive. It's not bad for me, but, yeah, doing that every day in the summer is gonna be it's not gonna be feasible for every single day, so it's nice to have this option. So I'm trying it out. So thank you for bringing that up.
Matt Giovanisci:Number 2, he says, office space. Are you fully considering the cost associated with the location away from your house? Additional Internet, business Internet here is, like, 3 times residential cost and slower. Duplicate office furniture, etcetera. If you really wanna get out of the house, that will help if you wanna get out of the house, that will help justify additional expenses.
Matt Giovanisci:If you wanna have a separate workspace versus home, that makes sense as well. From the sounds of it, yours your basement is dedicated to your business, so why not just build out the video set in the basement? Reduce the duplication efforts and create a fully optimized business center at home? Yes, Scott. I have basically succumb to that idea.
Matt Giovanisci:There was a part of me that, you know, felt I was taking up a lot of space with my business. So the basement, which we never use, except for guests, I just felt like, you know, where I put the the the set for the studio is, like, not in an ideal spot. It's it's, like, kinda near the door for the for the for the bedroom, and, you know, it it it blocks the there's a lot of, like, issues down there where it's, like, not an ideal setup. But I thought, okay, I have this huge basement, it's nice and cool down there, you know, I just had it like kinda redone. It's really cool to be it's really comfortable down there.
Matt Giovanisci:And so, in fact, the only place in our home that has carpet. Everything else in our home is either tile or hardwood floor. So it is the most comfortable place to really be, except it's full of my equipment. Like, my wires are everywhere, and, you know, it's like it's it's I'm not making good use of the space, to be honest. So that's sort of the issue.
Matt Giovanisci:And I thought, man, this space could be really like, it could be a really cool game room. And I only say that I'm not a gamer, meaning, like, I don't even like playing any games quite frankly. But, you know, we're 2 you know, we're we're a married couple with no kids, and we have a lot of friends with kids. And unfortunately, they don't like coming over here because it's not a kid friendly house. It just isn't.
Matt Giovanisci:If they were to go down to our basement, which is, you know, when I was growing up, that's where my parents would send us. They would just send us to the basement. We'd play video games or dick around down there or whatever. But in our home, like, everything's off limits because it's like, you know, it's all business stuff, it's all expensive equipment, and and I thought, well, if I moved all that expensive equipment into a dedicated space that was for the business, and I turned the basement into a true, like, super fun zone game room type of thing, a place that, you know because Steph loves games, and we can invite people over and we could have, like, a pool table down there and, like, you know, arcade games and, you know, a a console and, you know, sound system, whatever, just to make it like a cool fun hangout spot. So that kinda got that in my head, and, you know, I just thought, this it just feels like a waste to make it about my business even though, yeah, I mean, it brings in money.
Matt Giovanisci:Sure. But, you know, that was the thought there. But, yes, I did not consider Internet. I did not consider the well, the furniture, I would just take from the basement. I mean, because that would just go.
Matt Giovanisci:But, yeah, you're right. I would just take all of my it wouldn't be duplicate furniture. It would just I would just take all my stuff from home and bring it there. But, yeah, Internet's an extra expense. I mean, we pay, a $100 a month here, but here's the here's the thing that, and I don't know if this applies to us, but in the city where I live, they offer really inexpensive Internet to the residents.
Matt Giovanisci:Unfortunately, we don't technically live within the city limits, and so we don't get that access here. But if we did open up a an office space in that area, we would get it, I'm assuming. So there is that benefit. So it actually would be cheaper Internet than we would get at our house, in our case. So, yeah, it's not something I am fully discounting yet.
Matt Giovanisci:I'm I'm gonna see how this year goes with sales and profit. We, you know, we're making a lot of changes to the business. We're improving the business. In fact, I'm gonna do an episode after recording this one about some of the things that I noticed over the weekend. And if things go well I mean, what I'm trying to get to is a place of, like, extreme profitability for the business.
Matt Giovanisci:And some of the things that I'd like that other space to to do is really just exist as an office. So that and and no. The reason I want another space is so that my house can just be my house, and then my business can be my business. But you're right. I think it just makes sense to just turn the basement into my full blown, you know, studio for all things business and just leave it at that.
Matt Giovanisci:And maybe one day if, you know, we sell the business or we're not you're not gonna we're not as intense, you know, or, you know, we start you know, more of our friends start having kids, although, you know, it's pretty much over by now. But yeah. So I don't know. It's just it's just more to think about there. I'm not fully sold on whether or not I'm gonna get another place or not.
Matt Giovanisci:But, yeah, I I hear what you're saying, and I agree. I mean, I agree for now. Number 3, he said branded boxes, etcetera. So have you considered having Swim University branded packaging tape? So, yes, I have that.
Matt Giovanisci:I'm actually staring at a role right now. I got it from Sticker Mule. I know you said that you use Sticker Giant, which is outside of Denver, which is actually close by, So I could do that. So you also wrote, your book can be a shock and awe type of product. The extra attention to detail versus shipping in a bubble mailer and shipping can make a big impression on your customer.
Matt Giovanisci:I think you should consider what you can do to a major customer with the purchase. You know, box with a book, stickers, etcetera would make a solid impression. Yes. The box will most likely be a cat toy and then recycle, but you can make an impression versus typical packaging with some additional attention to detail. The reality is that you're not selling thousands of books, so you can invest in the time to package each book with attention to detail.
Matt Giovanisci:Additionally, if you are using Shopify, you may wanna consider u p USPS advantage shipping more than media mail, but less than priority mail, and, you know, it saves you money, etcetera. But okay. So, I've you're you're probably listening to the the episodes where I'm talking about this a lot. So I bought everything. So I bought all different size boxes.
Matt Giovanisci:I bought branded boxes, you know, test boxes. I bought this packing tape. I bought stickers. I bought magnets. I bought postcards.
Matt Giovanisci:I did I tried everything. And ideal so, yes, I am not shipping thousands of books, and so that is my thought. That was my thought of, like, look. I can sit down and actually make this a nice experience for the customer. And, you know, now that we're saving money, like, now that our book prices has gone have gone lower, I could reinvest that profit into making the experience better.
Matt Giovanisci:But there are things that I am I've also considered. Now having boxes, like putting my book in a box, that adds a lot of extra time to my day because I have to assemble the boxes before I put the book in. That that, you know, yes, I could get better at that, but it the boxes itself are heavy. They take up a lot of space, and I have to put them together, and I have to put the book in the box, and the packing tape, you have to wet. It's not just something that you can pull out and stick to whatever.
Matt Giovanisci:You you have to literally have a sponge and wet the back of it. You have to cut it with scissors or you buy, you know, some type of, there's I'm sure there's some sort of mechanism that, you know, pulls out the tape, wets it, and cuts it at the same time. But, the way that we would package our boxes, it would be a weird I thought of this like the tape would be weird. I've also thought of just getting boxes and getting a big stamp and stamping all the boxes with a logo instead of going and getting the boxes printed or custom printed. I don't I think that that's a bit overkill for for what we're doing.
Matt Giovanisci:But, yeah, I thought of all this and I I'm not a 100% sold on the shock and awe value because I think our business is very different. And I and I've I've honestly, Scott, I've thought a lot about this. There's just some things that we go above and beyond to do, and it just goes unnoticed. And the reason it goes unnoticed is because no one expects it from us, and then no one's impressed when we do it because we're just this pool company. I'm not advocating that I shouldn't do it.
Matt Giovanisci:All I'm saying is that I've just found that our our my extra mile in in my particular business goes unnoticed quite often and has not led to any positive outcomes. And so I that's that's that's point number 1. Point number 2 is the the box versus the bubble mailer. The bubble mailer is so much easier for me to pack because I just take a bubble mailer out, I slip the the book in, it slides in perfectly, I peel a little sticker, and it's and it's sealed shut. It is the fastest thing.
Matt Giovanisci:The other thing because I went and tested boxes. I tested, like, the mailers that are they're like, they're like padded mailers, but they're made of, like, recycled material and and they are recyclable as well. And I thought, okay, like, I want our material to be recyclable, But bubble mailers are waterproof, and our book is paperback. And so when I kept ordering I kept ordering books from Amazon, paperback books, and they always came in a bubble mailer. And I thought, why do they do this?
Matt Giovanisci:And it turns out they do it for waterproofing purposes. So I was like, okay. Yeah. That makes sense. Now I got branded bubble mailers from Sticker Mule, but they don't make it in that size.
Matt Giovanisci:So it just the the the size that I bought was too small for the book. I put the book in there, but it was, like, it was so much harder to pack because the because the bubble mailer was that much smaller, but it felt like a nice package. Now I'm I'm not I'm not, against the idea of doing boxes. I'm not against the idea of having, you know, stickers and whatever because, yeah, as soon as you start putting other things in the box, you no longer legally can send media mail, which you have to do advantage plus. But I don't think or at least I haven't seen that option come up in Shopify, so I don't know if that's available to me or not.
Matt Giovanisci:So yeah. There was a point in which I got kind of tired of thinking about this problem because, ultimately, the thing that I am trying to solve is how do I get the book to the customer the fastest? Now, obviously, media mail is not the fastest, but it is the cheapest for us to ship. But because I am able to pack pack them so quickly and take them to the post office with my current process, which is what I landed on, which is this white bubble mailer. I put the sticker on, put the book in, it's it's basically done.
Matt Giovanisci:That speed, I think, is more important right now. If we get to a point now, you know, I say that. Now and and the thing is is that with bubble mailers or the boxes, I could prepack everything and then have that as my inventory, and then just put stickers on boxes and, you know, like, once an order comes through, all I could do is print the sticker, stick it on the box, and it's and it's out the door. I'm not against that idea. It would just be a lot of work and, you know, to to do, but I'm not against that thought.
Matt Giovanisci:Well, right now, and that would make it a lot easier to store things. So there is something there. But, yeah, you're right. We wouldn't be able to do media mail unless we stuck you know, if we put stickers in and, again, like, I just I can see it making a lot of sense for a different type of business. If I was, doing like a home brewing business where it was like hobby based, I would go the extra mile because I would want to surprise and delight.
Matt Giovanisci:But with Swim University, I just haven't found I haven't found that thing that really, makes it feel special enough to warrant the price and the effort. And so I'm I'm, oh, I'm still looking for that. And to kind of articulate that a a little bit better is if the box like, when I buy boxes from Uline, they're never gonna get cheaper than that. That's the cheapest I'm gonna be able to get. Alright?
Matt Giovanisci:Now if I got them printed, which I could do, I if I got them printed, it would cost more money. Let's say it it goes from, you know, 50¢ a box to a dollar 50 a box. Maybe let's just say, conservatively, it's $2 a box. Alright? And I'm like, okay.
Matt Giovanisci:The box is nice. It's nice and printed. It looks kick ass. Right? The book goes inside.
Matt Giovanisci:You know, I think the tape is overkill. What I would probably do for for books is just get like those clear circles that you can just, like, seal the the box shut. I don't know if the tape matters all that much, or I just might buy if the box was blue, I'd buy, like, orange tape or something to kinda give it the brand color. Could be cool. But I I haven't landed on how much better that would be.
Matt Giovanisci:Here's another thought. I would do that in a heartbeat if I knew it would lead to repeat business. The problem is is that I'm selling a book, which is not a repeat purchase. If I was selling, say, like, a chemical pack where, you know, the like, when I I started using AG one back in, I wanna say, like, November of last year, and the first few boxes they give you are beautiful. But then once you start you know, once you're on the, you know, the subscription plan, they just send in a, you know, in a bag.
Matt Giovanisci:It's like, you know, it's not it's not packaged nice anymore. You know? Because they know, like, alright. We already got you. You're you're you're a steady customer.
Matt Giovanisci:We don't need to invest in this anymore. If if I was selling something that required repeat business, I would absolutely want especially if they had no idea who we were and we were a fairly new company, I would want that to look beautiful. But it wouldn't be a book. It would probably have to be something physical like I don't know. There's a lot of wind happening right now.
Matt Giovanisci:It's insane, if you hear that in the background. Yeah. It would have to be chemicals or some high ticket item, I think, where, I just yeah. I I if that makes any sense, I think again, still open to it. We'd love to figure it out.
Matt Giovanisci:But, like, you know, like, to me, I think, okay. Somebody gets a a nice box. The book's in the box. This looks great. Everything looks great.
Matt Giovanisci:And, hey, there's a sticker. It's like, okay. Sticker's nice. You know? Oh, okay.
Matt Giovanisci:There's a magnet for the fridge. K. It's just got the logo on it. Like, every time I order from Sticker Mule, they send me a bunch of stickers. I just throw them out because I'm like, alright.
Matt Giovanisci:Enough of the fucking stickers. You know? Like, I'm not putting these anywhere. Advertise your business on my, you know, on my computer or on my water bottle or wherever the fuck you put stickers. But if I could figure out some sort of value add that was light, meaning, like, if I could create, say, you know, something that would help somebody with their pool and was incredibly lightweight, and that could that could go in the box with the book and they weren't expecting it, that I would do in a heartbeat.
Matt Giovanisci:If it if it meant, again, leading to repeat business. Doing it once and just surprising them is, like, great. I'm never buying anything from them again. It's, like, well, what was the point of doing that? Like, you've probably already built up the goodwill, which is why they bought the book in the first place.
Matt Giovanisci:So we're not running ads to the book. If we were running cold traffic, then, yes, there would be a different scenario there. But because where it's all warm traffic, again, like, thought about this so much, continue to think about it, because I do wish I ran a business that had that kind of, you know, that sort of shock and awe value. I just at this stage or at least this year, I don't see where that makes sense for us and how, like, spending an extra you know, like, we so so what happened this morning was we got a $3 increase into our into our margin, into our profit for for each book now. So, you know, if we were selling books if we were buying books for 15 and sell and then it would take $5 to ship, you know, minus all my time.
Matt Giovanisci:Let's just say rough, $20 a book. You know, the the bubble mailers, I think, are like 50¢. You know, it's like so it's like $20, maybe $21. Alright? And we're selling it for roughly $50.
Matt Giovanisci:Alright? So we're making $29 a book, which is fucking awesome. Right? For a book. For a paper I mean, a nice thick paperback book, specialty book.
Matt Giovanisci:Now and people are buying it, which is, like, great, you know, highly specialized. We just gained $3. So now we're over we're making over $30 a book. And my immediate thought was, let's sink that into the to the the delivery. And Steph's argument was, let's pass that to the customer.
Matt Giovanisci:And then both of us came to the same conclusion, which is like, 1, not a single person so far has complained about the price of our book, and 2, why would we eat into our profits? Like, we're already like, we're selling a book. It's not the most profitable thing, but we're doing better than 50% margin. So, like, let's just take that because, you know, we can reinvest it in other places, not the delivery of the book, but in other digital spaces that do that does make sense, that is value add. So, again, that's that's all that.
Matt Giovanisci:So, Scott, thank you for your email. If you wanna send me an email, I'll do, episodes about it. If you want, shoot me an email, matt@moneylab.co. Bye.
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