The Secret Strategies of Top DTC Brands with Nik Sharma

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0:14welcoming Nick Sharma to the show [Music] pretty excited to have you here dude I can't believe it's taken this long it's all your fault for the record is not my fault you are a busy busy guy but I'm happy you're here whenever I want a perspective on anything d2c related Nick is my boy I look forward to his Sunday emails where he he sheds a lot of knowledge and I just wanted to spend an hour talking about d2c let's do it so let's just start with what's exciting you in D to see land nowadays like you could be doing anything yet you have been doing d2c for like a

1:16decade now why are you still in it and what's exciting I was just joking with somebody before this that uh once I'm done with this chapter I'm going straight boring B2B software like I'm going I want I want to make air traffic control one percent more efficient or in the back of an ambulance some machine one percent more efficient some contract that locks in for 50 years and takes a year to close why is it just because g2c is so difficult that you're kind of like should I do something more it's not that it's difficult I think it's uh in fact I think d2c is actually very

1:59sort of straightforward but the the thing is is you have to be really good at being agile agile with how you respond to things that happen in the d2c world um for example you know tracking changes the ability of how tracking gets fed back to a platform changes or there's a new law or a new algorithm in Search and that completely changes or you know there's a new algorithm from a social network that you were super reliant on for distribution and um in all of these changes there is a very clear okay this is the change which means this is what's going to happen which means this is what we need to do

2:47to react and respond but a lot of people don't go to the third piece and or they don't they see it but they don't accept it this happens a lot too with like brands that launch that um you know they have the hardest time going from zero to one and it's not necessarily because they're doing anything super wrong but it's like the idea just sucks you know like nobody wants adaptogen infused hummus for example I'm just making this up but like somebody is going to keep fighting for a year or two years spending their whole life you know trying to make this thing within that two years trying to make it

3:25a reality but it's like it's not even wanted by the market so you know in that case I think d2c is very simple it's like well it's either going to work or it's not going to work you're either going to fit into something that will sell and do well and of course there's ways to test that or you're not but trying to fight an uphill battle and then blame it on something else I think is like the lazy way out how do you know if you're walking up an uphill mountain or if you're just just just like almost at the top you know Seth Godin I think calls it

4:01calls it the dip you know knowing like you've run your clock up yeah I mean sometimes you know I mean there's so many stories of of entrepreneurs who've created products who you know it's like they have a week left of cash and then like at the end they like figure it out like you know Nikita beer for example um you know TBH that app that he eventually sold to Facebook like was like I mean I remember him calling me and being like hey dude like do you know how to shut down an office and shut down a company and I was like whatever happened to that app that you were gonna

4:37launch tbh and he was like I don't know yeah we might just launch and see what happens like he was about to quit but he still pressed submit yeah I think that's different I think that's a little different in the sense that um he's basically you know he's actually doing the opposite of what I was talking about this what I'm talking about is like you know his version of adaptogen infused hummus was like the product that didn't work and one option um one option would have been like just keep trying to figure out how to make it work keep spending every last dollar on ads to drive people there or convincing

5:17people to turn it on but you know I think what he did is what most people should do which is the pivot of okay this doesn't work let's take the learnings of what what did work in this process and it might it might have nothing to do with the idea of what was launched but it might be that oh we found a great packaging vendor here that got us good pricing we found a great flavor house that developed good flavors for us and then figure out what the next step ad is there's two ways to come up with an idea for a d2c product one is like you walk

5:50into the grocery store and you're like wow I wish this product would exist oh it doesn't I'm gonna go and create it and then there's another way which is I'm gonna like look at Trends and competitive analysis and a bunch of other ways to figure out if there's a market need which way do you recommend going and yeah just share some light on that I think it depends where your strength is so a lot of Founders Who start these businesses um you know like very little uh a small percentage of people actually raise money I'd imagine a lot of people who listen to this probably bootstrap or

6:29maybe you've raised a very small round but you know very few people raise 10 20 30 million dollars to build a business and as a result like if you're starting a direct to Consumer brand or a cpg brand or retail brand you sort of have to understand what you're good at are you good at branding are you good at storytelling are you good at sourcing are you good at Financial operations and cash flow management uh or are you good at like Performance Marketing are you really good at you know the creative side the business side the analytics side and um I think depending on what you're good

7:10at you will find one of these paths to discover what that product is somebody who has mass distribution can take the first route of walking into the grocery store and saying damn I wish I had a chocolate bar with four ingredients in it six ingredients in it and then you know you're you're competing with the biggest companies in the world um you know you're basically neck and neck against Hershey's and Mondelez and all these other companies uh that would not work for the average person who's bootstrapped and starting but it does work for somebody who has a ton of distribution already built in on the flip side something like Jolie which

7:51is a shower head filtered shower head the the uh the value prop is not really in the distribution but it's in the innovation of the product itself and so somebody who is more focused around branding or marketing or um even like you know sourcing can win at that game better than maybe somebody who just has a bunch of followers and is coming to bring something so I think it kind of depends I mean generally I would say like both could do either one they want um I think one thing I've learned too is working with brands at a very early stage you have to have some sort of a

8:32moat something that will get you from zero to ten very clearly um whether that is a a very good understanding of the market you know you see a clear open space whether that's the ability to go launch into retail off the bat whether that is the fact that you know black wolf nation is a men's skin care brand they own their own fulfillment center from the get-go they save tons of money there and they were able to you know do tons of things around merchandising and upselling products because they could and so I think yeah I think a lot of people arrive to it different conclusions or in

9:06different ways sometimes it's frustrations that somebody has on their own sometimes it's um you know something that they're just passionate about and then sometimes like you know there's a lot of businesses a lot of the earlier e-commerce businesses were started by like Finance guys who just said oh there's a clear Market hole right here here I'm gonna go build a product it's going to cost this much we're going to sell it for three times that there's a clear Market opportunity there's demand for it and um you know we're going to run Facebook ads um are the first uh examples of all these big d2c companies like the

9:40Casper's of the world like are they not failures like they all kind of their failures in the sense they like they became billion dollar companies they raised a ton of money and now when you look at them on public comps either they're because you know become private in the case of Casper I think Casper was privatized or a lot of these d2c companies have like market caps in like the 50 to 200 million dollar range where they've raised like half a billion or more yeah I mean uh Wall Street uh hates e-commerce retail or not retail but e-commerce and you know basically like Brands generally uh they hate a lot of

10:19the new brands like all birds is down 95 in the public markets you know Honest Company I think think trades at less than half of their revenue you know I don't think that wall Street's Judgment of a lot of these companies is an accurate representation of how these businesses could be run a lot of the businesses were also run you know like uh operationally they weren't that efficient um and you know to their credit like they were the first ones doing it you know Casper was the first company to put a mattress in a box and figure out how to sell it online and build that

10:52behavior if Casper didn't exist like whoever the next company was that did it they would have had the hardest time and you know ended up in the same position I remember sitting in New York City at a restaurant with co-founder of Casper and maybe 2011 or 2012 and he told me that he had just graduated basically like mattress science and I was like that's a thing at first of all I was like that's actually a thing like I didn't know like I'm from Canada I don't know I don't know like we don't have that up there you know like yeah that was the first and then he was like my

11:25idea is like I'm gonna you know and I create a prototype I created a mattress in a box and I just remember thinking to myself like this guy's crazy a mattress in a box it's impossible that that's not how this works and so you're right like we got to give them Credit in the sense of like they took big leaps yeah big leaps and you know Casper is a great example of uh you know Casper walked so everybody else could run like Casper Casper figured out everything that didn't work so the following companies could you know I think most mattress companies now that exist on the market they don't actually

12:04have inventory that they own they're all Drop Shipping on demand and so right away it's like you know that was something that Casper didn't figure out early enough that they did you know Casper had the beautiful big office in New York City and Soho turns out you don't need [ __ ] a big office with 75 people to sell you know e-commerce products um so I think even though like a lot of people would say that there are failures and I do think to some extent there were mess-ups like you know there's definitely Founders who took tons of secondary or you know took a ton of

12:40money off the table and then you know when layoffs come around they're sitting high and pretty with millions of dollars in their account and their employees have to go figure out how they're going to pay rent the next month I think that's pretty messed up but I do think they a lot of these early companies don't get enough credit for like Paving the way for um for the behavior of e-commerce that they created and instilled in consumers that exist today so if you were running Casper or The Honest Company like pick a company what would Nick Sharma do uh so if I was running The Honest Company I

13:18think right away I would um figure out what products to cut like I think I think some some of these brands that exist they they sell way too many things and they don't focus on something so they're not known for one thing honest companies like known for what good honest ingredients but you know does do they really need to have a beauty line and wipes and cleaning products and bath and body and baby products like probably not in fact I would imagine that you know two of these categories do really well for them and the other six just completely you know they're just they just exist so I would probably do that I

13:54think from a tech standpoint uh there's a ton of these early Brands honest included which operate on a technology infrastructure that was great 10 years ago but is not modernized and up to speed with what consumers are looking for today um I think just between those two things you could probably shave a ton off the bottom line and then of course like you know going into their customer acquisition and their customer retention and understanding their lifetime value of customers there's probably so many little things you could tweak uh that would turn the business and go up and to the right like you know whoever Runs The

14:30Honest Company site like they should be fired and unemployable in my opinion okay so if you were bringing you know it doesn't look like honest companies on Shopify like if you were bringing them on Shopify let's say um what you know what sort of d2c Nick Sharma prove stack would you propose um I mean I'd bring them to Shopify plus almost immediately um I would probably swap their subscription system to a company called stay which is really like a retention tool that also does subscription um you know they use things like hot jar which is you know expensive and old um it looks like they've got clavio

15:15which looks good explain what that is like what's clavio yeah so clavio is uh ESP email service provider think like MailChimp um you know MailChimp is probably the easiest comp for it but it's like an email platform for e-commerce businesses um you know I think like right away just moving them to Shopify would actually probably bump up their bottom line a good amount um just because of the inefficiencies that come with using Salesforce Commerce Cloud which is what they currently use um I would probably install a ton of apps from subscription to analytics to proper upsells to uh you know a proper review system um a referral program you know things

16:00making things easy like build your own bundle right now they have it but it's very clunky and the ux is really bad um and you know then I would start like tweaking and optimizing you know I'd figure out what does it take to get a new uh customer in the door a new subscriber in the door and I'd build landing pages around that I'd try to figure out um you know I Have This Acronym called the trace uh system which is like you know how do you Align Technology reporting audiences creative and the site experience that somebody goes to to try to build customer funnels that you

16:33can rely on X number of customers coming in every day new customers for the brand at a sustainable pace so yeah I think you know once once you make like the big tweaks like moving them to Shopify making the ux a lot simpler you know for example like their diapers cost thirteen dollars and it very it doesn't even tell you how many diapers come in the in the pack uh once you make all these like obvious things that they should be doing or whoever is in charge should be fired for then I would focus on the one percent improvements across the board so how do you increase the email capture

17:07rate by one percent how do you increase the cart click-through rate by one percent how do you increase the upt and the aov upt as units per transaction or items in your basket and aov is average order value how do you increase that by one percent every day um and then it just becomes a game of like chipping at it until you know it gets to a point where it makes a lot of sense okay let's let's let's continue on this thread of Nick sharma's honest reviews of d2c companies what's this is going to get me in trouble no okay well we'll take the other side of the

17:40spectrum what's a what's a d2c company that's doing a really good job and and why are they doing a good job um all right here's one that I think is doing a really good job um simple straight to the point I'm gonna drop it in the chat for you it's a brand called Cadence um they are they're basically these beautiful little travel capsules made of recycled plastic you know these guys they haven't raised an absorbent amount of money very little cash they're profitable on every purchase they have a healthy margin baked into their product they produce their own product which also helps with that they fulfill their own product which also

18:20helps with that and um they're very good at showing you the light at the end of the tunnel from a marketing standpoint and how you're going to get to the light at the end of the tunnel um and then you know tactically if you go to their site their photography is next level beautiful their use of product renders also very beautiful the way that they incorporate existing customers into their sales process to sell new customers fantastic their site experience in terms of understanding what you're getting how many you're getting why you're paying what you're paying what the benefit of having these are and what the alternative is for not using this

19:04product also very on point this is I think going to be a very clear 100 million dollar brand very soon the the photography is I'm just noticing this the photography is drop dead gorgeous it's like absolutely stunning the other thing I'm noticing is there's actually probably about 20 to 30 percent of video on on screen um ends up being Auto played but it's it's really helping me understand like what this product is and why why I should want it like sometimes I'll you know go on some e-commerce sites and I'll see video and it feels just like it feels like someone feels like they listen to a podcast and someone was like

19:47put video on your Ecommerce page and they did versus this is like really integrated into the experience yeah you'll also notice too like with all this video there's no lag and or no yeah there's no lag and load time or or slow down Insight speed as a result they also have this cool feature called text for 25 I assume that they're getting people's obviously uh phone number capture there uh which is pretty smart I haven't seen that like creating an SMS relationship are you seeing more more of that nowadays yeah definitely more on SMS um yeah I mean SMS is like it's it's generally a very hard thing to get the

20:31conversion rate of grabbing somebody's phone number is um you know probably half if not lower for most brands than what it is to grab email and also then you know the follow-up to that is how good is a brand at actually using that channel and sending things that are you know not coming off as spammy um but yeah SMS is definitely something that you know I I think it's like every every brand wants to have somebody's phone number you know because your open rates nearly 100 maybe 99 um and your click-through rates way higher your Revenue percent in general your Revenue per recipient that you send

21:08to for SMS is usually significantly higher than if you were to comp the same Revenue per recipient on email but a lot of people don't know how to use that channel in a way where it's like not annoying or it comes or it doesn't um you know like a lot of people don't know how to bring value through SMS as their brand and so that you know then it separates the ones that are good I can't think of any brand that brings value through SMS to me like to me it's always is annoying give me an example of how you can integrate SMS in a way that is

21:42respectful to the channel I.E it's a very intimate channel uh it's reserved for friends and family um yeah what's an example of something that you've seen or if you you know if you're uh Cadence like what would you do to integrate SMS well I think the one thing that I think about with uh email and SMS and really anything tied back to retention marketing is your goal is not you know there's like if you think of your goal as a con or your your um your outcome as like a a two or three step approach or or like a bus ride let's do a bus ride it's got three stops

22:24on the bus you get on the bus the first stop is actually just excitement and good content it's something that gets somebody thinking that as they're running out of their cases of hint water you know they get something fun exciting cute quirky funny um you know interesting insightful from the brand and it's not selling them on anything it's just good content and they see oh this was from hint oh [ __ ] actually I think I'm running low on hint I should reorder and it's just about getting mind share to beasts it you know like to be the uh top five or a top ten thought in somebody's head at any given

23:06point that's like stop one on the on the retention bus then I think stop two is understanding okay does this person actually need to re-up or do they need to know at this point do they need to see our brand again from a sales standpoint um you know this is where a lot of companies that sell consumables uh don't properly segment their list and so let's say you sell deodorant and somebody's on a deodorant subscription well if they're on a deodorant subscription they actually don't need to see that you're running a sale because you don't want them to unsubscribe and now buy from the sale and now you've lost somebody who

23:43would have stayed another eight months or you know three quarters and then the third part the third stop I think is actually sending that message and when you send that message it has to be sent in a way where it feels like it was written just for you quick Interruption from me if you're listening to this on Apple podcast or Spotify or getting any value you need to come to YouTube and subscribe to the where it happens podcast YouTube channel I promise you the experience is richer more interesting so if you're getting any value just stop what you're doing open up the YouTube app go to the website and press

24:25subscribe at where it happens on YouTube and if you're watching this on YouTube and you haven't subscribed what are you doing go go press subscribe thank you enjoy the rest of the show so a lot of people they they fill out the SMS piece as they're doing the email piece they're generally grouped together in a media plan or in a promotional plan and um that's where I think it goes wrong it's written from this promotional POV like you know somebody's writing a 15 off email they write the 15 off text whereas uh if I were writing a text I would say okay who is a friend that I

25:06have that embodies the customer that we're going after so we have this girl in our office named Carly she's like the customer for every client we work with and so you know if I were writing a text I would say okay now how would I text Carly that we're running a sale for 15 off and that's exactly what I would then you know I'd remove her name Carly and replace it with bracket first name and put that in and and let it blast off but the the real like I think sauce comes in one there's a lot of retention marketers that don't rely on good content or it's

25:40like folk it's too focused on sales it's not focused on like you know it's like hey let's go let's go uh let's go to my bedroom instead of yeah let's go to dinner first and grab a couple drinks um and then the second one is the the Miss of segmentation you know like every almost every SMS or email tool you use today has the ability to segment customers based on products they bought when they bought what type of even like shade of the color they bought um but it's obviously just easier to ignore that and send the text out to everybody I'm wondering if uh there's

26:14there's an opportunity to create like a Carly AI bot where 100 right how do we do that how do we do that no I think I'm curious if you thought much about how to use AI to personalize communication but it feels like that's kind of where things are going like if you're able to upload data about someone's habits how they talk where they live demographic data and then basically speak to them in a way that they really want to be spoken to I I'd pay for that service so for something like that actually you're the perfect person to ask I've had this question on my mind for so long

26:51so let's say I wanted to build Carly bot and it was like you know I I train you know in theory I train this bot on who the customer is uh what we're selling why they're buying you know the common objections or pain points they have before making a purchase like where do I even start to do that well I think so the key question is do you actually have that data so first the Assumption let's just assume that you have that data okay so which isn't necessarily going to be true right so I think there's that's actually where I think um some of the bigger retailers and and

27:33e-commerce players like the Amazons of the world have so much more data that they actually have an unfair advantage if they want to go down this route because you could get into a situation where you know your car they bought operates at 50 but Amazon's car they bought operates at 100 or 97 percent and that's actually we can talk about that later but that's where it gets kind of scary that as we enter this AI age there's an unfair Advantage for the large players not the small for sure-ups whereas in the pre like where it's been previous like as we've grown up it's always been in the startups that have

28:08been more agile but yeah so you have this data and you know you you'd have to well I I just actually just tweeted about this today there's something have you heard of Auto GPT no so um Auto GPT is new so you don't don't feel like you're behind or anything like that I already feel like I'm buying um and you know one of the the big problems right now with chat GPT is number one it's not connected to the internet number two it doesn't have much memory in terms of it doesn't remember a lot and number three it can't operate in real time the problem if you were just to build

28:54Carly bot on a um you know chat GPT type playground the problem is it's what if you responded to it right like you know and the memory wasn't very deep or what if you you know it's it's very hard for chat gbt to make real-time decisions based on how things are changing so an auto GPT does is you know let's just say the example is a customer service representative and auto GPT can understand customer inquiries Provide support suggest upsells and it could also speak literally speak in any language possible 24 7. so you can actually have it like you can be texting with it Carly bought and it responds in a voice note

29:47wow like that's that's why you know not enough people are talking about Auto GPT in my opinion but like is that so like tactically how would I set that up do I just go and start talking to it like hey I'm gonna feed you information yeah yeah there's like you go into GitHub like there's a reason why the number one GitHub repo right now and project right now is auto GPT over the last week because people are downloading it and playing with it and they're trying to figure out okay I want to make a customer service bot I want to make a social media management bot I want to make whatever

30:26bot but I wanted to act in real time I want to connect it to the internet and I wanted to have uh strong memory management and I also wanted to have text to voice that's insane I got to play so so you could like do I need to know how to code yeah yeah and you know yes yes like I think you know even downloading a GitHub repo without really understanding how to code is difficult right um that being said like I think that people actually underestimate how cheap it is to actually prototype some of these use cases and someone like you like you actually have a lot of data because you know

31:12through Sharma Brands like your agency and through you know hooks you know your landing page product you you just you understand a lot of um different segments right so there's a way for you to basically like if I were you I'd like contact a lot of my clients and be like hey I want to create this thing I want to create this Carly bot I'm gonna give it to you for free um the catch is I want some of your data you can go and create a prototype for probably relatively cheap and see if it works yeah I think the cool thing about Ai and your space like

31:46an Ecom is it's gonna do two things it's gonna drastically reduce the costs for for just owning and operating it for example yesterday we were talking to you know we have a an AI and automation agency called you probably need a robot.com and we were talking to this company that spends three hundred thousand dollars a month on customer service reps and what we modeled out is that using AI you can actually get that to twenty five thousand dollars a month interesting do you still have like a you know a management layer but so number one it's a cost savings and number two um arguably customer service is an

32:31example like the user experience for most people is pretty bad so arguably if the AI if Carly bot is good enough it's a better experience because there's no waiting times like there's literally no waiting times imagine customer service is no waiting times yeah man all this stuff is so fascinating I feel like the biggest Gap I have is what I mentioned here which is like the process of okay I have this idea to do like an on-site chat bot or a customer service bot or um a Carly bot for you know writing up SMS messages and then making the actual like application that goes live that Gap

33:09in between is the part I don't understand and don't even know where to start outside downloading some GitHub repo if I came to you and I was like hey I really want to create a d2c product and I wanted to hire charmer Brands to do it like you would be like very oh you got to do these 100 things like you've rattled off 45 products in this 30 Minute Podcast so far right like that it's second nature to you right right but like that there's a similar stack that exists in AI that you can leverage you know people have been people act like AI is like fresh in 2023

33:50like people have been building an AI for a decade it's only like recently that there's been like huge consumer ux new products like chat GPT that have come out so my point here is that it might seem daunting but once you actually get into the weeds it's actually a lot less daunting than you think the the customer service application is really interesting there's a company that exists called certainly have you heard of this yeah tell people what certainly is certainly is like a chatbot you can train so uh you know one example here is like when feastable is launched we had I think um 16 customer service agents

34:30fully trained up and ready to go and we came across this company certainly that we wanted to layer in into the customer service stack it would live on the site as a chatbot and we could basically train it it's called feastybot on uh on the website you could train it to basically understand the brand speak like the brand the tone of voice teach it how to answer questions and this bot eliminated 96 of customer inbound inquiries um and you know the customer service stack went from like 14 to 2 at the time I think now it's maybe double that but it was crazy how much money it just

35:11saved in human capital human resources and also just time yeah and I I I'm just on their website now like I love their their tagline which is create a digital twin of your best sales person yeah that's a great tagline right because that's like really what they're trying to do so when you see a company like this do you think oh these guys are screwed as soon as chat gbt gets to you know somebody else's hands or or are they like you know they have something here about certainly in chat GPT or is that just because you know people like me have now played with AI through chat GPT

35:49and like that's the the best way to cast the wide net of bringing me into their funnel if I'm like the CEO certainly am I getting eight hours of sleep absolutely not am I getting three hours of sleep no absolutely not am I getting five to six hours of sleep yes so I'm basically like I I'm definitely weary that I could lose to a chat GPT plug-in uh or shop you know maybe even Shopify competes directly but if I'm certainly the number one thing I'm focusing on is how do I make the ux for the end user like the most high quality experience possible that I'm light years ahead of

36:35whatever anyone's gonna create on you know competing platform because feastables will continue to use certainly if uh the end consumer is having a good experience you know what what feasibles doesn't want to do is like get like a cheaper solution that even might have better AI models and has been even trained better but the actual core experience that people are using to have these personalized conversations is worse than my take is that they're still they'll they'll retain it certainly interesting and I guess if certainly can continue to take their like data exhaust and turn it back into more proprietary info for them to make the conversations

37:22better more efficient faster Etc then that is kind of how they'll stay ahead of the curve totally and it's a bit of a land grab for them like if I'm them I'm trying to raise as much money as possible right so I can hire my real my real sales people to call up Procter and Gamble and some of these larger companies yeah and and get them to sign up with me even if it's for 12 months or six months or 18 months and get that data in I think certainly is a real business like I would love to I would have loved to invest in this company

37:57um all right let's do another honest a Nick Sharma honest review talk to me about a creator-led d2c example that you think is high quality I'm gonna go with rare Beauty which is Selena Gomez's um beauty company I like this company for a few reasons one I think Selena Gomez is just badass um second is the way that she decided to build this company was like how DJ Khaled puts albums together she basically just found the opportunity and then brought all the pieces together she brought the CEO together the CMO Etc um the other thing is she innovated around the packaging and the way that they merchandise products so they have

38:49these like Minis that they sell in Sephora and online which gets them well I should say the minis plus the fact that she is Selena Gomez and has this Mass audience and distribution that she does not pay for that allows her to sell products that aren't you know super expensive and where she can still make money which allows her to make these minis which allows her to drive way more sampling than you know maybe any other Beauty brand in the category so this is a brand that I think you know they mainly sell online for Sephora as well which does pretty well for them from what I could tell they're very much

39:30a come sit with us type of brand versus a you have to try to get into our you know tree house or whatever and I think they're very smart about how they go about building the brand you know this is a brand that could be successful um even after an acquisition and Selena is no longer involved whereas you know you think of other some other celebrity brands that exist in the beauty category you know their name is in the product itself and it makes it very hard to separate post acquisition or you know long term rarebeauty.com versus honest.com the first thing I notice is how different the nav bar is when when I was

40:13on honest.com it was like a thousand call to actions on the nav bar like there's just like a lot going on when I go to rare Beauty there's literally three tabs so you can shop there's a shade finder which I'd love you to talk about actually I'd like you to talk about shade finder and rare impact both those tabs because I find them both quite interesting yeah so um you know the the simpler the nav bar is the better it is uh generally in e-commerce you want to make things easier from a ux perspective versus make them harder you know when you land and you see this site above the fold meaning

40:52you don't have to scroll it's just whatever you see in your window you want this to feel like you just walked into a store in SoHo or in on Fifth Ave and then as you go through and see things for example you saw the shop the shade finder and the rare impact you want to almost like limit the options to guide them through the store so if you go into a store on Fifth Ave you know somebody looks at you and says all right I know exactly where to take this person in the store that's sort of what a navbar here does whereas like in the honest example

41:26you know there's probably like a hundred to 150 options of what you could click as soon as you hit the home page and look above the fold there's things that are changing scrolling side to side it's kind of hard to know where to look whereas here it's very clear you land you've got a hero product right in the middle and then if that's not what you want your best sellers is there above the fold so you can always just go right there or you just hover over shop and you can immediately choose if you want to shop all the products if you want to see just what's new because maybe you

42:00came to the site knowing that there's something new out if you're new to the brand you might go to Best Sellers and if you're a bit you know if you're not new to the brand but you know what you want you don't want to go to shop all you just choose between face or eye or lip and so I think this is merchandised super well for the type of traffic they get you have to remember too with celebrity or Creator Brands they get a shitload of traffic traffic that they didn't pay for traffic that they didn't send and so you know because of that you have to really

42:32focus on how you merchandise and bring somebody through the store um now they probably tested into both of the share find shade finder and the rare impact being on top given who her audience is and what they're interested in um you know they probably realize that the rare impact fund which is actually a real fund that they have that they contribute to is um something that matters to them and something that matters to Their audience quite a bit and you know generally when you have some sort of a you know like what's what sets apart Selena Gomez's brand from the next the next uh product on on the Sephora shelf selling blush or

43:13bronzer well it's the fact that like I now know that when I buy the lip oil or the bronzer stick that I'm also contributing to something good and you know that's what separates products from Brands is what keeps you coming back and what and especially in the beauty category where loyalty to a brand is so low I think it's only something like 14 of consumers will stay with a brand they'll still try other things but you know the brand part comes in when you have things like an impact fund or uh you know it could be as lucrative as an impact fund it could be as simple as like surprise and

43:52delight and really good text messages from the Carly bot the shade Finder 2 is something else that does really well in Beauty it just helps feel you know it's it's like the the concept of personalization is alive here and it's uh working it's not truly personalized because there's not that many levels of how deep this goes but it's a very simple way to add that touch and feel of personalization where somebody feels like they're now being heard or being recognized for in this case their color of their skin and making sure that there's products that match that also it just probably helps from a customer service standpoint of making sure that

44:29there's less returns because somebody's color that they bought is more you know connected to the actual color of their skin would you ever start a d2c company or do you prefer supporting the industry uh for sure start a d2c company like they're you know I think from a standpoint of opportunity there is no better time to start a d2c company think about how easy it is now to use openai's chat GPT and just build a module for something like if we need something and a developer is unavailable we can just go to open Ai and it'll write the code for us and we just copy paste it

45:06um so from that standpoint it's the barrier to entry has gotten lower from the standpoint of product sourcing and product development I think the barrier to entry's gotten lower the thing that has gotten really hard is cutting through the noise and finding something that actually has legs in today's market and I think for that you have to be super in tune with who's doing what and who's Finding Traction or who is just about to find traction or who's seeing hints of traction um you also have to just solve something real like there was a huge era of d2c brands that happen during um probably like right before covid and

45:47then definitely during covid or brands that didn't deserve to exist the 48th men's skin care brand the 37th white labeled supplement for bloating um you know these things these are not solving real problems they're just trying to be like money grabs those don't really last because consumers today are pretty smart and they will see that from a mile away whereas a brand that is actually solving a real problem for the consumer but also hopefully for something bigger those tend to stick around and you know have really no problem growing or sometimes like cookware look at cookware Brands over the last four or five years they've all

46:26just exploded every cookware brand I know is doing over 100 million dollars in revenue and um you know it's just like when when the trend starts to go if you can jump on that train you will ride that to the top yeah those companies that are doing 100 million in Revenue let's say like what's a bottom line an average bottom line probably like 20 15 to 20 percent it's not bad yeah yeah not terrible for like you know cash in the bank at the end of the day all things paid cool yeah I mean I'm interested Nick like if you ever want to collab on a

47:01on a juicy let's do it let's make the Carly bot what we should do is you you handle like the d2c concept fulfillment marketing and then I'll handle the Tech stack like AI car they bought and some cool fun AI stuff that and and Community stuff that just like makes the experience unique yeah I'm totally game for that um all right Nick thanks for coming on like I think everyone should sign up to your newsletter where could people find your newsletter the easiest place is just nick.co email Nik dot Co slash email I think if you just Google Nick email it comes up as well yeah and this is

47:51like this email I subscribe to it and I'm not huge in the d2c space I think I told you this Nick my dad who has like us has a Shopify store as like a side Hustle was telling me about you not knowing that we knew each other and he loves your emails without some emails and shout out to Mr eyes Mr Eisenberg and uh so it's really it's really it you know what I like about it is it gets me thinking and you you give good examples of other brands doing cool stuff so yeah I think a lot of the things I talk about too I try to be

48:24super tactical and explain it as if I'm talking to a five-year-old and I think a lot of those things can be applied in other other Industries or other verticals exactly and then uh you do have a podcast which is also awesome can you give a quick shout out to that yeah uh I'm a co-host of a podcast called limited Supply it's myself and this guy Moyes Ali who founded and sold native deodorant to Procter and Gamble uh we talk think of us as like the uh the Bloomberg business for e-commerce retail and d2c we try to take things that are interesting to us or happening or sort

48:58of like current events in the industry break them down talk about them and try to find takeaways for our listeners and people can watch that on YouTube I guess and Spotify and yeah YouTube Spotify Apple podcast basically wherever you get your podcast just look up limited Supply I've been finding it hard to get YouTube subscribers so recently I've been yeah like we've been trying to like Double Down on YouTube so like people who are listening to this like there's visuals if you go to YouTube so go to YouTube where it happens and subscribe um so you you know we'll put like the images of some of the websites that Nick

49:35was talking about and it's just it's a way better educational experience but uh Nick tell tell the people to subscribe they're not gonna listen to me go subscribe to YouTube If you're not subscribed to where it happens on YouTube your business is going to fail and it's not going to be anybody's fault except yours for not subscribing to where it happens it's not like we want your business to fail right it's we we don't want it yeah we in fact we're trying to help you it's your fault for not going and hitting subscribe and while you're there go find this episode right now on YouTube and click the like

50:09button yeah and tweet out tweet at us um if you enjoyed this episode um we will respond