Watch This First: How To Launch An E-Commerce Business

Summary

This video script outlines a strategic guide for scaling an e-commerce brand to $10 million in revenue. It emphasizes the importance of understanding business stages, optimizing marketing efficiency, managing cash flow, and maintaining a lean operation. The speaker shares personal experiences and failures, discusses the necessity of hiring the right people, and leveraging tools like Triple Whale for tracking metrics. The script also covers essential aspects such as creative and media buying, conversion rate optimization, email marketing, and the significance of positive customer reviews. The ultimate goal is to provide actionable insights that can propel businesses towards significant growth and success.

Takeaways

• 🚀 **Know Your Business Stage**: Understanding the current stage of your business is crucial to setting priorities and scaling effectively.
• 🔍 **Deep Dive into Metrics**: A clear understanding of your business metrics, including hidden costs and proper calculations, is essential for financial health.
• 📈 **Marketing Efficiency Ratio (MER)**: Track your advertising efficiency with MER, which is revenue divided by advertising costs, to ensure profitability across channels.
• 💰 **Gross Margin Optimization**: Regularly review and negotiate your cost of goods and freight to maintain and improve your gross margin.
• 🔮 **Forecasting for Growth**: Implement inventory and revenue forecasts to plan for growth and manage cash flow effectively.
• 🛠 **Creative and Media Buying**: Establish a feedback loop for analyzing creative efficiency and media buying to continually refine and optimize your strategies.
• 📊 **Conversion Rate Optimization (CRO)**: Set up a CRO program to improve conversion rates and average order value, leveraging tools like Google Optimize.
• 💌 **Email Marketing**: Focus on optimizing email flows and campaigns to drive a consistent percentage of revenue.
• 🌟 **Maintain Positive Reviews**: Keep customer reviews positive as they indicate customer satisfaction and can influence platform algorithms and marketing efforts.
• 🏋️ **Stay Lean**: Keep expenses low and monitor costs closely to maintain a lean operation and maximize growth potential.

Q & A

What are the key stages of business growth mentioned in the script?

The script outlines three key stages of business growth: 1) Zero to 1 million, where the focus is on finding one profitable product and one marketing channel. 2) 1 million to 5 million, which involves optimizing the flywheel put in place for the first million and possibly hiring contractors or agencies. 3) Stage three, which is about scaling the brand further through hiring more people for return on investment, channel diversification, and product and market diversification.

What is the significance of the book 'Ready, Fire, Aim' in the context of the script?

The book 'Ready, Fire, Aim' is significant as it discusses how businesses can scale from zero to 1 million, 1 million to 10 million, and then to a hundred million. The speaker has adapted these stages for eCommerce, emphasizing the importance of understanding the business's current stage to prioritize actions accordingly.

What is the importance of understanding your business's stage in the growth process?

Understanding your business's stage in the growth process is crucial because it helps you identify your priorities and focus on the right actions to move to the next level. It guides you on what to optimize, whom to hire, and what strategies to employ based on your current revenue and business maturity.

What does MER stand for, and why is it important for an e-commerce business?

MER stands for Marketing Efficiency Ratio. It is important for an e-commerce business because it measures the revenue generated per dollar spent on advertising. This metric helps in understanding advertising efficiency and ensuring that all advertising channels remain profitable.

How can an e-commerce business track their metrics effectively?

An e-commerce business can track their metrics effectively by using tools like Triple Whale, which provides a clear dashboard and features to monitor key metrics. This helps in maintaining a clean and organized view of the business's performance and making informed decisions.

What are some of the hidden costs that businesses might overlook when scaling?

Some hidden costs that businesses might overlook when scaling include sales taxes, duties upon import, and other regional fees that can significantly impact profit margins. It's essential to account for these costs in the financial planning and profit calculations.

Why is it important to optimize gross margin for an e-commerce business?

Optimizing gross margin is important because it directly impacts the profitability of an e-commerce business. By negotiating with suppliers and freight forwarders, a business can reduce product costs and increase the gross margin, leading to higher profits.

What is the significance of inventory and revenue forecasting for an e-commerce business?

Inventory and revenue forecasting are significant for an e-commerce business as they help in planning for the right amount of stock to meet demand and in understanding how much can be invested in product, people, and other business aspects. Proper forecasting prevents stockouts and lost sales opportunities.

Why is managing cash flow a critical aspect of scaling an e-commerce business?

Managing cash flow is critical because it ensures that the business has enough funds to pay suppliers, buy ads, and cover other operational expenses. Without proper cash flow management, a business may face financial difficulties, even if sales are growing.

What role does creative and media buying play in the success of an e-commerce business?

Creative and media buying play a crucial role in the success of an e-commerce business as they drive customer acquisition and brand awareness. Continuously analyzing creative efficiency, building tests, and understanding what works best on the core channel are essential for optimizing ad spend and increasing sales.

How can an e-commerce business improve conversion rates and average order value (AOV)?

An e-commerce business can improve conversion rates and AOV by setting up a Conversion Rate Optimization (CRO) program. This involves testing different page layouts, advertorials, quiz funnels, and using tools like Google Optimize to create variations and understand customer preferences.

What is the importance of maintaining positive reviews for an e-commerce brand?

Maintaining positive reviews is important as it indicates customer satisfaction, influences platform algorithms, and helps in differentiating the brand from competitors. Positive reviews also build trust with potential customers and can serve as a foundation for marketing efforts.

Why is it crucial for an e-commerce business to stay lean during the growth process?

Staying lean is crucial for an e-commerce business to keep fixed costs low and prevent unnecessary expenses from hindering growth. Monitoring expenses, avoiding over-hiring, and negotiating fees and rates can help maintain a lean operation and allocate resources effectively.

Outlines

00:00

🚀 Scaling to $10 Million: Strategies and Stages

The speaker outlines a roadmap for growing an e-commerce brand to $10 million in revenue. They discuss the importance of understanding the business's current stage and adapting strategies accordingly. The stages include finding a profitable product and marketing channel (0-1 million), optimizing the business model (1-5 million), and focusing on people and processes for further growth (5+ million). The speaker also emphasizes the need for hiring the right people, using the right tools, and establishing crucial reporting systems to track success.

05:00

📊 Understanding Metrics and Marketing Efficiency

This section delves into the intricacies of understanding business metrics, especially the Marketing Efficiency Ratio (MER), which is revenue divided by advertising costs. The speaker highlights the importance of knowing the true costs, including sales taxes and import duties, which can significantly impact profitability. They also recommend using tools like Triple Whale to track metrics and manage MER effectively. The speaker shares personal experiences and the consequences of not tracking these metrics, urging the audience to be vigilant about their advertising efficiency.

10:03

🛠️ Optimizing Gross Margin and Managing Inventory

The speaker discusses the importance of optimizing gross margin by reducing product costs and freight. They explain how to calculate gross margin and the impact of discounts and bundling on profitability. The paragraph also covers the critical aspect of inventory forecasting to avoid stockouts and lost sales. The speaker shares their own experience with inventory issues and emphasizes the need for considering lead times, seasonality, and having a buffer for unexpected delays.

15:04

💼 Cash Flow Management and Creative Efficiency

This part of the script focuses on cash flow forecasting, which is essential for paying suppliers and funding advertising. The speaker advises documenting major expenses and understanding the business's financial health. They also touch on the creative and media buying feedback loop, suggesting regular meetings to analyze and test creative efficiency. The speaker recommends using tools like Triple Whale's creative cockpit for this purpose and stresses the importance of testing different content styles and understanding customer motivations.

📈 Forecasting for Growth and Conversion Rate Optimization

The speaker discusses the importance of forecasting for inventory and revenue, especially as the business scales. They explain the process of using historical sales data and considering seasonality to predict future needs. The paragraph also covers setting up teams for better coordination and the significance of lead times in planning. Additionally, the speaker talks about the need for a Conversion Rate Optimization (CRO) program to improve the average order value and overall profitability of the e-commerce site.

🔗 Building a Strong Email Channel and Customer Reviews

The speaker emphasizes the importance of developing a strong email channel as a complementary marketing strategy. They suggest focusing on email flows and campaigns to optimize revenue and improve customer engagement. The paragraph also discusses the significance of maintaining positive customer reviews, which can impact the brand's reputation and marketing efficiency. The speaker advises on proactively asking for reviews and using incentives where appropriate, while also addressing customer service issues to prevent negative feedback.

🌟 Staying Lean and Scaling Mindfully

In the final part of the script, the speaker stresses the importance of staying lean to maintain low fixed costs in an e-commerce business. They advise monitoring expenses closely, avoiding over-hiring, and being mindful of currency exchange rates when making payments. The speaker also recommends negotiating with suppliers and service providers based on sales volume to reduce costs. They conclude by encouraging viewers to apply these lessons to grow their businesses effectively.

Keywords

💡Brand Growth

Brand Growth refers to the process of expanding a business brand to increase its market presence, customer base, and revenue. In the video's context, it is the overarching theme as the speaker discusses strategies to scale a brand to $10 million. The speaker outlines steps and considerations for growth, such as understanding business stages, hiring the right people, and using specific tools for analysis and optimization.

💡Non-Negotiables

Non-negotiables are essential elements or practices that must be included without exception in order to achieve a goal. The video emphasizes certain non-negotiable strategies for business growth, such as knowing the business stage, optimizing marketing channels, and managing cash flow. These are presented as crucial steps that businesses should not overlook in their pursuit of scaling to $10 million.

💡E-commerce Stages

E-commerce Stages are the different phases of growth that an online business goes through, from startup to maturity. The script adapts stages from the book 'Ready, Fire, Aim' for the e-commerce context, detailing the journey from zero to one million, one million to ten million, and beyond. Each stage has specific priorities and challenges, such as finding a profitable product and marketing channel in the initial phase.

💡Marketing Efficiency Ratio (MER)

The Marketing Efficiency Ratio (MER) is a metric used to measure the efficiency of advertising efforts, calculated as revenue divided by advertising costs. The video highlights MER as a key metric for understanding and managing advertising profitability across various stages of business growth. It is used to ensure that marketing investments are yielding adequate returns.

💡Gross Margin

Gross Margin represents the difference between sales revenue and the cost of goods sold (COGS), usually expressed as a percentage. In the video, optimizing gross margin is emphasized as a critical step for businesses in stage two and above. It is used to track profitability and identify areas for cost reduction or price increase.

💡Inventory Forecast

An Inventory Forecast is a projection of the inventory levels needed to meet anticipated sales. The script discusses the importance of starting an inventory forecast once a business achieves its first profitable sales. This forecast is crucial for avoiding stockouts and ensuring that the business can capitalize on sales opportunities.

💡Revenue Forecast

A Revenue Forecast is a prediction of the income that a business expects to generate over a specific period. The video describes how to create a revenue forecast by multiplying the projected inventory sales by the average sale price. This helps in planning investments in products, people, and other business aspects.

💡Cash Flow Management

Cash Flow Management involves monitoring and controlling the inflow and outflow of cash in a business to ensure there are sufficient funds to cover expenses and make investments. The script underscores the importance of managing cash flow, especially when scaling a business, and provides insights on how to forecast and maintain a healthy cash position.

💡Conversion Rate Optimization (CRO)

Conversion Rate Optimization (CRO) is the process of improving the percentage of visitors to a website who take a desired action, such as making a purchase. The video mentions setting up a CRO program to enhance conversion rates and average order value, which is vital for increasing profitability and customer engagement.

💡Customer Reviews

Customer Reviews are evaluations or feedback provided by customers about a product or service. The script highlights the significance of maintaining positive reviews for several reasons, including customer satisfaction, influencing platform algorithms, and building trust with potential customers. Positive reviews can also serve as a strong marketing tool, differentiating a brand from its competitors.

💡Staying Lean

Staying Lean in a business context means operating efficiently with minimal waste and low overhead costs. The video concludes with the lesson of staying lean, emphasizing the importance of keeping expenses under control, avoiding over-hiring, and monitoring variable costs. This approach helps maintain agility and profitability as the business grows.

Highlights

10 essential steps to scale a brand to $10 million in revenue.

Importance of knowing your business stage to prioritize actions effectively.

Adapting the stages of business growth from 'Ready, Fire, Aim' for eCommerce.

Finding one profitable product and marketing channel is the main challenge in the initial stage.

Optimizing a flywheel in the 1 million to 5 million stage involves refining existing strategies.

Hiring contractors or agencies can help scale the business in stage two.

Stage three focuses on optimizing people and processes for business growth.

Understanding metrics deeply is crucial, including hidden costs and proper calculations.

The significance of sales taxes and import duties on profit calculations.

Triple Whale as a recommended tool for tracking metrics and managing business growth.

Managing the Marketing Efficiency Ratio (MER) for advertising efficiency.

Optimizing gross margin by negotiating with suppliers and freight forwarders.

The necessity of accurate inventory and revenue forecasting for business success.

Importance of lead times and buffering for potential problems in inventory management.

Setting up a cash forecast to manage and plan financial resources effectively.

Establishing a creative and media buying feedback loop for continuous improvement.

Implementing a Conversion Rate Optimization (CRO) Program to enhance profitability.

Utilizing email marketing as a complementary channel to drive revenue.

Maintaining positive reviews as a reflection of customer satisfaction and trust.

The importance of staying lean to keep fixed costs low and manage expenses efficiently.

Transcripts

- Today, we're gonna go through 10 things

to take your brand to $10 million.

Some of these are absolute non-negotiables

that if you are not currently doing them,

you probably should.

We're gonna go through some of my failures.

We're gonna go through people you need to hire.

Tools you need to install.

Reporting that you need in place to make sure

that you have the best chance of succeeding.

The first step is know what stage of business you're in,

so, you know, your priorities.

One of my favorite books is, "Ready, Fire, Aim."

He goes and talks about how businesses can go from zero

to 1 million, 1 million to 10 million,

10 million to a hundred million.

I've slightly adapted these stages for eCommerce.

I like to think that zero to 1 million,

basically all you're trying to do is find one product

and one marketing channel.

You're just trying to, the main challenge is you're really

just trying to find your first profitable customers.

In this stage, you might just be learning your skills.

That is your main priority.

And to be honest, zero to 1 million annualized revenue

is not that difficult.

And I'm not saying that to demean people out there

that are trying that haven't achieved that.

I hope that seems that it's very inspiring

because the truth is when you have the right product

and the right marketing channel,

you will be able to scale your business incredibly quickly.

If you're not getting to that point and that 1 million

in sales with profitable customers,

you need to go back to the drawing board,

refine your product skills and refine your marketing skills.

Stage two, I like to think is 1 million to 5 million.

In this stage, you're trying to optimize a flywheel

that you put in place to get your first million dollars,

which if it is, let's say Facebook

and it's a singular product,

you're trying to optimize those two things.

It might be a creative feedback loop,

where you're improving your Facebook creatives,

or you are reducing your cost of goods

and improving your product quality.

In this stage, you also might be focusing on hiring people

as well, like contractors or agencies to really take things

away from your plate, so that you can scale your business.

In stage two, you might also be juggling cash flow as well.

We just did an episode on cashflow and how to manage that.

That is another one of your main focuses.

In stage three, your focus really is around people

and process.

You are trying to optimize everything

that we just kind of said.

You're trying to hire more people

that get a return on investment and scale your brand

to where it wants to be.

You've also got other options as well,

around channel diversification and also product

and market diversification.

Can you launch your business into other regions?

You don't wanna wait too late for that

because the opportunity might go away

due to competitors entering the space.

Number two is have a deep understanding of your metrics.

You might think you know your profit and that kind of stuff,

but the truth is there may be costs that are hidden,

or you're just not calculating them properly.

When I started a brand, we scaled it so quickly,

doing a million dollar sales in a month.

The truth is we failed to understand our true gross profit.

And we really forgot to even incorporate things like,

sales taxes, which is incredibly important.

Most regions will have sales taxes, which, you know,

if you're using GST in Australia or VAT it's a very,

very similar system, just different amounts.

That is going to be pretty much 10% off

your top line revenue, that you need to account for

in your profit in your bottom line.

Other regions, depending if they have free trade agreements

from places like China to Australia,

they have a free trade agreement.

So there's no duties coming from that.

But going to the UK, you may have duties upon import.

This is money that you're not gonna get back.

Make sure you have all of those metrics

really nice and tidy.

This is where I highly highly recommend

getting a tool like, Triple Whale.

So you have all of your metrics really,

really nice and clean so you can track them completely.

Triple Whale, is releasing so many new features

and honestly, their main goal is just helping entrepreneurs,

e-commerce entrepreneurs, like me, and like you.

You guys know that I don't promote any products,

unless I use them myself and we use these for any brand,

that's doing under $5 million revenue

because their dashboard is so, so clear

and they have so many other solutions.

Over the next eight points,

I'm gonna be talking a lot about certain metrics

and reports that we use to track our success.

Honestly, Triple Whale, has 95% of these.

I've used lots of other alternatives out there,

like B Profit, in the early stages.

But the rate of product development with these guys

is really, really good.

I'll leave a link in the description with a discount code.

Make sure you go check it out and just ask me any questions

if you have them.

So the third thing that's gonna take you to $10 million,

is managing your MER which again,

can be tracked in Triple Whale.

MER stands for, Marketing Efficiency Ratio.

It's basically your revenue, divided by

your advertising costs.

It's a great metric to understand

your advertising efficiency.

Because tracking in Facebook has become so, so bad,

it's really important that this MER,

becomes your north star, to make sure that all

of your advertising channels, if you've got, you know,

if you are in stage two or three that I mentioned before

are still profitable for you.

For one of our brands,

we definitely weren't measuring MER appropriately.

We were running each individual traffic source,

such as Pinterest and Snapchat and Facebook.

Each of them had an amazing in-platform rise

or customer acquisition cost,

and it should have been profitable.

In the end, our MER just started blowing out

despite what these platforms were telling us,

that gave us the signal to really pull these channels back.

We implemented post-purchase surveys,

like where did you see us?

And the truth is Snapchat and Pinterest were really,

really over reporting.

By using an MER metric, you can basically look at your store

and say, okay, I've made a hundred thousand dollars

this month and my MER is 25%.

So that means I spent $25,000 on marketing.

You can then sub track your gross margin

and basically be very comfortable that you are making

a net profit.

Compare this to the alternative situation,

where you're like, looking at the platforms in Snapchat

and you're saying, okay, I'm profitable on this channel,

I can spend a little bit more.

Profitable on Pinterest, I can spend a little bit more.

Profitable on Facebook, I can spend a little bit more.

If you aren't hyper focused on this metric,

the truth is you could just be unprofitable for that month.

Because once you've subtract your gross margin,

your fixed cost and your MER, you might be in the red.

MER, is a variable cost and it's really based on

your advertising efficiency, so watch it like a hawk.

It's especially useful, if you've got multiple media buyers

working on multiple different channels,

that maybe aren't communicating.

You should be getting all your media buyers

to be looking at Triple Whale, every single day,

on a one day period, 7 day period, 14 day period,

to make sure that nobody is really blowing out

that MER budget and they're working accordingly.

Then you can set soft rise targets for these platforms

and tinker around and find the best level for you.

The truth is, Facebook being the most efficient channel

out there to really drive demand is going to be

your main lever to really monitor and manage this MER

and making sure that it's under that threshold.

If you wanna learn more about MER and get really,

really detailed in the subject, you can even look at aMER,

which is basically acquiring new customer

and the marketing efficiency ratio around that.

Definitely go check out the common thread link down below.

These guys are absolute guns at explaining this stuff,

and you can get really, really granular.

The fourth point is, optimize your gross margin.

Now this is really, really important for the people

from stage two and above.

You can create gross margin in Triple Whale,

very, very easily.

Just click the little gear icon and create a custom metric.

Gross margin is determined as sales,

minus your cost of goods.

Typically it's communicated in a percentage as well.

So to do that, you just basically do revenue, minus COGS,

divided by revenue, as a percentage,

you can do that all in Triple Whale.

When we set up products in Shopify,

we include things like couriers, freight inbound, duties,

all of that stuff,

because then all of your dashboards are going to give you

absolute realtime data on how profitable you are.

By measuring your gross margin on a daily basis,

you can see things like coupon discount code leaks,

because if something leaks that you didn't think,

like a 80% discount or 100 percent discount,

that you set up in your back end,

you're going to be able to catch that very, very quickly

from your gross margin, it's gonna drop very fast.

To optimize your gross margin,

you can negotiate with your suppliers

to get your product costs down.

You can negotiate with your freight forwarders.

Once you get more buying power, go back to them and say,

this is how many containers we're gonna do

over the next three months or something like that.

As you grow, they should be dropping their prizes.

Always going to a negotiation with the willingness

to walk away and use another service, get their quote first,

and then show the other person

and use that as your negotiation.

One caveat to that, is when you're setting up things

like bundles, your average order value might increase,

but your gross margin decreases,

but the total gross a dollar amount, will also increase.

You really just need to be mindful around what is the most

profitable thing for your business.

We'll get into AOV and conversion rate in just a little bit.

So the fifth thing that you need to start doing

as a successful e-commerce business, is forecast.

And we're gonna cover, three main forecasts

that you need to do.

The first two is inventory forecast and revenue forecast.

I'm gonna talk about them together

cause they go really, really well.

The hardest product to sell is the product

that you don't have.

If you're out of inventory,

that is just gonna stop you dead in your tracks.

This is something that we didn't do properly

with the Oodie early and we were sold out,

losing possibly 50 to a 100 million dollars in revenue

over our lifespan.

If you're in stage one, possibly even earlier,

once you get your first profitable sales,

you're going to wanna start an inventory forecast.

What you do is, you go to your Shopify sales

and you look at what you've sold,

consider things like your MER and your opportunity to grow.

Have you got great creatives, yet? No.

What happens when you do have great creative?

These are the things, that will then allow you

to extrapolate those sales out

and really understand how much of that product

you're gonna need each month. Do it monthly.

You then need to consider things like seasonality curves.

In eCommerce, you've got those huge sales periods

in the middle of the year,

and you've also got it Black Friday at the end of the year,

which is incredibly important to increase

your inventory levels.

If you're a seasonal business like, Oodie,

you're going to sell more in winter

and you need to really understand that.

When you're an early stage business,

it's hard to understand that seasonality curve.

If you're a long standing business,

you can use historical sales,

but this is going to require intuition.

Remember, don't take on too much risk.

It's okay to cap growth

because you might run out of cash flow,

which we'll get into in just a second.

Once you have this inventory forecast,

you're going to be able to roll that up,

by simply timesing the amount of inventory

that you think you can sell by the average sale price

and you're going to get your revenue forecast.

This is going to be important to really forecast

how much you can invest in product, people,

all of those kind of things.

If you're in stage three and you're getting up to around,

you know, 5 million to 10 million to 50 million,

you're gonna wanna start setting up teams

around this process.

This could be as simple as a merchandise planner,

that really understands the ins and outs of your business.

It could also be a demand planner,

but the truth is, if you don't have lots and lots of skews,

you as the founder,

coordinating with your marketing and operations team

might be able to come up with the most accurate forecast.

One of the main things that you need to coordinate

with your operations or your product team is lead times.

They're an absolute killer.

You need to buffer in problems.

My first order of calming blankets,

I was selling on pre-sale or saying that the arrival time

was, it was like 12th of April, but the,

I didn't understand that there could be problems

such as a border hold,

where the Australian government holds your first shipment

to inspect it.

This took about two months and it was incredibly stressful.

I was emailing all my first customers,

in my first eCommerce journey saying why their product

was so late.

The other thing that you don't wanna do is miss

those Black Friday periods,

make sure your product has a little bit of a buffer.

So it is landing in early October, possibly even earlier,

the third forecast that you need to make sure

that you've got set up, is a cash forecast.

If you don't have money in the bank,

how are you gonna pay suppliers?

How are you gonna buy your ads?

Now, accountants, they really don't like making

cash forecasts, which is understandable

because they do take a lot of time.

You need to really understand the ins and outs

of your business.

This is where you, as the founder,

need to really document those major expenses

that are coming up, such as massive inventory

that you've placed.

Like this is where you go back to your inventory forecast.

We're gonna need orders here, here, and here.

Then what the person's gonna do is,

look at your base expenses,

such as your advertising costs and your gross margin

that we talked about just before

and then gonna extrapolate that out.

Assuming different variables based on the amount of revenue.

You need to be sure that you've got cash to fuel

that inventory growth.

So make sure that you're looking at the net cash inflows

and your cash balance, in those forecasts.

If you've got any outlier events, like hiring new staff,

that's gonna change those variable costs as a percentage,

they need to be communicated to the person

that's doing your cashflow forecast.

This is again, where I really like Triple Whale,

unlike most tools, they have a cash turnover widget,

which is really great.

It's basically your sales, minus all those variable costs,

which is gonna bump up your cash.

You can track that monthly or even daily with your team.

I'll put a template for some of these forecasts

in the description below, as well.

If you have any questions about it,

you can head to our mentorship

and I'm happy to answer them, as well.

Number six, that you need to be focusing on in,

I recon all of these stages,

is your creative and media buying feedback loop.

Now, depending on what stage you're on,

with your amount of team is going to change

this feedback loop.

But you need to be constantly analyzing

your creative efficiency and building tests

and really understanding what is working best

on that core channel that you're looking at.

I recommend a weekly or monthly meeting,

where you get in a room and you go, okay, what has happened?

What were the results? What should we test next?

What's our hypothesis for that and why it should work.

And then retrospectively look at it, the next meeting.

You can build reports around this, again Triple Whale,

has the creative cockpit, which is really, really good.

The main thing that I do recommend,

especially in the early stages is don't do really,

really granular tests.

The larger the variation, the larger, the increase

or decrease in results.

You can test things like, different avatars

that you're creating the content for.

Different content styles.

Is it a UGC? Is it a professional, unboxing video?

Test those big things initially, against each other,

using dynamic creatives,

or even if you're really new to Facebook,

use the split testing function in there,

if you don't understand dynamic creatives

and start getting really rigorous around understanding

why customers are buying.

You can use surveys, post-purchase surveys to customers,

asking them why they bought,

and then incorporate that into your media feedback loop.

The seventh thing that you need to be doing as an eCommerce

founder is setting up a CRO Program.

Now, again, it's gonna depend on your skill sets

and the team that you're gonna hire.

You really need to be optimizing things like,

your conversion rate and your average order value,

seeking more earnings per visitor on your site,

profit per visitor.

This is relatively simple now, thanks to the Shopify's

new themes and something like Google optimize.

You can plug it in, again,

the more variation that you can create,

the more drastic results that you can expect.

Don't just focus on, you know, changing button colors,

really change the layouts of your pages.

Also, the main thing that you should be doing

within this function, is testing things like advertorials

and quiz funnels that are best practice right now.

Go check out some of your favorite direct response brands

and see what they're running traffic to.

I recommend setting up a weekly or monthly cadence,

to review these results and why they worked.

These insights about your customers are gonna be incredibly

important to understand what tests to run.

One other thing, that I really like to do here,

is also set up a slack channel, a deployments channel.

So every time someone deploys a test or gets test results,

it gets recorded in slack.

What was the uplift? What happened and why?

The next thing you should be focusing on,

is your complimentary channels, like email.

We like to report on things like flows

and campaigns separately, as a percentage of revenue.

This way, if your sales go up drastically,

you can actually compare, if your emails were responsible

for that.

It's showing optimization over time of that channel.

It's great to align your team on that percentage,

so you can see how much they're improving.

You can run split tests on your flows.

In the early stages, you really want to be making sure

that you are focusing on flows

because you don't have that many resources.

Too many people are sending lots of campaigns

and just not grabbing that campaign,

putting it in their welcome series

and making sure that every single person

that goes subscribes, gets that email in the future.

The ninth and second to last thing that I love to focus on

as an early stage brand, is keeping your reviews positive.

There are so many reasons to keep your reviews positive.

Firstly, it's such a strong indicator

of how much customers are actually enjoying your product

and are likely to purchase again.

Secondly, it's that, there's a lot of underlying algorithms

that are actually trying to judge how a consumer feels

about your product after purchasing.

Facebook surveys their customers.

If you're selling crap things and customers are hating it,

chances are you can get a platform ban

or your just ads will become less efficient.

The third thing is, by having a really strong

peer review platform, that isn't biased

that you can manipulate like, Trust Pilot or Product Review,

customers really trust that.

That can be your foundation of your marketing.

It helps differentiate you from competitors.

Koala Mattresses did this incredibly well in Australia,

where they were the top rated mattress on Product Review.

This should be reported

by your customer service team monthly.

One of the best ways to get a really good review score

is stopping reviews at the source.

You want your customer service team to have a strong voice

within the departments, such as product, operations

and even marketing.

To make sure that customers are happy

and you're addressing those problems.

You might be able to adjust your product in a certain way,

that gets lots of more positive reviews.

You need to be proactively asking your customers

for reviews.

This should be in your email marketing software,

after a purchase, asking customers,

Hey, can you please leave me a five star review,

if you loved the product, if not,

please reply to this email and give me feedback.

That way, you're achieving two things.

You're handling disgruntled customers

that are really upset and you can fix their problem

one on one, and then you're just getting positive reviews

on your platform.

You can't actually technically ask for a five star review

with an incentive,

but you can actually ask for reviews in general

with an incentive.

So make sure you understand the legalities around that.

If you wanna incentivize reviews,

you can say, you can go into the drawer to win something

or an Amazon gift card.

If you really just need to bump those reviews up

in the early stages.

The 10th and final thing we're gonna talk about

is a very, very good lesson that I didn't learn

early enough, which is, stay lean.

The beauty of eCommerce businesses is the fixed cost

can be super low, but if you don't watch your expenses

like a hawk, it can cause lots of issues.

You wanna constantly be looking at payment fees

and invoices, going into your accounting software

and checking every single charge in the early stages.

Don't over-hire, a good role of thumb is one person,

every million dollars of revenue that you are doing.

Make sure you're monitoring things like FX.

If you're settling in your Shopify dashboard.

So your payouts are coming in AUD, you don't wanna then go

spend on USD using these platforms without converting

the currency first.

You can use tools like LYX or go to your bank

and get proper FX rates to reduce that expense line.

Make sure you're constantly just negotiating people down

based on your sales.

Those variable costs, lag payment fees,

although it might be a small percentage,

as your revenue grows based on your revenue forecast,

they will become solid amounts of money,

that you could be paying yourself or paying new people

and growing faster.

I hope you liked today's video, it's a little bit different.

It might be a little bit dry,

or it might feel like a pipe dream to other people,

but the truth is, these lessons are going to be incredibly

important for you to grow your business.

If you like this kind of insight,

or just have any questions,

happy to answer them in our mentorship.

I jump on and answer questions, you know, one on one,

alternatively, just leave a comment in the description

and I'll try to help, as much as I can.

Don't forget to like and subscribe.

Thanks.

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