Dec 23 2023
Postscript SMS Aims for Best in Class

Postscript is an SMS marketing provider for Shopify brands. The company launched in 2018 and has since raised a whopping $106.2 million across four funding rounds, per Crunchbase. Alex Beller is Postscript’s president and one of three co-founders.

Postscript’s marketing platform is SMS-only and Shopify-only. To Beller, that translates to “best in class” performance.

In our recent conversation, he and I discussed the company’s focus, regulatory compliance, and more. The entire audio of our discussion is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: How was 2023 for Postscript?

Alex Beller: Postscript’s business is a reflection of the Shopify ecosystem. We only work with brands built on Shopify, so we’ve felt a lot of what ecommerce brands have felt this year. We’ve seen growth in terms of brands adopting Postscript. It feels like 2023 is the year we carved out our niche in the market. It’s been challenging, but honestly, as I reflect with my co-founders, every year has been challenging. That part doesn’t change.

We’re an SMS provider for brands built on Shopify. We don’t work with any other platforms. We don’t do email. We’re best in class for SMS on Shopify

Our platform is built for brands to connect SMS to order and conversion data. That gets fed into Postscript from Shopify, and it’s anonymized. Roughly 12,000 brands of varying sizes use Postscript. That’s not nearly all Shopify’s customer base, but it’s an excellent snapshot.

This year, we’ve seen inconsistencies. On the one hand, headwinds certainly seemed present. We’ve seen more brands go out of business than in prior years. We also saw aggregate growth slow down. The last few years we’ve had high annual growth rates. This year’s growth is smaller. Many merchants were closer to flat. Still, ecommerce did not fall off a cliff. It was a bit of a retrenching.

Bandholz: In 2021, Florida passed a sweeping SMS compliance bill. What are the legalities merchants should be aware of?

Beller: There are many compliance rules in the SMS industry. One is governmental regulation that creates legal risk for brands. At the U.S. federal level, it’s through the Telephone Consumer Protection Act or TCPA.

The other is carrier regulation — T-Mobile and Verizon — to impact deliverability. Carriers might shut a phone number off if a brand breaks their rules. Those companies are protective over their airwaves and inflexible when dealing with an appeal from a small to medium-sized business.

Then there’s the legal regulation. Historically, TCPA ensured companies never texted anyone who didn’t explicitly opt in or had opted out. State regulations have popped up over the last few years, adding new risks. Florida is one of the leaders in this, along with Oklahoma.

Much of the risk involves sending the messages and a higher threshold for opt-ins. Our approach is to upgrade our backend compliance so brands don’t have to worry as much.

Unfortunately, the state regulations have triggered a groundswell of lawsuits. We address this in our product and have an in-house legal effort to help brands if they need it.

Bandholz: Talk more about the risks to merchants.

Beller: Florida has longer quiet hours for subscribers in the state — from 8:00 p.m. to 8 a.m. There’s also a limit of three messages within 24 hours for a specific campaign or product. Those state-level regulations in Florida don’t exist at the federal level. They apply to any brand with operations in Florida. The penalties are meaningful — $500 to $1,500 per message per subscriber.

Unfortunately, there are plaintiffs who buy deactivated and old numbers to receive texts they didn’t sign up for or are in the quiet hours. These plaintiffs partner with law firms to certify it as a class action. If successful, they can run down everyone who received that text, greatly increasing the penalty, which, again, is based on every message and recipient.

Brands have multiple prevention options. Postscript won’t deploy messages during the quiet period in Florida or elsewhere. We also advocate that brands adopt terms of service that include a class action waiver, wherein subscribers agree not to participate. That would limit liability to a single subscriber, the plaintiff, at $500 to $1,500.

Bandholz: Postscript is SMS only. Do you plan to diversify?

Beller: It’s the early days for SMS, and we’re working on driving performance across the entire customer journey. We focus on subscriber lifetime value and list growth. There’s much opportunity for my co-founders and me if we can differentiate our product from competitors. We can be dedicated players.

Bandholz: Where can people find you?

Beller: Our site is Postscript.io. I’m on LinkedIn and @ringmybeller on X.

Ecommerce MGMT 0 Comments
Dec 16 2023
Bushbalm Normalizes Bikini-line Skincare

In 2016 David Gaylord was a Shopify employee looking for a side hustle. Then he came up with a funky idea: skincare lotions for hair removal along bikini lines. The business name was funkier: Bushbalm.

Fast forward to 2023, and Bushbalm is booming, selling lotions and trimmers directly to thousands of consumers and wholesale to Ulta Beauty and 3,000 waxing salons. It spends a whopping $200,000 per month on Facebook ads.

In our recent conversation, I asked Gaylord about sales channels, marketing, and, yes, the name. The entire audio of our discussion is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Tell us what you do.

David Gaylord: I’m the co-founder and CEO of Bushbalm. We focus on bikini line skincare — below-the-belt products for ingrown hairs for razor burn. We also have a trimmer for down there. Our primary business is skincare, whether oils, exfoliants, or serums. We have a hydrogel mask called The Vajacial, which is quite popular.

We launched in 2016. Before, I worked in my family business in Canada selling hardwood flooring. When I was in university, my dad wanted to try ecommerce. I thought it was ridiculous. But I did what he said and looked at platforms such as BigCommerce and Magento. We chose Shopify because it was Canadian.

Four years later, I graduated from university and got a job at Shopify. From there, my partners and I started Bushbalm as a funky idea. It took us four years to gain traction. We didn’t quit our jobs until 2021. We were entirely bootstrapped and remain that way today.

During the four years, we spent very little on marketing. We did an Etsy show, which was good for talking to folks and learning what they wanted to say about us. When we spoke about “pubic oil,” they said, “That’s disgusting.” We tried “bush oil,” and they didn’t like that either. We got more into skincare and asked questions like, “Do you get waxed? You probably have irritation.” And they’d say, “Yeah, totally.” So that’s where we focused the business. In 2020 and 2021, we pushed hard on Facebook ads. In the last two years, we’ve leaned away from that. But we still spend at least $200,000 on Facebook monthly.

Bandholz: Do you get much friction with the name of Bushbalm?

Gaylord: We interviewed someone for a job here who said, ” I think you guys should change the name. And we were like, “You’re not hired.” A lot of folks we talk to appreciate that we’re blunt. The brand is kind of in your face with our TikTok channel. Sometimes, one in a hundred people will say, “That’s gross.” The other 99% say, “Why is it gross? Everybody has these concerns.” So, I think the name’s pretty powerful long-term.

Bandholz: You’re exploring brick and mortar, setting up your own salons.

Gaylord: We’re about 50% direct-to-consumer, and then 25% is wholesale from selling to about 3,000 waxing salons. We’re also in Ulta Beauty, the giant retailer, and Amazon.

We’re looking to double down in our own physical-store waxing salons. We’re not here to build 100 salons and be a huge chain. In a studio, we’ll learn more about the products and how people use them. We’ve been more eager on the content side. We don’t do much on YouTube. We do a lot of TikTok and Instagram, but having an in-store space is something we’re trying to figure out.

We have an excellent path to long-term wholesale growth. Ulta Beauty was the first domino to fall. They’re awesome. What’s good about Ulta is the shave section we’re in, which is basically the same style as CVS, Walgreens, Target, and Walmart. Five years ago, the taboo was so strong that no one would be around us because of the name. Now everyone’s like, yeah, that’s cool, you guys are funky. I think Manscaped, for male hygiene, paved the way for the taboo to go away.

Bandholz: Walk us through your content production.

Gaylord: We have a few folks on our team who connect with waxing salons and film content, or we’ll pay the salons for a photo and video shoot. Usually, 80% of the stuff doesn’t work, but 20% is excellent. We’re looking to scale. The need for content nowadays is insane. It’s the hardest part of Facebook ads.

We hired a part-time in-house aesthetician, a skincare pro. That has been a tremendous addition. She helps us with content. Otherwise, a lot of it’s sourced from content producers. The best thing we’ve done is ask photographers to subsidize photo shoots. They get photos, and we get photos. Everything works out. Obtaining videos that way is hard, but it works for photography.

We’ll buy content from folks. Communication style, personality, and entertainment are so important. It’s more intriguing to follow along a person’s journey instead of, for instance, the art of doing a leg wax. That type of video might be interesting, but building a character or persona to grow a brand does better.

The iOS and Facebook privacy changes were an easy hurdle for us. We’ve got 3,000 wholesale accounts, with one salesperson and one account manager. So it’s a super-efficient lead and very automated. Folks are eager to find something that works. There are no distributors for it either. So it’s very niche. The U.S. has 10 times more waxing and nail salons than Starbucks stores. I think it’s 330,000 salons, which is mind-blowing.

Direct-to-consumer was about 95% of the business three years ago; now it’s 50%. So we’re growing way more on this professional channel. And Ulta is doing well.

Bandholz: Do you worry about advertising attribution and tracking?

Gaylord: On the wholesale side, it’s hard because when we advertise on Facebook for our Ulta business, we don’t get sales data for a week — every Monday at 8:00 a.m. So we could run Facebook ads on a new launch at Ulta without knowing if they’re working.

Bandholz: Where can people support you?

Gaylord: Our website is Bushbalm.com. We’re on Amazon and Ulta. I’m on LinkedIn.

Ecommerce MGMT 0 Comments
Dec 9 2023
Argentina Suppliers Fuel Palermo House

Merchants often default to China for outsourced manufacturing. Yet competitive suppliers exist worldwide. For Palermo House, a direct-to-consumer provider of luxury furniture, Argentina is a natural source.

Marco Ferro is the company’s California-based founder with Argentina roots. He was born there, as were his parents, co-owners of the business.

In our recent conversation, I asked Ferro about importing goods from South America, shipping to customers, bootstrapping challenges, and more. The entire audio of our conversation is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Give our listeners a quick rundown of what you do.

Marco Ferro: I am the founder and CEO of Palermo House. We are a direct-to-consumer home goods furniture brand launched in 2020. We’re known for our Dune Lounger, a mix of a beanbag and a vintage chair. It comes in vegan leather, velvet, and some outdoor options. It’s stylish and comfortable, and people love it. Architectural Digest featured us. That’s been our hero product, although we have a vision to expand into other products.

My dad, my co-founder, designed the chair a few years ago. He comes from a family of architects. He created the lounger chair with a mid-century modern look. It fits well with that vibe and is minimalistic, functional, and comfortable. It’s not super rigid and yet stays in one shape. It molds to your body and changes when you sit on it.

Bandholz: Your suppliers are in Argentina versus China, like everyone else. What are the logistics hurdles in dealing with South America?

Ferro: I was born in Buenos Aires, Argentina, and so were my parents. My dad has many connections to Argentina and feels comfortable working there. It’s not the easiest country to transact with, with challenges around payments and political instability. But the situation is generally favorable. The exchange rates have been reasonable, so we’ve stayed for two-plus years.

As we scaled, we didn’t want to go to China or other countries that may require huge purchase orders. We wanted to scale comfortably. The good thing is that we have a lean and agile supply chain. We can acquire the lounger covers almost just in time, avoiding excess inventory. The filling that takes up more space is made here in California. The covers are made in Argentina, and we recently brought on a supplier in Columbia. But that’s not to say we haven’t ruled out going to China, India, or some other place where we can potentially find more cost efficiencies.

We ship customer orders unassembled in two boxes because large dimensions incur ridiculous oversized fees.

Bandholz: How do you acquire customers?

Ferro: We invest in paid marketing. Our primary channel is Meta — Facebook and Instagram. We also use paid search on Google. Our average order value is over $1,000. That gives us more room to cover acquisition costs.

We do organic Instagram, email, and SMS. We believe our products drive strong word-of-mouth referrals. We don’t have much data to validate that, but furniture, especially a product like ours, stands out in a home. When inviting friends over, it’s pretty visible, a mini showroom for future customers.

Bandholz: You’ve gone beyond the chair, offering home accessories, rugs, and throws.

Ferro: It’s been hard to sell anything that’s not the lounger. We haven’t found the right supplier for those products from a quality and price point. The rugs, for example, are 100% wool and hand-woven, made by artisans in the north of Argentina. I have a rug in my home. It’s thick and beautiful. But making these takes a long time, which is not great for business. They require some investment upfront as well.

Bandholz: Your product photography is fantastic.

Ferro: We shoot most photos ourselves. My dad plays a significant role as an architect. He has an eye for houses, and we will do some location scouting ourselves. It’s a collaborative effort, and we’ll choose the house. It’s mainly been here in Southern California. We use Peerspace — Airbnb is mainly for staying the night. We only need a couple of hours during the day. Peerspace is tailored for that use case for a premium price.

You have to get a lot done in the shoots in a limited time. We have big products. So it’s renting a U-Haul, going to the location, and moving big products around. At least they’re super light. We use male and female models as well as kids and pets. We try to show our products are for the whole family.

Bandholz: You’re bootstrapped?

Ferro: Yes. My dad, mom, and I are the owners. We haven’t raised any outside funding, so entirely bootstrapped. We’ve tripled annual revenue every year since our 2020 launch. That’s created funding challenges. We are starting to talk to potential investors. We like the idea of a partner in the space that can add value, capital, and talent.

In the meantime, we’ll continue running the business as bootstrapped. We’re working on our gross margin and specifically on our product cost. But we never compromise quality and feeling.

Bandholz: Where can people buy your stuff or reach out?

Ferro: Check out our website — Palermo.house. I’m on LinkedIn.

Ecommerce MGMT 0 Comments
Dec 2 2023
Beard-care Founder on Juggling Brands

In 2014 Eric Steckling launched Brio, a Michigan-based direct-to-consumer seller of beard trimmers. In 2022 the company acquired Ollie, a subscription-based provider of teeth whiteners.

The brands are seemingly complementary. Both sell grooming products. But merging them was challenging. Having been combined post-acquisition, they now function separately.

In our recent conversation, Steckling addressed launching Brio, acquiring Ollie, and lessons learned along the way. The entire audio of our discussion is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Tell us what you do.

Eric Steckling:  I run two direct-to-consumer businesses. Our core brand is called Brio. We make grooming tools for men, namely a beard trimmer. Ollie is an oral care company that started as a subscription-based teeth whitening strip. We acquired that brand in 2022 and then rolled all of our toothbrush stuff into it. Since then, we’ve developed our own toothpaste and related products.

Initially after the acquisition we ran both brands from Brio’s site. But we realized it made sense to separate them, with the oral-care content on one site and the trimming and grooming items on another.

Ollie was on its own when we bought it. I made some missteps in integrating it with our business. We switched subscription platforms twice and lost many subscribers. We merged it with Brio, but now it’s on its own.

On the Brio side, we can acquire customers profitably from the first sale, but beard trimmers last for years. We have to acquire new customers constantly.

Ollie is the opposite. Getting folks to buy an electric toothbrush is tough. But they come back and purchase brush heads for years.

Bandholz: You’re in a competitive space. How do you stand out?

Steckling: My perspective has changed after 10 years. We can stand out because the big brands have made terrible products in the last 15 years, not necessarily on the high-end, but the $30 versions. The $20 to $50 trimmers from major brands are not very good. That leaves the door open for us. Plus, our customer service is superior. If a customer has a problem with his trimmer, I will help immediately. He would never get that with a major company.

I did a deep dive into Andis, a legacy U.S. trimmer brand. It’s a fascinating story. The company started in Racine, Wisconsin, about 100 years ago as an electric motor supplier. They were good at making motors. But they eventually shifted into a big-box retail business, making $20 items.

It’s an example of big companies leaving gaps in the market that ecommerce brands like us can fill.

Bandholz: You sell on your own sites and on Amazon.

Steckling: All of our Amazon sales are from our own marketing, more or less. In 2014 our revenue was 100% on Amazon. It’s shifted over the years. It’s now mostly on our websites.

We’re not getting any free sales on Amazon. Everyone that buys there looks for us. Our listings are not showing up when folks search for beard products. Still, if we’re not there, we’ll lose the sale for branded searches.

So we’re leaving money on the table if we’re not on Amazon. But it’s a huge pain. There’s a ton I hate about Amazon. We’ve had so much trouble. They lose inventory, deactivate listings, hackers take over our listings, change the photos. You name it, and it’s gone wrong. String and tape hold the system together. It was built 20 years ago and has so many unfixable legacy problems. Although this year, Amazon has been much better.

Bandholz: You have a good system for finding influencers.

Steckling: It helps to have relationship managers coordinating affiliates, influencers, and content.

The most important thing when finding the right influencers is the niche. What is their expertise relative to your products? That, to me, has been the most significant differentiator for conversions. We almost ignore the number of followers because expertise and persuasiveness are much more critical. We’ve had videos with millions of views that didn’t sell anything and others with thousands of views that sold a lot.

With Brio, the best influencers focus on men’s grooming. We’ve tried fitness, automotive, and other male audiences. They don’t work as well. For Ollie we’ve had dentists address niche topics and include our product. The video might get just a few thousand views, but conversion is massive.

Bandholz: Where can people buy your trimmers and teeth whiteners?

Steckling: For the trimmers, go to Brio4life.com. To buy our whiteners and Sonic toothbrushes,  OllieSmile.com is the place. Find me on LinkedIn.

Ecommerce MGMT 0 Comments
Nov 18 2023
Disputifier Founder on Winning Chargebacks

Mark Wagner believes the best chargeback recovery systems are automated and data-driven. He founded Disputifier, an Austin, Texas-based chargeback software company, on that premise in 2021.

He told me, “We’ve developed an intuitive system over the years. It combines data from the transaction with our testing and identifies an appropriate response.”

He and I recently discussed the state of ecommerce chargebacks and how merchants can recover false claims. The audio of our entire conversation is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Tell us what you do.

Mark Wagner: I run a software company called Disputifier. We’re an automated chargeback recovery agency. We see over 60% of chargebacks being fraud. These are not impossible to win. It’s more about separating the valid credit cards. Say a crook bought someone’s credit card info on the dark web. That’s a very different situation than a customer trying to get free stuff.

We help with duplicate chargebacks [where a cardholder wins a chargeback, then loses it, then refiles it], which are hard to prevent but easy to win. Duplicates are our highest win rate — around 90%. We attach screenshots of the checkout page and the purchase process for duplicate responses. We submit all the evidence to the card issuer after testing. We have a ton of data identifying the exact way to format a response, which can have a huge impact.

We present the evidence via PDFs. So, instead of using the Shopify Payment’s response, we built our own from scratch. We can highlight specific areas and make it almost like a lawsuit with different sections. We try to format it differently from Shopify.

Bandholz: Do real people at the issuing banks read the documents?

Wagner: Yes, the banks will print your chargeback response and throw it on someone’s desk. That person will manually flip through it and decide whether to side with the merchant when he or she has already agreed with the cardholder. So the formatting and images matter. We keep text to a minimum — two to three sentences. Folks are visual. It’s all in the format, the graphics, the images, and how it’s presented.

We’re software-based, meaning we programmatically ingest data from Shopify and other sources and then add those into our automated response. We manually review our responses to ensure they’re up to par and if we have any custom evidence, but typically over 90% of responses are unchanged from what our system generates.

Bandholz: Can’t you just use Shopify’s fraud analysis?

Wagner: Shopify’s fraud analysis is too basic and not always helpful. It might have 10 data points without explaining the reason for flagging a chargeback as low or high risk. For instance, Shopify might mark a chargeback as low risk even if the order was placed outside of North America and shipped to California. It doesn’t make sense. Conversely, many are flagged as high risk with no serious indicators. If you’re refunding those, then you’re losing money. We’ve run tests. Roughly 7% of Shopify’s medium-risk orders (and 35% of high-risk) turn into a chargeback. So the vast majority are legit buyers.

Bandholz: How much effort should merchants put into fighting chargebacks?

Wagner: It depends on your size, business model, and average order value. It becomes a necessary but labor-intensive process if we’re talking about higher average order values — hundreds to thousands of dollars. If your AOV is lower, you should not spend time on it.

When I ran ecommerce brands, we had an employee who would try to determine if an order was fraudulent. She’d call everyone in the office and say, “Guys, look at this.” End of the day, we still had a ton of chargebacks. It’s an imperfect process that is better not done by humans.

Bandholz: What’s Disputifier’s approach?

Wagner: We’ve developed an intuitive system over the years. It combines data from the transaction with our testing and identifies an appropriate response. It merges the two. It’s a customized response for every order but matches the template. That format has worked for us. It then goes through a manual review and gets submitted on a merchant’s behalf.

We make money by taking a percentage of orders we win.

When Shopify brands come to us, they’re winning around 25%. Our win rate is a bit over 50%, depending on the processor. Alternate payment methods seem to have a fair dispute process, whereas credit card issuers can be unpredictable.

Merchants should always require customers to agree to terms and conditions, including the refund policy, during the checkout. Customers cannot complete their order unless they click the box to agree. Sellers can then reference it if a customer falsely claims a refund. It significantly helps the win rate.

Again, this is for high AOV. I wouldn’t do it on low AOV. Plus, for very high orders — $5,000 or more — merchants should make an actual contract with the customer. This will help with a win, too. Never take a chance with a big purchase.

Merchants should test and determine what that winning response looks like. It’s tough for brands to figure out the entire chargeback process on their own. It’s murky. Every bank has slightly different rules.

Bandholz: Where can folks get your software?

Wagner: Our site is Disputifier.com. Follow me on Twitter at @themarkwagner or on Instagram and LinkedIn.

Ecommerce MGMT 0 Comments
Nov 11 2023
Swing Dancing Business Booms

Ryan Hunter Masters is a Colorado-based musician who loves to dance. In 2015 he launched Show Her Off to teach swing dancing online. The business sells video courses — streaming and DVD — to booming success.

I first interviewed Hunter Masters for the podcast in 2019. In this second conversation, we addressed the origins of Show Her Off, customer acquisition channels, and his internal litmus test for starting any new company.

The entire audio of our conversation is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Give us a recap of what you do.

Ryan Hunter Masters: I have a company called Show Her Off. I sell video courses that teach couples how to dance. I won’t turn you into a professional dancer or get you on Dancing with the Stars, but I will teach you in less than 60 minutes how to dance with your partner and have her smiling and laughing. More importantly, couples feel closer and more connected compared to spending time looking at screens or watching Netflix and not engaging.

I teach entry-level social swing dancing. Many couples use it for their first dance. We have hip-hop, pop, classic rock, and country. You can dance to any music genre with this style, which is why it’s so popular and accessible.

Many couples who’ve never danced will start with this program. Some catch the dance fever, the dance bug, and they’re like, oh, wow, this is a lot of fun. Some take it to a local studio and learn professional dancing one-on-one with an instructor. The goal of what I teach is to have fun and give couples the confidence to step out on the dance floor and look good.

I do things that excite me. I love to learn and try new adventures. That’s how I got into this business. I ran a marketing firm managing Facebook and Google ads campaigns. I moved to Colorado, learned swing dance, and thought, “Gosh, this is so fun.” I already had the infrastructure to make videos because I had a fitness YouTube channel called Sparta Strength. I realized I could make videos teaching folks to dance. No business intention. It was purely organic and fun.

Someone told me I should throw the YouTube videos onto Instagram. Those posts got a lot of response and engagement. I made more and then decided to do a full-on shoot. I hired a videographer and a photographer, gathered friends, and found a romantic background for a cinematic shoot in the mountains of Colorado. That content did well. Show Her Off is a romance brand. I look for romantic cinematic landscapes in the background to add that extra emotion.

The business wasn’t making any money for a couple of years. But it was fun. Folks liked it, and I was having a good time. My marketing agency paid the bills. We eventually turned a corner. The business started to blow up. On the side, I’ve been exploring making music and singing.

Bandholz: You seem to follow your passion.

Hunter Masters: My litmus test is, “Would I do this for free because it’s so fun?” Sometimes, you don’t know until you start doing it.

That’s something that traps many entrepreneurs who are starting. They don’t know how an idea will make money. There are so many options, but an alternative way to think about it is there’s something you can do or are willing to do for free because it’s fun. Can you build an engaged audience of 10,000 to 20,000? Somewhere in there, as long as you’re paying attention and listening, there will be an opportunity to make money. You have followers who like you and your products or services. You can solve a problem for them and provide value.

Bandholz: How is the online course set up?

Hunter Masters: We have an online date night program. It began as an in-person romance tour where my friends and I would go around the country to wedding venues. We’d sell tickets, couples would come, and we’d teach three dance moves they could mix and match. I would have a photographer on-site with a lovely backdrop for the couples to get their own selfie photo, and we’d pose them in a dance photo so they had something to remember by, and then we’d have open dancing for the rest of the night.

We always sold those events out. A couple from California traveled to an event outside of Dallas. Our tickets were $35, so they spent 10 times that to get there. Another couple drove eight hours. I realized if folks are investing this kind of time to attend, maybe I could turn it into something else. That’s when I decided to offer digital instruction.

Bandholz: What are your busiest times of the year?

Hunter Masters: The week before Valentine’s and the week before Christmas we have a 400% increase in business. It’s a huge surge in customer support, ad management, and paid traffic. During those periods, I’m up at 7:00 a.m. and go to bed at midnight; for the most part, I’m on the computer all day. I call it my day trading hours.

For the busy weeks, I use a bid cap strategy for Facebook ads. It’s very technical, but it’s basically manual bidding inside Facebook. I bid way more than I would pay, and that pushes out other advertisers. I know from tracking my historical data this is the time I can do that.

It’s still a gamble. I stand all day and refresh analytics, monitor Facebook ads, check Stripe, and ensure everything’s trending up. If an ad starts to drop, I’ll immediately pull it down. Experienced advertisers advise bidding one and a half times your cost per acquisition. If your CPA is $100, bid $150. I might do three, four, five times my CPA. I’ll start with $500 to get it rolling.

Bandholz: Where can listeners buy your program?

Hunter Masters: Go to ShowHerOff.com. We are on Instagram, YouTube, and Facebook. Check out my music at Hunter Masters on Spotify.

Ecommerce MGMT 0 Comments
Nov 4 2023
New Beginnings for Beardbrand

The last time I discussed my company in an episode was in July. Things were close to their worst. We had furloughed our team for a month. But now, thankfully, the team is back to full-time. Our current strategy is focusing on Facebook as an acquisition channel. We switched our Facebook marketing approach from multi-phase testing to bid caps, something I learned from Andrew Faris.

We made the change at the beginning of October, and we’re seeing our cost per acquisition fall in line with our expectations for profitable growth. The downside is we’re getting only a few conversions daily due to the negligible budget. We’re still trying to figure out bid caps and how to create content that scales on Facebook.

New Channels

I’ve learned we constantly need to try new tactics from a tiny percentage, but not at the rate of putting our business at risk. Paul with BK Beauty was on the show a couple of weeks ago. His company continues to blow up — TikTok Shop has been a significant player in their successes. We’ve been trying to get our TikTok Shop up and running, but thus far TikTok Shop has been the buggiest software I’ve used.

Beardbrand launched on Amazon in January of this year with the hope of replacing the volume we were doing on Target. Amazon ramped up within the first three months. We stayed at that mark for the next six or seven months. We’ve had some growing pains with Amazon shipping the wrong products and a few review issues. It’s been a challenging platform. Nevertheless, as of a couple of days ago, it looks like we’re approaching a seven-figure annual run rate on Amazon, which is halfway to our goal.

Inventory

In July we had just hemorrhaged a ton of cash. Fortunately, we’ve seen our cash flow even out, and we’re in a better position. I’m not losing sleep anymore. We’re not throwing a lot of money back into savings, but I don’t want to significantly scale back the business from where it is now. I want to stay lean. That means ordering smaller inventory amounts than I would typically feel comfortable with and being okay with selling out to ensure that all my cash is not tied up in inventory that might not move.

One of our strategies is to be heavy on cash and light on inventory. There is the risk that we won’t make any money if we don’t have any products to sell. But if we’ve got all our capital tied into inventory that’s not moving, that’s not good either. It’s nice to have the flexibility to allocate resources to opportunities that may significantly impact us. We won’t go out of stock on our top-selling products. But we will delay ordering slow-moving items into the holiday season and focus on your best sellers. As this recession moves behind us, we hope to have a fuller inventory again.

Incentives

I’ve always wanted to build Beardbrand without incentivizing through discounts and promotions. However, being inflexible with discounts did not allow us to grow as we wanted, so we’re exploring offering discounts to new customers and subscribers. As a result, we have seen nearly a doubling of our subscriber list and some success driving up our average order value, too. We did that by raising our prices and launching a bundling program. We compared the bundling offer to a percentage-off tiered bundling system where you spend more and get a bigger discount. The free items drew more action from our customers.

The downside of the bundling program and the higher price point is that our conversion rate has decreased. Overall, our net revenue is down. However, we are not hemorrhaging cash anymore. With a higher order price, we’re doing fewer orders, so we’re putting less of a burden on our team, and we have fewer customer service tickets to fulfill. If you’re planning to build a business that you want to run and operate for years, think about developing a pricing and service structure for the customers at a higher price point.

As we approach Cyber Monday and Black Friday, we historically have an ongoing promotion called Decembeard. It’s a daily giveaway. Customers enter by placing an order, and depending on the order number, one out of 10 buyers will win a $25 gift card. We’re doing it for the first 10 days. When we go to the 10th of the month, we raise that to a $250 gift card, where one out of 100 will win.

Perspective

Beardbrand is now at a breakeven profit-wise. That’s not what I expected after 11 years, but I’ve come to terms with the fact that this is essentially a new business. I have to look at Beardbrand from a startup perspective. What worked for us when we launched in 2012 is entirely different than now.

I have to remind myself that being in the arena is the goal and to focus on the wins. The benefits of a win, such as a higher AOV, will compound for the business. If you’re struggling now and things seem hopeless. I’m right there with you. It is not fun or confidence-inspiring. But fight forward. Find opportunities and make your business what you want it to be.

To check out how we’re incentivizing this holiday season on our website, visit Beardbrand.com. Feel free to follow my Twitter for updates.

Ecommerce MGMT 0 Comments
Oct 28 2023
Retention.com Founder on ‘Email Laundering’

Adam Robinson is a former Lehman Brothers financier who in 2012 founded and later sold an email marketing company. Among the company’s features was “identity resolution” — the ability to locate folks’ email addresses.

That identity technology is the basis of Retention.com, which he launched in 2019. The firm can link anonymous website visitors to their email addresses. The website’s staff can then email those visitors, soliciting business. Robinson calls the process “email laundering.”

He and I recently spoke. We addressed privacy rules, spam concerns, and acquiring the Retention.com domain.

The entire audio of our conversation is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Give us a rundown of what you do.

Adam Robinson: I own a software company called Retention.com. We identify anonymous website visitors, mainly for big Shopify stores.

We do two things. One, someone hits your website, they don’t fill out a form, and they leave. We can get an email address for that person, help you email and add them to your list safely. Using the same technology, we enable abandoned cart emails. Most folks are not logged into a store these days. They’re logged into Amazon, Facebook, and Instagram.

We’re a U.S.-only product. The initial reaction to our service is often, “What about the General Data Protection Regulation?” But we’re not in Europe, so GDPR doesn’t apply. It depends on where the person is. A European citizen in the U.S. is not subject to GDPR. In the U.S., the CAN-SPAM Act of 2003 says email must have an opt-out, but it never mentions opt-ins. So long as there’s an opt-out link in your email, you can send it.

We used to be called GetEmails. We would place a pixel on our customers’ sites and then provide email addresses for their anonymous web traffic. We started focusing on Shopify stores and built a suite of bottom-of-the-funnel products — abandoned cart emails.

I saw an opportunity to focus on Shopify. I wanted to get the most prominent domain name possible with the most authority and relevance to what we were doing. I thought Retention.com was that. It’s not how an ecommerce brand would define retention, but still, you hear the name and know what that company does.

Bandholz: Someone must have been squatting on a domain like that.

Robinson: A woman had owned it for 29 years. To find that out, I first went through GoDaddy’s domain broker service. I found nothing. Then I asked a domainer friend. He told me he could help. He knew many folks in the domain industry. He said I would never get it if a big company owned it. If an individual owns it, it will probably be costly. I asked how much, and he guessed $300,000.

At the time, my business was in a position where we didn’t have a lot of employees, but we had a lot of revenue. It’s not the case anymore. We have a lot of revenue and a lot of employees. So I said, “I’ll spend a month’s free cash on this. Let’s do it.” Two months go by, and he tells me he has good news. “Someone owns this. It’s not IBM or Microsoft. However, the woman thinks her domain is priceless.”

She had a deal for $850,000 a few years before that fell apart. So that number was this number in her head. My friend got her down to $450,000 — $200,000 upfront and $250,000 in one year. I thought it was a great deal. I was ready to do it. Then the woman slept on it, woke up, and said $800,000 upfront.

I was ready to pay a maximum of $500,000. My buddy told me we could probably get it for that price, but it would be a couple of years down the road. He asked me, is it worth an extra $300,000 to have it now? I’m like, you know what? It probably is. I bit the bullet and paid the $800,000. It was painful but worth every penny. I have not thought twice about it.

Bandholz: You now own Retention.com. How do you obtain visitors’ email addresses?

Robinson: We partnered with publisher networks for the identity info, which we capture and transfer to our customers. We’re the middleman.

The theory I’ve formed is from talking to many privacy attorneys. Tracking U.S. consumers online is not going away. The argument is whether consumers are aware that they’re being tracked. There’s no liability for brands with clear policies collecting visitors’ addresses. Visitors might not read the policy, but it’s there.

Email recipients rarely trace it back to us. Recipients sometimes ask why you’re emailing them. We have an elegant way of responding. It’s rarely a problem, but typically, the brand (our customer) gets one email daily from somebody asking, “Dude, why am I on this list?”

If they get mad, we show them the date in the URL of where they opted into the publisher network. That shuts them up.

Bandholz: What about spam rates?

Robinson: There is an industry-wide accepted hurdle of one in 1,000 or 0.1%. A merchant’s main list is likely well below that, especially if the company uses Klaviyo, which cleans up lists.

Folks unsubscribe. They complain. If you’re getting first-party opt-ins, the spam complaint rate is likely below 1%. Our emails will be higher than that —  maybe 5%. That’s not a problem because sending reputation is evaluated by looking at all the emails that go out daily, not just ours. It’s the total number of spam complaints over the total number of sends.

So even though our spam rates are more than they should be, it hardly changes anything if it’s only 2% of your emails. That’s the whole reason it works. You could think about it as email laundering.

Bandholz: Where can listeners support you?

Robinson: Our website is Retention.com. I’m on LinkedIn and @RetentionAdam on Twitter.

Ecommerce MGMT 0 Comments
Oct 21 2023
New TikTok Shop Spurs BK Beauty

Paul Jauregui had much to celebrate when he first appeared on this podcast in 2020. BK Beauty, the cosmetics company he co-founded with his wife, Lisa, had reached $1 million in sales in its first year. He returned in early 2022 with more good news: The company had launched a thriving affiliate marketing program and bypassed the Facebook ad meltdown from iOS 14.5.

He’s back, having surpassed a whopping $10 million in annual revenue, bolstered by early success on TikTok Shop. In this our third interview, he shares BK Beauty’s growth challenges, positive TikTok vibes, and more.

The entire audio of that conversation is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: You’ve reached $10 million in annual sales in just four years.

Paul Jauregui: Yes. Three years ago, we were celebrating crossing the $1 million mark. Last week, we just crossed into eight figures. Managing that comes with challenges. We’ve learned a lot. Our business has three components at any given time — supply, demand, and delivery. Along the way, we’ve had supply-related problems, forecasting glitches, and inventory shortages.

On the demand side, paid customer acquisition was a big part of our recent growth. Going from $5 to $10 million in annual sales throws the supply equation out of whack. We’re doing fulfillment in-house, so our capacity to deliver goods and packages to our customers and get them out the door is reaching a level I never expected. Last month, we shipped over 20,000 packages. We have a daily baseline but still experience huge spikes with various events and launches.

Bandholz: You’re now selling on TikTok.

Jauregui: We’ve been on TikTok Shop for about a month and a half. These are the pioneering times. When we joined, it was before Shopify rolled out its native integration. We found some initial success. We were also onboarding into Amazon. We were midway through the process and working with Amazon’s emerging brands team. However, a few days ago I emailed Amazon to push that launch into 2024.

Instead, I need to focus on an area of the business that aligns more with our DNA. We’ve always worked with content creators on social platforms. TikTok Shop aligns well with that effort. We’re seeing a lot of success. It makes up about 15% of our total revenue on any given day, and that’s growing.

However, TikTok is spending a lot of money extending discounts to buyers on the platform — roughly 20-40%. We don’t pay for that. It drops directly to the bottom line. TikTok also offers free shipping, which goes into my pocket too. Both of those — discounts and free shipping — are helping with conversions.

There are many benefits to getting in now with TikTok Shop. We anticipate heavy promotions by TikTok during the holiday shopping period in three key areas: merchants, consumers, and content creators.

We’ve been running an affiliate program via ShareASale. That’s how we’ve compensated folks on platforms like YouTube. However, it was not easy to have an affiliate link on TikTok. There’s no description box below the videos, and not everyone goes into the comments. We would see a video on TikTok about us, and our YouTube organic traffic would surge because folks had to Google us to learn more and buy our products.

All of that now takes place on TikTok. Folks watching the videos can check us out right there. Before TikTok Shop, dozens of prominent creators on that platform talked about our products. But, again, there was no kind of clear path to buy. I looked at it as top-of-the-funnel awareness.

Now TikTok captures the actual transaction. The sales come from content creators talking about products they love. TikTok has enabled them to monetize that more effectively and share it with the consumers without leaving the platform.

One of our top videos on TikTok has about 1.7 million views. A content creator put it out a few weeks ago. It’s generated low five figures in sales and a good deal of commissions for her.

Bandholz: Is that process similar to Meta’s shops?

Jauregui: No. We’re on Facebook and Instagram shops. We have ads running on those platforms. But it’s not getting much of my attention. Ecommerce is a priority for TikTok. They have their own native affiliate program, checkout, and ability to create demand and awareness. There’s even a TikTok fulfillment. It’s all self-contained.

TikTok’s ecosystem is unique. Meta’s advertising platform is the world’s most efficient customer acquisition solution. TikTok has that, too, but it’s enabling creators to earn a commission, incentivizing them to produce more content. Meta creators don’t get commissions that I’m aware of — at least not in a straightforward way.

So our focus now is educating creators on TikTok and getting them onto TikTok Shop. Many creators have not tried it. To help, our team created a guide. We’re contacting creators already talking about us on TikTok. That’s where we see the most success.

Bandholz: Where can folks reach out to you?

Jauregui: Our site is BKbeauty.com. I’m @pauljauregui on Twitter. I’m also on LinkedIn. Reach out, and I will send you that guide.

Ecommerce MGMT 0 Comments
Oct 14 2023
For Manly Bands, Manufacturing Is Storytelling Gold

Manly Bands is a direct-to-consumer seller of men’s rings. The company launched in 2016 after John Ruggiero, the co-founder with his wife Michelle, couldn’t find a suitable wedding band.

This is Ruggiero’s second appearance on the podcast. In April 2021, we discussed the company’s founding, unique ring materials, and more. Since then, Manly Bands has acquired its manufacturer. The making of rings from, say, Jack Daniel’s whiskey barrels or Fender guitar strings creates compelling video, says Ruggiero, perfect for storytelling on social media and elsewhere.

The entire audio of our conversation is embedded below. The transcript is edited for length and clarity.

Eric Bandholz: Give us a rundown of what you do.

John Ruggiero: My wife, Michelle, and I started an online ring company called Manly Bands in 2016 to solve a problem of wedding bands for men. We were just married. I have large fingers and couldn’t find a ring that I liked that was not overpriced. My options were ordering from a catalog or having something custom-made.

I ended up buying from a website. The ring arrived in a flat mailer, with no box or customer service. It was a horrible experience by today’s ecommerce standards.

We got married, moved to Florida, and needed a job. We told ourselves, “We’re both entrepreneurs. Why don’t we create our own business?” We discussed the types of problems we’d seen and how to solve them. My ring experience came up, and we opted to try to solve it for other guys.

Our goal when we started was to pay rent. We thought making a couple thousand dollars a month from this would be fantastic. We considered it a lifestyle business, not high-growth. It was just Michelle and me in our garage designing rings and sending them out to customers. We had hit on something. Our message resonated with prospects.

Michelle and I make an excellent team. I come up with ideas, and she’s the implementer. A lot of our success goes to her creative mind. She names the rings and develops personas. She connects the rings to customers. Describing a ring solely as “eight-millimeter black” didn’t cut it.

We designed rings from unique materials, such as Jack Daniel’s barrels or special metals. The business took off. Since then, we’ve grown dramatically. We now have over 55 people in the Manly Bands family. About half of those are ring artisans who work in our recently acquired manufacturing shop in Utah.

Bandholz: When did you acquire a manufacturer?

Ruggiero: About a year and a half ago. We had been their customer for years, so we knew them well. Most of their business was wholesale, which didn’t interest us — going to mom-and-pop jewelers. They retained their wholesale customers and brand name. We acquired some of their assets and brought over employees.

Bringing on a manufacturing team has been one of the best things we’ve done. It’s been incredible to go out there and watch them make rings out of Fender guitar strings or metal from an M1 Abrams tank.

Bandholz: How does in-house manufacturing impact marketing?

Ruggiero: It’s been huge. Taking a camera to the other side of the office and filming the team using lathes to cut the metal rods or whiskey barrels into rings makes for incredible video. We have our camera crew out there all the time. We use that footage on our social media and in our ads and newsletters. We try to promote that because most companies in the men’s ring space don’t manufacture. They drop ship or order from overseas and then ship it out. But we want it to last a lifetime and be something people can take pride in.

We’ve had a lot of success with our military heritage collection, where we source unique military materials. We have the M1 Garand rifle stock, the wood part, from World War I. Watching our team put that in the lathe and cut a piece out for a ring is fascinating.

Our marketing for those rings talks about the history, the soldiers, where the weapon was used, and things like that. My wife and I studied filmmaking in college. We use our skills to educate and tell a story. For instance, I recently received an email from a customer who shared that his grandfather used to drive M1 tanks. The customer gifted one of those rings to his grandfather, and they had quite an emotional exchange. It’s nice to help customers connect with their past and create something meaningful.

Bandholz: Where can people buy a ring from you?

Ruggiero: ManlyBands.com. We have pictures on Instagram, too. I’m on Twitter and LinkedIn.

Ecommerce MGMT 0 Comments