320: Derek Halpern On How To Get 250K Orders In 2 Years With Truvani

00:00
You’re listening to the My Wife, Quit or Drop podcast, the place where I bring on successful bootstrap business owners and dig deep into what strategies they use to grow their businesses. Today, I my buddy Derek Halpern on the show. And if you’ve never heard Derek speak or on a podcast before, well then you need to listen. Derek is known for telling it like how it is. And in this episode, we talk about how he grew his e-commerce business to 250,000 orders in just two years. But before we begin, I want to thank Klavia for sponsoring this episode.

00:27
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Not only that, but it is price well too, and you only pay for the messages that you actually send. So head on over to postgroup.io slash Steve and try it for free. That’s P O S T S C R I P T dot I O slash Steve. Now onto the show. Welcome to the My Wife, Quit Her Job podcast, where we’ll teach you how to create a business that suits your lifestyle so you can spend more time with your family and focus on doing the things that you love. Here’s your host, Steve Chu.

02:23
Welcome to the My Wife Quitter Job podcast. Today I’m thrilled to have Derek Halpern on the show. And Derek is someone I’ve known for over a decade now. And we actually met when he randomly reached out to me and said, yo Steve, you want to Skype? And I said, And since that conversation, Derek has gone on to create many businesses like Zippy Courses and many successful blogs, including my favorite one called Social Triggers. And in fact, I’ve witnessed this guy’s success over the years, along with many iterations of his hairstyle as well.

02:51
Anyway, the reason I asked Derek to be a guest on the show is because he recently started an e-commerce business called truevani.com, which sells health food with complete ingredient transparency. And within two years, he’s managed to generate over 250,000 orders and he runs a seven figure business today in just two years. And today we’re gonna discover how he did it. And with that, welcome to the show, Derek. How are you doing today, man? What’s up? Thanks for having me. Dude. It’s been 10 years.

03:18
I know ever since back in the day provincial and then you had this entertainment blog I want to say right? Yikes dude let’s not talk about that. Let’s think of all the dirt shall we? I had several different iterations of my life. You found me right as I switched from posting salacious celebrity gossip into teaching people how to better help themselves. Well that means I caught you at a good time then. Yes.

03:48
You did. So for those in the audience who do not know who you are, tell us why you decided to give up digital courses and the blogging space to go into e-commerce and why Truvani? Well, I mean, first things first, I kind of feel weird calling Truvani an e-commerce company. We’re almost in 100 retail locations right now. So our goal is to get into thousands of retail stores, hopefully by the end of the next year. Even though we started out as an e-commerce company, we’re really a brand that’s creating

04:18
products that we believe people can use in their daily life with complete ingredient transparency. And some of the products we’re making, you you might see like one of our products is a plant-based protein powder and you might look at it and think like, what’s so special about it? What makes our products so special is you look at the ingredient label and you understand everything that you’re reading. There’s no weird ingredients in the product because we believe that we should use whole food ingredients.

04:47
Whenever it’s applicable, you know, like even though it’s a protein powder It should come from pea protein pumpkin seed protein chia seed protein There should be none of the weird stuff. You know what I mean? Like no gums natural flavors or any of that So yeah, we start true Bonnie, but it really came it’s actually funny It came out of an email very similar to the one that I sent you more than ten years ago About ten years ago. I found a blog by Vani Hari and I liked your blog

05:15
I sent her a message, just had to be in like 2012 or something like that. And I was like, Hey, I like your blog. We should meet. I literally said the same exact thing. We met over Skype and we became friends. And I started to become very passionate, passionate about what’s found in our food. Not necessarily about like some people will go and say that ingredients are dangerous or not in danger or organics better or not better.

05:44
All that stuff is all up for debate, right? Sure. From my perspective, I like eating organic whenever possible. These are the things that I do. So I don’t want to debate about what’s better, but what I can say without a shadow of doubt in my mind is that I believe that ingredient labels should be transparent, right? There should be no underhanded stuff being done on ingredient labels.

06:13
Right? this is something that I, I transparency is something that I believe in very much. So I was talking to my friend, Vani, about this for years and how I started to learn that ingredient labels aren’t always so transparent. We always jokingly said one day we should make a company where we just make the product people use every day and put transparent ingredient labels on there. And we said this from 2012.

06:40
Until about 2017 for five years, six years or so. And then one day I’m having a, I’m having lunch with my friend, Deb and my other business partner. And he was telling me that he was thinking about getting into the physical product space. And he was, had some ideas on where he wanted to go. And then I told him about my conversations with, with Vani, our other business partner, about how I’ve been wanting to do this for several years. And it came at that perfect time in my life where I was getting bored of.

07:08
teaching courses to people. Personally, wasn’t really finding that as fun as I used to find it. So I was looking for something new. And we all just got together on Skype, didn’t even meet in person, got together on Skype, inked a deal. 90 days later, we pre-sold our first product. And that’s how it started. Are you still running any of the digital stuff today? Like I know social triggers is still up and are you still doing Zippy or is that all kind of on the back burner now?

07:36
So social triggers is the business and it’s on the background. haven’t, I think what happened was I don’t email that often, maybe once a month. that I do have a lot of great courses on social triggers that really benefit people. I have done a sale on these courses once a year. Last year, right around the black Friday time, I did a sale of it on the year before I did the same exact thing.

08:02
But I can’t say I actively run it. The reason why I do that is because throughout the year, people are emailing me saying, hey, can you sell this again? Can you sell this again? Because they heard about the course or whatever. And I eventually just sell them once a year. But I don’t really put that much effort into trying to sell it. I just basically send out an email saying, hey, these are available again. And then the people who’ve been asking usually buy it. You’re pretty much 100 % True Bonnie, right? Yeah. I don’t do anything else with my time. OK.

08:31
So one thing that you’re actually one of the few food based companies that I’ve actually had on the podcast. So one thing I kind of want to ask you is how does selling food work exactly? So number one, do you need any special permits, certifications or any testing done on this food in order to actually sell it? Great question. There’s a lot of stuff that you have to do. And I don’t want to say I’m an expert. We have experts on the team that handle this, but I can give you a little bit of feedback here around how that works. Part of

09:00
testing anything that people eat, there’s different protocols that need to be followed. Like you have to test for bacteria, foodborne illnesses, allergens, all that other stuff, Whether you’re testing for, there’s some of the big allergens you have to make sure that there’s no trace amounts in. And even though, for example, on our protein powder, our stuff is made in a facility where peanuts are in the facility, right? And there’s peanut allergies in the world that can kill people.

09:26
So we warn them and tell them there’s peanut allergies in the facility, like there’s peanuts in the facility. And we put this warning there just so people are aware. Is that required by law or no? It is required by law. I believe it’s required by law. I believe it is. Now we test our product to make sure there’s no peanut residue in the product. Like we test for allergies. But I think it’s required by law to say that it’s there. Like I said, I’m not an expert here. that’s fine. Yeah, yeah, yeah, of course.

09:55
I don’t want to get myself into trouble, long story short, we have to test for all this stuff. Yes. We have to submit our labels to, you know, we’re USDA organic certified. So we, when we’re making a product, we have to make sure that the product is passing USDA organic standards where they look into our ingredients to make sure our ingredients are organic and kind of do that process. We’re also rolling out that we’re non-GMO project verified now.

10:23
That means non-GMO project verified. have to go in and look at our ingredients, sourcing and our suppliers, make sure that they’re using non-GMO best practices. One of our manufacturing facility is GMP certified, which is good manufacturing practices. They had to get certifications for the GMP. And I know they’re always likely to get audited for something like this, know, surprise audits to make sure they’re following protocol. There’s a lot of stuff that goes into it when people are eating something is, is, what I’m trying to say. And you do need.

10:52
you want to make sure you’re doing all of it. We’re working with the manufacturer that does it. We also work with the legal team and all the right people to make sure we’re doing all of that as well. Here’s why I’m asking that question. Sometimes when I buy like protein powder at GNC, for example, I’m pretty sure none of that stuff is tested. I actually had a buddy who was trying to sell that stuff and he didn’t actually have to get all these certifications. And so that’s why I kind of want to make the distinction of, you know, are you doing all this stuff?

11:19
voluntarily just because it’s part of your brand or is it actually required? I mean, what do mean tested? Like tested for what? Like people could sell protein powder. Not tested, but certified or do you need some sort of permit or something to do that? You know, it’s so funny because I’ve heard that that exact story before when you sell protein powder, Oh, supplements aren’t regulated. They’re not regulated. It’s like, hold on a sec. Yes, they are. Yes. Everything you eat is regulated.

11:49
What do you mean it’s not regulated? What’s not regulated is some of these outrageous claims that people make for supplements, right? And there’s a lot of outrageous claims out there that people make around supplements. And here’s the thing, that’s regulated too. It’s all regulated. What’s not really regulated, I’ll give you an example. There’s a very popular green powder drink. And if you look at the website, it’ll tell you.

12:17
You know, look, you get your broccoli, your oranges, your this, your that. They show all these pictures of vegetables. It’s got five times the daily amount of oranges, four times the daily amount of spinach, vitamin B or whatever. Then you look at the ingredient label and it’ll say the number one ingredient when the ingredient is number one on the list, it means that’s the most prominent ingredient is like vegetable cellulose, which is basically sawdust. It’s plant-flavored. And then they dust in the vegetable powder. So they put in a lot of cheap sawdust.

12:48
They dust in the vegetable powder, because that’s expensive. And then they put in synthetic vitamins and minerals to beef up their vitamin and mineral content of the product. They make you think you’re getting your vitamins and minerals from the vegetables, but you’re really getting it from the synthetic vitamins and minerals that they added to the product. That’s an example of where some of this screwery happens, right?

13:12
If you’re making protein powder and you say there’s 20 grams of protein per serving, if there’s not 20 grams of protein per serving, you’re gonna get sued. Do know what I mean? Okay. It’s regulated in the fact that you can get in a lot of trouble if you’re lying on your labels. Okay. Okay. When you, Devin and Vani got together and you decided to create this food company, what do you source food? How do you find these factories? How do you ensure that there’s no chemicals involved? How’d you guys start?

13:42
A great question. We started by looking for a manufacturer, a co-manufacturer, a co-packer, as they will. We had an idea for what product we wanted to make, what we wanted to have in it. Then we had to find people who were experts at it. We luckily found, we interviewed a lot of people, man. Like a lot of people who make these manufacturers, like manufacturers, they just find someone and use them, right? That’s not me. I’m, I’m like neurotic. Vani is neurotic, Devin’s neurotic. We’re all neurotic people. And we found manufacturers, we

14:09
You know, maybe found 30 of them, whittled it down, whittled it down. We visited the manufacturer to kind of audit the facility to make sure that facility is legitimate. The manufacturer we found, and he’s now one of our, you know, best, you know, he’s one of our best reasons why we’re even in business is that they were already fans of Vani’s books. Okay. They were already on our team, if you will. And they were very upset.

14:37
at what some supplement companies were doing with ingredients and all that stuff. So when we were looking for people, we basically found people who were on the same team. They were not a bigger company. They were a smaller company, which is good for us because it meant that they didn’t have any, you know, preexisting relationships with big companies that were going to explode on us. You know what I mean? So.

15:05
We found people on the same team. That’s the first most important thing is to have people on the team that believe the same things you believe, because at the end of the day, you know, if they don’t believe the same things you believe, they may not take it as seriously as you. That green drink I was telling you about, I think the founders of that company just wanted to make green vegetable powder. I’m not even going to tell you that. I don’t know if they knew what the company did to them, but the manufacturer laced it with sawdust was just cheap. Put in the dusting of vegetable powder.

15:35
and put synthetic vitamins and minerals and I’m pretty sure they didn’t know better that that happened, right? This is how the things could happen. Like, you you can kind of get tricked. This has not happened with us because Bonnie is already an expert on ingredients and food. I’m naturally suspicious of every, of everything, you know? And it, it has allowed us to, find a good, a good person. Now back to the ingredient suppliers.

16:01
Ingredient suppliers need to be certified organic USDA certification. You need to get a USDA certification. It’s not easy to get that certification so When they have the certification it means they went through the USDA certification process, which means it’s usually good enough for us. I Will be honest with you though. We did in some of our research uncovered that some people were claiming to be USDA organic and They weren’t

16:31
Or at least we weren’t able to validate it and we don’t use those people. We validate everything that people tell us. We also test things like if we’re selling protein powder and it says 20 grams of serving, we test that, make sure that’s true. You know, like we, if we’re wanting to know what the heavy metal content is in our product, we test that too. We test, we test everything. So you found the co-packer first and that person is just responsible for, for bundling everything. Is that correct? And then you have to source the ingredients separately?

16:59
Or do those kind of go hand in hand somehow? It’s all tied together. Okay. It just depends on what product, right? Sometimes you have to source the ingredients yourself. Sometimes you do it through a co-packer. Sometimes you do it through another ingredient supplier. It’s all different for every product. can’t, I know what you’re asking me, right? You’re asking me for the one way this happens. There is no one way it happens. Does that make sense? All Let me rephrase my question. First of all, do you just Google this? I mean, how did you find these places?

17:28
Did you literally just do Google or did you already have some connections? Google was a big part of it. Asking friends of friends, having friends that did work in the business was helpful to try to interview for ideas and pitfalls. Through virtue of being social triggers, I had access to a lot of entrepreneurs that have done things before. So it allowed me to bounce questions off people who’ve been down that road before. Okay. So that was helpful.

17:55
with regards to the co-packer, there’s lot of research, right? You’ll find that there’s only so many there’s only so many co-packers in the United States, right? What is it? 300, it’s not that hard to just look up all 300 of them. Okay. You know, there might be more or whatever, but everything was in the U S right? That was a prerequisite. Yes. Our, our, our, our manufacturer, we manufacture in the U S correct. Okay. All of our ingredients don’t necessarily come from the U S and that’s a different conversation, but

18:22
You know, like our monk fruit comes from China because that’s where monk fruit grows. Our peas come from the US and Canada. Our vanilla bean comes from Madagascar. You know what mean? Like it depends on which ingredient. It’s a global thing. Let’s just use monk fruit, for example. I mean, do you just say Google monk fruit suppliers or is there? Was that all connection based or is there like directories for this? Yeah, you can find directories. There’s there’s all complete newsletters and directories on stuff like this. Absolutely. OK, OK. There’s one.

18:51
I guess what I’m trying to say is like, yeah, you can go through manufacturing. Sometimes they know people sometimes it’s connection based other times, you know, there’s different conferences that you’ll go to where you can meet ingredients suppliers. There is, and we went to some of these conferences. There are different industry newsletters, right? Like that you could sign up to that kind of give you all the information that you might want about the product, about products or, or, or innovations.

19:22
So like there’s one that I’m subscribed to called like Nutri Ingredients. They kind of give you the DL on all NutriCeuticals. And then you guys take an extra step and you hire an independent tester to just kind of verify the ingredients they have. That’s just… that’s all part of it’s called identity testing, right? When you buy a powder, right? You could actually test the identity of that powder. Meaning is the powder what people say the powder is? You can do that. There’s a machine that does that.

19:50
cost tens of thousands of dollars for this machine, but they can tell you what that powder is by analyzing the powder. We also, you know, some tests are in-house, some are third party. Again, it’s not as easy as saying, hey, we test third party, right? That’s not a full accounting of how that works because when we make a product, right, we’ll say we’re going to make this product, we’ll test the identity of the product, then we’ll test the heavy metals, then we’ll send it out to a third party to verify the heavy metals.

20:16
then it’ll come in, we’ll test with foodborne illnesses, then we’ll make the product and we’ll take the product and test that with foodborne illnesses. Like it’s like, it’s a very complicated process. The whole, the SOPs for creating our products aren’t one page, right? It’s binary. So it’s hard to describe, I guess, because there’s a lot that goes into it, if that makes sense. Can you kind of tell, I don’t know if you’re willing to tell us this, but how much did you…

20:42
put down to actually get all this started? Because it sounds like there’s a high upfront cost of starting a business like this. Here’s what I’ll say. When you want to get into physical product businesses, the number one problem you’re going to have is that you want to make your own product and you have to convince a manufacturer to make that product for you. A lot of times these manufacturers will put unrealistic first order volumes in place to prevent you from, to prevent

21:11
people from working with them that they think might be a waste of time, right? Other manufacturers will put unusually low first order volumes in place because they don’t care. They’re in the one and done business, right? They want you to make something, they make a crappy product and they can get out. It’s up to you to know. Then there’s the third, the third part, the third type of manufacturer where they might have the high order volume, but if you can get them to believe what you believe, they might be willing to work with you.

21:42
Right? In this case, like I said, it was very helpful that we found someone that already believed the same things we believed. And it made working with them a little bit easier for people who are just trying to start something up. Another good story about this is Sarah Blakely, when she was talking about trying to get Spanx made for the first time and how she traveled to all these different hosiery manufacturers and nobody wanted to work with her until she found one manufacturer, talked to a guy.

22:10
He wanted nothing to do with it until the guy told his daughter about it. The daughter was like, I love that. And then she, this guy took a chance on Sarah to manufacture the problem, right? Yeah. In this case, I don’t want to say that was fully the story for us, but it helped that we were saying the same things, that we both believe the same things. And it made working together a no brainer for both of us. Okay. I imagine since you guys have scaled, you’ve probably outgrown this person, right?

22:40
or? Great. One of the things that I’m a big fan of relationships, right? If you have people that you work with and do a good job, you do everything in your power to make sure you can continue doing a good job together. So part of it has always been about being transparent about where our growth is going to go and letting them know that we expect them to keep up. At this point, we are now a multi-product company.

23:06
And we’re not as simple as like, we just manufacture one place. Like, especially as we’re starting to branch out into other areas, you know, where we, we have a book coming out. I don’t know when this is going to air, but we have a book coming out next week that we self-publish. Obviously our, our supplement manufacturer isn’t printing our book for us. Right. Or we’ve also done a lot of cool stuff. Like we have Giovanni frother’s that comes from a different facility. have glass straws that are actually hand bent.

23:33
to have a little crease in it so people could drink out of a glass. That’s made by a different manufacturer. As the company grows, you need to have different sources for different types of products. You’ve got to just choose the best source for your product.

23:46
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24:15
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24:44
And if you tell Steve that I sent you, you’ll get a hundred dollar discount. That’s E-M-E-R-G-E-C-O-U-N-S-E-L dot com. Now back to the show. Okay. So that first manufacturer that you were working with, they’re pretty much only manufacturing a set number of products for you or set styles, I guess, or item numbers or SKUs for you. We still work with the same manufacturer, if that’s the question. Yes. Yeah. Okay.

25:12
Are you willing to comment on kind of like what the margins are like for food products in general? That’s a tough question. Yeah, because you’re going to say which one, but I don’t want you to give away your margins. Which product is question number one, right? Which industry? Question number two. And number three is how are you determining margin? we determining margin? we’re, so wait a second. like again,

25:39
Here’s the cost of the product. Here’s the cost of the sale of the product. But we have to remember shipping and handling like one of the things we charge for shipping and handling. Just gross products minus costs. What you’re selling it for minus costs without shipping and everything. Yeah. But so that’s a very misleading number. can’t one. I don’t think I’m going to answer this gross margin. Yeah, I That’s I was trying to give you an out by giving you make it in more general. Like here’s here’s what I’m trying to say. Right.

26:07
when you buy any product that’s going to be in retail, your goal for any product is to have what they call one in four, meaning if it costs $4, it should cost $1 of cost of goods. Because by the time it all gets out there into the world, there’s other costs that are associated. So for example, you know, last year we charged for shipping and handling, right? We, we, people have to pay for shipping and handling.

26:33
For every dollar we charge of shipping and handling, actually costs us $2. So if you look at the cost of goods of the product and then look at the price of the product, you’re wow, that’s a lot of money. But it’s not because we’re losing so much money on shipping and handling, even when we charge for it. That’s one example. Another example, when you’re selling food products and people do returns, you can’t resell it. You got to take that product as a return and you got to trash it.

27:04
because it’s just a health hazard at that point. So now returns are basically full loss. You have to account for that. You have to account for breakage. have to account for all this stuff that, now mind you, we don’t ship out broken packages that often. It’s very rare, but all this stuff accounts for problems. What I will say is that I miss the margins in my information course business, in my software business. Yeah, of course you do. Things were so much easier.

27:32
when I was not selling a physical product. Because what I will say is financing growth of a physical product business has been the most stressful, challenging thing that I have ever experienced in my life. And the reason why I say this is because, Truvani, we are trying to create great products. I can tell you right now, our cost of producing our products is tremendously high.

27:58
I see people selling supplements out there for like 20 bucks a bottle. And I know that that’s something that costs them a dollar to make. Right. And I’m looking at this like 20 X I would die for 20 X, but we’re using high quality ingredients. You know, I’m lucky. I’m lucky if we’re not losing money on our first purchase when people buy products. That’s the first thing. Second is like, we’re trying to make products. We believe in, right. It’s not really about the money. It’s something that

28:26
I have complained about with my friend, Vani for like five or six years before finally I’m like, ah, screw it. We’re going to do it. Do know what I mean? It started as a truly as a passing business and we did not want to raise money from, from venture capitalists or outside angel investors or any of that, because we didn’t want to have an overlord determining how we ran the business. Do you know what I mean? Sure.

28:54
Of course. Especially when it comes to ingredient quality and all of that. The last thing that I want someone to say is like, hey, don’t do this. The margins are bad. That’s not why we do it. We try to make products that we feel like we can make better than what’s out there. That’s what we’re doing. Okay. That’s kind how we want to approach it. How do you deal with expiration dates on food products? I imagine all that needs to get factored in the calculation somehow too, right?

29:19
Yeah. So right now we’re selling supplements. A lot of supplements have two year shelf lives or one year shelf lives. It’s a little bit easier for us right now. We’re getting into other products that have lower expiration dates. It just means you’re, you have to have your logistics on point, right? When you’re dealing with food products, especially supplements, a little bit less so, but when you get into food products, you know, there’s melting, you know, Amazon won’t let you sell chocolate five months of the year because chocolate melts in warehouses and warehouses is very hot. So.

29:49
You got to account for all this. Sometimes you have to account for how you ship the products with expiration. You just have to have a very clear idea of when your products are expiring and make sure there is protocols in place to get rid of expired products. If you’re doing something like FBA with Amazon, they actually handle a lot of that for you. If the product’s expiring, they destroy your inventory for you, which is great. Basically we use 3PL, meaning we use a third party logistics company. And this is the type of stuff that we have to just.

30:17
wary of to make sure we’re selling products within window. Does your 3PL handle that for you or no? We just moved 3PLs. So I’m not and I don’t run the 3PL part of the business. Our operations team, Devin, would be the person for that question. OK, I’m more do marketing, sales, product development. So how that gets done, though, is what I can say is we generally buy inventory. We try to have anywhere from three to six months of inventory on hand, meaning

30:46
We want to acquire inventory and have enough for three to six months of inventory, knowing that we have a one to two year expiration and that we’ll have an inventory turn of six months. We like to give ourselves about six months. Plan it safe. Exactly. But we also like to have enough inventory. There’s some people out there that have one month of inventory on hand, which is a disaster for us because we want to use the best ingredients and we test their ingredients so much. And if ingredient fails a test, we’re not using it. And that’s going to delay our supply chain.

31:14
and we’re only keeping one month of ingredients on product on stock, we could be stuck without product for several months. So we like to keep a lot of products in stock because we want to be able to, you know, we always test their stuff and we might have to decline an ingredient supplier. We always say that we’re not loyal to any individual ingredient supplier. We’re only loyal to the test results. Right. Okay. That makes sense.

31:43
So let’s switch gears into your specialty. You’re responsible for marketing and sales, right? So how the heck does one go from zero to 250,000 orders in just two years? Why are you asking questions like, well, the one thing you gotta do, Well, I’m giving you some leeway because I know you like to talk. I’m giving you- lick your finger, jump around in a circle, stare up at the sun, touch your toe and do that in less than three seconds. And guess what?

32:13
Money and orders will rain from the sky. So let’s start from the beginning. Right. So you have this influencer, right? So what was your first step? Once you had product in hand? Why do people say it’s an influencer? It’s not an influencer. I have a business partner. Her name is Vani. She’s a friend of mine. Okay. I don’t know what terms to use, Derek, that you won’t correct me, but I’ll let you go on. So we have a new…

32:40
So we’re working with Vani and the big thing that we didn’t know, like I’ll just take you back. When we wanted to launch this, we didn’t know what kind of demand we would have for our first product. At the time we chose our first product was a turmeric supplement. This was chosen because at the time Vani was taking a turmeric supplements and that company got acquired by a large company. They then changed the ingredients of the turmeric supplements and just

33:09
never really told anyone that they changed it. This frustrated Bonnie and she stopped taking it. She now wanted the reason why I picked Tumeric is because we had this story of her having a bad experience with Tumeric and we just were like, you know what, we’re going to make a Tumeric product. That’s going to be our first product. But we still didn’t know would people buy this? You know, how much do people buy? Do people care? Is the Tumeric a very common supplement? Like why would they

33:39
try to Lani like why us? These are all concerns that we have. So we just started asking ourselves like, well, what’s going to make people buy from us? It’s like, well, what if we just told the story about Vani took a tumor supplement, the company got acquired, they changed ingredients and she stopped taking it. So 100 % true. That’s what happened. I was like, what if we just tell that story?

34:05
And then say, that’s why we’re launching our company where we’re going to release a product and it’s going to be what we say it is. We’re going to sell you the product. If we change ingredients, we’re going to tell you, we’re not going to hide it. tell you. And we told that story and what happened was is everyone started to raise their hand. They’re like, you know, I hate when companies do that. I hate when they buy a product I love and they change the ingredients. And what’s funny is this happens all the time.

34:35
I’ve worn the same set of shoes, Steve, for five years. And the same shirts too, right? Same shirts, I wear everything the same. These shoes, I bought these shoes when they first came out. I wore them, they were great. I bought them a second time, I wore them, they were great. I bought them a third time, the leather of the shoe wasn’t breaking in the same way, and it was cutting my foot on my big toe in a weird way. Like that’s weird, right? I bought the fourth set.

35:05
And it was doing the same thing. I bought the fifth set. was doing the same thing. I called the company and I’m like, did you guys change the leather that you’re using? Like, no, no, no. It’s the same exact thing. I’ll tell you right now. I don’t know how to determine if the leather changed or not, but I can tell you that two sets of shoes, the problem never happens. Three sets of shoes. happened every time. Right. They clearly changed something and didn’t tell anyone. And that pissed me off. So we told the story.

35:34
about how things got changed in the tumor. People were like, yeah, I hate when that happens. We said, well, we’re going to be pre-selling our product. The reason why we’re pre-selling is because we don’t know, you know, we basically being honest with them like, Hey, we’re going to launch this. We’re not sure what the demand is or how much we’re going to need. we’re going to, we have the product formulated. It’s ready to rock. Come out in February. We’re, you know, we want to see if there’s demands. We did it. And then the demand was there and then the sales came in, but it helped that.

36:04
We told a true story about a pain that we had in our life, which was tumor, changed ingredients, it’s annoying. And then we had the ability to get attention on that pain, which as you called it, is we had Vani who had an audience who could share that with her audience. Now a lot of people love to say like, well, what if I don’t have an audience? What do I do? It’s like, well, an audience could be gone through anything. Like you could pay for advertising.

36:33
and get an audience through paying for advertising. You could find an influencer as you call it and partner with an influencer. You could build an audience. You could do all of these things. So that’s kind of how that started. You tell a true story, people resonate with it and then they want to buy your stuff. So for that story and the way you launched it by saying you had the ingredients, did you…

37:02
based that first order quantity by the amount of interest that you got? Or did you already pre-order ahead of time? We did both. We pre-ordered product ahead of time based on what we thought we were going to do. Then the sale went up after the first day. We’re like, uh-oh, we didn’t order enough. We called the manufacturer and said, hey, can we order four times more? So how did that happen?

37:31
Like if you got interest beforehand, presumably, maybe you got emails, I don’t know how you did it. But why were the numbers so off from your launch? Well, because I didn’t even know I’ve never launched a product like this before. I didn’t even know what to expect. I see. You know what I mean? We were pre-selling it as an early launch and we’re trying to get demands just to figure out how much demand there was. And the demand was higher than we thought it was going to be. Turned out everyone was mad about

37:59
big companies changing the greens without telling anyone. Okay, I keep forgetting you’re used to digital products, right? There is no selling out. That’s right, that’s right. That’s exactly right. So that’s kind of what happened. So let me ask you this, that same message that you were talking about, this story, did it work when you ran Facebook ads to cold audiences? Yeah, of course. We ran a lot of ads to that story. I mean, it’s a good story. It’s a true story.

38:28
Turns out that there’s a lot of people out there who are mad at companies for changing ingredients. Actually, you could look at, you could find any major company changing ingredients and see that there’s a protest around the ingredient change. So when you were running that ad, was it a non-product specific ad? Was it just trying to get that message out and then lead back to your site or was it specifically about Tumeric? Yeah, honestly, this is what was crazy about it is it was a non-product specific ad. It was just like, hey, we’re launching this company. And by the way, our first product is Tumeric.

38:58
Okay. That didn’t even lead with benefits of turmeric. We just kind of led with the pain of companies changing ingredients and then said, by the way, our first product is turmeric and we plan to do so much more by buying this turmeric. You can get a really good product, but it’s also going to help us create more products in the future. We just basically told the true story of what we were trying to do. And we went from that one turmeric product, we have 12 skews now. And if things keep going the way they’re going, we’re hoping to have 24 skews by the end of next year.

39:27
I’m pretty sure that was intentional, but I think that was the smart thing to do, right? Most people buy brands because of what they stand for and not necessarily the exact product. So if you led with like, our tumor is the best, I’m pretty sure it wouldn’t have worked as well, right? Yeah, you know, we live in a world right now where people want to buy the company they believe in. This was true with information products. It’s true with, you know, food products. It’s true. It’s true with everything.

39:57
Right. People are buying for identity and it turns out that when you have a magnetic personality or identity, people want to be a part of it just because they like it. Right. Yep. And it’s like me, like I have a lot of different products that I use for different reasons. Like I, like, like I wear the same t-shirts every day. Right. I wear the same black Mack Weldon V neck t-shirt. I wear the same shirt every day.

40:26
Mack Weldon kind of caters to this new casual man, if you will. And I kind of view myself as a new casual dude. That identity might’ve gotten my attention, right? So it got my attention. Then I got their V-neck and their V-neck was amazing, right? So now I got 50 black, you know, Mack Weldon V-necks that I, that’s the only thing I wear. I literally do not change my shirt. I have the same shirt 50 times. The same is true with, I wear sweatpants every day. They’re like fitted.

40:56
Y3 sweatpants and I went through a lot of different sweatpants and I wear the same ones because they’re perfect. They’re literally perfect. There’s no complaints about it. Same thing is true with, with types of notebooks I use. I have a brand it is called, I can’t pronounce it. It’s called Nemo Cine. think M N E M O S Y N E. They make this really great notebook and it has really amazing paper, paper so soft. can rub your face on it and just feels great. Not that you’re ever rubbing your face on your notebook, but.

41:25
The paper’s amazing. It comes from Japan. And I buy this product. got, you know, probably bought a hundred of these notebooks because I just love using that product. It also speaks about me as a person probably that I’m that weird guy buying an imported notebook from Japan for $21 and that’s the only notebook I write on. Like, wasn’t going to say it, dude. I wasn’t going to say it, but all right. So you launched your product online. When did you guys decide to transition over to retail?

41:56
That was a 2020 decision. So we had several people very similar to how we started the company, man. Like, you know, people were mad about the ingredient selection while we were running this company for about a year and a half. And people kept asking, are you in retail stores? Are you in retail stores? Are you in retail stores? And we’re like, no, we’re direct consumer. We sell online. Oh man. I really wish you were at the local store. So customers kept asking. The retailers kept asking, Hey, can we put you in our retail stores? We put you in our retail stores. People are asking about you.

42:26
And we’re like, all right, whatever. I, I know nothing about this, but maybe we’ll do it. So we start doing some research into looking into retail. I’ve been, I’ve been in direct consumer marketing my entire adult life. I’ve sold everything direct to consumer. started out way back in the day, like, you know, early two thousands where I was in a fill hit for teeth whitening products, where I was selling teeth whitening strips or whatever. But I’ve been selling DTC my whole adult life.

42:54
And retail was a new thing for me. So since I didn’t have experience there, the first thing we did was recruit a director of sales from a company that had tremendous retail presence already. So I knew if I was going to get into retail, I needed someone to guide me in that process. We recruited somebody to do it. We also hired a consultant to help advise us in the process. Like the consultant kind of taught me to have an environment about the whole retail landscape. And he was a consultant that

43:22
was currently a full-time employee at another food company that was doing sizable volumes, you know what I mean, of revenues. So we hired them to try to get the ground work and that was cool. Then we found he helped us find a director of sales and actually helped us find the person, interview the person, make sure they’re legit. We then had the director of sales and our director of sales has been leading the charge in 2020. What are some additional headaches that going into retail causes that just doing straight D to CECOM?

43:52
you wouldn’t see. Well, you want to go talk about margins. Well, you got to sell your product for cheaper than you’re selling it to the retail store so they can make their margins. Sure. So what is it like a 2X markup? Depends. There’s not a flat market, right? Depends on what product it is. But I will tell you, it’s one more person you have to now satisfy with the price and they’re going to give you immense price pressure to push down. That’s the first thing. Second thing is

44:17
Is we’re a new DTC brand. even though we’ve been getting a lot of traction, some companies just don’t care. Right. So getting into stores is a different problem. If you will, luckily we have a good brand and there’s a couple of stores that took a chance on us. And then we over-delivered. We launched into one of the first chains we got in was a chain called Arawan. It’s a very beautiful grocery store in California. have amazing products in Arawan. And it’s one of the things that.

44:46
You know, when Vani goes to California, that’s when the first grocery store she goes to Devon. He lives in California. He loves Erewhon. Like everyone loves Erewhon. How could I have not have heard of this place before? How do you spell it? E-R-E-W-H-O-N. Interesting. Okay. Cause I live in California. Wait, wait. What part Cali? Northern California. I don’t think Erewhon’s up there. think it’s only so Oh, it’s an LA thing. Okay. Got it. Yeah. So it’s an amazing, amazing store. And…

45:14
You know, they took a chance on us. They put us in there. So we wanted to over deliver. What did we do? Well, we got an Arowan. The first thing we did, we started running advertising to the LA area, talking about being an Arowan. We emailed it out. We started promoting it. And you know, we, we sold through our inventory pretty quickly. And I remember hearing from my director of sales. He’s like, we sold through the inventory in like two weeks. That’s very rare for a new brands that goes into a store for the first time.

45:42
And we started getting reorders and people started buying and more people wanted to get in, get, get on board. And as we get more stores on board, we just keep marketing that we’re in those stores to the local areas. And I have come to realize that all retail is, and this is the way I describe business now. People want to buy the products they want the way they want to buy them. Some people like to buy online.

46:13
Some people like to go to the store and buy it. Some people just want to buy the product the way they want to buy it, period. So for the first year, we weren’t even on Amazon, dude. We go on Amazon, Amazon blows up. It’s a great source of revenue that people want to buy on Amazon. And it’s funny because it’s like, I like buying on Amazon too. So I get it. Some people just want to go to the store. So from our perspective, when we put a product on Amazon,

46:39
or we put a product on our website or we put a product in the retail store. It’s our job as a business to sell that product. There are too many people who think going retail is going to be the magic bullet that gets them all the sales that they want for their product. But there are plenty of people who go retail and don’t sell any products because it’s not the retail store’s job to sell the product. It’s the brand’s job to sell the product.

47:10
Right? It’s the brand’s job to build demand. The demand will come in location, online, on Amazon, but it’s the brand’s job to build demand. All the retail store does is make it available to be purchased in person. That’s really interesting. I actually never heard of people running ads to their retail stores because the margins are a lot less, right? Already you’re giving stores the wholesale price and then now you’re running ads.

47:39
for people to actually buy it. What do mean? That’s so people don’t talk about it, but it’s true. there’s this cool. I’m not arguing with you. I’m just saying. no. Let me give you an example. So when you get into a retail store, there’s something called trade spend. You know, when you see a product featured at the end of an aisle and then cap, you have to pay for that most of the time. If you want to get a special display, you got to pay for that’s trade spend. It’s funny because we’ve been breaking into these retail stores and we’re like, all right, what’s the trade spend options? They’re like, oh, we don’t do that for new brands. Like, okay.

48:09
Or like, you the first thing that I do is like, great, how do I pay for an end cap? How can I pay for a newsletter drop? I’m trying to buy the ads as soon as we go in, which is very rare, I’m told, for a new brand going into retail. Because I come at this from a direct consumer mindset, right? Where I’m used to paying for advertising to acquire customers, right? It’s called in retail, we call, you know, online, it’s called pay for advertising, acquire customers. That’s what they say online.

48:37
In retail, it’s called driving trial. That’s the word that they use. You have to get the store that has customers that may not know who you are. You have to convince them to drive trial. So you lose money on spending on advertising and trade spend to get their customers to buy your product for the first time. If your product’s great, they buy it again. You drive trial. That’s very similar to internet marketing. It’s all the same to me, right? You’re just driving trial of your product.

49:06
It just depends on where it is. Now, some retail stores have the ability to give you trade spend. Some of them don’t want you to spend any money on trade spend for the first 90 days that you’re in the store. Why? I don’t know. It’s rules. I have no idea why, dude. Like that’s, that’s a, that’s a question for them. I’m not a retailer, but sometimes they wait. I don’t know about you, dude. I’m not trying to wait for anything. So I’m to go buy my own ads if they’re not going to let me buy their ads.

49:36
I’m wondering if this strategy would be different if you weren’t a consumable product. Like if you’re a one and done type of product. Because I know you guys try to drive subscriptions whenever you can online, is that right? What’s a one and done product? Why would you? So I’ll tell you right now, consumables help. But if you’re a one product company, you will go out of business, period. I meant like a one product or one purchase type of thing that lasts a long time. What am I thinking here?

50:03
For example, like a handbag, for example. Yeah, but what’s the cost of the handbag? The price point is a lot higher, yes. Yeah, so you have more money to spend. I’m selling a $29 bottle of turmeric, right? So I’m pretty sure I can get someone to buy a handbag that they sell for… By the way, margins in handbags, if you’re buying a $500 handbag, it probably costs… Yeah, I it’s ridiculous.

50:30
Yeah, I actually know the margins of handbags because we released a true Bonnie bag as a free gift. know, yeah, that’s right. That’s right. So I know a little bit about know a little bit about how handbags work. But there’s a lot more margin in handbags and we’re selling. We don’t sell the handbag. We just made it as a gift, obviously. But there’s more margin to be spent right at the end of the day when you’re a business. Here’s the amount of money you get for this sale. Right. Here’s the cost of goods.

50:59
then how much money are you spending to get that customer? Is there any money left over to make any money here? That’s the question. And if you’re selling a handbag, I’ll tell you right now, if you only sell one handbag, you’re not going to win. You’re going to lose. going to be a loser company and you’re never going to make any money. You’re going to only make money if you sell a handbag and you sell a second handbag and you sell a third handbag and you sell a t-shirt and you start expanding your product.

51:27
The true revenue opportunity comes from building something for people that believe the same things you believe, selling them that thing, and then getting them to buy more things. With us as a consumable, the more things that they’re buying happens to be more of the same exact product, right? But with luxury apparel company, you might have to get them into accessories. It’s why most luxury apparel has handbags and shirts and sunglasses and perfumes. You need that to make the business work.

51:58
I remember you had an interesting view on discounting. Do you guys run sales for your products anymore? Sales. I hate sales. I do have an interesting view on discounting. I think that discounting is stupid almost always. I think it kind of spits in the face of the customers who pay full price. So that’s the first problem. Second problem is it encourages bulk buying, which is a problem when you’re a subscription based company.

52:27
And it also encourages people to buy more of a product they don’t necessarily need just because they’re trying to save money. So I think it’s actually bad for the customer. Um, so that’s the first problem with discount. Second problem is even though I’m anti-discounting, we do some discounts and the discounts are only to get people to, as I was saying before, drive trial. Like we have done a 50 % off the first month of subscription, meaning you could try about a product of ours and get 50 % off the first purchase.

52:55
as long as you subscribe to monthly delivery. The reason why we do this is predominantly because I want you to try the product and I know when you try the product you’re gonna love it, you’re gonna buy it again. Do know what I mean? Yeah. So we drive trial. Now we do that for right now predominantly because we don’t have our product in sample form for all of our products. That’s a whole other line of skews. It’s expensive. We’d rather just give a full-size product at a discount and then try to create all these samples that we could

53:25
give it out or whatever. It’s just too expensive to do that at the size company that we’re at. after that first purchase, you guys pretty much don’t discount anymore, although you can get it for cheaper if you subscribe, right? Yeah, we have some levels where if you subscribe, you save money on the subscription, obviously, because we want you to subscribe. We also have where if you spend certain amount each, you know, if your order size is certain amount, you can get free shipping and handling. I think that there are some bundles.

53:53
that we have where if you can get multiple products in the bundle, like one of each product or whatever, there’s a little bit preferential of a price on a per product basis in the bundle. But we generally don’t incentivize bulk purchasing. I think bulk purchasing is bad for business and I think it’s bad for the customer. So we rather you try multiple different products as opposed to buying 10 of the same product. I’ll tell you why I don’t like bulk. I can tell you a story about bulk purchasing.

54:24
When I started to work out, wanted to buy some supplements and I’m going through the process of buying these supplements or whatever. I ended up getting like six bottles of every supplement. And I was just looking like, then I get this big package of like, know, six huge tubs of stuff for six different things, like 36 containers. And I’m like, I live in New York city, dude. I don’t got the space to store this stuff. So I’m like, why did I just do that? That’s annoying. I’m like, why don’t I just get it shipped every month?

54:54
And I was like, that makes sense. And I then I look at my own behavior. I get my deodorant shipped to me every six weeks. I get my other stuff shipped to me. I get my toilet paper. I get everything shipped to me on subscription because it’s easier. And I’m like, that’s how this should work for supplements. Other people are doing this, obviously. I didn’t invent supplements, subscriptions or whatever. But I’m like, that’s just the better user experience than buying in bulk. So that’s what we do. We let people buy on subscription or not on subscription. They don’t want.

55:23
to, but they buy a subscription and they could pause, skip, cancel, delay their order, whatever they want very easily. Right. We don’t make it hard to cancel or anything like that. It’s actually, you have to make it easy to cancel in most States actually nowadays. Uh, so we make everything super easy for people and, and, and people like it. You know what I mean? We have a very lenient refund policy. Uh, we want people to try our products. We want people to like our products. We want people to have good experiences because at end of the day,

55:51
We’ve come to find that people will buy a product unless they may not like that product that they just purchased, but they like three other products we have. And the second you give the customer a bad experience, you lose that customer for life. Last question, Derek. Yes. There’s a lot of people who are listening. They’re debating whether to do digital products or physical products. And you kind of have this unique perspective where you’ve done both very well.

56:19
How would you decide either way? What would be like the main criteria?

56:25
I would tell people to take a step back and ask yourself why you’re doing this in the first place. I’ll tell you straight up. I started selling courses. I started social traders because I had something to say, right? I had, I had something I had to get off my chest. It was about marketing. I saw a lot of bad advice getting peddled at the time was pissing me off and I built an audience around teaching people good marketing advice and stuff.

56:51
I didn’t start selling courses actually because of Lewis Howes. Lewis Howes was like, dude, you got to sell courses. He talked me into it. He’s like, you know, you make killing doing this. You make a lot of money doing it. People would learn a lot from you. I never really liked it though. If I’m being completely honest, I did it. And then when I did it, people were getting tremendous value. So I started to get addicted to the help that I was giving people, right?

57:18
But eventually I got burnt out because I never really liked it in the first place. Do know what I mean? So I would say that if you’re thinking about selling digital products, like you got to really want to do that. If you want to teach people and you get, you’re the type of person that loves getting up on stage and teaching or making a course or showing people how to do things and you’re good at it or want to get good at it. And that’s what keeps you up at night. Like you were thinking about better ways to create courses so people actually get the results. Like if that what drives you sell digital products.

57:48
On the other hand, if you are frustrated by a product in your life that stinks, like I’ll tell you another thing that I might make one day. I have a kid, right? My, my, my lady was breastfeeding when the baby was born and we bought a breastfeeding chair. This chair was a rocking chair that had a nice cushion on it. And the way you would hold the baby, right? You have to put the baby, tilt the baby to the side. The baby lacks on the boob.

58:17
starts breastfeeding, but this chair had an armrest that was padded halfway. And then it was wood the other hand. This kid would occasionally be breastfeeding and whip her head back and smash her head on the wooden part of the breastfeeding chair. And I’m looking at this chair and I’m like, what the hell? Why would they put wood at the end of this breastfeeding chair? Breaking my kid’s head open. So I get a bunch of old socks.

58:47
I put it at the wood part of the chair and I tape it there, right? This is solve the problem. And I’m looking at this one day and I’m like, did we just buy a bum chair? I started looking online. Most of these breastfeeding chairs have hard arms, like hard arm rests. And I’m like, I can’t be the only person that has a kid smacking their head on this. So I might make a breastfeeding chair next, dude. But

59:16
As I’m saying, it’s like my ideas for products come from problems I’m having in my life. That’s how I would come up with the problem. You got to be passionate about it. I’m telling you the story of this chair and it still pisses me off to this day. My kid isn’t having the problem hitting her head on that chair anymore because we threw that chair in the garbage. If I’m ever going make a chair, let me tell you, I might make that breastfeeding chair where the armrest is fully padded. Literally, you know what I would put in the ad?

59:46
I would literally tell the story like, hey, when I had my first kid, my kid was breastfeeding, she’d pull her head off and smack her head on the wood and I thought, how come there’s no fully padded armrest? And that’s why I’m proud to introduce the Rocking Armrest Chair. That’s what I would sell this. I would just tell the true story of what happened, show you the product of the armrest and everyone who’s a would-be mom is like, oh no, I don’t want my baby to crack her head open either and they’re gonna buy my chair. So I get past you, dude. No, dude, I love it. That’s why I asked you.

01:00:16
Yeah. So Derek, where can people find true body products? Where’s the best place to go? The best place right now is go to true body.com T R U V A N I.com. That’s where you can see all the cool products we’re releasing. You can see all the cool stuff we’re doing. I don’t really post constant anymore. So people want to get more me probably the best thing they could do is just stalk my Facebook profile where you won’t get business content.

01:00:44
But you’ll definitely get some, um, rants, some unfiltered Derek rants, like the one I posted today. don’t know. Did you see that one today? I was like, so this morning, my lady said one of our up through the night. that the one? Yeah. Yeah. One of my best accomplishments is that we taught our baby to fall asleep each night on her own. And I laughed at it. I’m like, babe, all we did was put the baby in the crib and forget about her until the morning. We literally did nothing. How’s that an accomplishment? And she’s like, no.

01:01:13
that’s just like you to say that. And it’s like, yeah, it is just like me. But like, really, we put the baby in the bed. We have a baby’s crying. Most people can’t resist going to get the baby when it cries. Like, listen, we put the baby in the crib, and we forgot about the baby until tomorrow. And eventually, the baby falls asleep.

01:01:30
All I can say dude is that your wife is a good woman. Oh, she’s great. And if you guys want any of Derek’s archives, like your YouTube channel, you got tons of videos there. Social Triggers is a huge archive of stuff. There’s many ways to get a lot of Derek in your life. If you just look. Yes. And it’s also applicable today. Most of the stuff I’ve ever created is always evergreens. So if you go to my YouTube channel, there’s like a hundred thousand subs over there, socialtriggers.com. There’s a lot of good content there that’ll help you with your business marketing and all that sort

01:02:00
But for me, you can learn from what I say or you could watch what I do. I think watching what I do is probably the best way to learn. And that’s why TrueVine.com is great. And if you like supplements, you can check them out. Cool. Well, Derek, man, really appreciate you coming on the show. Glad we could get this together. Thanks for having me. Hopefully people made it to the end and had a good time. I think they’ll make it to the end. Just my guess. All right, dude. Thanks, man.

01:02:29
Hope you enjoy that episode. Naderik is quite a character and I love listening to the man speak. For more information about this episode, go to mywifecoderjob.com slash episode 320. And once again, I’m going to thank Postscript.io, which is my SMS marketing platform of choice for e-commerce. With a few clicks of a button, you can easily segment and send targeted text messages to your client base. SMS is the next big own marketing platform and you can sign up for free over at postscript.io slash Steve. That’s P-O-S-T-S-C-R-I-P-T dot I-O slash Steve.

01:02:59
I also want to thank Clavio, which is my email marketing platform of choice for ecommerce merchants. You can easily put together automated flows like an abandoned card sequence, a post-purchase flow, a win-back campaign, basically all these sequences that will make you money on autopilot. So head on over to mywifequitterjob.com slash KLAVIO. Once again, that’s mywifequitterjob.com slash KLAVIO. Now I talk about how I use these tools on my blog, and if you are interested in starting your own ecommerce store, head on over to mywifequitterjob.com and sign up for my free six day mini course.

01:03:29
Just type in your email and I’ll send you the course right away. Thanks for listening.