📦 - Mistakes Happen

DTC 302 - Obvi’s Ronak Shah, new on Amazon, and going wholesale [DTC]( Banter Wednesday, March 1, 2023 If this were real life, your funnel tracking would never be more efficient. 🔽 If you’re new to DTC, welcome! You’re in good company with fellow newcomers from Tony's Chocolonely, Nudea, Babeehive Goods, and Hooch Booch. In this newsletter, you’ll find: 👇 📦 Obvi's CEO Ronak Shah on his biggest blunders (and how you can avoid!) 📦 Where to find the best strategies and insights from the industry’s top movers and shakers 📦 All new updates from Amazon 📦 Building a customer support team equipped to handle volume spikes 📦 The pros and cons of going wholesale Read till the end to access exclusive DTC swag. 😎 👉 If a pal forwarded this to you, [subscribe,]( so you never miss out. Podcast 🎧 On today’s episode of the DTC pod, we sat down with Ronak Shah, the CEO of Obvi and a mentor at the upcoming C-Suite Mastermind in Las Vegas! Ronak's financial background and passion for creating top-notch supplements have helped him build a successful company with impressive growth. 🚀 In this episode, Ronak shares some of the biggest mistakes he's made with Obvi and gives us valuable insights into how to avoid them in our own DTC marketing endeavors. We had a blast chatting with him, and we're sure you'll love this episode! Oh, and if you plan to attend C-Suite Mastermind Las Vegas in March 2023, you'll have the opportunity to meet Ronak in person! 🙌 ‍The takeaways 👇 ✍️ Lessons learned Every growing company makes mistakes along the way, and Ronak discusses how Obvi is no exception to that. On the pod, he shared valuable insights on the common pitfalls entrepreneurs may encounter and how to avoid them. Mistakes to look out for: - Monetizing your community too aggressively. Ronak revealed that Obvi had made the mistake of offering their affiliate program to their community, which backfired as people felt like their community was being cannibalized. He advises that entrepreneurs should be careful with how they monetize their audience. - One-size-fits-all retention strategies. Using the same retention strategies for all their products led to an all-encompassing post-purchase messaging that failed to consider the different needs of the Obvi customers. - Focusing too much on external platforms. Ronak noted that entrepreneurs often spend too much time trying to make external platforms like Facebook and Google work better rather than focusing on what they can control. Solutions to implement: - Be authentic. When it comes to monetizing your community, Ronak suggests that entrepreneurs should take the time to understand what feels authentic for their community and stick by it. This may mean forgoing some monetization opportunities, but it will ultimately lead to a stronger community and brand. - Tailor retention strategies. To avoid one-size-fits-all retention strategies, Ronak advises entrepreneurs to break down post-purchase messaging by product and create tailored email flows that address the unique needs of their customers. - Focus on what you can control. To avoid spending too much time on external platforms, Ronak recommends that entrepreneurs concentrate on optimizing what they can control, such as their landing pages and cart conversion rates. By doing so, they can increase their conversion rates, which will ultimately lead to increased business growth. Ronak's insights on the mistakes that he's made in his business can provide valuable lessons for entrepreneurs looking to build and grow their own businesses, and as a C-Suite Mastermind Mentor, he wants to make sure that attendees will walk away with added value: “There are endless amounts of resources and… so much great content out there and what I don't want to do is come [to C-Suite] and repeat the same stuff because then the people paying… to come to this are not going to walk away with the added value, they're just going to walk away with reinforcement and reinforcement should not come at the same price as value.” 👉 Listen to the full episode with Ronak Shah [here!]( [To hear speakers like Ronak and many more, join us at the next C-Suite Mastermind in Las Vegas, March 23-24!]( 🤑 And only TEN DAYS to save $500! Register before March 10th to take advantage of this insane discount! Sponsor Get your FREE ticket to the largest virtual eCommerce event! 🔎 Looking to find the best strategies and insights from the industry’s top movers and shakers? We are willing to bet you are. That's why you're reading this newsletter! (we hope) It's also why we know you will love this upcoming virtual event! [DTCx5 Global!]( From the comfort of your home, you can hear from brands such as Sharma Brands, Beardbrand, True Classic, OBVI, HUSH, Mid-Day Squares and others with an INCREDIBLE headline speaker Kara Goldin, a Founder of HINT WATER and the Kara Goldin Show. [Grab a free ticket courtesy of AdRoll,]( and don't miss their session on “4 Ways to Maximize Your Marketing Dollars” with Courtney Herb, Director of Brand Marketing. During her incredibly valuable session, you’ll learn how to: - Effectively invest in brand awareness - Build your customer loyalty - Diversify your marketing channels - Analyze performance to optimize spend 👉 [Learn to do more with less! Join AdRoll at DTCx5 Global.]( Amazon What’s New With Amazon? Amazon has done it again! In the most recent episode of [All Killer No Filler,]( the team discussed what’s been cooking in the Amazon kitchen. Here’s a hint: shoppers are being hit with a whole new level of convenience. So, what’s new? 🛍 Buy with Prime If you run a Shopify store, you may have seen the option to add Amazon’s new ‘Buy with Prime’ button. It’s a nifty new checkout option that utilizes Amazon’s fulfillment network. If you already have Amazon Pay as an option on your site and have inventory in Amazon’s warehouse, it’s as simple as adding the button to your product page. When a Prime member clicks, it’s essentially a two-click purchase that fulfills from Amazon using Prime shipping. That’s right. Customers will receive their product in 1-2 days instead of the standard 4-6 business days. Not to mention, the shipping (for already existing Prime members) is completely free! Want to test it out for your brand? Here’s what the Pilothouse Amazon team suggests: - Spin up two landing pages for a product: one with the ‘Buy With Prime’ button and one without. - Test the two pages against each other to see how the button performs and if there are any negatives for your brand. - Decide if 'Buy with Prime' is right for your brand. P.S. You don’t have to do a full rollout! You can dip your toes in and test the new feature with only one product. 🎥 Sponsored brand video ad placements If you run sponsored video placements on the platform, you may have noticed that Amazon has recently rolled out top-of-search placements. No more below-the-fold videos that get missed by most! With the new top-of-search placement, you can maximize eyes on your video and include both a headline and a direct link to your Amazon store page. The [Pilothouse Amazon team]( notes that across millions in spend and thousands of clicks, video placements have a significantly higher click-through rate than sponsored product or sponsored brand product collection ads. The team is seeing great preliminary results with the new placement, so give it a go! For more Amazon insights and details, tune in [here!]( 🚀 Sponsor What would you do if Shark Tank told you to scale your customer support? 🦈 Imagine being on Shark Tank and hearing... "You are going to need a large customer support team. Once this airs, you’re going to hear from customers— A LOT of customers" This is what happened to the makers of beautiful, 3D paper-cut greeting cards, Lovepop. They had three main goals for the aptly named 'Shark Tank Wave' of customers. 🌊 - Scale and create coast-to-coast support - Flourish under the increasing attention - Grow while maintaining an amazing customer experience So Lovepop turned to PartnerHero to build a team to handle the wave and help the company with future volume spikes. 👉 [See how Lovepop flourished with the help of PartnerHero.]( Wholesale The Pros and Cons of Going Wholesale: What You Need To Know [1️⃣]( DTC brand sells exclusively through Shopify store. [2️⃣]( DTC brand gathers data through its direct-to-consumer relationships and proves its business model and product market fit. [3️⃣]( DTC brand expands to brick-and-mortar retail. Over the past few years, this “traditional” narrative has been disrupted by rising supply chain and online advertising costs, crowded categories, and the need to diversify growth channels. Now, you not only have DTC brands going wholesale, but you also have brands launching DTC and wholesale at the same time or brands launching via wholesale and then going DTC. What should your strategy be? “It depends.” There are pros and cons to selling direct-to-consumer just as there are distinct challenges and advantages to selling in retail stores. To get the lay of the land from folks who are active in both channels, we interviewed Noah Wunsch, CEO and Founder of sparkling beverage company [Ruby Hibiscus,]( and Spencer Lynn, Northeast Regional Manager for plant-based protein powder brand [KOS.]( A quick bio on these two brands: - KOS started in 2019, initially sold products online via DTC and Amazon, had an early retail win in having multiple SKUs carried chainwide at Whole Foods, and is also available in Walmart and CVS. - Ruby is two years old this March and retail-first; was picked up by Whole Foods pre-launch, is carried at Erewhon, Foxtrot, and sells on Amazon and via its website. Now, time to dive in. 🤔 What are some challenges of selling brick & mortar? - Going up against legacy players in your category can be eye-opening. Spencer says conglomerate-owned brands have seemingly endless budgets and already have household penetration, so it can often be an uphill battle for shelf space and awareness. - “Trade spend” expenses pile up fast, and retailers hold a lot of bargaining power. Spencer says slotting fees can cost upwards of $10K per SKU, plus there’s brokerage commission and paying for product demos. Noah says merchandising shelves is another consideration as you scale from hundreds to thousands of distribution points — paying a third party to keep your space clean, refill shelves from backstock, and make sure products are front-facing is an added expense. - Temporary Price Reductions (TPRs) can deeply cut your gross profit margin. Noah cites this example: if a retailer wants to offer 25% off, and your retail GPM is 50%, that is a significant reduction in revenue. - Retailers may have tight regulations on what your product contains. Spencer says banned substances lists can include no artificial flavors, colors, sweeteners, or preservatives. 🧐 Okay, so what are the advantages of going wholesale? - Increased exposure to your brand. KOS sends a post-purchase survey to online shoppers, and approximately ⅓ of respondents say they first heard about the brand by seeing it on shelves in a retail store. - Alignment with your target audience. Spencer says that Whole Foods shoppers tend to be health-conscious label readers, which is exactly the customer that resonates with KOS’s brand mission and value prop. - IRL product feedback and demographic data. You can conduct your R&D through demos and sampling, and people will tell you exactly what they think of your product. Noah says whatever biases you have about your brand will be corrected quickly by your customer, and even your assumptions of who you believe your core consumer is will be challenged. - It’s an acquisition target pathway. Your brand looks desirable to firms or larger retailers when you can show strong wholesale signals and the ability to scale your business. 💡 Any advice for DTC founders considering wholesale? It’s easy to get caught up in the excitement of large inventory orders and massive distribution deals, but Spencer advises nailing the basics before you go ham on growth: - Make sure you have a winning product - Prove yourself at the micro level, gathering data and velocity numbers that make you attractive to wholesale buyers - Protect your margins, but know where there’s wiggle room - If a retailer insists on charging an “everyday low price” for your product, can you take the hit? Noah also suggests starting small and testing the waters. Building strong relationships with your retail partners and customers is the name of the game: - When you have key account meetings, come prepared with a brand overview. Retailers appreciate a walk-through of who your brand is, your competitive set, and what differentiates you. - Demo as much as possible; you’ll find out which stores are the right fit for you, and you can refine your retail strategy around where you sell well (ex: cafes vs. sandwich shops vs. boutiques) and where customers are most excited to see you. - Stay in your backyard and don’t scale too quickly; when you’ve built powerful velocity with a clear focus, then you can expand to different regions. - Figure out what your end goal is from day one; what does success look like for you? Has your DTC brand started to look into, or already started testing, wholesale? If so, reply to this email and give us the down low! Quick Hits 👻 [Snapchat]( launches My AI. 👕 [Google]( announces new features for Wear OS and Android. 🐤 [More Twitter]( staff cuts? 🎵 [TikTok]( supports marketing partners. 🍁 [Canada’s]( response to TikTok. 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Don’t forget to [rate the DTC Podcast]( on Apple (⭐️⭐️⭐️⭐️⭐️) DTC Newsletter is written by [Rebecca Knight](, [Juliana Casale](, [Kate Gullett](, and [Michael Venditti](. Edited by [Claire Beveridge]( and Eric Dyck. Was this email forwarded to you? Sign up [here](. NEED MORE DTC? 🚀 [Advertise]( in DTC Newsletter. 💰Check out our course on [Facebook and Instagram]( ads! Rate Us [Fueled by Pilothouse] [Share]( [Twitter]( [Facebook]( [LinkedIn]( [Advertise with DTC]( | [Work With Pilothouse]( At Direct to Consumer, we are strongly committed to protecting your privacy and providing a safe & high-quality online experience for all visitors. We understand that you care about how the information you provide to us is used and shared. We have developed a Privacy Policy to inform you of our policies regarding collecting, using, and disclosing information we receive from our Website users. Federal Filing operates the Website. 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