Made 150k In Online Revenue On My First Year Into Branding. The Struggles I Faced And My Approach. : Entrepreneur

Backstory

I'm a college dropout who had mountains of student debt after realizing that you don't need a "photography degree" to get a good job. I landed a high paying photography position while I was at school and got all my equipment sponsored by the company. 4 years later I got into a depression and started to look for an outlet and found out about drop-shipping using shopify through a random teenager I happened to room next to on an Airbnb. I then quit my job, got into drops-shipping and a few years later I joined up with a friend to create my very first online toy brand.

Drop-Shipping And My Transition To Branding.

Going into it, my mindset was of a drop-shipper which kind of helped me…. But it kind of didn’t.

As a drop-shipper, there were only a few things I cared about. How much money can I squeeze out of a product and how long will it last until I need to find a different product.

In another words, I didn't care about longevity. After joining my friend in creating this toy business, I slowly changed my approach and have recently become a full pledge brand activist. Below was my immediate challenges and my approach as we make progress into creating our brand.

+Challenge: High Product Cost

+High Product Cost Approach

We simply can’t buy a million units to drive the cost down so we have to get creative when determining our price. As much as we wanted to increase the price, the perceived value was pretty low. So…. We got creative!

• Price Testing: We slowly increased the product cost that gave us a break-even point when advertising on fb. Settled at 18.

• Using Upsell: We then implemented upsell app by bold to help increase our average order value. We tried out multiple bundles. From buy one get the other for 30% off all the way to free shipping. The average order value did increase but we lost out in the end.

• Bundling: We then Bundled our toys into one package to also help with AOV.

Effect: The bundle became one of the best selling items on our website.

Average order value increased from $20 to $50 giving us a lot more legroom to reuse our money for advertising

Unintended Consequences

Although our average order value went up, our customer lifetime value went down. As a new brand we realized the importance of long term relationship. Sending email marketing proved that by showing low conversion rate on people who bought all our products already. We did a few months in and we started to see positive results on our email marketing campaigns.

+Expensive Shipping Rate

Not only was the shipping rate was expensive, it ensured lower conversion rate from new customers and increased advertising costs. Imagine buying an 18 dollar product to find out that your shipping cost is half of that price. Shopped around for the best rates and ended up linking with ezeeship.com. Not only did it have one of the best rates out there, the customer service was phenomenal. What cost us 7 dollars to ship before went as low as 4. Of course it all depends on the both locations and size of your packages but this is just to give you an idea.

Pros

• If you’re a small business, this is one of the best ways to get the cheapest shipping rate.

• You can use this service to ship products to virtually anything. (Amazon warehouse, Retailers, Mom and Pops, Etc.)

• Up to 80% off when shipping overseas

• Up to 65% off domestically and works with Fedex or UPS

• 2% Off All USPS services

• You can renegotiate your price once you start shipping larger volume.

• They are available outside U.S. (I know they do China and Philippines) Checkup on them.

Cons

+Low Conversion Rate Solutions for Facebook/Instagram

If you’ve ever dealt with any sort of advertising, you’ll soon find out that this is very common. Your approach will determine how well your campaign does. There’s only 4 things I look at once the ads start running ( The Ad Creative, Target Audience, Landing Pages- View page, fall out).

• Low CTR on advertising: With this approach, I broke it down into different pieces.

  • Ad Creative: Having only 6 products, we tried multiple ways to attract our audience, from fancy videos to carousel images. What worked best for us are video ads that point out benefits rather than features. Just imagine yourself scrolling down your feed and ask, would I want to buy this product? If this doesn’t get you thinking, just look at other ads that are doing well online and read books by Seth Godin.

  • Audience: Using Facebook/Insta ads, we quickly learned that my ads matter most but choosing the right audience gives you a boost. I’ve seen many people boast about not using an audience at all but this approach have worked best for us until you start creating your lookalikes. I don’t have a general rule when to start. I test every 1000 milestones I reach (visits, purchase, add to cart, etc). If it doesn’t work, I’ll wait til 2000, 3, 4, etc.

• High Traffic But Low Conversion Rate: It’s not enough to just think about the ad. You also have to think about your customer experience online.

  • Product Images: I keep this one simple. Best quality images that answers all your customers question about the product. BOOM! It’s simple but you’ll be surprised how many revisions we made to increase conversion rates.

  • Product Descriptions: Personally, I have an okay foundation on what to write but I always check back to fellow copywriters. Best approach is to use an already successful model and modify it to your brand. I say brand because that’s important too! A consistent message across all your pages will help increase trust of your customers.

  • Distractions: Sometimes your website’s bells and whistle actually distract your customers and make them not want to buy. One tool I use is an app called Hotjar. I believe google has something similar as well but what I like about hotjar is being able to see your customer’s full experience on your website. You’ll find out which ones are becoming a distraction and which one they like checking out on your web. What better way to optimize than to actually see what’s going on.

+Positioning: What makes you special? 1 year in and we’re only started to realize the importance of this question. This actually inspired me to write this blog. It’s because now we’re a couple months in testing and the results are slowly starting to show. The main thing to think about is figuring out where you stand and how to make sure it’s consistent to all your social media channels. Here are the things we’re working on to help support our brand message.

• Creative Strategy: An intentional effort to build creatives that are consistent with your brand for social media. I still struggle with this because you have to figure out your message and post daily and I mean Daily!!! Best way is to carve out 48 hours where you think about the type of posts, actually create them and put them up on Hootsuite. Great for Facebook, Instagram, twitter, etc. The only drawback is you can’t post 10 images on Instagram Hootsuite even though that’s the maximum limit for Instagram. Plan 1 month in advance.

• Blogs: Similarly, we use this to help support our brand. Looking at our numbers, we have had some purchases through our blogs. Not a significant amount at the moment but I imagine that if we start to create more content, it will be able to eventually support itself.

• Work in Progress: Since we just started to implement this, I feel as if we’re starting to head in the right direction but it is a work in progress. Once we get more results, I’d love to share our experiences with you!

+Final thoughts: It’s our first year and what I’ve provided is no way the exact way you should run your business. Every brand is different and they will all face their unique challenges. What I aspire to do is share the process that have helped us along the way and hopefully help you on the e-commerce world. Would love to know your unique challenges and tribulations. I’d love to learn from you as well!