New Q&A with Ezra: How I Launch New Brands, and More

Ezra Firestone, here for Live from the Internet. Let’s go to some customer Q&A. So, you know, you make this show possible. I’m just some dude talking about stuff, without you, the audience. So, I super appreciate you spending time with me listening to what I’ve got to say, and hopefully, I’m adding value to your life. That’s why I do these shows.

I do these shows because I think that you, my audience, will find them valuable. So, basically, I’m open to suggestions about things you’d like me to talk about, things you’d like me to cover, you know, but I also like to take some time to answer questions directly from the audience, every live show that we do.

So, you can submit those via email to ezra@smartmarketer.com, you can ask questions right on this Facebook post below this and then I’ll answer them on the next show. So, please submit your questions. So, for this episode, I’ve got a couple of questions that were submitted on a previous show.

The first one comes from Dan Mantilla, and he says, “What three channels would you focus on for a new startup in the B2B e-commerce space in 2018?” So, “What three channels would you focus on?” That’s an aggressive question. So, I think that, ultimately, I would focus on one channel.

I think a lot of people try to go wide when they should be going deep, and I think Facebook has a billion users or something like that, and it’s the best self-serve ads platform. So, I would really focus on dialing in Facebook and Instagram first because they’re the easiest to use, everyone is already there, the targeting is the easiest to set up.

And then once you had good customer flow and good optimization going on Facebook, then you expand to YouTube and LinkedIn and Twitter and things like that for B2B, but I would really start with Facebook and Instagram.

Next question comes from Peter Dlugokencky, and he says, “How much can I increase my Facebook bid in one day, 10%, 25% or 50%?” So, basically the idea is like, hey, if you have something that’s working well, how much can you increase the budget to see if it’ll continue to stay?

Like let’s say, for example, you’re running a video ad to a long-form sales page for a physical product, your physical product cost 30 bucks or 40 bucks, and you’re getting sales for $10 a pop, so you’re doing really well, you know, and you want to increase the budget so that you get your ad in front of more people, but you also don’t want it to… you know, sometimes what happens when people increase their budget is then all of a sudden their cost per acquisition hikes up as well.

So, when you are on a smaller budget, like if you’re running 100 bucks a day, you can pump that to 200 bucks a day, right? So, if it’s a smaller budget you can increase like 100% or 200%. But if it’s a bigger budget, like for me, like I’ll be spending $1000 a day on something, I will not increase it to more than 1500.

So, I won’t do more than a 50% hike at $1000 and above to see where it’s going to fall the next day. So, on a smaller budget you can be more aggressive with your increase in budget on a daily basis to see if your cost per acquisition or cost per click holds. On a larger budget, you’d be a little more conservative. Okay.

These are all… the last segment was about Facebook advertising. So, these are all, kind of, Facebook-related questions, but I’m open to questions about life questions about relationship, questions about e-commerce, whatever you want. So, feel free to ask your questions below this video, and then for the next show I will screenshot them and then I’ll answer them or some of them anyways.

Next one comes from Jason Walter, “If you are testing with ads, what would you do first, change the image or change the copy?” So, for us, we always focus on creative first, so the actual image itself. Now, we’re sticking headlines on our actual images. Little, you know, less than 20% of text, but we stick headlines on the actual images and on the video thumbnails.

So, we’re, kind of, doing both at the same time where we’ll have one image and maybe five headlines or five images in one headline. So, we kind of, do them together, but the image or the video thumbnail of the video itself, image or video or the more important asset because that’s what actually draws someone’s a visual, you know, draws their eyes. So, I would do the image, if you have to choose between the two, image before copy. Though copy is also very important, we kind of do them at same time.

This is from Imran Khan. Hey, Imran. “Ezra, what’s your process when selecting a niche for a business? How did you come up with BeeFriendly?” So, BeeFriendly, it’s, kind of, interesting. My family, my auntie, and uncle, I grew up in Hawaii, one local kind of, broader. Hey, to all my Hawaii boys and Hawaiiness. All the Hawaii folk, what up? You know, I represent Hawaii, went to elementary school and high school there.

All my childhood memories are from Hawaii. I was Hawaii boy, but I love Hawaiian culture, and it’s part of me, you know. You can’t grow up in Hawaii without taking a little bit of the Hawaii culture with you. But anyways, point is that my auntie and uncle formulate and make a skincare in Hawaii, and so that’s, kind of, where I had that. I just had the ability to source that product, and so I created a brand around it.

Now, when I’m doing product lines, a lot of people focus on a what I would call impulse buy products. So, products that are cheap, you know, they retail at $15, $20, $25, $30. I now focus on the premium end of a market. So, I want my average order value to be $75 to $150 for my product.

I want it to be an expensive product, reason being, expensive products have more margin, you make more money per sale and therefore you have more money that you can use to advertise. And what I’ve found is that it’s just as difficult to get a sale for $100 item as it is to get a sale for a $30 item, so I might as well focus on the more expensive item.

And, you know, for some folks there’s a bit of a hurdle there because let’s say I’m selling, you know, products where my average order value is 100 bucks. Well, my cost of goods on that $100 in reveneue, let’s say someone pays me 100 bucks and I’ve got to ship them $100 worth of makeup. My cost on that, my cost of goods is probably 25 or 30 bucks, right? Between 20% and 30% of the total order.

So, you know, I’m spending 25 to 30 bucks, right? Instead of like someone who’s selling an item for 30 bucks, they only have to spend $10. Like let’s say, for example, you’re selling a wooden cutting board for 30 bucks that you buy for 10. So, it’s cheaper for you to buy 110 bucks, that’s only $1000 that you can then sell those 100 items at 30 bucks a pop and make 3,000 for your 1000 invested.

Whereas for me, if I’m selling something that costs 100 bucks and I got to spend 30 on it and I want to buy 100 of those, I have to spend 3,000 upfront to then make 10,000 in revenue if I sell all 100 of them at $100. So, I’m investing more upfront because I’m selling premium quality items.

But I’m at a place in my business now, where I’ve been in business now for over a decade, have a lot of capital reserve, I’ve done well at saving money, you know, because, you know, I will just come out and say this, it’s easier to make money than it is to keep money, right? Like, people talk about how to make it. The whole, “What do you do with it once you have it and not have it all go away or owe it all the taxes or not pay?”

You know, a lot of people get in trouble with their money, they don’t pay their quarterly estimates, they are not projecting expenses properly, they pull too much out of the business. It’s a big issue, the whole keeping of the money thing. But I now… to answer your question, Imran, which is, “What process do you use when selecting a niche?”

I will look at a market and, hey, you know, I like consumable products, so you know, cosmetics, health and beauty, things that, you know, or products that lend themselves to multiple items in the product line, like camping or outdoors or something where I can have multiple products in a line, because if we look at every $100 million company, which is what I’m focused on.

I’m now focused on what, kind of, brands can I take to $100 million, not how do I build a multi 100, 000. Like when I started, I didn’t have any money, I was broke, I was working a full-time job, I was living in a 400-square foot apartment with my now wife. We were just really bootstrapped and so, you know, my focus was about, “How can I get anything to work?”

I was super happy with a brand that makes 100 grand a year that could pay me three grand a month, so I could quit my job. I mean, that’s where I was in my head was just I needed to get something to work, and so I was doing real niche stuff, right, super niche down, eat markets that I could go into real easily that didn’t involve a lot of capital where I could try to get something to work and just make a little bit of money and that was awesome and that was appropriate for where I was in my business at that time.

But now, where I’m at is in a different place. I have a lot more capital, I have a lot more surplus, I have a lot more experience, I’ve got a team, I know a lot more. And so now what I’m looking at is, how do I build eight-figure company? And so when I look at building an eight-figure company, I need a broad market offer. I need an offer that’s relevant to an age range and a gender.

That’s my criteria is. Is this product wide enough that it would be relevant to every man in America between 25 and 40, right? That’s an age range, 25 to 40 and a gender, men. I like that, kind of, market segmentation. And then from there, you know, I’m going to pick a premium product.

So, let’s say, for example, I’m going into, you know, the beard care space. It seems to be that’s a big thing right now. Everyone’s got the beard oils and this and that. I draw the line, by the way, at smearing oil on your beard. It’s like, okay, it’s one thing to moisturize your skin, I’m with you. But you start moisturizing the beard just too much for me. My beard does not need moisturizing.

Although credit to all the beard oil sellers because a lot of folks really enjoy those products, and I’ve heard reports from women that they like men whose beards are soft and smell good. So, I’m not actually anti this market, I just don’t use beard oil.

But the point is, should I be going into the men’s grooming market? I’m going to be looking for a premium product. Like some people sell beard oils for nine bucks, I’d be looking at the high end of that market where, you know, some of these beard oils are selling for $30, right? So, I’m always looking for the premium end of a market.

So whatever the market is, I’ll pick my market and for me, I’m looking at very broad markets. I don’t recommend that if you don’t have capital and direct response skill, right? If you’re starting out, I’d recommend lower-priced products because they are cheaper to buy the inventory. I’d recommend very niche because there’s less competition and super niche spaces.

So, it depends on where you are in your career. For me, where I’m at is I want broad market, something that could grow to 20 to 50 million and sell for $100 million, you know, that’s kind of where I’m at. And I want premium because it gives me more margin to invest in paid amplification, which is my model in business, is go out there and tell a really good story, have an amazing product that really delivers and amplify that message via advertising, is fundamentally what I do, right?

What you’re watching right now is a video that I think is going to help you, that you’re going to find interesting, that I’m paying money to put this in front of you. This isn’t in front of you for free. I had to pay Facebook, pay YouTube to put this out there so that you would see it. And my hope is that you will like it. You’ll think, “Oh, this guy’s cool. He’s got good content. He’s trying to help his content that is free is worth subscribing to.”

And I’m hoping that you will like my fan page or subscribe to my YouTube channel or go to my website and give me your email address. Like, I’m putting this out there. I’m paying money to get it in front of you with the hopes that you’ll like it, and if you do like it, you subscribe to me. And then eventually I’m like, “Hey, I have this thing I think you would find interesting. It’s a training program on Facebook ads, it’s cost money, right?”

So, this is called serving the world unselfishly and profiting, right? So, I’m going to roll a service now, and I’m also doing it in hopes that eventually I will profit so that I can spend more money serving, right? So, it all kinda works together. But my point is that my model is that of paid amplification.

And since my model is to pay money to put messages out there, when someone ultimately does buy from me, I want that purchase to have a high-profit margin so that I have more money to invest back into paid amplification. So, I hope that answers your question. Great question, Imran.

Okay. And that was the last question we have for Live from the Internet. So, hey, first episode of Live from the Internet, we are live from the internet. Let me know what your thought if there’s anything you’d like to see me cover, if you enjoyed the show format, you know, what you might like to see more of, you know, any suggestions you have, whatever, you know, I’m open to it.

I’ll be doing more of these shows. You know, this used to be called Smart Marketer Live. We’ve now, kind of, done a bit of a structure and the reason that we’ve done a bit more of a structure on it is because, you know, when we do these hour-long shows that are, kind of, a whole bunch of stuff in one hour, that’s what Smart Marketer Live was.

They’re hard to chop up into consumable bite-size pieces. So, by doing this show Live from the Internet, that’s very segmented like we have the buy and stuff and talking about in section. We have the me talking about life and relationship section, we’ve got the marketing news section, we’ve got these sections that are easy to pull out, and then put on social that are a little more consumable after the show is over. So, that’s, kind of, our reasoning for doing it in a bit more of a structured capacity. But I hope you’ve enjoyed this. Thank you so much, and see you on the next one.