POV: Your Business Goes From $0 To $1.5k/day

Summary

This video details the journey of an e-commerce agency launching its own brand, leveraging their expertise in Facebook ads and email marketing. They spent 3.5 million monthly on ads, generating over 60 million in sales for clients. The agency's challenge was to create a replicable formula for brand success. They researched and selected a product with a 70% gross margin, using tools like Shop Hunter. They utilized 3D renders for cost-effective creative production and focused on static creatives for ads. After initial struggles, they found success with a landing page variation, achieving consistent sales and a 16% net profit margin. The video outlines their research strategies, including Amazon reviews and Reddit, and their plans to improve margins and conversion rates.

Takeaways

• 🚀 Launched an e-commerce brand with prior experience in agency work, having spent millions on ads and generated significant sales.
• 💰 Currently investing 3.5 million a month on Facebook ads for clients, aiming to build a replicable business model.
• 🔍 Used tools like Shop Hunter to identify products with a 70% or higher gross margin in a growing market for the new brand.
• 📈 Started with a low-cost approach, focusing on product quality and 3D renders for creatives to reduce upfront expenses.
• 📊 Initially faced challenges but saw sales increase from $500 a month to $1-2K days after consistent efforts and testing.
• 📈 Generated a net profit of $1,994 excluding one-time expenses, but are currently at a loss of approximately $1,300 after including all costs.
• 🎯 Focused on static creatives for ads due to their lower production cost and CPM, despite the challenge of conveying value propositions concisely.
• 🔧 Emphasized the importance of research, including analyzing Amazon reviews and Reddit discussions, to understand customer preferences and needs.
• 📈 Improved landing page performance through multiple iterations and testing, finding a version that significantly increased sales.
• 💹 Aiming to increase net margin to 20-25% by raising product prices and improving payment processing to reduce fees.
• 🔄 Plan to conduct more split tests on landing pages once foundational business structures are solidified to further optimize conversion rates.

Q & A

How much money does the agency spend on Facebook ads per month for clients?

The agency is currently spending 3.5 million dollars a month on Facebook ads for clients.

What was the goal of the agency when starting their own e-commerce brand?

The goal was to build a formula or thesis that could be replicated from brand to brand, with the intention of acquiring brands in the future.

What tools did the agency use to identify potential products for their brand?

The agency used tools like Shop Hunter and other spy tools to identify products that were in a growing market with a gross margin of 70% or more.

How did the agency select the product they would work with for their brand?

They narrowed down to a few products with high gross margins and selected one they believed would be the best based on the data from the spy tools.

What was the agency's approach to creating product visuals?

They used 3D renders to create realistic images for landing pages and creatives, which allowed them to produce various visuals quickly and at a lower cost.

What was the initial cost structure for the agency's own brand?

The main initial costs included ordering products from manufacturers to compare quality, and creating 3D renders for visuals.

What was the turning point for the agency's brand in terms of sales?

Consistent sales began on June 16th, starting from 500 a month and gradually increasing to about 1 to 2K per day.

What was the net profit generated by the agency's brand after accounting for all expenses?

After accounting for all expenses, including graphic designs, video editors, and renders, the agency was at a loss of approximately 1.1 thousand euros, which is roughly 1.3 thousand USD.

What strategy did the agency use to improve their landing page performance?

The agency focused on research, including analyzing Amazon reviews and Reddit discussions, to understand customer preferences and improve their landing page copy and product offerings.

What is the current net profit margin for the agency's brand and what is their target?

The current net profit margin is 16%, but they aim to improve it to around 20 to 25%, especially at a smaller scale.

What steps is the agency taking to improve their financial performance?

The agency plans to raise the price of their products by 10 to 20% and is in talks with a merchant of records for better payment processing to reduce fees and improve overall financial performance.