POV: Your Business Goes From $0 To $1.5k/day
Summary
TLDRThis 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
🚀 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.
📈 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.
🔍 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.
Mindmap
Keywords
💡e-commerce brand
💡Facebook ads
💡gross margin
💡3D renders
💡landing pages
💡product ideas
💡static creatives
💡research
💡net profit
💡conversion rate
💡merchant of Records
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
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