What’s the latest trend in the area of building an online business that “sells stuff?” Find out in this short interview with Angel Djambazov, Director of Marketing at “Affiliate 2.0” innovator PopShops.com (left) and Peter Koizumi of drop-ship e-commerce innovator Shopster.com (right). Each company is blazing a trail and promises to take digital Web-based retailing a new direction. From better user toolsets to total business model revolutions each offers slightly different approaches to E-Commerce 2.0.
AUDIO TRANSCRIPT
Jeff Molander:
Hello this is Jeff Molander and today I am joined by Peter Koizumi of Calgary-based Shopster.com, and Angel Djambazov of Seattle-based PopShops.com.
Each of these companies are recent entrants onto the web-selling scene, and provide technology solutions to digitally-inclined entrepreneurs looking to set up and sell stuff on the web.
While they share a common goal, well, relatively common, they each offer fundamentally different solutions.
PopShops brings access to thousands of products, storefront creation, and merchandising power to cost fraction web-affiliates. Those are the web affiliates that get paid to refer customers on to advertisers in exchange for a commission.
Shopster brings similar storefront creation to the website owner, yet gives them complete retailing power; from customer service to order processing and delivery. In essence, Shopster takes a referral-based affiliate and turns them into an honest-to-goodness Web retailer, able to set prices, run sales and promotions, etc.
So thank you for joining me today, gentlemen, and let’s take a listen to how Chris Sanderson of AMWSO, leading affiliate program management firm, looks at this evolving space.
Chris Sanderson: I think it’s really exciting to see so many well-built and well-managed tools coming onto the market now. A lot of what we’re seeing is hardly new, but the way it’s being put together and presented is making it far easier for some of them to use.
The flexibility of the tools is really the key to their success. I remember seeing Geocities in action on the Homestead system back in 2000, or even earlier, but they weren’t very flexible, and what they now use or to present how they can be used.
Leading commerce focus such as PopShops allow for a massive amount of customization by affiliates. It’s easy to set up. You can put what you like in there in terms of the quality, in terms of the merchants. You can cross-promote a vast array of products across many different niches all within a particular niche. It’s easy to do and anyone can do it, and that’s really the key to their success, I think.
For affiliates wanting to go the extra step beyond other people’s products, then I think Shopster is really a product that stands out for me. Sure, they’ve had their growing pains, but I think now they’ve reached a point where they have a really subtle offering for people to use. Offering a lot of flexibility in terms of what people can sell, how they can sell it, and how they set it up. And again, flexibility is really the key for me.
It wouldn’t surprise me in a couple of months we see Shopster being plugged into PopShops as well, so we’ll see how Shopster works in the PopShop widget.
Jeff:
Well it’s interesting that Chris sees a potential partnership in between Shopster and PopShops, but let’s circle back to that later perhaps. So thank you guys for joining me today.
Pete Koizumi:
Thanks for having us.
Jeff:
In 60 seconds or less, I’d like each of you to comment on what your company is bringing to the table for small business owners. Small business owners, small business hopefuls, start-up entrepreneurs, or affiliate marketers. What makes both Shopster and PopShops truly innovative, or different, and what’s the big opportunity?
Let’s start with you Peter.
Peter:
Well, as you may have seen, Shopster is a solution for individuals who are looking to make money over the Internet. What we provide is a tool, an e-commerce software, as well as a 900,000 products where you can pick and choose and place in your store.
Really, what makes Shopster unique is that the individual isn’t required to find the product, and then they can sell it over the web. From there we basically take over the fulfillment, work with the suppliers, and those orders are shipped directly to your customer. And so really what we do, we allow you to grow a long-term business, and really build up your own individual e-commerce store without having the inventory, without carrying any inventory yourself.
Jeff:
So it sounds, at least to me, Angel, that this is very similar to what you guys do. Is that fair to say?
Angel Djambazov:
I think as you go on in this discussion, we’ll see some diversions and differences in terms of what Shopster does and what PopShops does, but I think on the surface there are some definite similarities.
To me, PopShops is a next generation of online tools. It focuses on agility and allowing small business owners who are interested in taking an affiliate marketing space or an online marketing space, that don’t have the technical knowledge or perhaps the resources necessary to build their own databases and to manage those databases in such a way that they can fill and post products that are relevant to their audience and to their niche.
What we do in PopShops is we do the heavy lifting for such online entrepreneurs. We give them access to, currently, 24,000,000 products. These are commissionable products, these are affiliate products. And they can then easily take those products and, in a variety of very flexible ways, customize the look, the feel, the integration of those products into their website or blog.
Jeff:
Interesting. So, when new companies emerge, it’s always with good reason, and typically that reason has to do with money being left on the table by incumbent players. So what about the existing digital business model, namely affiliate marketing? It’s broken in your opinion. Of course, that’s a pretty strong premise.
What could be done better for the small business owner, or the affiliate, and where is there being money left on the table? This is obviously, like I said, a loaded question, but it needs to be asked so we can understand the void you guys are each looking to fill.
Who wants to take that first?
Peter:
Well, at least for Shopster, I think one of the things that we see is that there’s this disconnect between the affiliate and the client. What’s happening is that with Shopster, what we allow you to do is really own the customer, and so you’re driving the lead to your store, you’re putting together the message, the product is being sold through your site, and once that sale is made, you own that information, or you have access to that customer’s information, so you can remarket to that individual.
The issue that we see with the current affiliate marketing business, is that affiliates are pushing leads over to the client, and it’s really there’s no touch-points after that with that affiliate. It’s become the challenge for affiliates, because you’re basically just driving leads and depending on the clients to make the sales for you, whereas with Shopster you spend the time and the effort to drive that lead, make the sale, and then you have the ability to remarket to that individual, and I think there’s a lot of value there.
Jeff:
To be fair to affiliates, I know that there are a lot of affiliates out there, and Angel you know this very well, that are obviously moving toward, or in the case of companies like FatWallet.com, these folks have been forming relationships with the customers that they refer to advertisers for a long time.
That’s not to say that the problem, the void that Shopster is looking to fill and offering a solution, doesn’t exist, it certainly does, it’s just very difficult for an affiliate to form that relationship.
Angel, how do you look at the business opportunity for PopShops? What is it that someone has failed to provide that you guys are able to provide now?
Angel:
Well, I wanted to expand on Peter’s point a little and touch on the PopShops differential. I think that Peter has a good eye on a void I think that Shopster is filling very well. I hear in this industry all the time the argument between whether it’s the affiliate’s customer or the website owner’s customer, or the blogger’s customer, or whether it’s the advertiser’s or the merchant’s customer, who, in affiliate cases, the affiliate is sending referrals to these people. So, who actually owns that customer relationship?
I hear both sides of that argument constantly. An affiliate like FatWallet is doing a good job of engaging their audience beyond just simply being a referral point to a distant merchant.
I think Shopster is doing good job as engaging their audience beyond to simply being a referral point to a different merchant. I think Shopster does a really good job of empowering their users to take up those element of customer service and really become actual…real owners rather than simply a gateway to a merchant that’s out there that wants to bring in new customers.
So, I think that is a kind of an expansive point because I don’t think that a lot of affiliates do that very well. I think the FatWallets of the world are rare and it’s a difficult proposition as you said just to do that well.
Jeff:
Yup, I actually have been involved in a couple of consultations recently and even with peers in discussions where I’m hearing either from advertisers directly or through peers that advertisers are beginning to look at affiliate networks as toll booths. And I think that’s kind of what you’re giving at here and I think that’s dangerous for an advertiser to begin to look at an affiliate network because then of course they’re looking at affiliates as a toll booth. And that’s a much lower value type of arrangement.
Angel:
Well, I mean in fairness man, I do think that the networks are beyond that and I think they also are starting to get that there’s other things that they themselves want to be able to offer. So, the pain point of PopShops looks at kind of came my own affiliate manager experience and dealing with affiliates who wanted access to the product catalog for I was the affiliate manager for OnlineShoes at the time.
One had access to that product catalog and in a practical fashion it was difficult to give them the amount of flexibility and customization and breakdown of the product catalog that they really need to succeed. And PopShops ultimately is trying to do that. PopShops is kind of…we looked around and said: “Wow, all these merchants and all these networks have this huge list of products.”
Like Barnes and Noble for example has almost 2-3 million products in their feeds and if I’m a brand new affiliate and want to access those products but I only want instead of two million books, I only want the Agatha Christie style mysteries of those books. It’s really difficult for me to segment those out even though they maybe the most appropriate for my audience.
To do that kind of segmentation and customization requires the building of databases, requires all these extra work that really I think excludes a lot affiliates because of the technical aspect to it. Much less if they wanted to mix Barnes and Noble with Powell’s, with Abe, with Amazon, with all these other companies that also sell books. And featured books that are perhaps more appropriate to one audience or better priced point for the particular audience they are trying to address.
And so, PopShops is attempting to give those affiliates access to tools that allow them on a very easy drag and drop basis, visually browse to the 24 million products that we have in our catalog currently in PopShops. We figure out which products are best for their audience in a more merchandising stance. They’re really merchandising to the audience. And then integrate them again without having to do that heavy lifting with the databases because it really again is a huge barrier to entry for lots of entrepreneurs will be interested in the industry but don’t bill with actual products because it’s too difficult.
Jeff:
It sounds very similar to what you guys are doing with the store front creation and merchandising at Shopster, Peter. Is that the same?
Peter:
Yeah, absolutely. I think Angel just brought up a good point where I think what’s become very challenging for a lot of affiliates and new affiliates is there’s become this large area to entry now for new affiliates coming in to the market and really opportunity programs such as Shopster and PopShops. What they really allow you to do is allow the entry level as well as the expert affiliate to come in, build a long term sustainable business and because they’re pushing on multiple product, they’re really building out a store or blog or whatever it maybe.
And hopefully in the long term driving repeat traffic to those sites and what that’s allowing you is new entries that kind of start building on a business as oppose to a lot of existing affiliate programs which really are catered much more towards those who have the financial backing to push a strong pay per click program or who have the expertise in really pushing a long tail keyword, etc.
So, really I mean, from Shopster standpoint, we feel as though we’re opening the doors to a lot of new web entrepreneurs and that’s what really makes it successful.
Jeff:
So, technical hurdles and operational hurdles are kind of being democratized and lowered, it sounds like by both you guys.
Peter:
Exactly.
Jeff:
So, how would each of you see…this may not be a question that you want to answer but I mean if someone out there is listening and says: “How do I make a decision? I’m looking at PopShops and I’m looking at Shopster and perhaps certainly not in any kind of competitive light but as options to set up shop on the Internet. What process am I going through in my head as I now understand a little bit more about each company and what each solution set provides? How do I make a decision to either be retailer or be an affiliate in today’s kind of scenario?” Is that a fair question?
Angel:
I think so.
Peter:
Yeah.
Man 1: You guys are serving a bit of different audience or are you serving the same audience?
Peter:
[laughs] That’s good question. I can only speak for Shopster but in terms of Shopsters’s audience we obviously a have a wide range of customers and one of the advantages of Shopster is that we allow you to be able to really not just locked down to the online store kind of software in terms of selling products but we allow you to place those products onto other online store front as well as auction sites such as eBay and should we drop ship the product and so we provide some variety there in terms of you being able to make money on the web.
In terms of making a decision between PopShops and Shopster, at least the message I would preach to our customers all the time is that you really have to be looking long term and by long term we mean at least three months to really kick start your business. I mean, it does take some…you do have to overcome some hurdles initially like any business, building up the traffic, building up your storefront and a lot of times, if you’re selling on eBay, you have to build up that reputation on eBay as well.
Really, if you’re looking for a long term, sustainable business and really looking to, if you have some retail experience in terms of merchandising or setting margins and if you’re…what Shopster really allows you to do is we allow you to take your own margin…
Jeff:
Well, it sounds like there’s a few more decisions that need to be made that Angel…that in your…that in the affiliate marketing model although you have lowered some technical hurdles, there’s still a level of simplicity involved that maybe appealing in terms of putting up a store and making money with it. Fair to say or…?
Angel:
Well, I think that’s fair to say. I think that for Shopster you’re essentially utilizing Shopster to start your own business around either solely the Shopster’s inventory or a combination of Shopster’s inventory and some other inventory that you are drop shipping as well. So, you’re really in that term, in the retail e-commerce space and building out your own business that way.
I think PopShops’ goal was to address what affiliate marketing to me really originally was, which was that: “Hey, I’m a website owner. I’m a blog owner. I have an interest something. Let’s say it’s film. I have an interest in film and I’ve been talking about film that I know really well and I have this passion for it and because of this passion, and the content that I have created about film, I now have an audience who comes and reads about films.
And I start thinking to myself: “Well, how can I monetize this audience so that way I can still be passionate about film and talk about but yet put content on my website in terms of advertising that is relevant to what my audience is interested in?” And I think that’s why the affiliate industry got kind of quagmired down into simply banners or…
Jeff:
Or search, I think. Right?
Angel:
…or simply text links or search, right. And instead of actual merchandising about products because I’ll tell you what: If I’m talking about “The Godfather” and how much I love “The Godfather” and how interested I am in the movie Eastern Promises which is just coming out now with Viggo Mortensen which is supposed to be the Russian version of “The Godfather”.
If I’m talking about these two films, I’m going to convert my audience far more if as well as talking about those two films, I also place a link if they would like of a product to someone who is selling “The Godfather” or “The Godfather” pack of movies rather than just simply throwing up a banner of their saying: “Hey, go into a good so and sos, you know, movie site and maybe you’ll find “The Godfather”.”
It’s relevant to my audience. I’m bringing my audience something that they’re already interested in. So, I’m really doing what inherently is merchandising and I’m tying it to my content and what PopShops ultimately does is it gives those website owners and bloggers the ability to be agile about that and move quickly through the choices of product. So, if one day I want to talk about movies, the next day I want to talk about camping or any of my passions, if I want to talk about Nascar racing.
If I want to talk about any of those three things, I can talk about them one a day or the next day and then grab products quickly without having to go through the headache of how am I going to manage this database, how am I going to track all these as far as what inventory I have out there in terms of advertising. We just lowered that threshold so you can go back to: “Hey, I just talked about something I enjoyed. Let me put something relevant as well to the website.
Jeff:
And it sounds like there are some definite similarities here as an example both of you guys allow someone to take that product or those products and interface with people like eBay and certain, I think PopShops interfaces in a click, in a single click with various blogs. Is that right, Angel?
Angel:
Yes. Yes that’s right. We interface currently with TypePad and Blogger and have a WordPress, a really fancy WordPress which is coming out shortly.
Jeff:
So, correct me if I’m wrong and this may sound overly PC, you know. I’m not usually overly PC believe me.
Angel:
[laughs] No, no. [laughs]
Jeff:
Nothing precludes a web entrepreneur, if you will, from working with both of you guys even on the same web page. Is that fair to say?
Peter:
Yeah, absolutely. My personal thoughts is that the two can definitely work hand in hand and we have several affiliates, I guess customers who use multiple programs. They use Shopster along with other programs such as PopShops and I can’t say that they…I don’t know offhand whether or not we have a customer using both Shopster and PopShops but at the same time it’s definitely doable.
Jeff:
Yeah.
Angel:
Yeah. I mean, to me using both platforms, PopShops and Shopster is equivalent of…you have a to make face which should be really geeky and make a facebook analogy of using multiple widget plug ins into your facebook page. They both can work together very and there’s absolutely no reason not to take advantage of all these great tools that are coming out.
And I think that’s one thing that’s really exciting about the industry currently is all the conferences I’ve been to this summer have talked about this need out there for merchants to really engage with a long tail advertisers and affiliates and this need for affiliates to have merchants networks provide them better and more robust quicker tools.
So, I think it’s an exciting time for me and Peter right now in Shopster and PopShops because we’ve already created those solutions and now it’s a matter of being ahead of the curve and really fulfilling that message to affiliates and the merchants out there who feel that need.
Jeff:
So, what’s this talk about a partnership that [laughs] Chris Anderson seems to think maybe in order. I’m not quite sure…any thoughts on that?
Angel:
I just think Chris is a rabble-rouser. [laughs]
Peter:
[laughs]
Jeff:
[laughs]
Peter:
[laughs] But Angel brings up a really good point and I think it’s really exciting times for companies like Shopster and PopShops in that what really allows a company like Shopster to grow is that the consumer buying mentality I guess has really changed over the last three or four years. In that, in the past they were really looking to purchase from these larger box of retailers and now the mentality has shifted towards people want to buy from experts within that domain.
And so again, if you want to buy light bulbs, you want to buy from an expert of light bulbs as opposed to Wal-Mart or any of the larger retailers because you have a larger selection and if you have any questions somebody can most likely help you directly. So, going back to what Chris was saying in terms of the partnership, I think one of the things is that Shopster offers obviously a variety of different products and PopShops, obviously having a very large of warehouse.
Jeff:
Yes, it’s similar.
Peter:
And for the consumer or for the end retailer or affiliates, why not take advantage of two large databases of products and really become an expert in one small niche and being able to pull products from multiple different areas without… and using just one interface and I think it’s exciting times for those affiliates out there to have the options. I think they could have available [cross talking]
Jeff:
Totally agree, excellent. I really appreciate you two guys taking the time out of your day to chat about your solutions and best of luck moving forward.
Peter:
Thanks for having us.
Angel:
Thanks for having us, Jeff.
[theme music]
