In this episode of Art of the Kickstart, we interviewed Adam Weiler, a top 500 Amazon seller and the CEO creator of Sunken Stone. Since 2017, Sunken Stone has been a premier, performance-based Amazon channel marketing partner with proven sustainable success. They have helped more than a hundred different seven- and eight-figure brands generate more than a hundred million dollars in sales on Amazon. Sunken Stone has international expertise, including marketplaces in Canada, Mexico, the UK, and the EU. Learn how Weiler went from selling HDMI cables on Overstock and eBay to creating and leading Sunken Stone to what it is today.

Topics Discussed and Key Crowdfunding Takeaways

  • Sunken Stone’s connection to Kickstarter, Indiegogo and Crowdfunding
  • Sunken Stone’s domestic and international team layout and collaboration strategy
  • How Weilers’ background influenced the creation of Sunken Stone
  • Branding insight and how “Sunken Stone” got its name
  • Sunken Stone’s WeFunder campaign and tactics behind how they raised so much capital

Links

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Sponsors

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Transcript

View this episode's transcript

Roy Morejon:
Welcome entrepreneurs and startups to Art of the Kickstart, the podcast that every entrepreneur needs to listen to before you launch. I’m your host, Roy Morejon, President and Founder of Enventys Partners, the world’s only turnkey product launch company that has helped over 2000 innovations successfully raise over $400 million in capital since 2010. Each week, I interview a crowdfunding success story, an inspirational entrepreneur or a business expert in order to help you take your startup to the next level. This show would not be possible without our main sponsor ProductHype, a 300,000 member crowdfunding media site and newsletter that’s generated millions of dollars in sales for over a thousand top tier projects since 2017. Check out producthype.co to subscribe to the weekly newsletter. Now let’s get on with the show.

Roy Morejon:
Welcome to another edition of Art of the Kickstart. Today I am super stoked because I am speaking with the one and only Adam Weiler, a top 500 Amazon seller and the CEO creator of Sunken Stone. Adam, really grateful for you to join me today on Art of the Kickstart.

Adam Weiler:
Roy, thanks for having me.

Roy Morejon:
So I know we go way back, but our audience may not have heard of you or what you’re doing over there at Sunken Stone, but you guys are doing lots of amazing things. Since you guys have opened your doors in 2017, you guys have helped out more than a hundred different seven and eight-figure brands generate over a hundred million dollars in sales now on Amazon. So if you would, let’s take a trip down memory lane and give our audience a little bit of your background and kind of what led you to becoming an entrepreneur and launching Sunken Stone.

Adam Weiler:
Yeah, thanks. So Amazon is the 800-pound gorilla, they weren’t always. Back in 2007, I was working for theater company and that was going to chapter 11, they were going on business, had a little time in between before going back and getting my MBA. And I took a credit card cash advance for some HDMI cables, put those up for sale online, including Overstock and eBay and my own website and Amazon had just launched this FBA program or fulfillment by Amazon program. And I was like, “Okay, let’s try that out,” put them up for sale online there and started selling them then sold those first thousand cables and bought 2000 and bought 4,000 started bringing in containers from China and kind of the rest was history after that.

Adam Weiler:
And then about five years ago or four and a half, five years ago, I started getting brands and companies saying, “Hey, can you help us with Amazon? Can you make it easier for us? Because we kind of don’t know what we’re doing,” and talked with the team, figured we can try it out, do the first one and then took them from a six-figure run rate to eight-figure run rate in six months, they sold and kind of rinse and repeat after that and off to the races.

Roy Morejon:
So I’ve got to ask because a lot of the founders and folks that we work with sometimes have a difficult time finding the right product, or trying to find the perfect product. So HDMI cables obviously you had a wealth of experience doing what you were doing, selling these high-end home theater systems for $50,000 a piece or whatever they were then. Why HDMI cables?

Adam Weiler:
We were making more on the HDMI cable, because it was a commission sales gig, we were making more in commission on the HDMI cable then we were selling a $3,000 TV. So that’s when it was like, “Okay, there’s got to be something here.” They’re kind of small. They’re not that heavy. I would have loved to have sold TVs or speakers, but it was within my field, I had domain expertise and there was a good margin at play there.

Roy Morejon:
Got it. No, it’s always interesting to hear in terms of the why, right, of what product did you pick first, and I think perfectly with Amazon, that is so critical, right?

Adam Weiler:
Well, and then to kind of like riff on that for a second the second product that we started selling, or I started selling, it was just me at the time, I was buying envelopes to put the cables in. So then naturally I started sourcing the envelopes and that kind of expanded into its own a line of office supplies. And then I was buying a bike lock for my bicycle and realized that there weren’t any good options with the features I wanted so I started sourcing those. And one of my biggest regrets was not niching down, just staying in that niche. And I’m an ADD entrepreneur just like everyone else and I kind of jumped around in niches, and I wish I would’ve stuck with just office supplies or just audio-video, or just bike accessories.

Roy Morejon:
And I think that’s a good nugget for our audience as well, in terms of when they launched their first product, Kickstarter, crowdfunding, whatever it may be, continuing to go down that rabbit hole or that niche in terms of continually asking your audience, what are some of the other products that might be in that same family or suite that’s going to fulfill their needs or the problems that they have currently?

Adam Weiler:
Yeah. Yeah, exactly. You’ve got a built-in tribe that knows and likes your products, and you know the demo that they’re in, what else can you cross-sell them?

Roy Morejon:
Yeah, exactly. So let’s talk a little bit about your team. What does it look like, what does it consist of and how has the team evolved over the years?

Adam Weiler:
Yeah, so right now we’ve got about 30 staff in the US and about 65 international staff. The international is split between the Philippines and Latin America. And then the US staff was started in San Diego, but since COVID, we’ve gone fully remote and we’ve hired in, I believe we’re up to 10 or 11 states now. So we’ve gotten fully, fully remote. And it’s been awesome. Once we did our first remote hiring posts for a copywriter and we got something like 5,000 applicants. It was just crazy. And we realized like, “Okay, this might be something, we’re getting really great applicants all over the country just by opening it up, let’s see what we can do here.”

Roy Morejon:
Amazing. So I got to ask, what was the inspiration behind your company name, Sunken Stone?

Adam Weiler:
Yeah. So that’s from, I would call it a bastardization of a Thomas Jefferson quote, “In matters of style swim with the current, in matters of principle stand like a rock.: And I like the alliteration of Sunken Stone. So what that means is, and similar to you guys, it’s like if people want the newest fad or trend or whatever the consumer taste is, I’m not going to fight against that, right? But it’s going to be a good value product, we’re going to back it up with great customer service, we’re going to treat our vendors and suppliers and partners with respect and decency. It’s like, those are the things we’re not going to compromise on. If someone wants pink hats that project Snapchat videos, we’ll sell them pink hats with Snapchat videos.

Roy Morejon:
I love it. So let’s dive in now a little bit on, in terms of the products that you work with now on Amazon, which ones are you seeing be successful, or are there any trends right now on the Amazon side that you’re seeing that some of our creators and entrepreneurs can look into?

Adam Weiler:
Yeah. So what is successful on Amazon? Back in the day you used to be able to just throw up anything generic and find a niche, and it would be successful because you’re kind of filling a gap. Now and then as you’re seeing, it’s more and more differentiated, more and more value and wrapping a brand story into that kind of sales pitch that you’re making on Amazon. So it always starts with the product. Without a great product, you’re just going to be treading water because as soon as you get momentum, you’re going to get bad reviews and it’s going to knock it down. So start with a great product, invest in every product spend the extra couple percentage points to get quality materials versus something that’s going to fail because on Amazon, your legacy is going to live on those reviews are your lifeblood. So start with a great product.

Adam Weiler:
And then find something that there is momentum, that there exists a niche, but differentiate it enough. And let me expand on that. We’ve done a ton of products that were the first of their kind, right? Like the first ever. And on Kickstarter, they were category creators and on Kickstarter, that’s great because you’re getting people that are searching for that product on Amazon. If there isn’t search volume for that, then do you really exist, right? You’re only showing up for keyword searches. So unless you can generate momentum with a keyword search for a product, that doesn’t really exist. So if you’re inventing new hologram glasses, right, are people searching for hologram glasses? Not necessarily. But if you have smart sunglasses now that Bose and Facebook and Snapchat have come up with those, there might be some search volume for those. I don’t know, that’s probably a terrible example, if you can think of other ones that would make it clearer for them.

Roy Morejon:
No, but I think it helps with the narrative in terms of Amazon is typically the place where there kind of has to be some sort of search volume, right? It can’t necessarily be a crowdfunded product that’s a brand new innovation that only early adopters are willing to invest in pre-purchase before it exists in the marketplace where it hasn’t become cool yet.And ubiquitous where there’s actual no volume, right? So how many crowdfunding creators or products have you worked with over the last 10 years?

Adam Weiler:
I think we’re at five or six. And it’s going back to if it’s a drastic improvement over a current option, those are the ones that do well. If it’s a category creator, those are the ones where it takes a little time and energy to get going, get momentum on Amazon. I would say, and what we say to the brand is like, take that ad spend you were going to put on Amazon or budget, allocate that to top of funnel, middle funnel Instagram, Facebook stuff, kind of pattern interrupt things where you’re showing someone, you’re educating them on why they even need a product like that in the first place. And then once you’ve kind of generated that demand, be on Amazon as that demand fulfillment channel but as far as demand generation, look to Facebook, look to Instagram, look to building, look the PR, those kinds of scenarios.

Roy Morejon:
So what would be some of those things in terms of working with crowdfunded creators that sometimes they miss as they migrate from shipping and delivering their product to the early adopters and then shipping their product to an Amazon warehouse?

Adam Weiler:
Yeah. So you’ll be amazed how many people don’t go on Amazon. So if you’ve shift your product to those early backers, those early supporters, and you’re also live on Shopify or your own e-commerce site or e-commerce or something like that, if you’re there, you should also be on Amazon. And when I say be on Amazon, throw up a listing, throw some products into the FBA warehouses and your other channels… If you’re spending on paid media, you need to be on Amazon because your paid media will be 20 to 30% more effective.

Adam Weiler:
And we can go into the details, but it’s really a rising tide scenario. You’re going to spend money on Facebook, some of that traffic is going to go to your website, some of them will not convert, but then they’ll go buy it on Amazon later when they’re shopping on Amazon. So by not being on Amazon, you are missing out on sales that if it’s a really, really unique product will be loyal to you but if there’s another product that kind of does what you do or similar enough, they’re going to get the sale on Amazon. So you really need to be there for defense.

Roy Morejon:
No, that’s a great point. And I think we see that a lot in terms of on the e-commerce space where there’s that halo effect, right? Like if you’re on Shopify, great, but the majority of the consumers I feel would then just go to Amazon anyway and buy it if the price is the same, because of the consistency of Amazon and the no hassle, if you will, of shipping or returns or any of those sorts of things.

Adam Weiler:
Mm-hmm (affirmative), don’t fight with consumer demand. You could either harness it like water and shape your river, but you can’t stop it. If someone wants to buy an Amazon, okay, great, let’s play with the pricing, maybe let’s do bundling, let’s do unique skews that aren’t messing with your other channels. There are ways to work with it smartly where you’re not hurting your other channels, but at the same time, you can’t just say like, “We’re never selling on Amazon. We’re going to only do e-commerce.” Well, you’re giving up 25% revenue incrementally. That’s just silly, right? That’s a stupid move.

Roy Morejon:
Yeah. No, I get that. So we’re Q4 2021 Amazon, right? What are some of the things that you’re seeing or that you’re ramping up for your clients?

Adam Weiler:
Oh man. So the theme this year is logistics and supply chain. We’ve got a whole in-house team devoted to inventory management, like within the Amazon FBA warehouses, just our team manages the stock levels of those. And Amazon is suffering from labor shortages, they’re suffering from some stuffed warehouses, they’re suffering from long lines of drop of USPS and UPS and FedEx stuff. So our goal in Q4, honestly, is to stay in stock with inventory because on Amazon, if you don’t have stock, you don’t exist. With Shopify, you can take back orders or pre-orders or things like that and same with Kickstarter, but for Amazon stay in stock.

Adam Weiler:
And it’s working with brands. We’re performance based so we get a percentage of sales. But if one of our partners has call it 10,000 units and they need to make it through Q4, and normally Amazon would get 25% of those allocated, but they’re going to run out on their own, we’ll work with them to say, “Okay, let’s take 10%, let’s trickle some in so our keyword rankings don’t get demolished during Q4.” But then you’re making a higher margin sale on your side and one of our core values is partnerships. So we’re not going to take inventory that you’re going to make less on and divert it over here when you’re constrained on inventory. So what’s the best for you? Let’s stay in stock, let’s have a plan to get you back in stock when you get some new inventory.

Roy Morejon:
Speaking of planning, so obviously supply chain logistics, all of that has just completely been disrupted during COVID. What does the next few years of shipping and logistics and Amazon fulfillment look like?

Adam Weiler:
Every time someone asks me that I say we’re betting on the 800 pound gorillas to figure this stuff out. If it was up to me and you, if it was up to sellers and brand owners to figure this stuff out, we’d be kind of screwed. I’m betting that Costco and Walmart and Amazon and Facebook and Shopify are investing billions of dollars into this and they are already, right? It’s like, you’re already starting to see the stories about Costco and Walmart chartering their own entire tanker trucks or container boats to get from China to here to save Christmas, right? It’s like I’m sure they’ll make a nice movie out of that in a few years.

Adam Weiler:
But air freights, just in time shipping, smaller shipping parcels, DHL shipping containers, less than container loads, people buying whole airplanes to bring them over here, these are creative options. I’m banking on the fact that Amazon are going to have some great options because they have billions of dollars at stake every single year and we’ll be able to hop on their Amazon boat once they roll it out for other sellers.

Roy Morejon:
Maybe we need Mr. Elon Musk to do like the Hyperloop underneath the ocean to just tube product from China to America.

Adam Weiler:
Can’t wait, we’ll be the first one. And then joke about that, people are using Uber freight, which we know it’s Uber, they’ve got a freight platform for container load and less than container load. And people are using that to drop inventory at Amazon warehouses during this Q4.

Roy Morejon:
Anything to stay relevant and on Amazon at this point, right?

Adam Weiler:
Mm-hmm (affirmative), got to stay in stock.

Roy Morejon:
So Adam, I’m going to jump a thought train here, because you did actually run a crowdfunding campaign, an equity crowdfunding campaign on Wefunder earlier this year in February, 2021, you guys raised over $600,000 from over 250 investors. So first props for that, but I want to dive into the why and why you ended up using equity crowdfunding to raise additional capital for what you guys are building.

Adam Weiler:
Yeah, I think equity crowdfunding is the future or is the now. And I don’t think I’ll ever have another company where I don’t do an equity crowdfunding. I’m trying to think of scenarios where I wouldn’t. It’s one of those things where it is the intersection of fundraising, so it’s like you’re generating actual funds that we get to deploy into the company and I’ll talk about what we deal with those, so you’re raising funds. At the same time, you are publicizing the company. So what I was telling people, I was like, “This is marketing that we are getting money for that we wouldn’t have, to do this the old fashioned way we wouldn’t have gotten any exposure.”

Adam Weiler:
If you look at our SEO or Google Analytics during the crowdfund, there was an explosion of activity. I think our site traffic went up 4X during the months of the campaign, definitely resulted in us gaining new clients and new partners and opened up a ton of opportunity as far as partnerships and kind of companies that wanted to work with us. So it’s marketing where you’re getting paid, you dictate the terms so it’s not like a VC is trying to nickel and dime you for that last quarter a point, you set the terms, you go out to the market and it’s been awesome. I can’t say enough great things about it.

Roy Morejon:
So let’s talk a little bit about that prep work leading up to the Wefunder campaign that you guys ran. What were some of the things that put you guys in such a great position to raise so much capital?

Adam Weiler:
Yeah, I think a couple things. So we had great legal, thank guys you for that intro and great creative, thank you for that intro as well. So legal and creative were, I would say, the iceberg, the underwater part of the iceberg, and we had to get some things taken care of from our corporate paperwork and all that fun stuff. And it was just nice to work with professionals that had done this before. And pay for expertise, right? It makes things so much easier. And we had great video shot, we had great creative, we had a great landing page set up that converted and told the stories so well.

Adam Weiler:
And then just like when you are doing a Kickstarter campaign, it’s all about that pre-work, right? Having those lists of potential supporters and reaching out to them, letting them know that they’re in that alpha group, being able to then set a kind of early backer, very similar to Kickstarter, but early supporter phase where people can get in at the pre-price and then it goes out to the public at a higher price. So really cool stuff that we’re able to do on the platform.

Roy Morejon:
So I know we’ve talked about this offline quite a bit, but in terms of you already had customers, you had people that are paying for your service, using you and getting great results with their Amazon sales. What percentage of those customers came in and funded the equity crowdfunding campaign, where now not only are they customers, but also massive brand evangelists for you and owners?

Adam Weiler:
Yeah. Yeah. I think around 10 of our current clients and former clients are now owners in the company. So I mean, that story doesn’t get better than that, right? That means we’re doing something right if someone who’s paying us money also puts money in to invest, it tells us we’re on the right path.

Roy Morejon:
Absolutely. So reflection time on the campaign then, what, if anything, would you do differently or are you planning on running another campaign next year?

Adam Weiler:
Not planning on another one yet, but that’s something to think about. I hadn’t even thought about that actually. It did take up a good chunk of my time. We do quarterly projects at the company and this took up my main quarterly project time for two quarters. So it’s not a you just put it up there and you get half a million bucks and there you go, it’s a lot of work, it’s a lot of time managing it and talking to people and having conversations. I would rethink the paid media strategy, maybe try to do some more PR, maybe do some more pre-work beforehand instead of just going live and then trying some paid media tests then. I would’ve done more pre-work on the paid media side.

Roy Morejon:
Good enough. Well, Adam, this is going to get us into our launch round where I’m going to rapid fire a handful of questions at you.

Adam Weiler:
And yeah, I really do not know what these questions are.

Roy Morejon:
Well, that’s the beauty of it, Adam. Let’s get started. So what inspired you be an entrepreneur?

Adam Weiler:
I think it was innate or, shoveling snow and making mixed CDs and selling weed in high school, that’s just always been in me

Roy Morejon:
The hustle mentality. So if you could meet any entrepreneur throughout history, who would it be?

Adam Weiler:
Any entrepreneur in history? I think DaVinci, I guess you can consider DaVinci as selling his breakthroughs and inventions.

Roy Morejon:
Absolutely. So what would have been your first question for him?

Adam Weiler:
Walk me through your process. How do you solve a problem?

Roy Morejon:
Yeah. What book would you recommend to our listeners in the entrepreneur and startup world?

Adam Weiler:
So many. So if it is operations, I really like Radical Candor. That’s a good one. Oh, High Output Management for anyone managing people, Andy Grove’s High Output Management, probably read it twice a year for the rest of my life, might be the best business book I’ve read. And then what else on a creative side> I’ll send you like 10 more that really impacted me.

Roy Morejon:
Right on. So what advice would you give to a new inventor or entrepreneur that’s looking to launch their product on Amazon?

Adam Weiler:
Just go, just do it. So on Amazon, it could either be really easy, you just get up and you get verified and the system likes you one day, the robot gods are kind and you can just go and get up and start getting some data. If you run into technical issues, Roy you can put my email here, we can help you out. Just get some data. We see so many people not going because of this and what if this happens, it’s like, just get out there, put your product live on optimized images, you’ve probably got content and copy already from your campaigns, just get it live. You can always optimize. It’s e-commerce, that’s the beauty. It’s like, we can change everything.

Roy Morejon:
Just ship it, right?

Adam Weiler:
Just ship.

Roy Morejon:
What are the top three skills that you think every entrepreneur needs to be successful on Amazon?

Adam Weiler:
Perseverance, being able to see data and make decisions and I guess action against that, so being able to understand it, making actions and then perseverance because you’re going to be frustrated as hell sometimes.

Roy Morejon:
Indeed. So Adam, what’s one invention that’s made your life easier during the pandemic?

Adam Weiler:
Not going to say Zoom because Zoom’s made my life worse. Oh, I’m talking on it right now. So what the heck is this thing, what brand? This is the Plantronics Boom Mic. It’s got noise canceling microphone, not just noise canceling earpiece. So I can walk by a construction site on a walk and no one would even know, I’ll be on a conference call, nobody would even know that I’m not in my office.

Roy Morejon:
Nice. All right, Adam, last question. What does the future of crowdfunding look like?

Adam Weiler:
I think equity crowdfunding is ubiquitous and everywhere, everyone is doing it, or at least I’m talking about it as a strategy. I think it’s going to make equity raises more competitive for brands because now you get the crowd and the wisdom of the crowd to compete against venture capitalists and private equity groups. And then the same thing with a standard pre-sell crowdfund. There’s no reason to do these long cycles anymore when you can get instant or faster validation from the crowd. Now, whether it’s Kickstarter, Indiegogo or your own tribe that’s to be seen but I think anything to get you to data faster, whether it’s equity or pre-sale, it’s a good thing.

Roy Morejon:
Absolutely. Well, Adam, this has been amazing. This is your opportunity to give our audience your pitch again, tell people what you’re all about, where they should go and why they should check you out.

Adam Weiler:
Yeah. Awesome, thanks Ray. So sunkenstone.com, we got a ton of great information on our blog and YouTube. If you want to know how to run Amazon PPC campaigns or new brand registry stuff, go there. If we can help you out with anything specific, you just take our success quiz or fill out an email question and shoot me over any questions you’ve got adam@sunkentone.com, it’s adam@sunkentone.com and I’m happy to help. This was fun. Thanks, Ray.

Roy Morejon:
Absolutely. Thank you, Adam. Thank you audience for tuning in. Make sure to visit artofthekickstart.com for the notes, the transcript, links to Adam’s company and everything else we talked about today. And of course I got to thank our crowdfunding podcast sponsors, the Gadget Flow and ProductHype. Mr. Adam Weiler, thank you so much for joining us today on Art of the Kickstart.

Adam Weiler:
Thanks, Ray.

Roy Morejon:
Thanks for tuning in to another amazing episode of Art of the Kickstart, the show about building a better business world and life with crowdfunding. If you’ve enjoyed today’s episode, show us some love by giving us a great rating on your favorite listening station. And of course, make sure to visit artofthekickstart.com for all the previous episodes. And if you need some help, that’s what we’re here for. Make sure to send me an email to info@artofthekickstart.com. Thanks for tuning in and I’ll see you on the next episode.