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The My Wife Quit Her Job Podcast With Steve Chou
637: The AI Automation Stack Behind The Fastest Growing Ecommerce Brands With Leo Sgovio
00:50:26
In this episode, Leo Sgovio breaks down the AI-powered workflows he built to automate influencer outreach, generate video ads, and launch products without relying on giveaways or PPC. He walks through the exact system he used to sell out 5,
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- [00:00]
Steve Chou
Welcome back to the podcast, the show where I cover all the latest strategies and current events related to E commerce and online business. In this episode, Leo Segovia breaks down the AI powered workflows he built to automate influencer outreach, generate video ads and launch products without relying on giveaways or ppc. He walks through his exact system he used to sell out 5,000 units before Christmas and how he clones winning competitors ads using a chain of AI tools. Enjoy the episode, but before we begin, I want to take a second to mention that I have a free e commerce community that I'm incredibly proud of and would love for you to be a part of. It is a place where real sellers come together to share wins, troubleshoot problems and support each other through the ups and downs of building an online business. You can join completely free over@mywifequarterjob.com community and I would love to see you there. That's mywifequitterjob.com community.
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Now onto the show.
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Welcome to the My Wife Quitter Job podcast.
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Today I'm excited to have Leo Segovio on the show. Now I first met Leo at my annual E Commerce conference's Seller Summit and I think he was introduced to me by my good friend Branded Young. And regardless, we got back in touch recently at Kevin King's Market Masters eventually where I realized that this guy's got a ton of different businesses all in the e commerce space and he's a seller as well. And so he's been in this industry for over 15 years, maybe more than that in the e commerce space. In 2017 he was actually the head of innovation for Viral Launch, which was a company started by my friend Casey Goss who was actually on the show and I think he sponsored the Seller Summit a while back as well. And then since then he started Convo Mat, which is a marketing automation tool for sellers, and Spliced IO, which is an influencer, an affiliate marketing program for creators and brands. But the reason I wanted to have Leo on the show today is because he is using AI heavily to automate a lot of e commerce processes and ugc. And he's the type of guy, as you'll soon see, who's always on the cutting edge. He always wants to know how everything works. And with that, welcome to show Leo. How you doing?
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Leo Segovia
Hi Steve. Good, good. How are you? Thanks for having me. I appreciate it. Actually it's funny because you we met, I don't know, three, four years ago. Yeah, and I mean like of chasing you, I wanted to like, connect with you because I admire you as well. So thank you for, you know, your words, but, you know, I just feel the same way towards you. So I appreciate you having me on the show today.
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Steve Chou
I think I was like. When I first met you, I was like, who? What is this supermodel doing at seller summit?
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Leo Segovia
That's the reputation. I don't. I don't like. I don't want to have this space. But, you know, guess what? Everybody introduces me, like this guy. I'm like, hey, you know, I just want people to know that it's a brain also here.
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Steve Chou
So.
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Okay, so, Leo, I know the audience. My audience doesn't know you that well just yet. How did you get started with E Commerce? Because I know you were in the fashion industry and you were a dj, so how the heck does that lead into.
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Leo Segovia
Yeah, you know, Steve, I've always been very passionate about it. Even when I was working in the fashion industry in Italy and DJing, I was selling shoes on ebay, I remember. And then, you know, that was kind of like, led me to understand how to import stuff from China. I was probably only 20 years old, maybe younger. That's also how I learned how to write English very well. Because at the time, I can't remember what the chat tool was. I think it was powered by AOL or something like that. But you had all these chat rooms, and that's where all the Chinese were. But then where it really took off is when I decided to move from Italy to Canada. And because my family there had a really long, large travel business. It was called redtech Ca, similar to Expedia, was obviously privately owned. And so at the time, they asked me to do some like, kind of data entry job in the SEO space. They wanted me to optimize title tags, you know, the descriptions, and pretty much make these pages optimized for Google engines. And that's where I really got passionate about that industry. In fact, they sponsored me. They decided to sponsor me, keep me there, because they liked my work ethic. And that's. Yeah, since then, I never left E Commerce space again. I did a couple of interesting things. I had a Santa website, you know, where kids could write letters to Santa.
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Steve Chou
Oh, that was you?
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Leo Segovia
Yeah, that was me. Yeah. Okay.
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Steve Chou
I'm actually about to do a YouTube video on. Yeah, it's actually. Excuse me, though. Like, I'm calling the video Dumb Business Ideas that Made Millions. And that's actually one of them.
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Leo Segovia
That was one of them. I was making too much Money with Google AdSense at the time because you, you wrote. So the kids wrote this letter or just picked kind of kids they wanted. And this script in the back end was creating the naughty or the list of the good kids. Right? Yeah. And on that page it was full of AdSense ads, which kids obviously don't know anything about it. It's just clicking everywhere. And one of the reason why it was making so much money is because of the NORD Santa tracker, which is related to tracking, tracking systems, like the GPS systems in the Google kind of AdSense space. And so all these GPS tracker ads were showing on the Santa site and they were actually paying a lot of money for clicks on these ads. So at the end of the month, like 3, 4, 5,000 DOL and just, you know, AdSense campaigns. But then we took it a step further. We started actually printing letters. So I had my parents, my brother, you know, working on this project from Italy and they were just printing all these papers, you know, during Christmas time and shipping it to kids. It was fun. It was fun project.
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Steve Chou
That's hilarious. Okay, I had, I had no idea. Yeah, I mean, I've listened to some of your interviews in the past, Leo, and there was one story I think that you told where your first Amazon product, you actually did not launch with ppc and it was just all influencers.
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Leo Segovia
Yeah. Yeah. And you know, it's funny because today is probably the most, the best, most effective ways to, to launch as well. But what we did this was October last year. We decided not to do giveaways, anything like that. And which is normally what I will do, like to rank on Amazon, but we decided to just use creators, influencers and PPC. So a lot of content that was coming from TikTok and Instagram. And then we just went with this auto and broad, kind of semi broad campaigns. But the result were fascinating. I've never seen a product, obviously it was a game. So you have a lot of demand during Q4 for games, anything related to giftable items. But that became almost its own kind of strategy for us to launch. Like, right timing when there's a lot of demand, plus traffic coming from outside with influencers. And yeah, we sold out. We initially bought only 5,000 units, so we ran out of stock before Christmas and it was very successful.
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Steve Chou
Yeah. So I know I've had other people use influencer marketing very effectively before, but on the flip side, whenever I put out one of those episodes, I always have a bunch of people send me emails saying, hey, you know, it's great. I love that case study. But like, how Do I actually get these influencers? How do I get them to follow through? You've done this many times and you actually have an influencer platform. What I mean, is there an easy way to do this or is it always going to be a pain?
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Leo Segovia
I don't think there is an easy way to do this, but we've tried to streamline it so that it becomes easier. Because when it comes to influencers, and especially on TikTok, where you deal with a lot of affiliates, you know, you're talking to people that obviously want to make money. And there are also very two different platforms, like on Instagram, for example, it still matters how many followers they have. And if the audience is kind of resonates with your product. On TikTok Shop, the audience, the followers don't matter at all. Because any video, you know, the algorithm is very, very interesting from that perspective. Every video can go viral. And so what really matters is that the creator you work with knows how to create content like the right hook, which is what we try to do. But the way that I think we improved or accelerated kind of the success rate from that perspective is by leveraging AI to not only find the right creators, because it's a volume game, right? The more people you reach out to. So there are these bots, right? We have an agent that sends a lot of emails to Instagram creators and sends a lot of DMs to TikTok creators. But right now there are three or four platforms known in the space that do similar things. And the problem with most of them is that they spam creators. So you can send a thousand messages a day or a thousand emails a day, but they're not being seen because you're spamming them. And so they have so many messages. So we partially solved that problem, but if they don't solve it too, it's right now a little bit of a tricky situation because we are doing, I believe, a much better job at reaching out to creators that meet certain criteria. And we use a lot of AI. Like we have 114 different data points that we look at before sending out an invite to a creator to join a campaign or to work with us.
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Steve Chou
Have you ever wondered how much your
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business is actually worth?
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Now, I sold one of my businesses through quiet light and honestly, just getting that initial valuation changed everything for me. Not because of that number itself, but because of what came with it.
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My advisor walked me through exactly what
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buyers would be looking for, how I needed to restructure my accounting, what documentation I was missing, the Gaps in my financials that might kill a deal before it even starts and stuff that I really had no idea that mattered when
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it came to selling a business.
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And here's the thing, I wasn't even ready to sell yet. But knowing what I needed to fix meant that I could actually start preparing.
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And I now had a roadmap.
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Everyone at Quiet Light has built or sold businesses themselves. So when my advisor told me what needed to change, it was actually coming from real experience, sitting across from buyers. And by the time I was ready, everything was positioned right and we attracted serious buyers. So if you've been thinking about selling someday, even if that day feels way far off, just getting a free valuation from Quiet Light will make a huge difference. You'll learn what you need to fix right now so you're not scrambling later. And if you're interested, go over to Quiet Light.
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Com.
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Leo Segovia
So we know we're reaching out only to creators, that they're going to like our product and they most likely are going to like our offer. Because if you are working with affiliates today and you send them a 20% offer, if they are a micro one, they might say, yeah, you know, 20% is pretty good for me. I'm just looking to make some money right now. But if you're reaching out with these bots to someone that has already got making a bunch of money high GMVs, they're not going to look at your message, they're going to ignore you, they're going to delete it. So that's how we became better and better when it comes to outreach and knowing, you know, with the power of AI. Also, when is the right time to send a DM based on all these different factors? Does it make sense?
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Steve Chou
So interesting. So you, you actually go out and you've scraped a bunch of creators and you've categorized them with AI.
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Leo Segovia
So we did that. We also have obviously creator creators on our own platform. And then when it comes to using the APIs, we sort through them before. Right now, I give an example the way that most platforms do it. You go in there, you select some filters, you say, okay, I want to creators from us. I want creators that make about a thousand dollars gmv. And then in the games industry, right, you press the button and now the bot is going out there and sending messages to everyone that is being returned from these APIs. We take it a step further, we analyze everyone that is being returned and see do they actually fit our criteria? Because the APIs, you know, they work, they just get the database run a Query, they give you responses. But then when you look at all these ones individually, they might not be very relevant. They might not be like maybe in the game industry our game Perhaps is for five year old and up, right? Five year, five to 12. But they're being returned because perhaps we search for family games, but they have only toddlers or they have two year old kids. So for us that's not good enough. Right. So that's where we step the game up and filtered and created our own scoring system instead of relying on why these APIs return to us.
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Steve Chou
How do you know what's a good offer to offer one of these creators once you find one?
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Leo Segovia
So it depends on what they are currently making in terms of gmb. It also depends on how many brands they're working with. It depends on how many videos they create, what an average video makes for them and if what they're making can be kind of like replaced with. With yours. Right, with your product. So let's say on average they make $10 commission on a product, right. If you are not, you know, matching that, they're not going to obviously replace whatever they're working on today, which is making money with yours, especially if you're just starting. They don't even know they don't have any GMV related to your storefront. Right. So they don't know what your conversion rate is. So that's the challenge. You know the challenging part is, right, it's like the cold start, remember on Amazon, but this time instead of showing it to the algorithm that you're worth it ranking on page one, you know, you're showing it to the affiliates on TikTok shop.
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Steve Chou
Yeah, so I had heard that there's only like a thousand affiliates on TikTok Shop, for example, that actually make more than $10,000. So it seems like the strategy to find that pool, it's very small. So is your strategy different to just get anyone based on the type of content that they create?
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I just wanted to take a moment to tell you about a free resource that I offer on my website that you may not be aware of if you are interested in starting your own online store. I put together a comprehensive six day mini course on how to get started in E commerce that you should all check out. It contains both videos, video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online. Now this course is free and can be attained@mywifequitterjob.com free. Just sign up right there. On the front page via email and
- [15:33]
I'll send you the course right away.
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Once again, that's mywifequitterjob.com free.
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Now back to the show.
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Leo Segovia
Yeah, yeah, we adopt, you know, kind of a three phase strategy. Depends on the size of the brand. So if the brand is small, we go after like more the micro influencers just to get the traction because you have to, to go over the $2,000 GMV in order to get, to unlock more messages. So we try to obviously go through faces because it doesn't make sense for you to work with a, you know, try to work with a super affiliate if, if you're not there yet. Right. So that's what we try to do. But. Right. I think right now there is more than a thousand. Like I know a couple of affiliates myself here in Miami that I've started like two months ago and they're already doing about 10,000. So I think the pool is becoming bigger and bigger. But I think there is still a huge gap between the amount of brands that are looking to launch and the number of affiliates that know what they're doing or they can drive revenue.
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Steve Chou
I'm curious, so for the people who use your tool and they have hits on TikTok, is it usually from someone who is relatively new from a creator perspective, like hasn't made that much money and then you just find those diamonds in the rough as opposed to finding like the big guys that are.
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Leo Segovia
Yeah, yeah, yeah, absolutely. I think for example, this guy that I just told you is Spanish. Right. So what he's doing is taking all the content that works extremely well in English and he's just doing it in Spanish. Same script, same thing. He's just cloning and he's killing it. Is, is literally killing it. So there is that. Right? There is. We have this AI analyzer that also looks at the videos that have gone viral and tells you pretty much how to replicate that success. So if you, if you find those creators that like your brand, they kind of meet your, fit your brand criteria. I think you can also work with them. You don't want them to do what you want as a brand because you want creators to be creators. But I don't think they, they mind if you tell them, hey look, this is this guy's lot of money. You know, let's try to do something similar. Yeah. But most of the time it's like from new creators that are just grinding, right?
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Steve Chou
Yes. Yeah. I'm curious for the people that use your platform, can you just give me some Metrics or some ideas like how many people you have to message, like what the hit rate is, like how much persistence do I really need, how many, how much product do I need to have to give away, like the budget, that sort of thing. Just some guidelines.
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Leo Segovia
Yeah. So at the beginning you need to unlock that $2,000 GMB in order for you to get to pass the 2,000 messages that you have on a weekly basis. So all the metrics are weekly based. Right. Or the limitations. So you unlock the $2,000 you have to keep obviously that. So at the beginning we're still doing like friends and family purchases. Last year a lot of sellers were doing, were using also friends and families, but doing like more than one units per purchase. Right. So you get to the number a lot faster with less people. But then once you unlock the 2000, you get to the 5000 messages and then that is the next year is to the 50,000. So once you get to the 50,000 messages, obviously it's a lot easier for you to find a lot of creators because you really need to message a lot of them today for the reason that I explained earlier, where everyone is kind of spamming, right. So it's hard to be found. The other way is to just create these open collaborations. If you're working with TikTok creators, so you let them apply instead of inviting them right through a DM that is kind of like maybe a little bit easier, like everybody's going to apply. But if you're looking just to get some sales so you can even potentially ask them to buy the product and then you do the refundable sample, right? So they buy the products and then you refund them. That counts also for purchases. And, and so I would say the really toughest part is that initial cold start, which could last a couple of months.
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Steve Chou
Are you talking about breaking past the 2000 or going, getting to that and
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Leo Segovia
past, past the 2000 because you know, the good affiliates, they want to see that you're, you know, you're an established shop.
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Steve Chou
Right.
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Leo Segovia
To work with you.
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Steve Chou
And then, and then budget wise though, like would you, let's say you launched a new product, would you start with like TikTok shop or.
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Leo Segovia
Yeah, but I, I don't think I will do only TikTok shop.
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Steve Chou
Okay, Steve.
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Leo Segovia
I will, I will still have another channel. The reason is that today there is this, there is a little bit of confusion and, and most people in TikTok shop, they don't really know their numbers simply because the platform has, it's not, it's still new and it's not like Amazon where you know what the fees are. Like a tick tock shop right now to incentivize brands, they're giving a lot of rebates and sometimes they do discounts and then there's a sample, then there is the shop ads, commissions. So you know, most brands, they say they're not profitable, right? Or if they are, it's like tiny. But if they sell on Amazon, they see this huge, you know, the halo effect. Yeah, this halo effect on Amazon, if you do shopify, same thing. So I don't think, I think Amazon TikTok is a very great discovery channel, but the channel that today is still probably the most profitable was to be Amazon. So if you can launch at the same time on both platforms, I think that's where you have a successful business. Like we've seen one of the competitors when we launched our product on Amazon last year, another guy did it on TikTok and Amazon and he sold 70,000 units in Q4. 70,000 units only because he was very, very active on TikTok shop. So did he make minor TikTok shop? I don't know, maybe not. But on Amazon he killed it for sure. Right.
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Steve Chou
And then somehow you have to correlate the two. Right? Because I mean it's clear that there's this huge halo effect which is also
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Leo Segovia
what I think most companies right now are not doing correctly. They say we have the halo effect, they say we can track the attribution, but they're not doing it right because they're only using the Amazon Attribution API, which as you know, it's not accurate.
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Steve Chou
I mean, is there really a way to track like typically the way my wife shops because she does a lot of these TikTok shop, she doesn't buy on TikTok shop. But what she does, she sees something and then she'll just Google it, find the Amazon ad and then click on it. So there's no attribution in that case, right?
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Leo Segovia
In that case there is no attribution. Exactly. That's why those that are saying, oh, you know, we see the hello Effect with using the Amazon Attribution API. I'm like, you're just BSing people to get a little bit of, you know, to get to gain a little bit more business. But truthfully speaking, there's no way, you know, if someone goes on Google, what you can see on Amazon if you go straight to Amazon is maybe more branded searches. Right, but not if they come from Google.
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Steve Chou
Right? Yeah, no, that, that makes sense.
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Leo Segovia
Yeah.
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Steve Chou
Leo, I want to shift gears and because I know you, you did a lot of cool talks on AI UGC and that just fascinates me because, well, one I want to know, is it legal? Are a whole bunch of people running meta ads right now with AI UGC and is it allowed? Is it work? How easy it is to pull off en masse, like, what are your opinions on it?
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Leo Segovia
So it is allowed. But for example, TikTok just announced that creators cannot use AI clones to promote physical products unless. Yeah. So there is, I think there is a shift happening right now where AI is becoming so almost impossible to detect. That is deceiving. Right. So these platforms, I'm not sure about meta, to be honest, but I know TikTok for sure announced this like last week or this week. They said, you know, even if it's your clone and you've already tried it yourself, the product yourself, you cannot use AI to say that these glasses are actually very comfortable. So that is a huge, huge shift because tools to create AI U GC so I still think the best way probably to do it or to use AI is for like general, like social proof. So you're not really using these AI clones to sell something. I'm pretty sure people will do it the same way they've done it this story. Like especially affiliate marketers, you know, they created ways to scam the system. But yeah, like for technically speaking, we should not be allowed anymore.
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Steve Chou
Can you elaborate on what you just said though? So don't use it for UGC but for social proof. Isn't that you're talking about like putting on your website then and not running it on the platform?
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Leo Segovia
Yeah, I think even on your, on your page. Right. If you have an Instagram page, TikTok page, you can use AI clones of yourself or you know, influencers, they just cannot promote a product. So they cannot make a claim about a product, whether it's a skincare or physical product, because technically it's fake. It's not. You making that claim is an AI clone. So you're, you're deceiving people. But if you're just using AI to generate informational content, you know, how to do clients for your face or how to proper, like a routine, you know, things like that. You're not really selling anything. You're, you're teaching people, you're informing people of certain things. So that is an okay utilization. Like, like a use case, which today is still okay. But otherwise on your website you can use tons of like testimonials yeah, they're not obviously, like, yeah, I think that you violate other type of laws, but you can still create that type of content. Right. For.
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Steve Chou
I mean, that even seems like a gray area to me. So let's say, for example, you sell a beauty product and you just show this AI person going, hey, you know, I'm, I'm clearing my skin. This is what my, my routine. And then you casually flash the bottle, but you don't try to sell it. Is that legal? I mean, that's an advertorial, right?
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Leo Segovia
Yeah, and it's an advertorial. It's also legal based on the new policies. It's also legal, so. Which I'm, I'm kind of happy about it, though, because I don't think AI should be used for that. Yeah, I don't think it's a very good. It's a fair use and ethical use of AI. Everybody was excited about it because I'm like, oh, I can create so many. I can have so many, like thousands of influencers. But yeah, they said, no, this is not allowed.
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Steve Chou
Okay, so even the advertorial is illegal.
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Leo Segovia
Yeah, yeah, yeah. As of now it is. So that might change because, you know, if you go on TikTok, they also allow you to, to create a lot of AI generated content. Like, they even have tools themselves.
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Steve Chou
My whole feed is AI now, actually.
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Leo Segovia
Exactly. Yeah, exactly. So I don't know how far they'll push the audience force, you know, this type of violation, but as of now, they're saying it's not allowed to do it.
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Steve Chou
Okay, I know before I hit record, you gave a talk recently on how you took an existing ad or commercial and you swapped it with a product. Is that. Was it just a fun exercise then, or is that actually practical?
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Leo Segovia
No, that is practical. I was actually surprised myself of the results, and I think they can be totally used for advertising. On meta, for example, what I did, I was able to take a secret, you know, secret deodorant.
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Steve Chou
Yes.
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Leo Segovia
So I found this ad and it was pretty cool. And I showed secret deodorant kind of like pop up in the, in the first frame, and then the last frame had a lot of like strawberries, raspberries, and disco balls. Right. And so I said, okay, I want to recreate these, but with my own product. So I used to sell deodorants when I first started selling on Amazon in Canada. So I took one of my products, I actually found it on Google. Google. I passed it through Nano Banana, and they created a very beautiful, like 3D rendering for me. And then everything is managed on this airtable. So you're in airtable, you have the input photo. And then if you want another photo, you can add it there too. But then you just give it a prompt. For example, hey, take this commercial, this ad, and then swap the main secret deodorant with my deodorant, but keep everything else the same. And what this N810 flow does, it will use Gemini to understand the video and it will use Asuno to create music for the video. And then it will even create a script for VO3 to clone the video. So the end result was better than the original secret video. The music was, was great. The last frame was kind of the same with the raspberries and the disco ball. But the color I told, I told also make make sure that the. The colors of the videos are more kind of like in theme. With my product, which was green, you know, with. With. With some flowers. And it was just outstanding. And then what I did, I took an aloe. I know alo right now is like one of the most popular brands, right? For like those leggings, like sports kind of clothing. And so I took these alo commercial. There's these two girls, they're eating popcorn and then pretending to watch tv, but they're actually like inside a cottage and a mountains. And I'm like, hey, you need to clone this with a different brand of these leggings that I found on Google. And on the popcorn box, I wanted to print my logo instead my brand. And then I wanted to swap one of the girls in the video with this one, which is a model for this new legging company. And it did exactly what I asked. And then the whole ad was. It was almost identical. So you don't need, you know, script writers anymore. You can just get the best ads and pass it through this 8810 flow. And you just have a bunch of ads for your own brand. So I think that was pretty cool.
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Steve Chou
So that's crazy.
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Okay, just for the audience, in case you guys didn't understand a single thing what Leo just said, let me just define a couple things. So Nan is like this. It's like this open source platform where you can connect a whole bunch of different tools together. That's probably the best way to describe it. And so you use Nano Banana, which is an image modifying tool, to insert your deodorant into an image, which you then fed into Gemini. You fed the ad you want to recreate into Gemini because Gemini reads Videos and then you had it generate using VO3 commercial with your stuff. Is that. Is that the flow? And sooner.
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Leo Segovia
Yeah, you just missed one step, which is after the video was analyzed, it will pass that script to Nano Banana again to create the first in the last. It depends on how long you want this video. So it potentially depends on the input video. You can have these ads last even like 60 seconds. So you can go past the 8 second limit that VO3s. So what Nanobanana does, based on the input video, it will just create the frames, you know, the initial frames of each one. And then with the input frame, VO3 will create that part of the. Of the ad. So then we stitch it all together at the end using FFmpeg.
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Steve Chou
Okay, that. That stuff's manual, right? That steps.
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Leo Segovia
Manual. No, I automated even that.
- [32:02]
Steve Chou
Oh, you did?
- [32:03]
Leo Segovia
Okay, yeah, yeah, yeah, I automated everything. So the in. In airtable at the end, you just see the final video.
- [32:09]
Steve Chou
Nice.
- [32:10]
Leo Segovia
Yes.
- [32:11]
Steve Chou
Can we talk practical applications of that? So what did you do with these videos?
- [32:15]
Leo Segovia
Yeah, practical application advertising. Like you just take it, you post it on your. This is legal. You can post it on your obviously social channels. So it can be a video if you go to see Allo right now or a secret Instagram page. That's what I got these videos from. So you can literally do the same thing and post it on your Instagram or TikTok page and use them for meta ads. You can run.
- [32:41]
Steve Chou
Meta has a policy where you have
- [32:42]
to mark whether it's AI. I think I'm not 100% sure yet because I haven't actually used them.
- [32:49]
Leo Segovia
Honestly speaking, there is no avatar involved in these videos. Is just product.
- [32:56]
Steve Chou
Oh, okay.
- [32:57]
Leo Segovia
Yeah. Animated motion. Right. So there is no, no one saying, hey, I like this product. This is literally an ad.
- [33:03]
Steve Chou
Oh yeah. Okay. So yeah, it can be.
- [33:05]
Okay.
- [33:05]
Amazing. So your flow now, assuming you run meta ads is in your air table. Are you just feeding in essentially your product images and the ad you want to duplicate?
- [33:17]
Leo Segovia
Exactly.
- [33:18]
Steve Chou
Is it automated to that point? Okay, and. And it comes out with good stuff, like within. Very good tries.
- [33:25]
Leo Segovia
Very good. I don't know how we can show some examples to your audience, but it's very good. Maybe after I send you a link, you can add to the. The podcast with.
- [33:35]
Steve Chou
Absolutely.
- [33:36]
Leo Segovia
I can upload it on YouTube and then we can show it there.
- [33:39]
Steve Chou
It almost seems like Leo, like this service would be something that you could sell also.
- [33:44]
Leo Segovia
Right, I know, I know. Steve's doing. Maybe we added in splice. You know, you upload your video and then, and then you just get 10 different outputs that you can choose from.
- [33:55]
Steve Chou
Well, you know why I was thinking
- [33:56]
about this is because some of these ads which you say they don't need like a UGC component to it, but spliced, you're working with influencers. From the perspective of a seller like what you just suggested sounds way easier than having to message thousands of influencers and manage and give out free product. If this works also for ads like, I would naturally gravitate towards this. Right?
- [34:23]
Leo Segovia
Yeah, no, this, this stuff is very powerful for different reasons. But I'll give you just a couple of quick ones that I'm thinking of. One is I was on a call last week with Scott Cunningham. You met Scott, of course.
- [34:38]
Steve Chou
Yeah, he'll be at Seller Summit.
- [34:40]
Leo Segovia
Yeah, yeah. And Scott, genius guy, he's got it all figured out. When it comes to meta ads to, to Shopify, he's got these long form, right? So that video can be used in this long format. So you have the video obviously showcasing what the product is and kind of like hyping the audience or the viewers and then you have this long form content explaining why it's good, you know, so you go through the problem, the agitation and the solution through their head. So that's one use case that is extremely powerful. The other one, I met these guys at this event that was happening last week in Miami. They started selling last year, beginning like January 2015, they only, only do meta ads to Shopify and they're an eight figure brand today. Eight figure brand. So to your point, I agree this stuff might be more powerful than messaging, you know, thousands of creators. Right, Because I think you have a little bit more control and we've always known that selling on Shopify gives you a little bit more control once you figure that out.
- [35:40]
Steve Chou
So you built all these automations presumably for yourself so you could sell products, right?
- [35:46]
Leo Segovia
Correct.
- [35:48]
Steve Chou
Can you just comment on some of the results, like how, how are you able to use these and did it lead to meaningful revenue for the products that you're launching?
- [35:57]
Leo Segovia
So last year the one, the last product which I've used these new strategies because that was really the first use case implemented, I would say use case of AI. We sold out. We sold out. We ordered 5,000 units for a new product overall. I mean in my career I sold over 8 figure on Amazon, the first brand. Then I got into supplements, then I got into the games niche. Now the games, the games do about seven figure and we are looking to accelerate this year. But if you give you, if I want to give you just a practical example. What really happened over the past, I would say four months, which is more relevant. That success was due to like, thanks to what I just explained. Right. Accelerating the marketing strategy, leveraging the AI that before, you know, I didn't have access to. So having more pieces of content, leveraging like different channels, bit of Instagram, little bit of TikTok, that helped a lot. So before it was just mainly me obviously doing these launching launches from a marketing perspective. But now I feel like I have four or five people like working with me because the rest is kind of automated.
- [37:23]
Steve Chou
Sure. Was this all posted organically or did you actually put money behind some of these videos for ads?
- [37:31]
Leo Segovia
Only on meta. And I shared some examples, not of my own, but I shared some examples of how some of the most successful brands right now are doing it on it on Meta. But the funnel is very simple. It's really like meta ads to a landing page to Amazon. And that is working extremely well right now because Amazon likes the external traffic you get.
- [37:59]
Steve Chou
Interesting.
- [37:59]
So you send it to a landing page.
- [38:01]
Is that presumably to get an email or something before you send to Amazon?
- [38:05]
Leo Segovia
No, not even. You're just warming up the traffic before sending it to Amazon simply because you don't want to just send a bunch of traffic to Amazon that might not be relevant. Which means that you're kind of like killing your conversion rate or jeopardizing it anyway and the result of, into a potential, you know, loss of ranking. But by doing it this way, if someone is clicking on the landing page to go to Amazon, it is most likely to convert. That's the reason, number one. Reason number two, your cost per clicks are extremely cheaper. Oh, and one thing I forgot, we do Google Ads as well, right? Always. We always run Google Ads. But when you do send Google Ads from Google to a landing page, you tend to get 15, 20 cents clicks. If you send it to Amazon, you're probably paying triple.
- [39:04]
Steve Chou
Interesting. I was under the impression that attributed links, external links to Amazon. Don't tank your conversion rate for your listing. Right.
- [39:15]
Leo Segovia
That's, that's what I, that's what I think as well. I just like to be cautious when it comes to these things because I don't have, you know, some papers that have been ever released that I can use to kind of back this theory. But everybody, I think we are aligned when it comes to that. They shouldn't, shouldn't really affect it. But I like to be a little bit more careful. Like I like just to be cautious when I run this type of campaigns because I remember in the past, like black hat people sending a bunch of like bots to a specific landing page and eventually, like, you will see this in your reports, which will eventually affect your, your rankings. And so like.
- [39:59]
Steve Chou
Yeah, yeah, because in my mind at least, if you have this really compelling meta ad and then you send it to a landing page and then to Amazon, it would convert better if you just sent it directly to the conversion page. Right. Where you could just do one click checkout. At least in my mind. I've never actually run meta ads to an Amazon listing. I always run it to my own site. So that's why I was just curious.
- [40:21]
Leo Segovia
So you're saying not on Amazon, just, you know, if you, in this case, if you're selling and selling on Shopify, you just might as well send it straight there.
- [40:28]
Steve Chou
No, that's not what I meant. I meant you said that you run a meta ad that goes to a landing page and then they click to Amazon.
- [40:36]
Leo Segovia
Yeah, right.
- [40:38]
Steve Chou
But it should, in theory, at least in my mind, convert better. If you have a really compelling ad, send them straight to Amazon on. Because that's one less step. Right. To conversion.
- [40:48]
Leo Segovia
Yeah. So the reason why it does convert better when you send it to a landing page is because on the landing page, it's like an advertorial. So you're warming up their audience and explaining why the product is really good for them, which, what happens when you send this straight to the landing page? Amazon product detail page. You have a lot of ads, there's a lot of distractions. So if you haven't kind of prepped that user first or warmed up the user first, it's very likely that if they see the price cheaper on one of the other competitors that is advertising on your page, you're probably going to lose that click.
- [41:27]
Steve Chou
Okay.
- [41:27]
Leo Segovia
Instead, if you do it. Yeah, if you do it the landing page first, they already know, okay, this is the best product. This is what I want. They go there, they just check out.
- [41:35]
Steve Chou
I see. Okay, that makes sense. And then the second question to that is, why not just take that sale for yourself on your own? On your own Shopify store, for example, get the emails and whatnot.
- [41:47]
Leo Segovia
Yeah, that makes a lot more sense. The reason why we don't do it right now is because we don't have Shopify, we don't sell on Shopify. But I, you know, with my next brand, or if I launch the next brand, I will definitely do that because it doesn't make sense to keep going Amazon if you can just, just, you know, build your own audience on Shopify and then you have the emails of these, these customers like it's your business, it's not Amazon's business. Right?
- [42:14]
Steve Chou
Yeah, no, absolutely. I was just curious. So, yeah, I, I know in the past you've been mostly Amazon, right?
- [42:20]
Leo Segovia
Just in general, mostly Amazon. Yeah.
- [42:23]
Steve Chou
Yeah.
- [42:24]
What are your thoughts?
- [42:25]
Just looking forward on Amazon because they keep raising advertising costs and FBA costs and AWD costs. Where do you see things going in the Future now that TikTok also has enforced that everyone uses FBT going forward, I think in just a couple months.
- [42:40]
Leo Segovia
Yeah. So quick note on that. I was just on a webinar yesterday with the TikTok team. So they're not taking MCF away. So I think there was an email sent with the wrong wording. So MCF can still be done. They're not enforcing everyone to go fbt, they're just enforcing a couple of changes to Amazon so that they comply with the FBT program. But we as an as Amazon sellers, we choose to be able to fulfill through Amazon. Now when it comes to what's going to happen with Amazon, I think Chad Rubin, you know Chad, right? Yeah. I think for the first, well, he said for the first time, Amazon this year reported the lowest amount of new sellers to the marketplace. So I think they're losing some just because Amazon, MCF or I, sorry, Amazon FBA is no longer that opportunity of 2015, 14, mainly driven, I think by people like ourselves. Now I don't put, I don't want to put myself in that mix because I never said Amazon is not a good opportunity anymore. But there are a lot of gurus out there that are saying Amazon is no longer good. And so people follow what the gurus are saying and I think for that reason they just probably are going to tick tock instead because everybody's pushing tick tock these days. But it is true that Amazon is increasing the fees. They're forcing developers to pay $1,400 a year to use their APIs, which I think is a bad idea because are the partners in this case the developers that have built this ecosystem. If it wasn't for companies like Helium 10, Jungle Scout and all these other companies like that spend so much money in advertising driving people to their platforms, we wouldn't have so many sellers selling on Amazon. They created product discovery tools, right. Pro key research tools. So I think right now if they limit also partners from growing and innovating and scaling because of all these additional fees, I don't know really what their goal is. Then you have AI OpenAI and Google with commerce protocols trying to get the sales straight inside these generative engines, which I think is going to take also some business away from Amazon. So I think the next year or two is going to be probably a decline. Well, it's already declining, but I don't think they'll let, they'll, they're, they're strong enough to, I think they're, they're figuring out the best way. Like I know they're trying with Rufus to go off of that platform making.
- [45:31]
Steve Chou
They've blocked all the AIs from crawling them also.
- [45:33]
Leo Segovia
They block, they blocked all the AIs from crawling them. So I think they're trying to, you know, keep that ecosystem pretty strong and protected. But look, I don't think, I don't think that the opportunities is gone. In fact, I think Amazon, if anything is becoming probably a better opportunity because less sellers are joining and so less competition. But at the same time you need to figure out a way to be profitable. And that is a different kind of conversation because there is a lot that can be done then.
- [46:06]
Steve Chou
Yeah, you know, on the TikTok front, I had, I mean, you, you talked to TikTok team, obviously, but I had heard that MCF will be allowed, but you might have to use one of these approved services to make sure there's compliance and that's an additional fee. And, and FBA is already like almost twice as expensive as fulfilled by TikTok, so.
- [46:26]
Leo Segovia
Yeah, yeah, Aftership is one of them. I think they're working with shipstation. There are a couple of like, vendors in US that are approved.
- [46:34]
Steve Chou
Yeah.
- [46:35]
Leo Segovia
But yes, I agree with you. So they do say that FBT has better prices. The good thing is that if you want to work with FBT, you can actually host the products in your own 3PL warehouse and they'll come, they'll send the driver to your warehouse to pick it up, to pick up the product. So they're trying to like, you know, make, make this transition kind of smooth. I don't think it's smooth, to be honest.
- [47:03]
Steve Chou
Yeah, but it's not going to be. It's going to be.
- [47:05]
Leo Segovia
It's not going to be. Yeah, it's not going to be. But we, we know why they're doing it. Right. So let's see, let's see what happens there.
- [47:13]
Steve Chou
Yeah. Leo, hey, thanks. Thank you so much for coming on the show and sharing your wisdom. Where can people go to check out your influencer platform? Platform as well as I Don't know if you're going to ever productize this commercial generator, but that I'm sure everyone listening would be on top of that as well.
- [47:31]
Leo Segovia
Yeah, yeah, yeah. No, I appreciate it. So the spliced is spliced IO SPL I C E D spliced IO for the affiliates, kind of like the M automation platform, which is also, by the way, I don't think I mentioned this earlier. I think it's is the only one in the space right now that fully integrates with seller partner APIs. So for, for Amazon sellers looking to go on TikTok shop is probably the most comprehensive one. And then for the NA10 stuff, just follow me on LinkedIn because I share a few things there. I do sometimes some webinars, so I have a couple of flows that I can share with anyone. Like one of them creates AI ugc. So the typical avatar that says, hey, you know, I just tried this Apple mouse and I love it so much I encourage everyone to buy. The other one is this, you know, ad commercial kind of cloner. Yeah, I have both of them. I've been giving it away for free. I don't really care. I don't, I don't know if I'm gonna monetize or make them kind of part of supplies. And if I do, there'll be like a professional level so you don't have to kind of go through the grind yourself. But yeah, if you're, if you guys are interested, I'll talk to Steve eventually about sharing with you some sort of examples so that if that's something that you like to build, you can always reach out to me on LinkedIn. I'll send you the. The flow and then you can install it on your own, any 10 server.
- [49:00]
Steve Chou
Awesome. I'll post that in the notes underneath this when it, when it comes out. But Leo, you're not even a, you're not a program or anything, right? This is all just stuff that you done on your own and figure everything out, right?
- [49:12]
Leo Segovia
Yeah, yeah, but I do code a lot. In fact, behind the Streamyard screen here, I have my cursor open because I do a lot of coding myself. Yeah, you know, it's hard when you have so many ideas and then you have developers that don't like they're not on the same page. That's why I think just to close to wrap this up, AI is just as powerful as the person behind it, right? The brand utilizing it. So at some point I had to learn how to code because I needed to do certain things myself, but it has become a distraction though, because I enjoy it too much.
- [49:49]
Steve Chou
Yeah Leo, I appreciate it. I'll link up all this stuff in the show notes, but once again, thank you so much for coming on.
- [49:57]
Leo Segovia
Thank you. Thank you Steve. I appreciate it.
- [50:00]
Steve Chou
Hope you enjoyed this episode. If you're not using Claude code or any automation platform for that matter, you are falling behind, so make sure you set aside some time to just play with this stuff. For more information and resources, go over to mywifequitterjob.com episode 637. And once again, if you're interested in starting your own e commerce store, head on over to mywifequoterjob.com and sign up for my free 6 day mini course. Just type in your email and I'll
- [50:23]
send you the course right away. Thanks for listening.