00:29
And this is why I’m focusing a significant amount of my efforts on SMS marketing. SMS or text message marketing is already a top five revenue source for my eCommerce store. And I couldn’t have done it without Postscript.io, which is my text message provider. Now, why did I choose Postscript? It’s because they specialize in eCommerce stores and eCommerce is their primary focus. Not only is it easy to use, but you can quickly segment your audience based on your exact sales data and implement automated flows like an abandoned cart at the push of a button. Not only that, but it’s price well too. And with the holiday season rolling around,

00:59
SMS is the perfect way to engage with your customers. So head on over to postscript.io slash Steve and try it for free. That’s P-O-S-T-S-E-R-I-P-T dot I-O slash Steve. I also want to thank Klaviyo, who is also a sponsor of the show. Now it’s safe to say that most of us have been doing more online shopping lately. And if you’re an e-commerce brand, that means you might be seeing more first-time customers. But once they make that first purchase, how do you keep them coming back? That’s what Klaviyo is for. Klaviyo is the ultimate email and SMS marketing platform for e-commerce brands.

01:28
And it gives you the tools to build your contact list, send memorable emails, automate key messages, and more. A lot more. That’s why more than 50,000 ecommerce brands like Chubbies, Brooklinen, and Living Proof use Klaviyo to build a loyal following. Strong customer relationships mean more repeat sales, enthusiastic word of mouth, and less depending on third-party ads. So whether you’re launching a new business or taking your brand to the next level, Klaviyo can help you get growing faster. And it is free to get started. So visit klaviyo.com slash my wife to create a free account.

01:56
That’s KLAVIO.com slash my wife. Now on to the show.

02:18
Welcome to the My Wife Quitter Job podcast. Today I’m thrilled to have Alex Beller on the show and Alex is someone who I was introduced to by my friends over at Gorgias because I was looking for an SMS provider and I’m really glad that they did. Alex is the founder of Postscript.io, which is the company that I use for my text message marketing and they specialize in e-commerce, which is what initially attracted me to them and they’re reasonably priced and very easy to use. And since I’m a geek, I like how they have an API so I can do some more advanced stuff.

02:48
Anyway, I brought Alex on today to give us an overview of SMS marketing, how it works and how you can use it to grow your e-commerce business. And with that, welcome to the show Alex, how are you doing today? I’m doing great. Thanks for having me, Steve. I’m excited for this conversation. Yeah, I appreciate your patience. So what ended up happening this morning is I rebooted my Windows PC and all of a sudden it decided to install like 30 updates. And so I had to scramble and switch over to another computer and Alex was very patient. So I appreciate it.

03:18
No worries. So Alex, give us the quick background story and tell us how you got started with SMS marketing and how did you decide to start Postscript? Cool. So this goes back to the fact that I’m an e-commerce person. So before starting Postscript, I worked in e-commerce on the brand side for six years. And most of that was spent at a company called Stack Commerce in Venice, California. And what Stack Commerce does

03:48
is they’re an e-commerce platform that owns and runs and operates storefronts on behalf of digital publishers. So the way to think about it is like the Mashable store or the CNN store, Companies like that, that they depend on advertising, but they’re getting more and more interested in commerce revenue. That company, Stack Commerce, builds and operates branded storefronts and does all the sourcing and the fulfillment and the customer support. So it’s like a new revenue channel for those online publishers.

04:17
And so I got exposed to e-commerce through that. And it was very hands-on, very tactical, lots of like time-spending Google Analytics, optimizing marketing channels and things like that on behalf of these clients. And when I was there, a few different things happened. So the first was, because this was over the last like eight or nine years we’re talking about, it really became clear that every single year, mobile traffic as a percentage of

04:47
e-commerce traffic was just increasing. Every single year, the mobile share was getting larger and larger. And at the same time, we were seeing email performance, not decline by any means, but more just sort of plateau. It’s at that point, such a used and established channel. And so me and my now co-founder, who also worked with me at StatCommerce, I have two co-founders, but one of them, one you know, Adam, we were curious about like, what is the mobile first retention channel?

05:17
What is email for our phones? mean, this is the new platform that we’re spending all our time on and acquisition is huge there and Instagram and Facebook mobile ad programs are like huge sources of customers. But what’s the retention channel for it? Is it email or is it something else? And then that’s all the context. But then a friend of Adam’s who ran a lifestyle business on Shopify was complaining to him one day that

05:46
he didn’t have an easy way to text his customers. And so that seemed like a very specific problem for us to potentially solve, which is a good thing. I mean, you’ll relate to this because you if you like, you’re an entrepreneur and you think so much in terms of entrepreneurship. When we were getting started, the thought process was we want to make a product that we can sell to businesses. We want something with organic distribution, which in this case would be the Shopify app store.

06:15
a way to get our first customers just without paying for it or without chasing them. And the third was we wanted to be able to get our first customer within 90 days of starting to build the product. And so we didn’t know exactly what we were doing and we weren’t that familiar with this e-commerce ecosystem with all the platforms and the huge amount of entrepreneurship going on. But we immediately saw installs and customers. And just every single month it slowly grew to the point where after about three months,

06:45
We applied to Y Combinator and we got in and we went through that route and we went full time on what we originally thought was just going to be like a small side project that would be like a niche offering. And the reason is because it was more than just us thinking about mobile retention. And over the last two years since we’ve launched, which was in September of 2018, we’ve seen SMS go from like,

07:12
an idea that people are very skeptical about to what’s becoming a, still very early, but what’s becoming like a mainstream marketing channel in e-commerce. And so there’s lots of different ramifications of it, but it’s been really exciting to watch us go from the like skeptics phase into the early adopter phase where, you know, best practices are getting established and there’s just all kinds of interesting stuff going on.

07:36
So let’s talk about the skeptics, because I would say maybe last year or maybe a year and a half ago, I was one of those skeptics. And I’m pretty sure that there’s a lot of people in the audience that are skeptics. So let’s start from the beginning here. SMS text message marketing, people usually get texts from their friends and that sort of thing. And I’m sure there’s a lot of people listening to this thinking to themselves, I can’t imagine getting marketing messages in my SMS inbox.

08:05
What are just some typical response rates for text messages when consumers receive them from a company? Sure. So there’s a bunch of data around this. So response rates tend to be really high, but there’s still a lot of noise there. So even if you see 5 to 10 % responses, people texting back on an SMS campaign, not all of them are going to be

08:32
the most cogent things because people just were so comfortable sending texts. It’s not like an email that we perfectly format. So the funny thing is a brand will probably see a wide spectrum of texts from people saying, wow, this is awesome. I love this to, Hey, who is this? I’m driving. I’ll call you later on to like, you know, stop, which is how users unsubscribe. But the more interesting thing for me is the difference we see brand to brand. And this part’s a little predictable.

09:02
But if a brand is kind of approaching SMS, which is this new high engagement marketing channel, if they’re approaching it with their customer interests at the forefront, and if they’re using a personal voice, and if the brand is something that people feel loyal to, maybe because it’s high quality products or they have a great voice, we run sentiment analyses on the background on SMS responses. And brands like that, their users are replying in much, much, much happier ways.

09:32
So the example I’ve been using lately, there’s a company called Bloom, B-L-U-M-E. And they do really creative stuff with their SMS program where I’ve been on their list for maybe six weeks, their post-script customer, and twice they’ve sent out a campaign with a Starbucks gift card so that anyone that they’re sending it to can go get a free drink at Starbucks. they’re running, I saw because I was talking to their team,

10:02
currently running a book club with some of their users through SMS. Like there’s like 40 or 50 people that they’re like all like reading together. And so that’s like a very, very non spammy way to think about the channel is like, how can we just engage and retain and like be authentic with our brand voice to our most valuable customers verse the email first approach of like sending a 10 % off code.

10:29
four times a week to your entire list. That just doesn’t work with SMS. What does Bloom sell? Bloom sells, I want to get the exact right wording, it’s like feminine self-care. So it’s everything from like razors to skin products to acne oil to I think like feminine hygiene. Interesting. So they’ve just started a community, I guess is what it sounds like. Yeah. And that’s certainly one extreme, but

10:59
even more in the middle, like taking an automation heavy approach using campaigns or broadcasts, using them sparingly, writing texts so that they’re like in the voice of a human, maybe even personally coming from like the founder or figurehead of a brand. All of those are ways to just take a more targeted, more tailored approach than what’s standard in email that people like because they don’t want to hear from a brand four times a week via text. But

11:27
they might want to hear about really relevant things through text because they’ll actually see it. I know for myself personally, I only have maybe like a handful of companies that I let text message me. Can you just kind of comment on the differences in behavior for email versus text from the point of view of a consumer? Yeah, that’s actually a pretty insightful comment because we have this theory where there’s going to be a cap. So we don’t know it’s.

11:54
It’s still sorely in the channel. We don’t know where it’ll happen yet, but we think to your point that people will probably top out at a certain number of brands that they like welcome and sign up for via SMS, right? Maybe it’s five, maybe it’s 10, maybe over the next couple of years it’s 15. It’s certainly not the 200 different email lists I’m signed up for. So with that, we also think there’s this like first mover advantage in this space where people who are working on building their channel now,

12:23
and are taking care of those users and not just driving unsubscribes, they’re gonna have an advantage in the long term. So can we talk about, I guess, strategy for a little bit? So let’s say I have an e-commerce store and I have email, I have SMS, and let’s say I have chat as well, or messenger marketing as well. How do I grab those? Since everyone you said has like a limited attention span for SMS, how would I run these differently than an email campaign? Yeah, so the omni-channel question varies brand to brand.

12:53
But the best practices that I’ve seen come up change a little bit based on stage. So here’s what I mean. If someone is collecting subscribers in different ways and they’re just getting started with SMS, there’s a pretty good chance that their subscriber lists across different marketing channels may not be identical. Right? So that’s the first thing. Like if you’ve been collecting email forever and then you suddenly start collecting SMS, you may end up with like new people on SMS that aren’t on email and most your email list won’t be on text.

13:23
So that’s the first thing. The second thing is like realizing the power of omni-channel and timing. Like I’m more likely to watch a Netflix special that they just launched if I see a billboard for it, if I see a YouTube ad for it, and if a friend tells me about it, then I am just one of those things happens. And I don’t want all three of those things to happen to me at the exact same moment. That’d be weird. But I think a similar approach here, and that’s what the data is showing us. When people run A-B tests on

13:52
like post-purchase upsells. If they run it where they just send email, they just send SMS, and then they send email and SMS with staggered timing, that third option sees about a 15 to 20 % lift in revenue. So what we recommend is, look, you’re going to send emails many times a week. Instead of that for SMS, think about what’s the most important message you have coming up, what’s actually relevant for a text. Then do a little digging, see if there’s overlap between your lists.

14:21
and maybe just stagger the timings that email goes out Wednesday, the text goes out Friday and the text goes out to anyone who like hadn’t purchased yet. And so there’s ways to be a little bit more targeted, but in general, the data shells that tells us that omni-channel approach is a good thing. You just don’t want to be too simple with it. Interesting. So you advise to lead with email or would you rather text the message first and then follow up with email? I’m a little biased here and I try not to be biased.

14:50
I think it really just is situational. think email is incredibly important. I’m not one of those people who thinks it’s dead. And like, if you’re starting off and you have 10,000 people on your SMS list and 150,000 people on your email list, you know, there’s just not that much overlap. like, sending both out at the same time makes sense. However, with something like a flow, like an abandoned cart flow, the SMS will be higher engagement.

15:19
But I kind of think it’s smarter to lead with email because email is so much cheaper. Like you only want to fire that text if someone didn’t open or didn’t click or didn’t buy from that email. And so because text costs a lot more than email, you might as well save that money and go email first. The way I was thinking about it is that, and we can talk about this in just a little bit, but delivery rates, like for email, you might get like a 20 % open rate. I think that’s like the average. Whereas SMS, it’s like in the nineties, right?

15:49
Yeah, so from my perspective, at least when you send out a text, it seems like almost everyone’s going to get it. Whereas with email, you’re only going to get like a fifth of your people. So can you just kind of comment on that? Yeah, I mean, your stats are your stats are pretty much like dead on from what we see and on the click rate side of things with text, we see anywhere from like 7 % click rate up to like, I mean, people see like 40 or 50 % click rates when they do like

16:18
a new drop that users were excited about. I think what you just said makes sense. I’m personally try to avoid being too pushy of like an SMS only or an SMS first narrative just because that’s what people expect from me. But I think what you just said makes sense. And I think what it comes down to is like, is this promotion, is this message something that is very important and that you want users to see? And if it is, that’s a great use case for a text. If it’s more,

16:47
The same sort of thing that’s happening week to week. Maybe that should be either a more targeted text or that should be led with an email. I guess if we put numbers behind this, it makes it easier to understand. How much does it cost to send a text? So about about one cent. Okay. So about a cent and whereas email is significantly cheaper than that depending on it. Okay. So I understand. So just by sheer numbers, you probably want your SMS.

17:15
marketing messages to be a lot more focused, a lot more targeted, a lot more, you want the revenue per subscriber to be a lot higher. Yeah, that’s what I think. Because the other side of it too is that like we were talking about earlier, sensitivity and sensitivity to the channel and that people won’t subscribe to tons and tons of channels. So in my mind, if users or if stores take a little bit of a more cautious approach to SMS, not only will they keep their costs lower, but their unsubscribed rates will stay low.

17:44
And so their list will build much faster over time. So you mentioned abandoned cart earlier. And one of the things that you can do with Postscript is abandoned cart messages, similar to what you’d have in email. So would you advise someone with an e-commerce store to actually have, like there’s abandoned cart for Facebook Messenger, there’s abandoned cart for email, and now there’s abandoned cart for SMS. Do you advise that people have all three going? Yes. If you have a subscriber on all three channels, which I would expect,

18:12
The vast majority of subscribers would be on one or two channels. I absolutely recommend to have all three firing. And I would just say stagger the timing and have them cancel if the user buys. So if a user, if it goes email SMS, then Facebook, if the email goes out and the user doesn’t buy, then you send a text a day later and they do buy have the, have the Facebook automation watching that purchase completion so that it cancels if the user completes their purchase before the like third day.

18:39
Okay, that makes sense. Then you’re hitting them on all channels and hopefully one of those messages we’ll get through. Yep. And can you talk about frequency? Like how often are people sending these messages out? Yes. So totally decent framework for this is thinking like there isn’t really a cap on relevant automation flows. So things like targeted welcome series, abandoned carts, post purchase upsells, post purchase customer support check-ins or

19:08
shipping and tracking notifications. I recommend people go hard with all of those because users will find them timely, really build out an advanced automation strategy. For brands with subscription, application, there’s all kinds of other flows they can build as well. On the like campaign or broadcast side of things, I say slow it down. The best way, it’s not a hard number. It’s not like once a week to your whole list. That’s not it. Instead it’s like, what is our marketing calendar?

19:37
and when do we have something that’s relevant for a text. If you have a great piece of content one day and an amazing promotion one day and then a new product drop another day, that’s probably worthy of three texts in a week. But if all you have this week is another 10 % off coupon to try to drive purchases, that is like few and far between. So if someone is getting hit with a text once a week from a brand, I think that’s palatable and okay. If someone’s getting hit with a text three times a week, I think that’s over the top and

20:06
you’ll see a lot of unsubscribes. Can we talk about this welcome series? Is this welcome series that you’re talking about very similar to the email welcome series? Yeah, a lot of times it’s very similar. But to your point before, like the the engagement rate will be so much higher. And I view welcome series is actually one of the like underutilized things in e commerce, even though everyone does it. Because I think it’s the it’s someone has signed up, they probably haven’t purchased yet. And so they’re just waiting there halfway warm to be converted.

20:36
And that’s the opportunity to like build brand connection, educate them, overcome some of their like pricing, not pricing, some of their purchase concerns. And so doing that through a channel where people see it, you know, 95, 98 % of the time, that’s an awesome spot to overcome some of those objections and to build a little loyalty. And so I like to see brands doing it with a little bit of founder or a little bit of personal voice and then.

21:03
we see and subscribers feel a little bit more attachment, like interest in continuing to learn more. I’m sure because of running your company, you’ve probably encountered a whole bunch of welcome series. Can you just kind of maybe go over some of the more successful ones and how they’re structured? Yeah. Cause I know for my email sequence, I initially email very often in the beginning and then it kind of tapers off to once a week. I would imagine that for an SMS welcome series, you don’t want to be texting them like every day or every other day in the beginning either. Right? Correct.

21:33
Yeah, so I’m pulling up that other launch we had recently, Really Good Text. That was a shameless plug, but you can sort by Welcome Series on there. Well, so ReallyGoodText.com is a place where Postscript.io is posting all the great text messages that all its companies are posting. So if you want to get an idea of what other companies are putting out, then you should head over to this site. I’ve actually used it extensively for my store, but you guys actually had the data behind it too, so that’s why I thought I’d ask.

22:02
made by our friends Alicia. yeah, one of my favorite welcome series, this is spring, something up is from Judy. So Judy is a disaster preparedness brand. Um, so they sell like disaster kits, but what they use SMS for and what comes across in their welcome series is they take a more localized approach to awareness. So they sell these disaster preparedness kits and they’re, it’s very DTC and well-styled.

22:28
but they aren’t just trying to like shamelessly endlessly convert you with the welcome series. Instead, it’s a little bit more brand building and education. And what they then do over time is they’re tracking where everyone is by zip code. And then they’re sending out disaster alerts via text whenever something happens. So if there’s a tornado warning or if there was an earthquake or if there’s like a hurricane coming in, that sort of stuff. And so

22:54
setting the context for that in a welcome series and then asking for a purchase later of one of their kits, I really like that mix of content and conversion. So that sounds very interesting. Do you have a more generic case of just consumer products, maybe in the beauty or apparel space or something like that, where you don’t have something like disaster relief that someone actually really wants to get alerts for, for example? Yeah. So, right.

23:22
That’s kind of a funny comment. People want disaster alerts. That’s reasonable. Yeah. So we have a couple of welcome series templates that get prefilled in folks’ accounts. And the often split we do is one flow for if this is a new user that’s never purchased before, and one flow for if it’s a returning purchaser who this is just their first time signing up to the SMS list. Because SMS is new.

23:52
And because of compliance, how you have to start from scratch, we see a lot of that. And so both of these are three message templates spread out. It’s one message the first day, then it’s one message the fourth day. So three days later, then it’s one message a week after that. And the third one is for returning customers is when there’s like a call to action to buy. And the first two is like education and context setting. And then a little bit of just like a branding, sometimes a customer review gets included like

24:22
Check out one of our five star reviews on this product, that sort of thing. I see. And how long is like the average welcome series? Not sure about the average. I see them run anywhere from two weeks to a month, just depending really on like how high the bar is for a product. If it’s a stick of deodorant at a low price point, maybe only a couple of weeks. If it’s, you know, hundreds of dollars on a set of sheets.

24:50
I’ve seen Welcome Series run several months.

24:55
If you sell on Amazon or run any online business for that matter, the most important aspect of your long-term success will be your brand. And this is why I work with Steven Weigler and his team from Emerge Council to protect my brand over at Bumblebee Linens. Now what’s unique about Emerge Council is that Steve focuses his legal practice on e-commerce and provides strategic and legal representation to entrepreneurs to protect their IP. So for example, if you’ve ever been ripped off or knocked off on Amazon, then Steve can help you fight back and protect yourself.

25:24
Now, first and foremost, protecting our IP starts with a solid trademark and Emerge Council provides attorney-advised strategic trademark prosecution, both in the United States and abroad for a very low price. And furthermore, the students in my course have used Steve for copyrighting their designs, policing against counterfeits and knockoffs, agreements with co-founders and employees, website and social media policies, privacy policies, vendor agreements, brand registry, you name it. So if you need IP protection services, go to EmergeCouncil.com and get a free consult.

25:53
And if you tell Steve that I sent you, you’ll get a hundred dollar discount. That’s EMERGECONSCL.com. Now back to the show. I see. So in two weeks, that’s really only like three or four messages, right? In terms of the content of the messages, is it product focused or is it, which messages tend to work the best describing the brand story? Cause you have to be a lot more compact with SMS, right? So there’s less information or you have to be a lot more selective about what you convey.

26:23
What have you seen from the brands, like the exact sequence of what they’re sending out and how they’re compressing all this information in just a couple of sentences? They’re compressing it by really only tackling one topic per message. So maybe one message is like introduction, context setting, link to learn more, right? Just context setting for how the brand is going to use SMS. Maybe the next message is walking through all like the great features of their hero product.

26:51
Maybe the third message is validation, right? So customer reviews or including a quote from a customer or including an MMS GIF of a bunch of different quotes and like great reviews of the product. And then the fourth message is just a straight up like a call to action with a purchase incentive of 10 % off. So by tackling one thing in each, as opposed to trying to cram lots of different stuff in every single message, which you don’t have to do because people are reading every text.

27:21
Unlike an email where I may only catch, you know, one out of five of the welcome messages you send, the text I’m probably going to read every single one so you can break it out more. Interesting. And you mentioned earlier that you don’t want to be broadcasting to your entire list. So what should be your strategy for just broadcasting campaigns once you have them on your list? Yeah, relevancy. So everything comes down to relevancy and the framework of like, is this worthy of a text? know, just less is more here.

27:51
So to get specific, what that looks like is if you’re thinking about sending out to your entire subscriber base, it should be for something so relevant and worthy, right? It should be for a new product drop or a new collection. It should be for a substantial promotion of some kind. It should be for a piece of content. Or if you’re taking a more targeted approach, we like to see segmentation based on

28:19
user behavior or past purchase data. So what that can look like is like if someone has bought product X and you and your data show that product Y tends to go really well with product X, creating a segment of people who bought X but not Y and sending them a more targeted broadcast about product Y. Or doing a new product launch to people who bought last year’s version.

28:47
So segmentation of purchase behavior is a big thing. And then the other is just SMS engagement, where sometimes we hear from folks like, hey, I really only want to send to my most engaged users. How do I do that? So the other version is, if someone’s been running their SMS list for a few years, maybe they create a segment of people who’ve clicked in the last six months and hold back on sending to users who it’s been over six months since they clicked a message.

29:15
Are there penalties for sending to people who haven’t opened in a long time, like email, or does everyone pretty much get the message? Everyone gets the message. There aren’t penalties. It’s really just about unsubscribes. So you can’t send to anybody who has replied stop or replied cancel or unsubscribe or end or any of those things because of like a legal compliance angle from the TCPA, which is the Telephone Consumer Protection Act.

29:40
But as far as deliverability goes, it’s different than emailing that like a message sent is a message delivered. You know, one thing I just noticed recently, like literally just the other day was I now have a spam SMS folder on my phone. Yes. Yes. I noticed this too. This is, it turns out it’s something that I think Apple did. Do you have an iPhone? No, I don’t. I’m on Android actually. Interesting. So there’s an iPhone one as well.

30:05
and it’s not spam, but it takes unknown senders and breaks them out into a separate folder. Is that the same on Android? No, this one’s literally called spam. That’s pretty cool. Yeah. So we are expecting, as with email, eventually inboxes to be broken out and feature we’re working on right now that will be live soon is called contact cards. And so what that will allow is for you, for example,

30:33
to send out a text, especially in the welcome series, that includes a contact card that’ll be saveable with like the name of your store and an image and things like that. And so that way we’re gonna see brands start encouraging their subscribers to like save us as a contact so that once those inboxes start happening, messages won’t go there. Interesting, this is a similar principle to email, right? Where you’re adding them to your safe senders list essentially. Yep. Right. Interesting.

31:02
Okay, so what about a post purchase sequence? Can all these things be automated? Like if someone bought this, I want to send them automatically a text message with this product that’s like a cross sell after a certain period of time. Yes, absolutely. That’s a great use case. Okay. And so a lot of these things that I’m doing with email can be done with SMS and a lot of the segmentation principles, and correct me if I’m wrong, are very similar. So for example, if I have someone who signed on who hasn’t purchased yet and I’m just trying to get them,

31:30
to buy for the first time, I might send them a different message than someone who has purchased from me many times, for example. I think that’s right. just the frameworks are often correct. The difference is that SMS should be just even more targeted and sent even less often. Right. So this is not only from an economic perspective, since it costs more, but also from a unsubscribe perspective, right? Because your rate of unsubscribes are going to be higher as well.

31:59
Correct. It’s for both those reasons and the third, we call it for like NPS, right? Where it’s just easier to annoy end users through text messages. So even if they don’t unsubscribe and even if they still buy from you, it may change, it’s such a potent channel, it may change the outlook towards your brand if you’re sending them four to five texts a week. It might just feel that the brand’s a little annoying. Right. Actually, I’m already kind of annoyed at once a week.

32:27
for some brands actually, but I stick on because they send out like good promotions from time to time. I don’t wanna miss them. So, but one thing I wanted to ask you also are just some guidelines on what metrics to expect. So when you send out a broadcast, like what is a good unsubscribe rate or typical I should say. Yeah, so the mean unsubscribe rate for a campaign is 0.7 % that we see.

32:56
So that’s just like completely average across everything. The highest unsubscribe rates exist on welcome series and abandoned carts because that tends to be the message, like the first message a user has got, right? If they sign up from a pop-up or something or landing page, or if they opted in a checkout and then got an abandoned cart. So that’s pretty common where for abandoned carts and welcomes, you might see a two to 3 % cumulative unsubscribe rate because people like got the first message, got the code they wanted.

33:26
and then opted out of the list. Interesting. What you just quoted is significantly lower than some of the numbers that I’ve gotten from other SMS consultants, including myself too. But I assume that I’m not doing everything correctly yet since I just got started. But 0.7 % just sounds really low. So that is the completely overall aggregate number from all the postscript, which I know because…

33:54
We are working on benchmarks lately. Yeah, I’m sure you have the numbers. But that changes quite a bit by product category, which is interesting. let’s see, beauty and cosmetics and food and drink have lower unsubscribe rates than it seems home goods are the highest at 1 % for campaigns. Yeah.

34:23
So let’s talk about acquisition here. And I know just getting SMS subscribers is a little bit different than email, for example. So what are some of the best ways to actually get people on your list? So this is the spot that we’re seeing a lot of creativity. Obviously, the tried and true methods of get opt-ins at checkout, get opt-ins through a pop-up, those make sense. And we don’t want users to compromise their email collection. So what we recommend there is either focus

34:53
on email collection on desktop and SMS collection on mobile when it comes to pop-ups, or collect both. Maybe make a two-screen pop-up where first you collect email and then you ask for SMS or vice versa, have SMS as an optional field. That works really well. If we work with a brand who only wants to collect opt-ins at checkout and doesn’t want to do a pop-up, we will honestly say, hey, you know what? You’re probably not ready then because

35:22
We’ve seen that be a huge delta for success because you can’t have an opt-in box pre-checked at checkout. It has to be unchecked. So because of that, using pop-ups and other forms of collection is really important if it’s going to see any scale at all. But beyond that, we’re starting to see really interesting other forms of acquisition where, you know the keyword opt-ins, like text post script to 30303, that sort of thing? We’re seeing people start to include inserts in all their packaging that’s going out.

35:51
whether or not the sale came from an SMS user or even their e-commerce store. We’re seeing people include just keyword opt-ins in all their packaging as a means to, if they have a retail presence, get their retail buyers to become direct e-commerce subscribers or just to grow the list in general. That’s one cool method. Another cool method we’re seeing is for brands that have a nice large organic or influencer-led social media practice, we’re seeing people include keyword calls to action

36:21
on like their Instagram profiles, put them on Instagram stories, also include one click opt-ins on Instagram stories, like swipe up to subscribe. And then we’re seeing the paid side of this. So we’re just starting to see brands use Facebook lead ads as a way to gather compliant messaging. And the last and coolest thing. for the lead ads, sorry. So you’re at, people are actually physically typing in a number as opposed to using the keyword automations. Correct.

36:50
They’re typing in their phone number or if Facebook already has their phone number, Facebook can like pre-fill it and the user just essentially gives agreement. So we’re seeing some Facebook lead ads. We’re seeing Instagram stories and some Instagram ads with the click option as well, not the pre-fill that you mentioned. But probably the coolest form of opt-in that I’ve ever seen that I saw last week was a brand

37:19
worked with lots of influencers and they had one of their influencers talk about the keyword sign up. That was the call to action. The brand was trying to get those influencers subscribers to, or the followers to become direct subscribers to the brand. That was cool. But then I saw the same brand work with a TikTok influencer and the TikTok influencer made a screenshot video of him texting back and forth with the brand.

37:48
And it was a very funny conversation. The brand was like engaging really fast and that video went viral on TikTok. And so the brand saw tens of thousands of signups just from that. Interesting. Okay. So in general, like you mentioned the Facebook ad and just the different ways with the keyword automation and just typing in the number or click to subscribe. Which one do you find the best? Like for me, I know I would much rather text a word to a certain number than

38:17
type in my number, for example. Which form is like the highest converting one is basically what I’m asking you. Yeah. Your intuition is correct where the one click opt-in that like pre-fields a message or just calls to action on keywords, like text this to this, those convert higher than a form fill. Okay. And I know my best way of attracting subscribers right now is like right in the banner on every single page of our store, we have

38:44
text BBL to this number and you get a free product essentially. That’s smart. Yeah. I think that it’s still early in terms of just using like call to action banners like that, or even like collection on product pages, maybe like opt-ins for when a product is back in stock or opt-ins like wait lists via SMS. Those things haven’t really started yet, but I think they’ll start soon. Interesting.

39:10
I do want to touch a little bit about compliance since I’ve gotten questions from people where, oh, great, why don’t I just take my whole list from Klaviyo or whatnot and just start messaging them? So can you talk about, like, if you already have a bunch of numbers, like, how do you legally text message them? Yeah. So this is the most important thing we’re going to cover. SMS is different than email. You cannot do that. You cannot send a text to old customers.

39:39
who you happen to have their phone numbers. Unless they explicitly opted into SMS marketing, which means with the proper language, they like sent the first text or they checked a box at checkout or they put their phone number in knowing that they’d be signing up for SMS marketing. Even if you have their phone number, they are not eligible to be sent text to and the penalties for it are very high. 500 to $1,500 per message sent.

40:08
gets automatic class action status inside the US. So there’s this whole industry of lawyers who, what they do full time is they go around and they like try to find people who got a text accidentally and then they send a demand letter and they file a lawsuit. So if you have a big list of numbers that you’re exporting from Klaviyo or from Shopify or whatever, do not send them unless they are actually SMS opt-ins. And like with Postscript, Steve, we actually don’t have a way for users to…

40:37
just upload a list. They can submit it to our compliance team to like go through with them to ensure that these were proper opt-ins, but we put that in place. It’s not self-serve uploading just to try to prevent, you know, customers from getting themselves in trouble. So let’s say you have this list of numbers. What’s the best way to get them to opt in? You cannot send them a text to do it. The best way is if you have a list of phone numbers, it probably means they bought from you. It probably means that you have their email addresses too.

41:06
So what I recommend to brands is maybe send a couple part email series trying to get them to also opt into SMS. We have brands who send an email once a month or every quarter promoting their SMS list. We have brands who include a call to action to their SMS list passively in every single email, like at the bottom, right? Text this to this to sign up for our VIP list. So you can use their emails to send them an email.

41:34
You can use their emails to build a lookalike audience, to pay to get them to opt into your SMS list, not a lookalike audience, but to build that audience, but you cannot text them directly. I know for my store, I just kind of make an effort to cross pollinate everything in general, but I don’t think I’ve gone the other way yet. Do you know of any companies that have the phone number, but not the email and go for the email? Like send it, you mean send a text saying, hey, sign up for our email list here. Yeah, exactly. Yeah. I really haven’t seen it yet. Yeah.

42:04
I guess maybe it’s, I haven’t done that either yet. When I was doing Messenger, I used to cross pollinate my Facebook Messenger and my email all the time. But for SMS, I haven’t done that yet. think maybe it’s because my perception of SMS is it’s the holy grail of communication right now. Meaning like no one can take this number away from me and it’s pretty much a sure thing for correspondence. Granted, it costs money, but yeah, I just thought I’d bring that out because I wasn’t sure if any other brands were doing that. Really not seeing it yet.

42:33
This is kind of like more of a future looking question. How much longer do you think SMS has until marketers kind of destroy it? Like, yeah, so here’s what I think as an e-commerce marketer, email has had a 20 year run and it’s still going really strong. I think SMS is most similar to email because it’s an open protocol, right? Nobody owns the email platform.

43:01
There’s lots of different vendors. It’s the same with SMS. It’s an owned marketing channel. And that’s a little different than messenger or WhatsApp or Instagram, which is there’s rules governing it set up by Facebook. So I think we’ll have a very, very, very long run. think it’s, I mean, it’s clearly the dominant communication method of the next 10 years at least, but the norms will change. So when you say ruin it,

43:28
What I see is even more of the version I’m talking, I’m preaching already, right? Five years from now, but we see so many brands and some other platforms take an approach of like, send your whole list twice a week. Just, just blast them. I don’t think that’ll be happening in five years. I think it’ll be still heavily used, but a much more tailored approach, very targeted messages, very targeted automation flows. And also I think responses will get bigger and bigger. Right now we have a lot of our.

43:58
are customers that also run support through SMS. So if users reply with questions or had an issue with their order, the brand will manage that out of the help desk. And I expect we’ll see more and more of that, just the channel becoming more two-way, less broadcasty. Yeah, actually, I was just about to mention that. So I have Postscript hooked up to Gorgias. And one thing that I do for the post purchase, because you have to send them when they opt in a message, right?

44:27
And so I say, Hey, if you have any questions about your order, just reply and we actually get replies. And oftentimes we can actually even upsell during this conversation, which makes it sound a lot natural, a lot more natural. totally in that respect, I see it a lot different than email because they get an instant response. Yep. It’s like live chat that your customer takes with them everywhere they go. That’s pretty potent. Yeah. And so in that respect, it’s a lot more effective than email in my opinion, at least.

44:57
So Alex, I know you wanted to talk about this new certification that you have and we kind of touched on compliance. What is this all about? Yeah, so what it’s about is that this is a new channel. It’s new for marketers, even if they’ve done email forever. It’s new for e-commerce people. So we get the same questions over and over and over again when brands are looking to start out with SMS. They need to understand compliance. They want to know best practices. They want to know how to build an omni-channel strategy.

45:26
They want to know what best practices are for list growth and acquisition, how they should manage responses. Really a lot of the stuff we’ve covered today. And so what we decided to do is we took everything we’ve learned over the last few years and we boiled it down into the SMS marketing certification, which it’s live on Postscript.io. If you go over the learn tab, you’ll see the button. It’s completely free. It’s a several hour long video course and there’s some videos and then there’s some quizzes and

45:56
And if you, even if you fail the quizzes, we give you another chance to study up and take them again. It’s totally free and we’ve been testing it for a few months and we’re getting really, really good results and really good quotes back where we think it’s just going to lay the foundation for marketers to understand the dynamics of the channel and how to think about the channel and what are some initial best practices so that they can then really tailor it to their brand. And so we made a general one and we also launched what we called the Postscript

46:25
partner certification. And this one is, very similar, but it also includes some sections on like, how do I position it in cell managed SMS services? That one’s really made for agencies or other technology partners. But the general certification, that one just came out on Tuesday. It’s been getting just some like great engagement and feedback. There’s hundreds of people that are already taking it. And we’re just excited about like similar to really good techs.

46:53
providing another resource for the community to just learn about the channel. And the one last thing about it, I’ll say, is this is not meant to be Postscript specific. It’s really for anyone even not using Postscript that wants to better understand SMS in e-commerce. Yeah, and I know when I first got started using Postscript, there’s actually a lot of rules that you need to follow. There’s also stuff that you need to add to your privacy policy in your terms and conditions.

47:21
You know, I had a question in my mind, have you known any really large companies that have been sued for breach? Because I still get random text messages on my phone. And there’s clearly spam messages. Are they enforcing all this stuff? I hope there is an enormous amount of litigation here. Okay, if you like Google TCPA lawsuit, I mean, there’ll be millions of results. So yes, there are lots of stories within e commerce. There’s also some stories of like,

47:50
There’s a story of a very, very, very big brand that we work with who long before PostScript was created, I mean, back in 2010, they took all the phone, they didn’t know any better. And they took all the phone numbers of people who checked out at their retail locations and they started sending them texts and they were sued for a hundred million dollars and they settled for $10 million. And that one is public. That was before we existed, but that’s kind of just like the scope of things here. But the other thing is politicians and

48:19
and political fundraising, that’s where so much of this kind of texts come from, right? You didn’t sign up, but you just are suddenly getting texts from all these different candidates. And the way that’s working is because there’s a carve out in the law. When politicians pass the TCPA, they put a carve out in there for political fundraising and political communication. So they aren’t subject to the same opt-ins. Okay. Convenient. Yeah, actually come to think of it, most of the spam has been political.

48:49
Well Alex, this was very helpful and I hope and I just want to tell the listeners out there that I’ve been using text messaging for maybe half a year now and it is a fantastic channel. I’m probably gonna be posting my results. I actually don’t even have all the functionality implemented yet and it’s already become one of my top five channels for my e-commerce store. So if you guys aren’t on it yet, it’s probably the next own marketing platform. It’s not performing as well as email for me just yet because I have so many more email.

49:18
subscribers and I do text but per subscriber it’s it’s worth a lot more than an email subscriber based on my limited results here. So yep, awesome. We’re seeing the same thing. Well, thank you so much for having me. This is a great combo. Yeah, thanks for coming on Alex really appreciate it.

49:38
Hope you enjoy that episode. Now if you are not doing SMS marketing for your online store, then you should start right now. Seriously, it works so well and it’s probably 5x more effective than email at least. For more information about this episode, go to mywifequitterjob.com slash episode 325. And once again, I 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 cart sequence, a post purchase flow, a win back campaign, basically all these sequences that will make you money on autopilot.

50:06
So head on over to mywifequitterjob.com slash KLAVIO. Once again, that’s mywifequitterjob.com slash KLAVIO. I also want to thank Postscript, 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-E-R-I-P-T dot I-O slash Steve.

50:33
Now I talk about how I these tools on my blog. 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. Just type in your email and it’ll send you the course right away. Thanks for listening.

00:27
Now safe to say that most of us have been doing more online shopping lately. If you’re an ecommerce brand, that means you might be seeing more first-time customers. But once they made that first purchase, how do you keep them coming back? That is what Klaviyo is for. Klaviyo is the ultimate email and SMS marketing platform for ecommerce brands, and it gives you the tools to build your contact list, send memorable emails, automate key messages, and more. A lot more. And that is why more than 30,000 ecommerce brands like Chubbies, Brooklinen, and Living Proof use Klaviyo to build a loyal following.

00:56
Strong customer relationships mean more repeat sales, enthusiastic word of mouth, and less depending on third party ads. So whether you’re launching a new business or taking your brand to the next level, Klaviyo can help you get going faster. And it is free to get started, so visit klaviyo.com slash my wife to create your free account. That’s klaviyo.com slash my wife. I also want to thank Postscript.io for sponsoring this episode. Now if you run an e-commerce business of any kind, you know how important it is to own your own customer contact list.

01:24
And this is why I’m focusing a significant amount of my effort on SMS marketing. Because I sincerely believe that SMS, or text message marketing, is going to be a huge channel for my store going forward, and I have chosen Postscript.io to be my text provider. Now why Postscript? It is because they specialize in e-commerce stores, and e-commerce is their primary focus. Not only is it easy to use, but you can quickly segment your audience based on your exact sales data and implement automated flows like an abandoned cart at the push of a button.

01:51
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.