Josh Hadley 8:47

Interesting. Well, and I think that that’s, that’s what I would love to dive into is, you know, what is it that, you know, brands could consider getting into if it’s outside of Amazon. And also, as you talked, you know, you talked about how the buyer pool for these businesses is shrinking. So a couple questions, I want to ask you is what makes a brand more attractive to the limited pool of buyers that are there. And then number two, how do we dive into you know, building a brand that is more attractive?

Chris Shipferling 9:21

Look at say for an all Amazon business that’s you know, call it? I don’t know what to call it one to 10 million, right? That’s the you know, again, kind of selling to that limited buyer pool. The disciplines haven’t changed. You know, a lot of business brokers you’ll hear and rightfully so they’ll focus on trailing 12 month profitability. That’s really just an instrument to show that the company has been a profitable business. What types of protections Do you have an IP Do you have around both your product? And also like Do you have a review moat? You know, are you But where’s your company going? Is it going up to the right? That’s also very important. And then of course, it’s just really about, okay, I’m buying this, where am I taking it? Right? And so the attractiveness of that, which is, hey, look, if you’re just a really good cash flowing company. Okay, great. Well, I know I’m buying something that I could probably bolt on a few other products too. I can continue to launch new product I heard you know, Adam Heist was on your podcast. I love Adam. And, you know, he just said it the other day and one of his videos when you’re just purely selling on Amazon, man, it’s like an ice cube. Like, it’s constantly melting. And so if you look at and go, Okay, well, this is something I can consistently launch new products. Okay, that’s, that’s a good discipline, that’s a good, that’s a good discipline for me to invest in. So it’s kind of the same, I’d say, level of discipline, that’s, that’s even been around for the same businesses for the past decade, you know, why am I buying it, but there’s a huge discount, unfortunately, when it’s something that a is going to be, as never had the proof of concept away from Amazon, that’s number one, doesn’t have heavy consumer product protection. And what I mean by that is real product roadmap, real design, or, or utility patents on the product itself. And also just, you just, I’m gonna say you just know, because it’s so subjective, to say that, but you just know, it’s gonna be really difficult to grab market share outside of Amazon just period. So there’s a real discounting all of that. And so, and again, it just, it limits you to a specific multiple, but look, there’s buyers out there that are happy to buy those companies all day long. There are there are, there are corporate corporate folks who left corporate America and are looking, they retired or they retired early, they got laid off, but they’ve got a really good IRA, which is also a good vehicle to purchase companies, they’ve got enough leverage kind of personal wealth leverage to get an SBA loan, and they’re looking at it and they’re modeling it out and going, I’m gonna buy this for three, multiple and I’m gonna cashflow for the next 10 years, and I’m gonna grow it nice and slow. And the SBA loan doesn’t burden the business and I can make some money out of this thing. I mean, that there’s a real market for that. But it does play into my point, it’s just a skinny amount of it’s just a limited buyer pool. That’s it. Fascinating.

Josh Hadley 12:18

I want to, you mentioned, you know, Adam Heist’s comment that, you know, your products on Amazon are kinda like a melting ice cube. I think that that’s an important thing for a lot of our brand owners to understand. And why is that? Chris? Why is that statement true that you launch a product on Amazon, and it’s essentially a melting ice cube? And what do you see? How does that play into, you know, you’re trying to build a brand on Amazon that’s only focused on Amazon.

Chris Shipferling 12:46

I mean, look, it’s very parallel to the product development process, you know, every product development process, and every textbook that you’ve ever read about PPD, or NPD, has a bell curve to it, right. And that’s essentially a melting ice cube, right. And so the principle is fairly identical, where I believe it tends to play out faster on Amazon is because majority of the products that are sold are not brand driven. And they’re driven, more or less to resolve for whitespace and less to resolve for a problem, which is typically what brings sustainability of an actual product that also plays into my brand story and my brand narrative and make something super sticky for a guy like you and I to go back and buy over and over and over again. Right? I think that that does, I think that plays a bigger role, where again, you’re just kind of going, and we’ve all listened to the same content. And by the way, it’s great content, like it’s great for people who just want to do this, right, which is, here’s the here’s the trick, you go to Helium 10, identify these keywords that are not, you know, go to Google, find the keyword trends that are now at you know, it’s like finding an Altcoin man, you know, the Altcoin that said, like 10 cents right now, and you read a little bit about the project behind it, and you’re like, this thing is gonna be $1 In two years, I’m gonna buy a million of them. And I want to be very wealthy over time. It’s, you know, it’s that same kind of mentality where it’s like, I’m gonna research the keywords that I have that people are searching for. And then I’m going to resolve for the trend, or the keyword, I’m not actually resolving for a consumer problem. The iPhone, everybody uses Apple as an example. But the iPhone resolve for a phone problem, right? It brought the computer to the telephone, and it became your all in one and they just absolutely bland. I can I can do everything here. But they resolve for a lot of different whether it’s problems or just inconveniences. And that takes a real product development when you’re thinking about that, you know, that’s when you get utility patents introduced. That’s when you get it’s when you get design patents introduced. And I’d say the other the other way to not be a melting ice Keep we’ll get into this later is I’ve got a lot of activity away from Amazon that’s driving people to Amazon, you know, we see that with a lot of the with with the brands that we’re working with one in particular in the beauty space is driving a very nice Amazon business. But that’s because they’re driving a really great meta strategy right now. And so, and look at the end of the day, Amazon, Amazon’s a marketplace of convenience, man, like I go there because I want the thing in two days, I can trust that it’s going to come either in a day or two days or three hours. And I just would rather order there than on their Shopify website, although there’s things that are happening in the Shopify world that are making it more way more friendlier, like Shopify is moving to one page cart here very shortly, which is very different than what they’ve had in the past shop has made it easy. And then of course, you know, they’re getting Shopify, big commerce. And these platforms are working with three pls to try and become much more friendlier when it comes to getting product a lot faster, etc. But you get my point. So yeah, but that’s why it becomes a melting ice cube. So you’re just stuck in a place where it’s fine. If this is not a bad, this is not a bad methodology, by the way, like there’s no good or bad here. It’s just the result is very different, right? When I’m just constantly launching new products, but they’re going really well. And I’m cash flowing a lot of money, great man, the end result, the end is very different than the end over here, where I’m applying, you know, real conviction, real discipline, into a brand that I’m growing to be very prolific, and as prolific as I can make it, because that’s the value driver for someone to go. Yep, that makes a lot of sense for me.

Josh Hadley 16:43

I love that. And I think that our listeners, I think, want that right. I think all of us deep down, we want to have that, you know, house name brand, right? That people you know, actually care about because you’re right on Amazon, half the people never even know who they’re purchasing from. And most of the time, they just think they’re buying it from Amazon. I can’t tell you the number of people that buy our products, they get it and they see a picture of our family on the insert card, right? And they’re like, I had no idea that’s like, oh, how do you not see it? Like our branding is all over the place? Yeah. But it’s just not there. Yeah. So Chris, I would love to pivot our conversation at this point, like, I’ve drink your Kool Aid at this point of, I’ve got to get my brand to be more omni channel. Yeah, I need to make sure that I’m not just creating this melting ice cube that Amazon is getting more and more overseas competitors every day. It’s a race to the bottom right now, that is a render ultimately, I believe in the next five to 10 years, the people that will win on Amazon are going to be the people that are driving external traffic in other ways, right? They’re promoting their products to Shopify, or their own carts or their own retail strategy. And it’s trickling over, like you mentioned onto Amazon, just because people are aware of the brand itself. And it’s not no longer this arbitrage of keywords and PPC clicks. I think it’s all that’s going to be a very small portion of the market five to 10 years from now. So yeah, totally. That’s I guess that’s my question for you, Chris. Yeah. Yeah. I mean, look, it’s a brand owner. Yeah. How do we scale?

Chris Shipferling 18:27

It’s? Ah, you got several days? Yeah, I mean, look, the other thing to think about too, I’m just, I’m having some, I’m having some singles, kind of some quick hits. And then we’ll get into some of the more like, you know, triples and doubles here a little bit later. But I mean, even just hearing what you’re saying, you know, reading Kevin King’s newsletter recently, where, you know, he’s been doing a lot of deep diving into the new search engine that’s about to come out. And I think they announced some things that accelerate around this as well, where it’s a bit more like predictive in nature, and less about the keywords. And more about, I know you as a consumer, I know what you should be buying. Well, that’s, that’s always been happening. But that’s just now as as smart as it will ever be. And the other thing we can’t forget, we tend to get into a very myopic view that Amazon is the static thing, and that it’s just kind of Amazon, Amazon, Amazon and everything that goes on around it. It’s just like, well, we don’t really pay attention to it. TikTok is about to revolutionize how you purchase product 125,000,000%. It is going to be very interesting to see what happens in this quarter. Because they are coming after the jugular of Amazon, no question, zero question. So as a business owner, you’ve got to start thinking about that those things when it’s like, well, well, what does a TikTok strategy look like? Well, that’s heavily doused in influencers in your own videos and getting as many affiliates as you can to drink that kool aid because you’re offering them you know, actual cash to sell the product. And it’s going to be a lot more of that and I’m telling you, it’s They’re making it they have a relationship with shipbob. We have a client going we have two clients, three clients right now actually going through the process of getting on a TikTok Shop. It’s not easy. It has been one of the hardest things I’ve actually seen a client have to do. But

Josh Hadley 20:15

Why is that ?

Chris Shipferling 20:16

There’s a lot of red tape to get there. There’s a lot of like, it’s a longer application, there’s a ton of applicate. It’s like basically bottlenecks. So it’s a lot more administrative why it’s been so hard. And then also, I want to say they only have a relationship with ship ops. So like, I don’t think you can actually ship from your own three PL, just yet. I think you have to do it through Ship Op. I think I could be wrong in that. So I’ll circle back with you. After the podcast to put in the show notes. Chris was actually wrong. ChatGPT was right again. So anyways, that’s just a kind of a quick hit that I was thinking about. But But yeah, I mean, you’re totally right. I mean, when you’re really thinking about and your business owner is going okay, well, how do I actually scale from here? How do I grow from here? Well, look, you know, when you started your company, you said I’m gonna just go to Amazon, it was all about Amazon and less about product in some in most cases. And again, I’m also speaking from having talked to a lot of founder owners that have Amazon businesses. So it’s not like I’m just throwing this out of, you know, thin air, some hat, this is coming from some real context. But it’s more like, Hey, I’m just gonna go find a product, I’m going to sell that widget through Amazon, that’s kind of what it’s been. And there’s been more strategy and more resources deployed around how I’m going to get the widget at a cost, that’s going to convert the consumer and pack my way into being on page one as fast as possible, and finding the honey holes and reservoirs to quick growth, quick, quick hits, right. And I think you’re shaking your head, because yes, we all hear the same type of content and have been hearing this for many, many years. And if you really want to now grow and scale your company away from this sales channel, which my friend Ben Leonard, who I don’t know if you’ve met him or not, says

Josh Hadley 22:04

it’ll be actually coming on the podcast a few episodes after you.

Chris Shipferling 22:08

Sweet! He says eloquently, Amazon is just a sales channel. And so when you’re thinking about your channel expansion and your channel strategy, you’ve got to sit down and go, number one with my with my product, can I actually do it, and you got to have the hard conversation with yourself. Because just because you made on Amazon doesn’t mean that the stet, you’re gonna actually be able to drive a lot of consumers to a website to convert. And there’s a lot of reasons for that. A, you may have been a part of that rat race and almost commoditize your product. And so it just doesn’t make a lot of economic sense. I mean, to be honest with you CAC away from Amazon cost to acquire the consumer away from Amazon, and ao V. I mean, look, man, you’re talking 20 to 30 bucks to acquire, at least when you’re optimized, at least, right? Yeah, and you’re talking, you’re talking a OVS have to be well north of that, at least double that, then your LTV has to be about triple that. So like, I’ve got to have something that either on my first handshake, I’m very profitable, and I’m really profitable. Or I can afford to acquire the consumer at $40 or $30. Knowing that my LTV is $180. And so these metrics now matter, you got to really think through that. So that’s how do you think through that? What are the ways to think through all of that? Well, number one, you always start with your product, your consumer products company. So do I have something that people will want to come back and buy over and over again, is my product good quality? You know, do I have something that is highly, you know, highly protected, and highly defendable, and really truly differentiates myself over the next guy, because on DTC I can’t hack, I can’t hack my way to conversion. Like, I’ve got to be really good at selling my product. And if you don’t have a whole lot of bullets in the chamber to sell the product, well, you’re going to drive a lot of traffic, and they’re gonna go, Yeah, I’m good. This is just — this is cheap. This is not something for me. Like, I’ll just go find it on Amazon. And if I’m just the customer trying to find cheap, I’m just going to find it on Amazon. But there’s so many other, there’s so many other things you have to deploy to get people in that mindset of thinking about you as a brand. And so there’s a lot of ways you also have to reach that particular consumer. So then it’s about the acquisition strategy, right? So I look at and I go, Well, where can I expand as a DTC? Is it retail, what retail, but then you also have to go do I have the actual product? Is the product ready for both DTC and retail, and then you got to think about all the acquisition channels. So if you tick those boxes, you say, yes, I’ve got the product. I can afford this, knowing that actually, CAC is not going to be 30 It’s more gonna be like 100 Plus, I mean, it takes a minute. So you gotta model all that out and be prepared for it. Um, Then you’ve got to really go, Okay, if I tick those boxes now I’ve got to start thinking about, Well, where are the acquisition channels I want to spend time in? And where are the acquisition channels that are really going to drive the best traffic and thinking about that marketing mix. And I want to say one thing, and I’m saying a lot. So bear with me, not every marketing mix is the same, what works for one person is not going to work for another person. And that’s the other mentality because Amazon is a very templatized type of approach it like x and y, it will always equal A away from Amazon, I could I could go through all four of our clients right now that we currently work with. And every single one of them has seen success through different acquisition channels. And each one of them have a very different story. There’s elements and threads that are very familiar and similar. It’s not one size fits all.

Josh Hadley 25:54

Interesting. Well, Chris, I would love to. So let’s kind of take this chunk by chunk here. Okay, so we’ve got a brand, we want a 10x our brand, okay, we know that Amazon, we need to start, we need to see Amazon more as our sales channel, instead of the only sales channel, right? We have an Amazon brand, I think that people need to, if you really want to grow and scale a brand, you’ve got to stop thinking of yourself as an Amazon brand. So then you have to start thinking like, okay, what are other channels that I could get my product distributed or sold to right, so you’ve you mentioned TikTok shop. You’ve got Walmart, you’ve got Etsy, and then now you’ve got Teu and Shein and some of those other guys, right. So those would be like kind of third party marketplaces. Then you’ve got your own DTC website, whether it be WooCommerce, Shopify, DTC, that’s where your customer acquisition cost, that CAC is going to be pretty darn high 100 bucks just to bring somebody in. And then secondly, or Lastly, I guess you’ve got retail, right, wholesaling your product into retail stores. And so, Chris, I guess the question would be, you’ve got a successful Amazon seller, we’ll say, okay, they’ve they’ve hit the seven figures on Amazon. So out of all these channels, where would you recommend somebody starts? Or does this all go back to the earlier point that you made that it’s like, everybody’s different? And it’s always a unique approach?

Chris Shipferling 27:30

So I would say it’s a bit of mixture. It’s a mixture of both. So yes, I would, I would peanut butter that everything’s different. And it’s always a unique approach. You know, the easiest thing for an Amazon seller to do or someone who’s traditionally sold only on Amazon, the easiest thing for them to do is to go to what I would call the next concentric circle, which is other marketplaces. That’s, that’s simple, right? Walmart started to act very much like Amazon. It’s growing like crazy. I still have not seen the results that everyone’s been shouting. It’s still very much a small percentage in comparison to Amazon. But it is growing. There’s a lot more sellers there. I just think Amazon still I mean, Walmart still has a ways to go to become more friendlier for a lot of Amazon a lot of Amazon sellers their AOV is less than 30 bucks. And if you don’t have Walmart+, which a lot of people don’t have Walmart plus, you and I both have Amazon Prime you and I’m guessing I don’t have Walmart+, I’m guessing you don’t have it either. Well, there you go. I know it’s anecdotal. And it’s a stupid stat. But it’s something right? Well, if you buy anything less than 30 bucks, you get charged $8 for shipping on Amazon, or on Walmart. So they’re in a little bit of a I think that’s why you’re seeing a lot of sellers go, Hey, I put my stuff on Amazon or Walmart, put my stuff on Walmart, and I’m not really seeing the sales that everyone else is screaming. It’s mainly that reason. But it’s easy like going on eBay is easy. And you can even, you know, utilize software like ChannelAdvisor to go into Newegg and Rachid tan and all these other different types of marketplaces all over the world if you wanted to. That’s an easy, easy next concentric circle for a lot of folks who are traditionally on Amazon. But if you want to start now, thinking about the other concentric circles that you just mentioned, I would say even tic tock shop, I mean, unless you can get really clever with your content around your product, then you’re just going to really struggle to sell because, like, if you’re just showing a video of something that feels very commoditized and it’s not a great price point, you’re probably just going to be spinning a lot of tires on TikTok but you’ll I mean, who knows you might who knows who knows like again, I’m not claiming that whatever I am saying is like gospel it’s who knows you could have a great experience but you know, typically what you find I bought a I bought an external monitor from from TikTok Shop, right? Like this thing just sets up next to my computer. It was 95 bucks and like my TikTok was just flooded with their videos, and easy videos like Okay, do you go to different work? Do you go to Starbucks to work and blah, blah, blah, it’s like, boom, want that, right. So even though it’s a little bit more commoditized, they did a clever video nailing their their consumer. So I’d say that concentric circle would be like TikTok Shop. And then of course, I think the next and things like that, I’d say the next concentric circle would be d to c. And that’s a much harder go. That’s everything we talked about earlier. So I would also, I would also put this in a hierarchy of difficulty, right, kind of as you were talking through it. And then I think the final, the final piece of difficulty is wholesale, you know, fair makes it super easy for anybody to sell their product. And you know, it operates very similar to a marketplace, it’s very much low touch, you know, you have to have some level of customer support, some some level of sales support, but very minimal. But you’re not going I mean, you’re only going to do I don’t know who you’ve spoken to about fair as you’ve been consulting with folks. I mean, I’ve never seen it go. I’ve only talked to one person where they’re like, oh, my gosh, I’m doing millions through fair.

Josh Hadley 31:04

Yeah, I haven’t. Yeah, I haven’t heard anybody just like, revolutionize their business. And now they are all in on the whole, wholesale. Yeah.

Chris Shipferling 31:12

And so like, exactly. And you mentioned Etsy, even though it is a marketplace. So I would I would also put, you know, Macy’s and Home Depot and all those marketplaces. But then Yeah, so you’re getting to TikTok, then you get to, you know, you get to DTC and then with retail fair, and then that’s when I think rubber starts to hit the road, man, that’s when that’s when you feel the brakes, I think, a lot harder in that circle. Because you really have I mean, if you really want to be in retail, how will we How do you define that? I define it by being in a retail environment, like a Best Buy a Kohl’s a Target, a Walmart, a byebye, baby is making a comeback, you know, any of these types of retail environments. I just talked to somebody this morning about this, you can get online target plus, even though that’s a very weird thing going on at Target Plus, right now you have to have at least 100 SKUs. And still a buying process. And it’s just they don’t have their act together yet. They’re much more liberal on their website, you want to get in their store, that buyer only has this much space for you. And that space has been allocated for so many dollars per store per week, and so much profitability per store per week. And the buyer is heavily graded and judged literally their bonus is judged on their planogram and the program that they’ve put in for their particular category or subcategory. So you better have something that you that everybody stinking wants and go by the way, it’s not commodity, because that’s why they have their private label brands, they just take all commodity and just say I’ll make it myself, like, I don’t need your commodity, that’s awesome that you’ve got 55,000 reviews. But if I’m just making something that’s 20 bucks, I’ll just, I’ll just do it my own brand. And I’ll make way more money than just putting your stuff in here for that type of product. But if I’m really going to buy into something new for this shelf, Oh, buddy, you better come heavily packed with some data, you better have some unbelievable innovation, or branding that just knocks people’s socks off packaging that is just out of this world. That’s the hardest concentric circle. And you know what some of your listeners may even refute what I’m saying and say, Well, I got into Target stores. And it’s like I’d love to talk to you. How long did it last? Why were the conversations? What were the basis for why you got there, you find very, very rare. We have one client we work with that the target buyer actually reached out to them. But that’s because they nailed it with branding. Like they’re one of the most well branded clients I’ve ever worked with period, end of story. I’ll share it with you later. And you’ll go Oh, wow, I get it. But that’s somebody else. That’s the extent of the exception, not the norm. So yeah.

Josh Hadley 34:04

So with that being said, and I think with retail, I think it’s important for people to understand, like retail is definitely a totally different beast, a couple things for you, for anyone to consider. Even just going on to Faire, I know that there are other people’s business models where they will go acquire your product on Faire and then go flip it on Amazon. So you need to be you know, you’re only kind of creating some competition for yourself and your own Buy Box. When you do that. That’s one consideration. And then number two, if you’re wanting to get into these big box stores, you need to start like the amount of capital starts to change, right? Because you’re going to be sending in 1000s of units. You have to upfront all the inventory and then guess what if it doesn’t sell, you eat all of that inventory back right because this retail game is not an easy Hey, once I get in the You know, the coast is clear. It’s, you’ve got to be paying, you know, for slotting fees, which means where’s that my product being located? Is it on the bottom shelf? Or am I sitting in the prime spot in the middle? You’re paying for that? Yeah. 100% like you pay for Amazon ads, if you want to show up top of the page. It’s more expensive. That’s right. I mean, there’s you could go on and on. But I think our sellers need to understand like, it’s a different ballgame, you need to have a very good strategy. You do like we’ve all learned about Amazon, you’ve got to invest all that same amount of time, or even better partner with somebody like yourself that’s kind of been there, done that and has the who’s right, that know how to get things done.

Chris Shipferling 35:45

Yep, that’s right. So I agree with everything you said. I mean, look, bottom line, it takes this is on average. So again, this is just average, three years to get profitable in retail, and expects point five row as your one that’s good, that’s actually really, really good. Because it takes so much to get the brand sticky inside of a program and planogram to give you the opportunity to, to land expand, that’s what they talk about a lot in retail, land, expand, and then sustained. So that modeling means that there’s a lot of investment in capex that goes into year one and two. And then in year three, you start to feel the relief and then year four or five. Yeah, I mean, dude, you’re, you’re adding so much more. At that point. You’re a prolific company, and you don’t have to, you don’t have to do as much to drive the consumer to the store. You know, it’s semi take take a look at someone like Manscaped you know, that’s somebody who went into retail and had a wonderful DTC business and Target pursued them, and they went into Target exclusively. And we know that we know the logistics company that manages all their logistics. It’s actually one of our clients that we’re taking to market and the law of average is very real. We’ll leave it there. Even if you’re even if you’ve become somewhat of a strong brand on Amazon, let’s just say it’s Amazon and you go because there have been brands have gone from Amazon to you know to retail again we pick on him there’s because there’s only about three that have actually done it really successfully. But you know, even even with someone that’s been a prolific people know who they are going into retail is still there’s so much profit, you nailed it, dude, you nailed it with the slotting fees. And you now just there’s so much program and return percentage, and you know, about upfront you, you up front of everything. And it’s 90 day terms, like so I’m buying the product getting paid forever. Yeah, you’re not in tip, typically, you’re not getting paid for six months, from the time that I put the order in with the factory, I have got to I’ve got a hole that cashflow for six months. So that’s honestly where great abs come in and short term. You know, po factoring plays a really good role with brands that are just knew to retail. Yeah, it’s actually a really, it’s a really good way to go because you’re like, Screw it, I’m not gonna be that profitable anyways, I’m out, we’ll take a loan to make sure that this thing gets really, really off the ground.

Josh Hadley 38:10

Yeah, well, I think it’s fascinating. I mean, you talked about how you’re not going to be profitable for three years, you’re a half a percent, you know, as your row as point five row as I think an Amazon seller listening to this, I think they just they lost their mind. They’re like their jaw hit the floor. They’re like, Are you kidding me? Because on Amazon, we’re expecting 5, 10 ROAs it’s not there, we’re starting to shut down campaigns, right? Yeah. So just, it’s a different animal. It is. Chris, I would love to dive into maybe some case studies that you might have brands that you’ve worked with, just to kind of I think the hard part is we can’t lay out a clear path to say, we’ll take your brand, and then go here, do X, Y and Z. And then you’re just going to 10x your growth. I think what we’ve talked about is here, all of the additional like growth levers that you could potentially pull upon to grow your brand to 10x. But it’s going to require some testing and I think that’s the most important thing you need to do is always be testing different offers, different marketplaces, DTC, even experiment with some retail to see what gets you go. And so yes, I would love to hear what you’ve seen other brands succeed with, fail at, how do they pivot?

Chris Shipferling 39:31

Yeah, I mean, look, it’s a lot of what we discussed. I mean, you got to start somewhere. And I think a lot of the I think a lot of the frustration intention comes in when you and I are having this discussion and someone hears it and they go, Well, I want to be that concentric circle, that final concentric, concentric circle tomorrow, and it’s like no man, that takes a long time. And it’s really it’s building blocks. It’s building on other things on other things on other things. And again, it goes back to what we said earlier, both directions or paths are not are not wrong or right, they just have different results. And the end looks very different. And so if you want to choose this path to, I really want to 10x I want to grow, I want to be more prolific, I want to have channel expansion and diverse channels and diverse acquisition channels, I want to start owning my own data. And eventually I’d love to get into retail, and be an extremely valuable asset to a strategic who goes holy cow, like, I have to buy desks the other side, this is very my new point. But everybody who’s in retail, and you know, actual retail shelves, everybody’s reading the data, the IRI, the FTMX, the Nielsen data, and they’re seeing week by week who’s starting to gain actual market share. And that’s where corporate strategics that’s all they’re doing. And if you’re eating someone’s lunch in a category, that’s that’s, that’s where you sell for, you know, who is the Amazon brand? The the beauty brand that sold to Church & Dwight?

Josh Hadley 41:00

was, I don’t know you have Native deodorant sold, you have Zesty Paws, right

Chris Shipferling 41:07

There’s a third. And it’ll come to me later it was a but they sold for like, oh, gosh, 650 million. But again, it’s because they they’re they they moved out, they have the concentric circles. And they’ve found themselves in an extremely valuable spot to Church & Dwight, who is a huge private equity fund that buys and holds, to be frank, all these consumer product brands. And so what do I say to somebody who’s like, I want to do this, I want to kind of go? Look, you highlighted a lot of things I think it is about it is first off, you got it. You got to have a plan, man, allow us to say it right? You got to put together a plan, you got to put together a business plan. Where am I going to go first? How am I going to fund these things? Like I said, there’s there’s what I would call singles and doubles, and triples, and then homeruns. And there’s a lot of singles when you’re been an Amazon brand, because you’ve got the domain expertise to go into other marketplaces and crush, but there’s a ceiling, right, but an aggregate can actually bring some decent cash flow to your company to then fund the next level of growth, which is typically direct to consumer. But you got to have a very good solid thorough plan on how am I going to achieve direct to consumer, we talked about it earlier. Can I afford the CAC can I do I have the product and product development to actually achieve what needs what I want to achieve out of growth for this particular channel? What are the acquisition channels I’m going to test right? You know, a big thing that’s occurring right now is customer selling your product consumer selling your product, UGC ogci, called owner generated content where the owner is kind of the face of the brand and user generated content. They’re actually the ones selling the product on your behalf. You know, that’s a big thing right now. And that’s actually doing really well, well, five years ago, that wasn’t a thing. So following trends, testing the trend for your brand, to your point, taking, you know, 10% of your budget and applying it to just pure I mean, this is best practices for meta, you always have 10% of your budget where you’re using and just testing different method, testing different offers. Landing Pages, that’s something that you’re not used to with Amazon landing pages are everything, you know, deploying different potential strategies. Take colon broom, for instance, they grew exponentially because they created a very sophisticated quiz, they drove all of their acquisition, they are paid, paid traffic to this quiz. They went, you know, consumer goes to the quiz. And at the end, you get hit with a drip campaign of eight different emails. And they saw there, they saw their conversion go up almost like 300% just by deploying this as a strategy. Does that work for everybody? No, it doesn’t. So to your let’s go back to your point, like, what’s my plan? What’s the acquisition channels? How am I testing, and then also, I’m now going to layer in, the reason why I’m going to believe that I’ve got, what I would consider a really good plan is because now I’ve also brought in these experts to help me and I brought in these people who done that built the t shirt, etcetera. So what you ask for a case study, this is where we’ve seen success. We’ve seen this with success with our clients. You know, we have one client that’s in the custom rug business, in order for them to scale and grow two things, had to get the operations perfect. spent two years doing that started getting actual strategic bids from like real, which I can’t say on the podcast, but real strategic, big, big, big players. And it’s now ready to actually 10x and we have worked with them. The director of marketing came from Big Green Egg worked in the automotive industry, big mind big thinker has got we’ve been taught we’re talking to him today at two o’clock. I mean, just incredible strategy for now taking the brand from 10 million to 35-40 million. The operations can handle it so they’ve got the operational leverage now and you’re putting the right people in place just to absolutely go bananas. And so yeah, I’m rambling because I could talk about this for days and days and days. But yes, I mean, if I were to boil it down in a more simplistic way, it’s thinking about the those concentric circles have real business plans to them. One thing can lead to another, you want to have a building, you want to have building blocks that build on each other. Because I don’t necessarily need to rebrand for DTC or the other marketplaces, but I might need to rebrand or refresh for retail that’s happening to one of our clients right now. Wonderful branding. When we came in, we even said, look, you’ve got really good branding. But then when we brought, you know, a best in class, retail consultant, and we’re working to get into Sephora, or Ulta, and target, you know, we’re now working with a branding agency of who’s done a lot of work with, you know, big beauty brands. And we’re going through a refresh, both positioning messaging, and packaging, because now I got to talk to, I got to talk to the consumer in a different way, when I go, it’s got to be quick. I can’t look like anybody else. Make

Josh Hadley 45:59

makes a lot of sense. Chris, we could certainly go on for the next 10 hours, you and I just discussing different strategies and yeah, things that we could dive into. So Chris, I’m going to wrap things up here, and then let you kind of add on anything you think I forgot. But I love to leave the audience with three actionable takeaways from each episode. So here are the three that I’ve kind of noted. And then Chris, you let me know if you think I’m missing something. So action item number one, if an Amazon seller wants to 10x their brand, and they want to be seen as that like household brand name, you want to go you know, sell your brand for 100 million plus dollars. The first step and action item I would take if you’re not on multiple marketplaces, that’s your lowest hanging fruit right now. Go expand. Go copy and paste and go get yourself on all the other marketplaces. Okay, we talked about Etsy, we talked about Walmart, we talked about you know, Newegg and Rakuten, okay, now, is that going to be game changing amounts of money? No. But it starts to add up, right, it’s going to be that little snowball, imagine getting 5% of your current sales, from Amazon, but on each of those different platforms, right, they can start to layer up. So that would be action item number one, that’s something you can do with an existing team that you have in place now. Action Item number two, this is where things need to get a little bit more serious, is open up a DTC channel. And I would also kind of correlate, you know, maybe a TikTok Shop in this as well. So you kind of start experimenting with influencers, affiliates, that are going to drive traffic to a either a if they’re on TikTok, then it’s going to be to your TikTok Shop. If it’s off of TikTok, then you’re going to be driving it to your DTC website. Yeah, that’s right. And I think at the end of the day, you just need to see this as I’m going to throw a bunch of crap at the wall. And I’m going to see what if anything, I can get to stick. But knowing that this is not going to be an easy play, you’re going to have to test and just because somebody is doing an XYZ funnel and their ad looks this way, that doesn’t mean you can go copy and paste that and it would do wonders for your own right, which leads me to my third and final action item is find the who and don’t worry about the how. I think that so many of us that have grown our e-commerce business on Amazon, we are so used to — I purchased this course I followed the course I made millions of dollars. And I think all of that kind of goes out the window when you need to start focusing on DTC now, are there courses that teach you how to you know, create your own Shopify store and all that stuff? There certainly are. But if you’ve already got a million-dollar-plus business on Amazon, you’ve got the funds. And you can go a lot faster. If you go find the right who’s and you know, Chris, that’s why you mentioned it’s not necessarily you, you are not the person I would go to to say hey, what’s the right meta strategy for me? But you know, the right who’s, you know, the right who’s to get me into retail, you know, the right who’s to help me rebrand so that I do look better for a potential exit down the road. So what’s right, Chris, anything else you would add to that?

Chris Shipferling 49:22

No, I think you nailed it. The one the only thing I would probably add is on action. Step number two, there are really great BI tools and attribution tools that help you keep discipline and guardrails in your spend. So you can do what they call agile testing, which is it’s a little bit like kind of carpet bombing, but it’s lots of testing, stop and analyze, lots of testing, stop analyze. And so and then I also to that point, find someone who’s actually gonna be a big word. So I don’t want to I don’t want to be interpret like this is super expensive. You can find someone on an hourly basis, a good data scientist who can actually Read your data from these acquisition channels and with this attribution tools, and can tell you what is your data saying to you? We do a lot of now with our clients. And it’s, they obviously find that to be not only valuable, but they appreciate that. Yeah. Awesome.

Josh Hadley 50:15

Great insights. Chris, this has been an amazing conversation. We wrap it all up here, I’ve got to ask you my three final questions that I get asked every day. So the first one is, what is the most influential book that you’ve read and why?

Chris Shipferling 50:30

You know what you had Michael Gerber on here, and I have to say he’s either, E-Myth was a close second, or maybe even tied for number one, but look, Good to Great, man. It was the first business book I ever read back in 2000. And like the year it came out, and Jim Collins is just such an influential mind in not only leadership, but just how business owners should be thinking about their own company. And I use wrong, I use the bus analogy almost every day. And my business partner, Jason is extremely tired of hearing it.

Josh Hadley 51:01

For the right people on the bus and the wrong people off aloft,

Chris Shipferling 51:05

Right people, right seats, and your plan isn’t perfect, I kind of add, I’ve created some addendums to it, you know, the driver is your actual strip strategic plan.

Josh Hadley 51:17

I love it. Chris, second question here, What is a new productivity tool or software tool that you’ve recently discovered that you think is going to be a game changer?

Chris Shipferling 51:26

You know, I’ll go back to those attribution tools. We’ve been doing a lot with Northbeam. And while it’s more for, I’d say media buyers, Northbeam has been a wonderful attribution tool. Second to that, there’s, I have to say there’s a BI tool, because that plays a bit of a separate role, it gives you a lot more insights into your particular customer, the traffic that’s coming to the site. It’s called source medium, phenomenal. Like we love those guys, super, super smart guys who develop this software. And we always recommend that a client has both because if you and you have both, you have a more comprehensive view and read on what’s happening. Where’s my where’s my attribution? Where where are the can where’s the conversion really coming from? It lists everything on Northbeam? And then for those who are coming? Like we look at a lot of cohorts, right. And so it’s like, well, let’s analyze this particular cohort data. What’s the what’s the type of customer that’s landing on this landing page versus this landing page? And you can do a lot of you get where I’m going. It’s source, and North beam two. Great two great tools.

Josh Hadley 52:32

I love that. All right, Chris. third, and final question, who is somebody that you admire or respect the most in the e-commerce space that other people should be following? And why?

Chris Shipferling 52:40

Rick Watson no question. The guy is, like you and I spoke man, the guy is just super nice, super humble. But you know, I’d say aside from that, very insightful and thorough and thoughtful in what he types as far as posts on LinkedIn. And then he does a podcast. It’s like a 20-minute podcast, where he recaps kind of what’s happened the week before, I get a lot of my news from him, man, because like you and I write every day, we’re distracted, whether it’s business, family, kids, activities, etc. And I really appreciate like loading up LinkedIn and Rick post something where I’m like, boom, I love that. And just again, really, really good ecommerce insights. I think like I was telling you earlier, it’s not as much Amazon as more like direct to consumer omni channel. But I think for this audience, it’s a great person to to follow.

Josh Hadley 53:38

I love that. That’s a new name we haven’t heard before. So people need to follow Rick Watson, I appreciate the new recommendation. Yes. Absolutely. Yeah. Chris, if people want to follow you along, tell us a little bit more about GW partners, and SouthCol.

Chris Shipferling 53:54

Yeah, I’ll be succinct, you know, GW Partners, gets involved as early as possible as you’ve listened to the podcast to help affect every function of the business and optimize it for a sale on your time and for the valuation that you want. So instead of this noise and message of sell, sell, sell, sell, sell. Now, let’s take a few steps back, are you even ready to sell? What’s your goals? Let’s create a plan to get towards your goals. Let’s deploy the right people on the bus, wrong people off the bus, et cetera, et cetera. And eventually, we sell your company. I mean, we still do that. We’ve been doing that for us for six years in this particular ecommerce, consumer product space. And we’ll be doing it for a long time, but we sell your company, but what we’re doing now is a bit more of a hybrid model where we’re wanting to get involved as early as possible. On South Col. It’s very similar, but we are equity stakeholders in the business. We take minority equity, usually less than 50%. Actually a lot less than that, but that’s pure definition of minority equity. We capitalize the business through our joint venture with sellers fi and then you know, we both get the company Ready for sale through all the work that we do with GW and also with Escala who you know those boys very well. It’s not boys, huge team. And then we resource the company as well with multiplying. So I would say very, the biggest difference is equity versus you know, do you just want more of a traditional kind of consulting m&a relationship?

Josh Hadley 55:21

Awesome. I love it. Well, Chris, I appreciate your insights that you shared with us. He dropped a lot of knowledge bombs on us today. Lots to digest from this episode. So thanks again for your time. Yeah,

Chris Shipferling 55:33

Thank you, Josh. Appreciate it, man.

Outro 55:35

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