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.

Outlines

00:00

🚀 Launching an E-commerce Brand and Scaling Challenges

The speaker discusses the launch of their e-commerce brand three months prior, highlighting the company's previous experience working with multiple brands and generating millions in sales. They detail their current expenditure of 3.5 million per month on Facebook ads for clients and showcase their success with specific brands, achieving significant sales growth within short periods. The speaker emphasizes the difference between running an agency and building a personal brand and the motivation behind the challenge. The initial steps involved brainstorming product ideas and aiming to create a replicable formula for brand success. They discuss the importance of understanding various aspects of running a brand, including ads, payment processing, fulfillment, and supply chain management. The speaker shares their strategy for product selection, using tools like shop Hunter to identify products with high gross margins in growing markets. They also explain their approach to creating cost-effective marketing materials, such as using 3D renders for product images and videos, which has proven to be a significant advantage. The paragraph concludes with a discussion of the financial results so far, including profits and losses, and the ongoing efforts to improve the brand's performance.

05:01

📈 Scaling Ads and the Path to Profitability

The speaker outlines their strategy for scaling the e-commerce brand's advertising efforts, focusing on static creatives due to their ease of production and lower CPM. They discuss the importance of packing a lot of information into a small creative and the necessity for direct value propositions. The speaker shares their experience with testing different product pages and the eventual success with landing page variation six. They emphasize the critical role of research in business, particularly analyzing Amazon reviews and Reddit discussions to understand customer preferences and pain points. These insights inform their advertising and product development strategies. The speaker also discusses the financial results of their efforts, including revenue, refunds, ad costs, and net profit, and their goal to improve the net margin to 20-25%. They mention plans to raise prices and improve landing pages to achieve these goals, as well as their efforts to address payment processing fees by engaging with a merchant of Records.

10:02

🔍 Analyzing Metrics and Future Improvements

The speaker reviews the current conversion rates of their landing pages and the challenges they face in improving them. They discuss the need for more split tests but acknowledge the current limitations due to the necessity to first address payment processing fees and improve margins. The speaker also highlights the importance of scaling slowly to ensure customer satisfaction and to identify any long-term issues with the product. They mention their plans for future improvements, including potential price increases and landing page enhancements, and express their intention to share their progress more frequently through videos. The paragraph concludes with a note on the need for foundational business structure improvements before further scaling and testing.

Keywords

💡e-commerce brand

An e-commerce brand refers to a business that operates primarily online, selling goods or services directly to consumers through a website or other digital platforms. In the video, the speaker discusses launching their own e-commerce brand as a new venture for their agency, which is a significant shift from their previous work with other brands. This move is part of a broader strategy to build a replicable business model that can be scaled across multiple brands.

💡Facebook ads

Facebook ads are a form of online advertising where businesses pay to display their products or services on Facebook's platform. The speaker mentions that they are currently spending 3.5 million a month on Facebook ads for clients, indicating the scale of their advertising efforts and the importance of this channel in driving sales for their e-commerce brand.

💡gross margin

Gross margin is a financial metric that represents the percentage of revenue that exceeds the cost of goods sold (COGS). It indicates how efficiently a company can convert its sales into actual profit. In the transcript, the speaker discusses selecting products with a gross margin of 70% or more, which means that for every $100 of sales, the COGS would be $30 or less, highlighting the profitability potential of the chosen products.

💡3D renders

3D renders are computer-generated images created with 3D modeling software, often used in product design and marketing to visualize products realistically. The speaker mentions using 3D renders to create high-quality images for their product's landing pages, which allows them to produce creatives quickly and cost-effectively, without the need for physical photoshoots.

💡landing pages

Landing pages are standalone web pages, designed specifically for marketing or advertising campaigns, where visitors arrive after clicking on a link. They are critical for converting traffic into leads or sales. The speaker discusses the importance of landing pages in their marketing strategy and the process of testing different variations to find the most effective one for their brand.

💡product ideas

Product ideas refer to the initial concepts or proposals for new products that a company might develop and market. In the video, the speaker talks about generating product ideas and selecting one with the potential to be successful in a growing market, emphasizing the strategic approach to product selection for their e-commerce brand.

💡static creatives

Static creatives in advertising refer to non-animated, single-image advertisements, often used in digital marketing. The speaker chose to focus on static creatives due to their ease of production and lower cost per thousand impressions (CPM). They also mention the challenge of packing a lot of information into a small space and the need for direct messaging in static ads.

💡research

Research in the context of the video refers to the process of gathering information and insights to inform business decisions, such as understanding customer preferences and competitor strategies. The speaker emphasizes the importance of research in their business, using Amazon reviews and Reddit to gain insights into customer behavior and preferences, which then inform their marketing and product development.

💡net profit

Net profit is the amount of money left over after all expenses have been deducted from the total revenue. It is a key indicator of a company's profitability. The speaker discusses their net profit, which is currently at a 16% margin, and their goal to improve it to around 20 to 25% by raising prices and improving their cost structure.

💡conversion rate

Conversion rate is a metric used in marketing to measure the percentage of visitors to a website who complete a desired action, such as making a purchase. The speaker mentions their current conversion rate at 2.4% and the need to improve it through further split testing and optimization of their landing pages.

💡merchant of Records

A merchant of Records, as mentioned in the video, is a payment processing service that offers personalized support and assistance, similar to a private version of a service like Stripe. The speaker discusses working with a merchant of Records to improve their payment processing, which includes reviewing and improving their terms of service and policies to avoid issues with payment processors.

Highlights

Launched own e-commerce brand after working with multiple brands.

Generated millions in sales and currently spend 3.5 million a month on Facebook ads.

Email agency has generated over 60 million in sales.

Achieved 103k in sales within 24 hours for a brand.

Scaled a brand from 335k to 1.6 million in six months.

Decided to build a replicable formula for branding.

Started with product ideas and aimed for a 70% or more gross margin.

Utilized tools like Shop Hunter to identify successful products.

Chose a product with the potential for the lowest production costs and easy creative production.

Employed 3D renders for creating realistic product images quickly.

Generated 1,994 in profit excluding one-time expenses.

Incurred a loss of €1,1.1 th000 including all expenses.

Sales increased from 500 a month to 1-2K days.

Focused on static creatives for ads due to their low production cost and CPM.

Landed on a successful landing page variation after several iterations.

Research is vital, using Amazon reviews and Reddit to understand customer preferences.

Generated 27,000 in revenue with a 16% net profit margin in the past 14 days.

Aiming to raise prices by 10-20% to improve net margin.

Considering merchant of Records for better payment processing support.

Landing page conversion rate is at 2.4%, with plans for more split tests.

Emphasizes the importance of scaling slowly to ensure product quality and customer satisfaction.

Transcripts

3 months ago we launched our own

e-commerce brand now our agency has

worked with multiple Brands before we've

generated multiple Millions we're

currently spending 3.5 million a month

on Facebook ads for clients a email

agency has generated over 60 million in

sales and you can see uh here's a brand

that we did to 103k within 24 hours

here's another brand we took over we

took them from 335k before working with

us to 700 76k then 1 million then 1.6

million in month six now running ads for

clients running your own brand is a

little bit different and we decided to

take on this Challenge and build

something big now this all started

because of this challenge running an

agency is cool but being able to build

something you own is even cooler and

what we did in the beginning is come up

with a couple of product ideas we think

could work our goal with this entire

idea is to build a formula or a thesis

that we can

replicate we want to build a formula we

can easily replicate from Brand to Brand

later we can acquire Brands and so on so

forth the best way we decided to start

here is by building our own brand so

we've gone through all the trials and

tribulations and so we understand all

the issues that every brand owner faces

running ads that's one part of the

business but then you have payment

processors you have fulfillment you have

your supply chain you have theme

management now we've had the skills for

Team Management we've had the skills for

ads but we don't have the skills for

fulfillment Payment Processing none of

those now what we did to kind of figure

out the product we're going to be

working with is we decided to use tools

like uh shop Hunter and a couple of

other spy tools to see which products

work

shop

Hunter we kind of browsed through a

variety of products and we came down to

a couple of products that were in a

growing Market that had a

70% or more a gross margin so that's

meaning if you sell your product for

$100 your cogs are uh $30

$30 or less

you can't see it here but that's

basically what we came down to we found

around 30 product ideas and we picked

one that we believed would be the best

now when we started we had we decided to

go a route with the lowest possible

costs and the easiest way to produce

different styles of creatives so the

main costs we had in the beginning was

ordering product we order a couple of

products from a multitude of

Manufacturers to compare their quality

and see which one looks the best uh we

also made took measurements and we made

3D renders this is something big because

with 3D renders we can easily churn out

creative we can get great images for

landing pages and this has been probably

one of the best decisions we've made so

far literally you can take your product

if it is a phone you take all the

measurements of the phone measurement

here measurement here measurement for

each oned cameras you get 3D render if

you get someone who

does textures very well the products

look extremely realistic I would say

most people would not be able to tell

the difference between a high quality

photo shoot photo shoot or the 3D render

the only difference is these 3D renders

can produce creatives in different

images and videos super duper quickly so

that was one huge Advantage we had um

the other cost were landing pages we

decided to go with repo uh and for

creatives we used our own creative team

for the agency to uh generate

sales now moving forward these are the

results so far We've ran this brand

since kind of like end of April uh but

we didn't see much success up until June

really 16th of June is when we started

getting consistent sales from like 500 a

month and we slowly increased

to roughly 1 to 2K days that's currently

where we're at if we look at the

financials overall we've generated

1,994 in that profit so this is from

when we started but this is excluding

all the onetime expenses we had if we

calculate all the expenses we had with

graphic designs video editors render all

the apps we're currently at a loss of €1

1.1 th000 which for you Americans I

believe is like roughly what

1.3k USD very rough math probably maybe

a bit

more but so far the beginning has been

great and right now we're on the path to

profitability so here's what we did with

ads and how we got from zero to

this state where we start to make some

profit number one we focused on only

running static creatives the reason why

we chose static creatives is they're

easy to produce we can test a bunch of

angles if something works we can turn it

into video another reason is the CPM

where Statics are lower typically that's

what we see the challenge with Statics

is you want to pack a lot of information

into one small creative and you have to

be very direct you need to give the

value proposition right away and also

the landing pages need to do a lot of

heavy lifting with educating the

customer um we started off with kind of

running ads to an

advertorial uh to a product page uh

straight to product page

and we tested uh two product page

variations none of the product pages

worked we ended up going through this

process over and over again to find a

landing page variation and landing page

variation six worked what did we do how

did we get to this

point the main kind of caterpillar for

us seeing some success on landing page

after we failed over and over again is

research

if you start a brand or even if you're

running a brand research is the backbone

of your business this gives you

angles this helps you improve your

product

product this also gives you an idea on

what the competitors are

doing now the question is how do you do

research we came down to a couple of um

strategies and there are these number

one Amazon reviews on Amazon you can go

and find a product you're selling or a

similar product scroll down to the

reviews read the longest reviews and

also see what are specific keywords

people use for reviews for products with

a lot of reviews you can of take out

diff you can filter out different

keywords tap on them and see why the

customers are where the customers are

mentioning if it's Comfort they might be

saying like hey I bought these shoes

because they're very comfortable to walk

on my knees don't hurt etc etc you can

find the exact words customers

use

words you can find the exact stories

customers

use and this is a great foundation on

the copy you write within your landing

page on the angles you use within your

advertisements and everything else you

do number two this is something I

believe people under estimate and it's

Reddit you can go and search for your

competitors you can go and search for

your Niche and you find communities

where your customers hang out on now the

caveat here is typically the audience

would be

younger but still even for our product

we're selling to people who are

65

plus Reddit has been great for

understanding why people like certain

proms products why people hate certain

prod products and what are the features

people look for even from an ads

perspective we're able to get these same

stories and different words how people

Des now after implementing and improving

the research we're currently at these

numbers where we've generated 27,000

Revenue in the past uh I would say 14

days uh we've only had

$322 in refunds the total cost with ads

cost of goods merch and stuff it's at

22k so we're in 4.3k net profit which is

a 16% margin now looking and analyzing

in these numbers something I don't like

and something I want to improve is this

net margin we want this to be to like

around 20 to 25% especially at a smaller

scale uh and what what we're looking at

is all the kind of like silent Killers

so we don't get death by th000 paper

cuts here this is Payment Processing

fees uh this is is uh we us

underestimating the cost of goods and

other stuff to beat this we're going to

be looking to raise the

price we're going to be raising the

price by 10 to 20% seeing how that

impacts Ras whether that changes

anything if not great if yes then we

might need to improve the landing page

and for the payment Pro processing we're

currently uh in talks with a merchant of

Records this is basic basically a stripe

just a private stripe where you have

actually someone to talk to so if you

have any issues they're able to help you

out another huge benefit of seen of the

merch of Records they look at your terms

of service privacy policy all the

policies so you so payment processors

don't hate you so we're able to um kind

of improve those and we're currently

working with a guy who used to work at

manscaped.com pretty

cool now look looking at this so far

another kind of metric we're looking at

so right now is the um conversion rate

for landing pages currently our

conversion rate sits at 2.4% we have

three pages uh these two are going to a

different product this is going to

product one this is product two product

two the challenge we're seeing is we're

not seeing great conversion rates for

none of the none of the landing pages

and for these two ones at the bottom

they kind of fluctuate sometimes this

landing page comes on top sometimes this

landing page comes on top so we still

need to do more split tests the only

issue is if we want to run split tests

and have statistical significance we

need to increase ad spend and kind of

right now we're in this limbo where we

need to uh fix our payment processing

fees and improve our margin and only

then we can start improving

the conversion rate and whatnot in terms

of the tests we're doing right now I

would say probably nothing for this week

or next week just because there's a

foundational business structure we want

to make and that's something I've seen a

lot of people make mistakes mistakes on

where they build a business uh they

start running their own uh e-commerce

store they see good results and they

scaled like 10 20 30k days quickly and

they run into PayPal holds stripe holds

they run into potential too many refunds

because they didn't scale slowly and see

whether the customers enjoy the product

there's any issues with the product

because obviously you testing a product

for yourself in a short term and

customers using it for long term is very

different things that's kind of where

we're sitting at right now and what

we're thinking about what we're going to

be improving and that's a process we

kind of went through into launching our

brand I'll be making these videos more

frequently kind of

weekly uh or maybe even sooner uh so you

would see what we do what works for us

and you can make these

implementations

yourself my batter is low so I have to

charge my computer but uh yeah hopefully

you enjoy this video and I'll see you

later