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How to Scale Your Ecom Business to $10M in 3 Steps
63 Plays5 days ago
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E-commerce isn’t hard — it’s misunderstood, and that misunderstanding is what keeps most people stuck grinding for scraps instead of scaling to real money. In this episode, a $450M e-commerce founder breaks down the three things that actually drive growth (what you sell, how you sell it, and how you run the business) — and what you can stop wasting time on (apps, themes, social profiles, and algorithm panic).
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Transcript
Understanding E-commerce Strategies
00:00:00
Speaker
Ecommerce isn't hard, it's misunderstood. I'm a $450 million dollars ecommerce founder and for a long time that misunderstanding was the only thing standing between me hustling for zero and scaling products past $50 million dollars a year.
00:00:15
Speaker
Once I finally understood e-commerce the right way, it became one of the easiest businesses I've ever run because I was finally focused on the right things. I've since helped grow a handful of products from zero to over $50 million dollars a year, and every single one of them did the same three things well.
00:00:33
Speaker
In this video, I'm going to show you those three things and just as importantly, what you can stop worrying about. let's start with what doesn't matter so the first thing that doesn't matter are apps there's over 13 000 different shopify apps and people love geeking out about what are the best apps what app should i install what are the top 20 apps i should put on my store none of that stuff really matters We scaled our business from basically zero to millions of dollars per month with one hard-coded webpage, basically meaning zero apps whatsoever, straight to a checkout page, which is a default setting inside of Shopify. Nothing else mattered.
00:01:10
Speaker
All these apps people love talking about. Sure, you can use them to upsell some stuff. You can add a little bit of incremental revenue, but that's not what really moves the needle. Second, your Shopify theme.
00:01:22
Speaker
There's over a thousand themes out there, but really what matters is just one to two pages of your entire e-commerce business, your main landing page and your checkout page, and your checkout page by the way on shopify you have very little control over shopify has basically templatized that entire page and so it looks almost the same for everybody so what does that mean there's really only one page that matters your entire store theme at some point it's nice to have a nice pretty looking side feeds your ego makes people think you're more important but in terms of actually driving sales all that matters is that one page you send all of your traffic to
00:01:58
Speaker
which means your theme doesn't really matter
The Role of Social Media in Sales
00:02:00
Speaker
that much. Third, your business social media profiles and strategy. Your sales are almost guaranteed to not come from your business social media profiles. Very few businesses out there that I've seen scale to seven or eight or even nine figures grew because of their business social media profiles. Don't worry about how pretty your Facebook or Instagram is or how cool your TikTok is. None of that stuff really matters because in most cases, you're either going to be using ads, which people don't even see the rest of your page. They're just going to see the ad and either buy or not buy, or you're going to be using influencers. And in that case, you're using their profiles, not your own. So don't spend any time worrying about your business social media presence. Lastly, algorithm updates.
00:02:44
Speaker
People love freaking out about Amazon updates, Facebook updates, other platform updates. None of that stuff really matters. There was a big campaign budget optimization update a few years ago that everyone was freaking out about. It's gonna change everything with how you run ads on Facebook.
00:03:01
Speaker
nothing really changed. Facebook didn't even roll out what they said they were going to, yet all these agencies and all these people creating all these YouTube videos and TikTok videos were freaking out about why this is going to change everything and every podcast was talking about that. Didn't matter at all.
00:03:15
Speaker
Even the recent Andromeda update on Facebook, doesn't really change anything because good Facebook advertisers have been using broad targeting and lots of creative for years. So none of this stuff really matters and none of it's big news. So don't be freaking out about that stuff. Don't try to stay up to date on that because the basics are what really matters. Those updates really just give agencies something to talk about and try to scare people with so that they make more money. They feel that their job is more important and harder so that you give them money and don't try to do any of this on your own, which you really can. getting traffic is super simple once you know what does matter. The biggest misconception in e-commerce and the reason people think it's hard is because they think e-commerce is all about gaming online systems.
00:04:00
Speaker
Facebook, TikTok, Shopify, Amazon. There's always people out there who are trying to find the next hustle, trying to find the next loophole in an algorithm. And then what do they do? I've seen these people for over a decade now.
00:04:11
Speaker
They're constantly every year trying to find these things. And they never get anywhere. They never build any real empires, any real wealth. The truth is that e-commerce is easy when you think of it like a billion dollar consumer products companies.
00:04:26
Speaker
We are not the first people to try to build a consumer products company as big as possible. Just in the past, they were doing it offline. They were running either billboard ads or TV ads or radio ads, and they were sending those people into a brick and mortar retail stores.
00:04:40
Speaker
Other than that, the business is exactly the same. They ran those kinds of ads, now we run online ads. They sold in brick and mortar stores, now we sell in online stores. Otherwise, the fundamentals are exactly the same. And nowadays, it really starts blending together because they wanna sell online and we, once you get big enough, wanna sell in brick and
Brand Ownership vs. Dropshipping
00:04:58
Speaker
mortar. So the three things that really matter are what you sell,
00:05:03
Speaker
how you sell it and how you run your business so let's get into the first one what you sell in my first business i started by selling other people's brands of products i was basically kind of wholesaling i would buy their products in bulk resell them online and it was okay because not a lot of people were selling those products online now now tons of people sell them so it would be no good but it was okay but my margins were not that great Then one day I was at the pool at my apartment complex with soon to be my wife. I think it was my fiance at the time. And I just met a guy. We started talking business. And he i was telling him about this product that was taking off in my store that I had no idea what it was. It was somebody else's brand. He's like, hey, he's like, I can private label that thing for you.
00:05:42
Speaker
So then he could actually go create my own version of this product and put a label on it. So my cost dropped from about 10 bucks a unit to $4 a unit. Incredible. I made way more profit. I own the brand. So I started selling that on my own website side by side with that other one. And just like grocery stores will have a generic version of a drug and then the branded version of a drug and sell them side by side. I was basically doing that same thing.
00:06:05
Speaker
But because my margins were so much higher and people were looking for the product, not necessarily the brand at the time, that that's the model that I switched everything to. So the big lesson there is that you wanna own the brand, which is why I recommend not wasting time dropshipping.
00:06:19
Speaker
Now, if you don't have any money, and you got $500 to your whole name, sure, go do dropshipping or something. But if you're you know a six-figure employee or you already have built a successful business before or you just don't wanna waste a lot of time in your life and you wanna build something that can last and can actually change your financial life,
00:06:34
Speaker
If you're going into e-commerce, you've got to own the brand. But owning the brand of the product you sell isn't enough. You also have to sell the right kind of product. Around that same time, when I was selling other brands of products, I was actually the number one seller of a product called Cavanese.
00:06:49
Speaker
And the problem was, even though I was the number one seller on multiple channels online, on Amazon, off Amazon, number one ranking in Google, the sales were limited. Like my total sales for that product were probably like 50 grand a month or so. And the problem was is that I didn't own the brand, so I didn't have that great of margins, and the upside was extremely capped.
00:07:08
Speaker
So the big lesson is there is that not only do you need to own the brand, you need a product with high potential. And so I ended up later on getting into some of the products that were being promoted on Dr. Oz. So one of them was Garcinia Cambogia, which just took off. That thing was selling millions of dollars a month. I was probably selling a hundred grand a month of that product alone on Amazon primarily.
00:07:28
Speaker
And that product was selling a lot, good high margins. I owned the brand. So I ticked a lot of boxes. The problem was, is after a few years, that product was dead. It was a fad product that didn't last. So another big lesson when choosing what product to sell is you want to sell something that would last. So I've been doing this stuff for over a decade. So I was able to take some of those lessons and apply them to our business, Life Boost Coffee, that we own today.
00:07:52
Speaker
And that's how we've been able to scale this business over the past six years.
Targeting Niche Markets
00:07:55
Speaker
from basically nothing to over $50 million dollars a year, and sales right now are growing by more than $10 million dollars a year.
00:08:02
Speaker
The big lesson was there is that we went after a big market coffee, huge market, the third highest drink beverage in the world, big market, but we found a niche appeal within that market that could expand. And so one layer of that is that we went after healthy coffee, one of the healthiest coffee possible. As we all know, people want to be healthier. And in that market, it's a newer concept to have healthier coffee because people up until really recently, and I'd still say most people don't realize there's a difference in certain coffees. So that was one part of that market that we went after. And the next part of it was specifically low acid coffee.
00:08:36
Speaker
So we're sort of evolving now from just low acid to broader being a very healthy coffee as far as our positioning. But we started even more niche with low acid coffee. And that's what allowed us to scale with almost no budget to where we're at today and turn this into one of the fastest growing businesses in America. So I like to call this strategy A hidden monopoly. A big lesson from one of my favorite marketing books that I've read over the past few years called Positioning, it was actually written 25 years ago, is that there's so much power in being first to market.
00:09:08
Speaker
As they say in that book, the easy way to get into a person's mind is to be first. And they give a few examples. Who was the first person to walk on the moon? Neil Armstrong.
00:09:20
Speaker
Now, who was the second person? What's the name of the highest mountain in the world? Mount Everest. What's the second highest mountain in the world? So your goal is to find your own hidden monopoly. And by doing so,
00:09:33
Speaker
you get to establish a strong powerful position within a big market because we're not the first people at this point with billions of people on the planet at all trying to hustle and make money you're not going to be the first in almost any market unless you're developing some bleeding edge technology product but with a basic consumer product unless you have a massive research team you're not going to be first So forget that advantage. But what you can be first with and realize the power of what the authors of positioning realized a quarter century ago is that you can be first in a small segment of that market and you can find a hidden monopoly that others aren't tapping into yet. So here's the framework to do this.
00:10:11
Speaker
First, you wanna pick a big market. Now, I don't recommend selling on Amazon as your primary source of sales. I recommend building your brand off of Amazon and then letting that traffic bleed onto to Amazon so you don't have to play the price games and all that competition nonsense on there. But that's kind of outside the scope of what we're talking about. But what you can use Amazon for is to research products because for any consumer product, it's likely being sold on there in some form or or another. So the easiest way to find big markets, you can use a little tool out there that tells you exact revenue numbers, but you don't really need that.
00:10:45
Speaker
All you do is go to Amazon, search for bestsellers, and look at any categories you're interested in, ideally a market that you're familiar with. And a saying that I like to use is the more you know, the faster you go. So if I was to jump into, you know, women's makeup or something, like I'm not gonna know anything about that market other than what I hear and see my wife doing. But if I was to jump into a fitness market, which I'm very into, I drank coffee for a long time. So doesn't have to mean you're the world's greatest expert in it, but it means that you actually use the product. So I recommend filtering by those kinds of categories, pick four or five of them, and then look at the products that are in the top 100.
00:11:21
Speaker
Any product in any of those top level categories on Amazon that's in the top 100 is selling a ton. So those are the big markets you can identify. Create a list of five, 10, 15 of those that you could possibly be interested in selling those products. Then,
00:11:37
Speaker
Start opening up those top selling products and reading reviews. What you want to look for is all the products that are selling well, that are competing with each other. Find out what do people like, what do people not like, and who is buying these products.
00:11:50
Speaker
After you read dozens of these kinds of reviews, Read the, I don't think you'll probably ignore the one stars because those are typically just crazy people, but would recommend reading the two, three, four, and five stars and see what people like and don't like and who is buying it. Start taking some notes on that general product category and you're going learn a lot about that space because the next step is you want to create a uniquely positioned version of that product.
00:12:13
Speaker
The copywriter Ivaldo Albuquerque, who wrote one of my favorite copywriting books, it's also very short, which is nice, it's called the 16-word sales letter. His first question in there for you as you're preparing to write your copy is how is this different from everything else that I've seen?
00:12:29
Speaker
Because humans crave novelty. We're wired from thousands of years ago to notice things that are new because it was in our best interest to make sure we didn't die. And so as humans, we're wired to notice new stuff. So when you're launching a new product, you wanna make sure you have something unique and different that people have never seen before. So you're taking this big market, you're looking at all the products that are selling well, you're digging through there, finding out who's buying, what do they like and not like, and then how do you create your own niche within there?
00:12:58
Speaker
A simple yet powerful example of this is dude wipes. These guys saw baby wipes, which not just babies were using, adults were using, men, women, and they ended up basically taking this massive category of baby wipes and created a guy-focused version, black packaging, manly sort of language, sort of tongue-in-cheek comedy on their packaging, and they built a massive multi-hundred-million-dollar business that Because they found this big market and found a hidden monopoly within there, which they didn't have to go any more complicated than baby wipes for guys. Now, if you're going after a bigger market, I don't think you could probably make a coffee for guys. That's not narrow enough because that market is so big. And so it kind of depends how big the market is for how niche you need to go to find your own hidden monopoly. But dude wipes are a perfect example. And I'll give you another example here in just a few seconds. Next, you need to get pricing and cost of goods sold. You can just do this through Alibaba, go to Alibaba, search for the product, or do a quick Google search, type in whatever the product it is, plus manufacturer.
00:13:59
Speaker
And your main goal here is just to validate that you can sell it for around four to five times what it's gonna cost you to make it or to source it. Now, your pricing can be 20 to 50% above other premium products. To give you an example, regular mayonnaise is like 28 cents an ounce.
00:14:17
Speaker
Avocado mayonnaise, a more premium version, is 67 cents an ounce. Primal Kitchen, which was sold for $200 million, dollars their avocado mayonnaise, an even more premium version, is 83 cents an ounce, or 24% above your regular avocado mayonnaise. So when you're trying to figure out if you're gonna have the margins to there to do this product,
00:14:36
Speaker
that you want it to be four to five times above the cost of the product, but you can sort of bake in that the selling price you're gonna be able to sell at is anywhere up to 50% more than other premium products currently sold
Testing and Launching Products
00:14:48
Speaker
in that market. The last step is to test small and get testimonials and reviews.
00:14:53
Speaker
And so you wanna validate, you've done all the research, big market, you've got a niche appeal, but you're not always gonna be right. So I recommend even at our stage, we've got this business that does 50 million plus dollars a year. We still, when we launch new products, we know there's not a hundred percent success rate. So we try to reduce that risk as much as possible. We're about to launch what could be a hundred million dollar product, but we're starting with just a thousand units. But we're preparing that if this thing sells like crazy, like we think it will, that we're ready to ramp that up.
00:15:20
Speaker
But we don't want to add in multiple thousands of units. Because we could have got something wrong on the flavoring, on the packaging, could have got something wrong on the general appeal of the product, may need to change the name, who knows? So especially if this is your first product or you already own a business and you're launching your next product and it's not as big as ours, or even if it is, try to test as small as possible. Get a good product live with good packaging, good branding, do all those things right. But other than that, keep your risk as low as possible. And then your first goal is to get it in the hands of real people, real customers, so that they can give you feedback
00:15:51
Speaker
on the product itself so you can improve it, but also so you can get initial testimonials and reviews that you can then use to put on your landing page in your ads and make it way easier to sell more in the future. So to give you an example of how this whole thing has worked, I wanna talk about the electrolyte market. So Trace Minerals was founded in 1972 and started creating electrolyte products.
00:16:13
Speaker
Then Hammer Nutrition, I remember back in the day, i was doing you know some endurance cycling. I ran a marathon. I did this long bike ride and stuff. So back in the day, I was using Hammer Nutrition electrolyte products. They were founded in 1987. Then Noon, which is one of my favorite electrolyte products, a little tablet I throw in a bottle of water when I was doing a bunch of jujitsu. That was the only way i could stay hydrated in Texas when it's like 100 degrees outside. ah But those Noon tablets, they were founded in 2004 and got to over $100 million dollars in sales. Then Liquid IV was founded in 2012, and they were acquired by Unilever in 2020 and scaled to a billion dollars in sales. So you would think that like, oh, man, this electrolyte product, that everyone's already done and I can't enter this market. But then Element came out in 2018.
00:16:56
Speaker
They were not the first in this market by decades, but they were the first to enter this big market and focus on a low sweetener, high salt electrolyte.
00:17:07
Speaker
Now they're valued at an estimated $200 million. dollars Big lesson here, find your hidden monopoly within a big market. That's step number one, what you sell. That's what really matters when it comes to succeeding in e-commerce. Number two,
00:17:22
Speaker
How you sell it. So we know what to sell. Now, how you sell it. This is the second out of three things that really matters. Big misconception in e-commerce is I need more traffic. If I just could just get more traffic, my business is going to scale.
00:17:35
Speaker
I started doing e-commerce in 2009. Started learning more internet marketing, copywriting, conversion, optimization, landing pages, and all that. More like 2010, 2011. twenty ten twenty eleven And so before I started, before I did any of this sort of stuff, so I never enjoyed this, there was the days of 5 cent clicks from Google. If you hear guys that started 20 years ago doing this stuff, they're like, oh man, back in the day, Google was so cheap, I could get 5 cent clicks, was just printing money.
00:18:00
Speaker
And so that was before my time. When I first started, I started my first e-commerce business doing SEO. Back then, you could run software and build a bunch of links and rank stuff almost overnight. It was pretty awesome until it stopped working. Then I switched to AdWords, Google AdWords, advertising on search keywords when it was a much simpler platform. That's how I scaled to a couple of million dollars a year.
00:18:21
Speaker
Then I found an early opportunity on Amazon and created creating a course because nobody else was doing this stuff back in 2012. And that business exploded. But those are my initial traffic sources, SEO, AdWords, then Amazon. Today, we scaled our coffee company basically with Facebook ads. And it's still our biggest channel. But for the first year and a half, all we did was Facebook ads. Then we added affiliates. Then we added Amazon, which is our fastest growing channel right now. And then we've added every other possible traffic source you could imagine.
00:18:49
Speaker
Every ad platform, every organic type of traffic, now we're doing AI optimization. And now we're working on doing a lot better job with influencers and they're going to start advertising on more podcasts. So the traffic sources are always gonna be changing, but the principle of how to access that traffic and what really matters with the traffic
Maximizing Customer Value
00:19:07
Speaker
never changes. Give you another bigger example, Olipop.
00:19:11
Speaker
built their massive business from 70 million in 2022 to 200 million in 2023, primarily with social media and influencers. They have over 1.7 billion views on TikTok.
00:19:22
Speaker
Traffic sources are always going to change. How you can afford that traffic is never going to change. And I like to call it the visitor value engine because there's something that I call the value gravity law, which means all traffic flows to the businesses that make the most money per visitor.
00:19:40
Speaker
It absolutely has to, because if you're a big platform like Facebook, for example, the biggest advertising platform for most e-commerce businesses, it's based the primary factor of whether your ad or somebody else's ad is showed to one of their users is who bids the most, who can pay the most.
00:19:56
Speaker
And so if you can pay the most to get your ad in front of somebody else, then you win. That's how you win the entire game. And even brick and mortar retailers work by the exact same principle. They have limited shelf pace in their stores and they're gonna put the product there that makes them the most money.
00:20:12
Speaker
So your whole goal in business, whole way to get traffic, because traffic is never the problem, is to make more money per visitor than all your competitors. And the formula for this is fairly simple. It's just conversion rate,
00:20:25
Speaker
time lifetime customer profit. Conversion rate, how many orders do you get versus how many people visit your funnel or sales page? So that's conversion rate. Lifetime customer profit is if you get a group of customers, how much money do they give you? I typically look at 12 months.
00:20:40
Speaker
How much do they give you in revenue and sales over that 12 months? And then how much does that equal in profit? Hopefully you can simply ah multiply that amount of revenue by your average gross profit. That's good enough. That's exactly what we do. Conversion rate times lifetime customer profit is your visitor value.
00:20:58
Speaker
The higher your visitor value, the more likely it is that all the traffic's gonna flow to you because you can bid the most. For example, if your visitor value is $10 while for your competitors, it's $5, at $4 cost to get somebody to your page, both of y'all, you're both running traffic, you're both making money.
00:21:15
Speaker
At $5, they're breaking even. You're doubling your money. At $7, $8, they're losing money, burning cash while you're still printing money. They're out of business. You're scaling to the moon. That's the power of visitor value.
00:21:27
Speaker
So here are the primary steps of the visitor value engine. First, you gotta get sales coming in. The first step is to increase your conversion rate by optimizing your hook or main appeal on your landing page and for your product.
00:21:42
Speaker
Get lots of proof, which is why I like to get products into people's hands, get lots of testimonials, images, videos, and text testimonials. And then third, optimize your offer. And so first for your hook, you can test that, come up with five to 10 ideas of what are the main reasons people would possibly buy your product.
00:22:01
Speaker
create a landing page and just change out the headline. Test a few different headlines and find out what is the main reason people wanna buy your product. That's your hook. Two, proof you can't have enough. Just keep adding that as long as you possibly can. Don't start with zero, but make sure you add text, testimonials, and star ratings, images, and videos. And then third, your offer. This is also gonna help you increase conversion rate, but just make sure you have a strong guarantee and a reason to buy now, some sort of discount and a strong guarantee.
00:22:30
Speaker
The second is you need to increase day one average order value. So you need to get customers to pay as much as humanly possible up front. A friend of mine, Ezra Firestone, had something that that he said that stuck in my head for many years now. He said that, you know, an average repeat purchase rate for a Shopify store is like 25%.
00:22:50
Speaker
And so even if you're selling great products, doing a great job on customer service, people are happy. 75% of the people that buy from you are never coming back. That means all the money you ever get out of those people is on the first and only order. So you have to get as much as ethically possible out of them on day one. And the way you do this is by offering people better deals. Everyone likes better deals. You're not tricking anybody or any that kind of stuff. You're just saying like, hey, you could buy one unit or you could buy two units, three units, four units, five units, six units and get a better price. Or you can add these complimentary products in and also get a better price or get free shipping. And so the first step is to add bundles, which is just multiple units or multiple products at a discount.
00:23:30
Speaker
Then you add something called a pre-purchase upsell. So if you were to visit our landing page and you click the add to cart button, we have a little pop-up box that asks them to add even more to their cart. And so that's a pre-purchase upsell. Sometimes you can do it on the cart itself or on the checkout page itself.
00:23:44
Speaker
Third, post-purchase upsells. So this is after the first order is locked in Then you offer them more stuff before they hit the thank you page. And then fourth is shipping optimization. Generally, the best rule of thumb is that you want your free shipping tier slightly above your average order value. So if your average order value is $50, maybe you want your free shipping tier to be 55 $60.
00:24:08
Speaker
Most people way under optimize this and also see if you can just keep bumping up your shipping price. i had a guy that came to us and he was selling, i think like $5 million dollars a year and his shipping price, can't remember what his free shipping tier was, but when people paid for shipping, which was a lot of his orders, he was only making like $4. He charged him like $3.99 or something. I'm like, look, if you bump that up to like $9.99, it's going to make zero difference in terms of conversions.
00:24:32
Speaker
but it's gonna give you an extra 50 grand straight to your bottom line. He made that change, took five minutes, and immediately had an extra 50 grand added to his bottom line. Absolutely incredible. So shipping optimization, how much you charge and at what level people get free shipping is another part of increasing day one average order value. Third, increase lifetime value.
00:24:51
Speaker
So first order, depending on the business, can be anywhere between 30 maybe 70% of your lifetime value. of your lifetime value Of the people who buy on day one, some are never coming back. Some will buy a lot.
00:25:04
Speaker
For us, it's basically we get 40% of our 12-month lifetime value on the first order. 60% comes from all the other orders after year one. Some businesses, like I have a buddy who sells gas masks,
00:25:17
Speaker
And in his business, I don't know his exact numbers, but my guess is because people are buying it for survivalism. They're scared about stuff happening in the world. And so he's gonna get a lot more of his value on that first order. Cause he doesn't have a consumable, doesn't have a subscription product. It doesn't mean one business is better than the others. It's just the reality of the business.
00:25:34
Speaker
But no matter what business you're in, you can still make the easiest money taking all your existing customers and selling them more stuff. And so the way you do that first is you have to get ahold of them. So I call this relentless follow-up. This means following up with them through email. This can be broadcast and autoresponders.
00:25:49
Speaker
SMS through postcard mailings, literally physical postcards and ad retargeting. Those are the big ones. So follow up with them every way possible with whatever your backend offers are. Those could be complimentary products. It could be to buy more of what you're already selling or in our case, to get people on subscription. So increase lifetime value because that's going allow you to pay more upfront to acquire new customers.
00:26:10
Speaker
Now, once you've done these, the fourth step is to ramp up traffic. And so I recommend starting with the default platform of the day because now you're going to have a high visitor value. So you can tap into pretty much any traffic source that you want. You don't have to hunt around for these super cheap ones. I would start with the default one. Default one today is Facebook advertising or meta advertising where you're advertising on Facebook and Instagram.
00:26:32
Speaker
That's where I would start. Maybe number two would be like TikTok advertising. Then you can kind of go down from there. You can use other paid media channels. You can use organic traffic, influencers. People have built businesses on all of these. What really matters is if you make the most money per visitor. Because if you're using influencers and they can make more money promoting your stuff than somebody else's, they're going to promote your products.
00:26:52
Speaker
This is exactly how we built our business at amazing.com up to a hundred million dollars in sales is because when affiliates promoted us, we paid them like $2,500 when they promoted our course and it converted at a high rate, which was more money that they can make promoting literally anything else, even more than their own products at the time. And so that principle applies no matter what kind of business you're in. If you can make more money per visitor,
00:27:15
Speaker
traffic will come to you. So I recommend starting with the default platform of the day, meta advertising or whatever platform you really want, and then model creatives or your ads, images and videos after what's working for other people. You can find that out just using Facebook ad library.
00:27:30
Speaker
Now, if you wanna go deeper with what I'm talking about here than what I'm be able to cover in this video, I highly recommend you join my newsletter. You're going to get a detailed breakdown of how all this stuff works. And I'm sharing with you exactly how I'm building my businesses that do around a hundred million dollars a year and are growing by eight figures every single year.
00:27:46
Speaker
Click the link in the description below or visit mattc.com slash newsletter.
Sustainable E-commerce Practices
00:27:52
Speaker
The third thing that really matters when it comes to building an e-commerce business is how you run your business. This is why so many people fail at e-commerce. You're building a real business with real potential, not some short-term hustle to game a platform, whether it's Google or Amazon or Facebook or YouTube or anybody else. This is also why a lot of early e-commerce hustlers quit. They started creating YouTube videos on how to do e-commerce, and the next day they're doing crypto and Bitcoin and whatever else because they couldn't figure out how to run an e-commerce business like a real business, even though they were in the right place at the right time.
00:28:24
Speaker
They didn't know how to build real businesses, which is also why As I'll say again, not a big fan of dropshimmy because I don't think it's the best business long term. It's a nice little short term hustle to maybe turn a few hundred bucks into a few thousand dollars. Beyond that, it's a waste of time.
00:28:39
Speaker
So to show you what can go wrong when you don't run a business the right way, there was a member of ours that joined years ago. She went on and built a $3 million dollars e-commerce business, absolutely owned and dominated her market. Then Chinese competitors came in and crushed her on price.
00:28:53
Speaker
She kind of sat there and just let it happen month after month after month. She didn't differentiate her products. She didn't try to really double down on that her products were made by somebody in America, which helps sell stuff when you're selling to other Americans. She had too many products that just kind of ballooned. Her cost balloon was spending money on anything and everyone and all kinds of agencies. And the last time I checked with her, her business was about to die. She was almost in tears when I was talking with her. That's $3 million. dollars Somebody even offered that to buy it from her.
00:29:21
Speaker
to zero because she wanted a little bit more and didn't run her business the right way. I've been there too. I nearly ran a hundred million dollar business into the ground because I didn't run that business well.
00:29:32
Speaker
Fortunately, I was able to take a lot of these lessons to our newer business. and we, from the very beginning started forecasting. Here's how much we're going to spend. Here's how much we're going to make what's left over. kept our operating expenses extremely low so that we can reinvest almost everything into marketing, especially the first couple of years. That meant we were able to grow aggressively without losing money, without raising money, without any debt whatsoever. So I call this the growth flywheel. Number one, keep your fixed costs low so you can reinvest in marketing.
00:30:02
Speaker
Don't get an office. Don't hire a lot of full-time employees. Use contractors as much as humanly possible and even agencies, even though I'm not a big fan of most agencies. Some out there are fantastic, but it's just like finding a needle in a haystack. But keep your fixed costs as low as possible. Fewest number of people, fewest number of subscriptions, fewest operating expenses so that you can reinvest as much into marketing as possible.
00:30:25
Speaker
Number two, stay above board, especially with reviews compliance. I've seen people, there was ah some Chinese sellers that literally were doing a billion dollars a year, but they were gaming Amazon's review system, got kicked off of Amazon, and my guess is that was their entire business.
00:30:40
Speaker
Do not mess around with compliance-related stuff, legal and also reviews. Don't copy people's content. Don't make up fake reviews. Don't game those systems. Make sure you're above board and compliant with all of your marketing so that you can stay in this for the long term. Because whether you want to just keep building the business and reap the cash flow for the next 5, 10, 15 years, or you eventually want to sell this business, either way, you need to be above board with everything you do.
00:31:07
Speaker
Otherwise, a thing can be taken over or go to zero in an instant. Next, take care of customers, not just because it's the right thing to do, which is nice, but because those customers are what ends up turning into a higher lifetime value because they come back and buy more stuff and also free traffic because they refer other people. And plus those customers, not only do they come back and buy more stuff, but happier customers also give you better testimonials. They give you video testimonials, image testimonials, text testimonials, and all that stuff, which is why this is a flywheel, is that the more customers you get and the more you keep happy, the more testimonials you get, the higher your conversion rate, the more customers you get, and that's how your business news compounds and takes off. That's why I believe you know this past year for us and our business has really been like a leap ahead of any prior prior year. We were growing fast all these years, but this year it's just felt easier. It's been way more profitable, but also just felt easier because i think we finally reached this tipping point our team and i got to give them full credit for this does a fantastic job at taking care of our customers and you do that for year after year after year it builds this brand which a brand is really the associations people make with your products and your company and part of that is not just the images and whatever you associate in advertising part of it is like did i have a good experience with this company or not That becomes part of your brand. You can't just turn that on overnight. But over years, that compounds, and now they're referring other family members and customers come out of nowhere.
00:32:35
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And we're really realizing that now. So take care of your customers, not just because it's a good long-term thing to do, but because they turn into testimonials, they turn into referral sales, and they also turn into repeat buyers. Lastly, 80-20 your business all the time. Keep the main thing the main thing.
00:32:52
Speaker
Improve your products, especially your main best-selling products. Constantly make that thing better. i remember one time I met this guy at a brunch and he was selling just random products on Amazon, but he was crushing. He was doing like $2 million dollars a month, completely unbranded products too.
00:33:07
Speaker
And I was like, how are you doing this? He was like, well, he's like, every time I reorder, I improve something with the product. His umbrella that he had was dominating the market and literally got featured on one of the morning shows completely unprovoked because he just kept improving that product every single order. So we all have that opportunity. Keep making your product better. This is why Apple keeps improving and even non-technology products keep improving every single time because that is ah what allows you to stay ahead rather than some new hungry competitor like one of us to jump in and take your sales.
00:33:37
Speaker
Constantly improve your marketing and cut the stuff that's not working. So cut the products and cut the marketing channels that are not serving. Cut the ads not working. Cut the channels not serving. Cut the platforms not serving. Cut the products that aren't driving that many sales so you can make room for your main stuff to keep flourishing. Same thing applies to expenses.
00:33:54
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Cut the waste so you can reinvest more in marketing and stay ahead of everyone else in your space.
The Growth of E-commerce
00:33:59
Speaker
So the three things that really matter, what you sell, how you sell it, and how you run your business. If you feel like you missed the boat on e-commerce, consider this. 80% of all retail spending on earth still happens in person, in retail stores. Yet e-commerce, even though it's only 20%, is growing like crazy and is only going one direction. World online retailer e-commerce is $8 trillion dollars and is growing $600 billion dollars a year.
00:34:25
Speaker
And you can reach literally at least half of the entire world with a few clicks of a button on one of the five billion user platforms. And if that wasn't enough with AI, you don't need a large team to create fortune 500 level branding, copy and graphics and videos to claim your piece of this market. That's growing $600 billion dollars a year, but you can't wait forever. Big companies get smarter. Entrepreneurs get hungrier and opportunities just don't last forever.
00:34:53
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So therefore, the gold rush in e-commerce is not over. The resources available just finally got good enough for you to start digging. So what are you waiting for?