Dylan Carpenter

Hell yeah, man. So is this your first time getting this deep into a business, from the ground up?

Kendall Shaw

Yeah, I would say this is my first time scaling actual physical product brand to multiple seven figures. I've done drop shipping in the past, but as you know, with drop shipping, once you have a good product, products can die out and stuff. But with drop shipping, after the product dies out, you're just there. But with this, if our return on ad spend starts to die down, we know it's not really the product. It's more of the angle, or the copy we're using has died out, and we need to refresh the offer. So going through that whole experience has given us a lot of valuable insight, just because we are a marketing agency too. We do have equity in this business, but we also ... My whole entire team does run the advertising for this business. So it's given us a lot of insight, and it's also allowed us to really test a lot of strategies with media buying and direct response marketing. And that's what's helped us actually not only grow the business massively, but also grow our clients as well.

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Dylan Carpenter

Yeah, man, I think that's super cool, how you can test on this, implement it for your clients. I have a buddy named Dan, and we had him on the podcast maybe months ago, but they're a massive agency as well. They have maybe three or four of their own brands, and they do all of their tests on their brands, and implement it for their clients. So, I think you've got yourself here a really cool little golden nugget to help scale the agency side on top of this. But super snazzy, man, shouts out for all the success there.

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Kendall Shaw

Appreciate it, man. Appreciate it, man. It's really been such a great opportunity. I wouldn't have said without my client, I would have never been here, because I had no idea what the product was before they reached out to me. And fast forward to now, we're doing crazy numbers, wholesaling deals, and have the whole warehouse and the 3PL, and just going through all of that has really given me a lot of insight, just because for a lot of agencies, they only see the back end, the running the media buying. But there's so much more that really goes into it, and that's really helped us improve the results that we've gotten for our clients, as well as for our own brand that we use ourselves.

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Dylan Carpenter

Hell yeah. Well, speaking of results, let's go ahead and segue into our Rich Ad, Poor Ad side of things. So man, you send me over this ad, just so everybody has some context, I'm not going to read it word for word, but essentially we have a product that cleans your system immediately after the first use. You simply stir this flavorless gel into coffee, tea, or smoothies. It's a user generated video oriented here, but can you give everybody some context on what the ad is, who it's speaking to, how you all more or less strategized this specific ad, and ...

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Kendall Shaw

Yeah, for sure. I would say, so just a little context, our marketing agency, we actually are a partner, so we have equity and [inaudible 00:05:53] might be doing a lot of things, but we do have equity in an influencer marketing business. I would say that's been really key into our scaling shaggy for this business, just because there's really a lot of different content styles. I know you know Josh [inaudible 00:06:07], who I look up to heavily, and looking at a lot of the big DSC brands that have scaled really fast, we've noticed that a lot of them have really large emphasis on user generated content, and repurposing that UGC it's different content styles, editing it, et cetera. Someone I look up to is Social Savannah on Twitter, Savannah Sanchez. She's really big about UGC as well.

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Kendall Shaw

So we launched this brand, we initially launched it with just basic image ads, and that scaled us up to, I'd say probably four to five K a day in revenue, but we knew once we started adding user generated content, and testing the user generated content, that's how we were able to have consistent six figure months, and consistent five figure days. So that added, right there, basically it was just a piece of user generated content that we sent to one of our influencers. We do influencer campaigns every single week, every single month, sending out product to influencers. And we don't even really care, honestly, just being transparent, just we're a brand that we don't care about making the sales on the influencer. What we do really care about is the actual content piece, because when you use user generated content in advertising, we've seen extremely low CPMs. That ad, we probably spent about a hundred dollars for that influencer, and we've probably made, I would say that ad, we made about 160, $170,000, 3.4, 3.5X, with a good spend behind it too. And just to keep in mind, we launched this brand in April. So we actually started running that ad, I would say, in mid May or June.

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Dylan Carpenter

Man. So this single ad alone did well over six figures.

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Kendall Shaw

Yeah, for sure.

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Dylan Carpenter

[inaudible 00:07:39] piece. And it cost you a hundred bucks for this one influencer.

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Kendall Shaw

Yeah. And the influencers are so happy with it, because they get a ton of brand exposure, right? And we get a content piece, they get the product, they get paid, so everyone's happy. And that's really been one of our key, and will continue to be one of our key ways to scale. Just because once you get a brand up and running, and you have your paid acquisition strategy down, it's really not about media buying to grow. The media buying, as you know, media buying is cool, but that's not what's going to grow your business. You have to focus on the copy, the offer, the landing pages, and the content of your ads. And once you do that, from my experience, you can slap a broad campaign, no targeting, and if you have a good copy, good creative, good landers, and good offer, you're going to crush, right?

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Dylan Carpenter

Oh yeah. You said it best right there. I think that's a great approach there, and a great area of focus. Now when it comes to these influencer deals, and they spend a hundred on this, do you all have different models for compensation? Hey, we'll pay you a fat fee, and we'll send you the product, then we'll get you a percent of sales? How do you all structure those, just in case somebody is looking at maybe getting into the influencer game, and have some idea of where to even get started there?

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Kendall Shaw

Yeah. Yeah. So for some of our bigger influencers on our brand, we've had celebrities reach out to us, and they've posted the product. What we've done for them is, we just gave them, for the really big influencers, we gave them free product and didn't even ask them to post, just to build relationships. And that's a really big thing about influencer marketing. It's less about asking for certain things, it's really just about the relationship building. But I would say the majority of our strategy is working with micro influencers, so anyone who has less than, I would say 150, 200,000 followers, I would consider personally micro, just because once you're above that following, most of those people actually have their own physical product brands or brand deals of that nature. So our strategy is, we just pay them.

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Kendall Shaw

We ask them what they want, and most influencers don't really know how to charge the pricing, so they either overcharge or undercharge. And we ask them what they want, and we just pay them, get the content. And then we have them post. And then our influencer marketing team, they just basically go and take all that content, and they basically track all the analytics from actual campaign. And this is something we're doing on a weekly, a monthly basis, to give you an idea. We just set up a campaign, that we probably spent about $2,500 on the campaign to set it up, as well as the thousand dollar fee to our influencer marketing agency that we work with and have a percentage in, and basically they manage the whole entire campaign, and we're probably going to reach 1.7, 1.8 million people across all the different personal pages.

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Kendall Shaw

And not only will we make revenue from that, and brand awareness, and those people getting your middle of funnel, since the middle funnel audiences are people who engage with your page, but we're really banking on the actual content piece. I care more about the content, less about the actual posts, just because the post is cool, but the revenue is really made when you post the actual content piece. You use the content piece in the actual ad.

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Dylan Carpenter

Yeah, no, that makes complete sense there. Now I think a key concept to take away from this is the micro-influencer side. Of course they know what they want to do, but they don't maybe know their worth yet. So I feel like I heard Josh speak about this, from [inaudible 00:11:05] Snow, maybe two years ago. And shoot, he's probably still doing that these days. But it's a great way to build rapport. As you mentioned, relationships are everything there. So you can probably get in on the ground floor, a hundred bucks, "Hey, we'll see the product, maybe two or three videos", to where you are going to get a little golden nugget like this, to where you can put, shoot, five figures behind that generate six figures. So I think that's a killer example of how powerful influencers are, no matter what their size is.

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Kendall Shaw

Right.

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Dylan Carpenter

Well, hell yeah.

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Kendall Shaw

[crosstalk 00:11:34] that.

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Dylan Carpenter

So the power of influencers, I still can't believe this costs a hundred bucks and generated six figures, but dude, that's [inaudible 00:11:41].

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Kendall Shaw

Well, it only generated six figures because we decided to test it. I'd think that'd be a really big thing, because prior to this, I told all my clients that we need an influencer strategy and you guys need to use it. And when you have a drop shipping store, you can have an influencer strategy, but it's not going to be at scale, nor will it be at the level of ... How do I say this, consistency? Because it's a non branded product, but when we started testing this for our own brand, that's when we really saw the breakthrough results, especially on the top of funnel, right? Just because once you get the people in the middle and bottom of funnel, your ads can be different, but your ads don't have to be as influencer based. It's more of value, benefits, discount codes, et cetera. Whereas with top of funnel, for at least these products, it was really just showing the value and catching people's attention. And it was really some good testimonial piece of content.

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Dylan Carpenter

Oh, yeah. And I think creative is ... So with your influencers, are you more of a volume guy on the creative, take what you can get? Do you have a set plan there? Just test it and see what pans out? Or are you more of a quality game there?

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Kendall Shaw

Yeah, we're definitely in a volume game, just because you can't really quality control influencers. You can, obviously, but our influencer agency that we work with is called Power Agency. Like I said, my marketing company's, we decided to become a minority partner in this business after we tested it on our own personal product and we saw the results. So we were like, why wouldn't we want to offer this service to our clients, right? But we just were really in a volume game and making sure that the video content that they're posting is genuine, because it's really about the video and the image content that they're leveraging, just because you're going to be able to leverage that. And it's also a mini testimonial.

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Kendall Shaw

So something we're working on now, here's a free nugget, is we're using Zipify pages. I'm sure you know what Zipify [inaudible 00:13:28] Firestone. So we're testing some Zipify pages, and just posting, excuse my French, a shit ton of user generated content for testimonials, and having as a testimonial retargeting landing page. Just because we're on Shopify right now, and Shopify is great, but I'm nowhere near a UI UX developer or coder at all. So we're going to test that for the middle and bottom of funnel, testing different landing pages, testing different copy, different marketing angles. I really feel like the key to the success of scaling this brand was, obviously running ads is great, but really direct response marketing, having a great copy and direct response marketing background, plus leveraging that user generated content, was really what allowed us to scale so fast. There's also having a good product obviously, but those really key fundamentals can be leveraged across any niche.

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Dylan Carpenter

No, I think you're spot on there. Yeah, you're definitely on point. Now, this has been very lucrative, and I'm totally about it. Let's go ahead and segue this bad boy into our poor ad segment. Now, Kendall, go ahead and check out your messenger man. Since you're in the drop shipping realm, I thought it'd be fun to find a very shitty drop shipping ad. So go ahead, rip it apart. What are your first thoughts when you see this bad boy?

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Kendall Shaw

The first thought is, I don't even know how they got this approved by Facebook. [inaudible 00:14:52] that girl looks fully butt naked. That's the first thing. The second thing is, I think this is one of those people that are trying to get rankings on Amazon. That's what I'm assuming. This just looks they slapped the AliExpress ad on Facebook. And this person, I don't think they speak English.

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Dylan Carpenter

Oh, no.

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Kendall Shaw

The grammar is totally messed up.

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Dylan Carpenter

[inaudible 00:15:19] best part. I think we re we roasted this one a while ago, but due to the whole drop shipping background, I'm like, "This is going to be a fun one." And just so everybody has some context, it's a random brand called [M Brush 00:15:31]. Hey, get your back brush now. It's easy to get your back. Keep your body clean. Want to grab one on Amazon, place an order on Amazon, we'll cover the full price for you. New Amazon accounts are not eligible for this offer. So there's limited stock, hurry and get it today. So we have a trash ad, very contradicting on the English side of things. Place an order on Amazon, but new Amazon accounts are not eligible for this. So I think you're spot on, went to Alibaba, copied some descriptions, copied the images to where ... We have a shitty ad here.

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Kendall Shaw

Very shitty ad.

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Dylan Carpenter

I like how it's optimizing for the messages too, not even going to Amazon, just straight to messenger. Oh Lord, would you buy this? Would you buy this, if you saw this?

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Kendall Shaw

If they targeted me, I report that shit, man. No, man. I would test it. I could test it. I might steal it and test it myself, honestly, but I would not buy that. No.

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Dylan Carpenter

Just from that send message, I'd be curious where it links, to where I want to see their followups, just so I could ... I want to roast the front end, but I want to rest the back end too, so it would be fun to see how terrible their automation is.

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Kendall Shaw

All right.

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Dylan Carpenter

Oh, well what a shit ad. It always lightens up the mood a little bit, with that bad boy. All right. So the most exciting segment, rich ad, poor ad, rich dad, poor dad, take a page out of that book more or less, but we'd love to dive into some financial principles, maybe some tips on testing, scaling. With you all launching in April, I would imagine cashflow may have been a question, how to scale, subscription [inaudible 00:17:12] models. So you may not have broken even within 30, 60, or 90 days. But based on you all's life skill, the business so far, what financial tips would you have for somebody maybe looking to do something similar, and maybe they're scaling up? What tips you got for the people out there?

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Kendall Shaw

Yeah, that's definitely a really good question. So I'm going over the financials. We were just blessed that we all own our own businesses, so we just put a couple of thousand dollars in, right? And just tested it, right? We bootstrapped the whole entire business, no outside money, but we bootstrapped it from day one. And that was honestly, obviously it's the first year in business, so getting a warehouse, getting other packaging stuff, and we also do our own 3PL, right? We don't have a 3PL company, don't plan on hiring one anytime soon, just because, just from our own personal experience, as well as we want to have quality control on our products, since it is a supplement.

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Kendall Shaw

So going through that experience, I definitely would say on the financial side, the first thing is, something that we didn't leverage that I wish we would have, just due to it being a new business, we couldn't get a credit initially, until after a couple of months of bank statements, obviously. So if I could go back in time, I would have definitely started leveraging credit instead of debiting. We were debiting our Facebook advertising spend. That would just help with cashflow, right, especially when you're doing six figure months. Fast forward to now, obviously we're using credit, but that would be the first thing.

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Kendall Shaw

The second thing is ... This is actually funny, a shameless plug, but really knowing how much you're netting. We built our own software company called Ad Guru, we can touch on that a little bit later, but with our software that my agency owns, called Ad Guru, It shows you how much you're netting per ad set, per campaign. Not your ROAS, but your net ROI, so after your product cost, your shipping, employee, literally every cost, right?

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Kendall Shaw

I would say that honestly helped a lot, because Ad Guru was actually developed, I'd say two months ago. So we were able to start using it to analyze our campaigns, and that helped us a lot with scaling, just because some campaigns, basically just going to show you the ROAS, but it doesn't show you how much you're actually taking home. So I'd recommend using Ad Guru, or even going using order metrics, so you can really see your numbers on a day to day basis. So that really helped with cashflow.

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Dylan Carpenter

Did you all have KPIs to meet, there in the beginning, and then in the end? Because I'm curious on the returning customer rate, how you were able to come up with [inaudible 00:19:38] KPIs without really knowing about them yet. So [inaudible 00:19:42] dark, or just hoping-

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Kendall Shaw

Yeah. So we had our break even cost per purchase for sure. But we were just blessed, when we launched the offer, right, we were getting really, really cheap cost per purchases. [inaudible 00:19:52] our break even cost per purchase. I'm not going to give the exact numbers, just because competitors will probably listen to this, but let's say our breakeven cost per purchase was like $25. When we launched initially, we were getting seven to $12 purchases. And we're selling a consumable, so even if we were losing money on the front end, we know we have good customer service, good email marketing, and a good follow up remarketing and retention system that will make money. And we are very profitable on the front end, as well as hyper profitable on the backend. And we'd even have enough time, and we actually hadn't even launched the subscription side of our business yet.

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Kendall Shaw

We just had repeat customers, and we have a really ... Segwaying into the next point, really making sure you have your Klaviyo set up correctly, initially. I would say that's something you want to set up after you launch, a week or so, so you know that you obviously have a proven product and offer. I just paid an email marketing agency, my buddy [Coby Gatsby 00:00:20:45]. He's a great guy as well. We paid him to do all of our campaigns, all of our email flows. And it wasn't cheap, but having that system in place makes having your backend set up really well, as well as diversifying your ad spend across other platforms, right? Most people who listen to this probably only do Facebook ads, which Facebook ads are amazing, but we really tested a lot of pay per click, a lot of quote search on Google, and that really helped us diversify our blended return on ad spend, and that really, really goes from there. I would say that's the main thing.

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Dylan Carpenter

Yeah. And before the call, I know you mentioned something big came up. Is that something you can bring up on the Shopify capital side, or ...

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Kendall Shaw

Yeah. So we just, once you start doing revenue, the Shopify capital just offered us, I think 30, $40,000 for percentage of sales. And we're on Shopify plus, because if you have problems with your ad account, or your customer service, you're going to get kicked off the Shopify payments immediately. But we haven't had any issues. Our chargeback ratio has been way below even 1%, I would say it's probably 0.2 or 0.3% at the max, maybe less than ... After over 20,000 orders, we've had less than a hundred chargebacks, right?

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Kendall Shaw

So they just offered us some funding, and we took it just to get more product, test other products. And we're also expanding into Amazon and other sales platforms like Etsy, just because e-commerce is booming, as we all know. And at the end of the day, we want to look at the business from a straight business perspective. And if you have a proven product, I recommend selling on other platforms, just because the buyers are already there, and it's their platforms. And if you have good packaging, you can get repeat buyers pretty easily. They might follow your Instagram if they purchase from Amazon or Etsy, and then now you have someone that you can reengage with if you're running retention campaigns, and retention campaigns are super duper awesome.

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Dylan Carpenter

Now on the Shopify capital side, is it ... I think it was a percent of sales you mentioned, but is there also an interest rate, or a fixed fee? Or is it just straight a percent of sales? [crosstalk 00:22:56]-

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Kendall Shaw

Yeah, I think it's a percentage of sales. Let me check my email real quick. I'm pretty sure it's a percentage of sales, plus obviously they're making money on it too. Excuse me. But yeah, just a percentage of sales, and they just go from there, really.

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Dylan Carpenter

No, that makes total sense. Because yeah, we ended up having another brand on, maybe last week or the week before, and I'll send you this recording, but he did PayPal capital, Shopify capital, and he has some nightmares. So I'll send you that, a shameless [crosstalk 00:00:23:28]-

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Kendall Shaw

Oh, Lord.

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Dylan Carpenter

... podcast, but it's cool to get other perspectives, just because, luckily, people have been through these ropes before, so it's good to get, how did it work for them? What kind of deal did they get? Just to see where you're sitting in that whole environment.

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Kendall Shaw

Yeah. I think it's 17% of sales, or something around there. Which is cool. [crosstalk 00:23:48]-

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Dylan Carpenter

You can probably get it back so fast too, yeah.

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Kendall Shaw

Yeah, we're not too worried about it, just because we know that capital is going to allow us to go into other markets and scale faster. We actually paid Welling Media, I know you know Chandler and them, just paying more for more content. It's going to be worse taking the investment, just because, look, we can reinvest our money, but why not use other people's money?

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Dylan Carpenter

Oh, and that stems to the final question of this. Once that Shopify capital runs out, what's you all's next plan, is it a VC, some more debt, what's you all's thoughts on, to ramp it up? Because if you all are doing this good, you want to add more fuel the fire. So I'm curious what's after Shopify capital.

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Kendall Shaw

Yeah. I would say definitely getting a line of credit, a very large line of credit, or just getting a private investor to buy out percentage of the business. We have a lot of options, just because the store has done well, and has done well really quickly. But we haven't even really started exploring those options. If we're looking for anything, it would probably be a hundred, $150,000 investment, around there, and just use that to really just catapult the marketing side. We can obviously bootstrap it too, but we, as the partners in my business, and I can speak on their behalf as well, definitely would like to pay ourselves out more, just because we have bootstraps from day one. So I know if we've got an investment, obviously we pay ourselves a percentage of that, and then reinvest a good portion back into the business, on just continuing to scale, using that for a lot of bigger influencers, maybe paying some big celebrities, things of that nature.

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Dylan Carpenter

Man. This has been juicy and interesting, man. I'm loving this. Well Kendall, man, how can anybody get in touch with you? We dove into some super nitty gritty info, some killer ads, some terrible ads, some cool little financial tips, more or less. But how can anybody get in touch with you? What are you getting into? I know you mentioned Ad Guru. But what's that little last minute pitch? You're welcome to get it out there for us.

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Kendall Shaw

Yeah. Yeah. If you guys want to get in touch with me, you guys are more than welcome to check our website out. It's called Maybach, M-A-Y-B-A-C-H, dash media dot com. That's my main company, my main entity. My Instagram is just my name, Kendall without the E, so K-N-D-A-L-L, I've got the OG username. But, shameless plug, but touching on Ad Guru, as an advertiser and a brand owner, I really see both sides of the eight ball, and I think it's super important to have a tool that's going to optimize your ads to help you scale. So I would say for anyone who's interested in really scaling even further, I would love to show you guys more about our software. But yeah, man, to anyone who was saying, now's a perfect time if you're in the e-commerce, or really any advertising industry, online advertising [inaudible 00:26:41] basically blow up these next few months.

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Kendall Shaw

So if you guys have any questions, more than happy to help. Don't have anything to sell you. I just generally like helping people. So you're always free to either hit us up on our website, or just shoot me an email, or DM me on Instagram, I'm here.

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Dylan Carpenter

Well, hell yeah, Kendall. You all heard it first, and now this next Q4 is going to be epic. So hit him up.

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Kendall Shaw

For sure, man. It's going to be very interesting, just because I'm curious to see, with everything going on right now with COVID, to see if there's going to be a second wave, or ... Not that we want that to happen, but to really see how the financial situation is, as well as, since there is going to be an election, I'm curious to see how the elections are going to affect the CPMs with bigger advertisers bidding on broad keywords. As I bet Trump's teams are not really doing any targeting, they're probably doing demographic based targeting, or location-based targeting. I feel they're past interest level targeting at this point, or how much money they're spending.

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Dylan Carpenter

Oh yeah. They're dumping buckets of money in there.

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Kendall Shaw

Yeah. So they're spending millions a week, so I'm curious to see how that's going to affect the CPMs. So, and also with FedEx and USPS, it's going to be very interesting scaling, just because we do sell a consumable. So I'm just curious to see how that's going to affect the LTV of the customers, especially because this Q4, even though there's going to be a big e-commerce boom, fulfillment companies and USPS, FedEx, and all the other companies, especially with the election coming around, it's going to be very interesting to see if they're going to be able to handle the volume. And if they're not, how much delays are going to be. Because as you know, UPS and FedEx, USPS, FedEx, all these other companies, they all actually do leverage United Postal Service still. So they're just marking up their price a little bit. So even if those companies get backed up, the only ... God knows how backed up the postal service is going to be.

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Dylan Carpenter

Oh, it's going to be absolutely bananas. But this is exactly why we have to have you on towards the end of Q4, to figure out what's been going on, man. I'm pumped to catch up and get you on this for [MV2 00:28:51] maybe two or three months down the road, to see how Q4's treating you so far.

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Kendall Shaw

For sure, man. I really appreciate you and your time today, I'm definitely excited to see ... The goal is definitely, I want to have my first seven figure Q4 on this brand. So doing 300,000 a month, if we do that, we should hit there for sure.

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Dylan Carpenter

Hell yeah. Well Kendall, man, it was a treasure chest of goodies, man. Much appreciated. But thanks for coming on, man.

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Kendall Shaw

For sure, for sure. And God bless, guy. I Look forward to being back on pretty soon here.

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Dylan Carpenter

Hell yeah, I want everybody to have a good one.