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Physical Product System Guided Notes PDF
Physical Product System Guided Notes PDF
Welcome
Overview
Fundamentals
Create Your Store
4
4
5
5
Niche Selection
12
Product Selection
17
Target Selection
22
Getting Started
28
MVP Model
28
Apps
30
PL Traffic Overview
31
32
Introduction
44
Overview
44
Market Testing
44
Ads
47
53
Growth Stage
56
Overview
56
Ads
57
Reporting
67
Scaling Up
70
Scaling Out
71
74
Maturity
Overview
77
77
Video Ads
78
Video Ad Scaling
85
87
Decline
88
Overview
88
Pricing
88
Value Add
89
Scaling Down
91
92
Welcome
Overview
Fundamentals
Create Your Store
- Use the link provided to get a 14 day free trial for your store
- Enter in your information and create the important docs
- Install your apps (See Apps video)
- Structure your store (MVP video)
- First go to shopify.com to start your trial as shown below
- You will select Online Store and then enter your info in the address form that comes up
- You will be asked a bit more info that you can fill in or skip
- Then you will be brought to your store, next you will want to go to Settings and then
General as shown below, here you will want to update your legal business name if you
have a business, your timezone, your default weight which will be used your shipping, and
whatever else you think is necessary to fill out on this page:
- Next you will want to go to the Payments section and choose your payment source:
- Next go to the Checkout section and make sure Accounts are Disabled is checked, name
isnt so important so you can choose First and Last name or Last name only, but you want
to make sure that email is required. Then scroll down and check automatically archive
order under after an order has been paid and fulfilled. The additional code and scripts is
where your checkout and conversion pixels will go. Once you scroll all the way down you
will see the refund policy, privacy policy, and terms of service boxes, you will want to click
Generate Sample for all of these, if you are using your home address as your business
address you might want to remove the address from these generated sample:
- Next you will want to copy the text from each of these boxes and make a separate page
for each as shown in the steps below. Copy the text from one box and go to Online Store
and then Pages, click Add New Page in the top right corner, name the page and then
paste the text and save the page (save in top right corner) Repeat this process for the other
two sections and then link to these pages in your footer:
- Then scroll down to shipping zones and click on Heavy Goods Shipping, what we like to do
here is make shipping cost a certain amount per weight, so what you would do is change
the name of the shipping zone, and change the weight, the example below is for
something like a necklace, so what you would have to do is set up a lot of different
shipping rates here :
- Next you will want to unlock your store. Do this by going back to Settings and then
Online Store and at the bottom click choose a plan:
- Next you will want to set up a theme. To do this go to Online Store and then Themes
and then Visit Theme Store in the top right corner:
- You dont need to spend a bunch of money on a theme up front, just choose something
that you like and that looks nice. Once you are bringing in some money, you can get a
better theme.
- Next you will go into Domains and this is where you can buy a new domain or you can
add an existing domain if you have it. Follow Shopifys instructions on how to set up your
domain.
Niche Selection
- 3. This will show you the interests or niches available to you on Facebook. We will use
Firefighting as an example in this course. Some interests such as Jewelry are more of a
category than an interest. If you were to target the interest jewelry with a jewelry item,
you would not be using Facebook to your advantage. You would want to target a more
specific niche such as ukulele with a ukulele necklace or jewelry item.
- 5. You will want to click this and then click Audience Insights as shown with the cursor
below:
- 6. When prompted, click on Everyone on Facebook as shown with the cursor below:
- 7. On the main page of Audience Insights in the left column you will see different options
for the audience you want to create. The location (eg. USA), the age (eg. 18+), and the
gender (eg. All). Under Interests you can type in your interest (eg. Firefighter) as shown
below:
- 8. Once you enter your interest the middle section that shows the demographics will
change. As seen below, for the interest firefighter the audience is 59% Women and 41%
Men but if you do a simple google search, you will find that the majority of firefighters are
men.
- 9. If you remove women from the search by clicking men under the gender in the left
column you will see the audience size change under (New Audience) -above cursor
shown below- 2.5-3m monthly active users. Later you will learn how to refine this and who
to go after.
- 10. Next go to the Page Likes tab as shown with cursor below:
- 11. Here you can look for pages that say I support -niche- or I love -niche- or -nichemoms you can also go to the main Facebook search and type these in as shown below:
- 12. As you go through these pages you will be able to see which ones are being used to sell
physical products this helps you to see how much competition you have, and you want to
see a handful of pages so you know there is a market for what you want to sell
Product Selection
- You will be brought to a page of items related to what you searched and you can see how
many watchers an item has (highlighted in yellow) and to the right of that, how many
past sales this item has had.
- For another example you could search something like Firefighter necklace, find one with a
lot of past sales and watchers, click on that item and in the description you can see how
many have been sold and how many are still available as shown below (see cursor):
- You can also see that the price is cheap so there is room for a markup. Next you would take
the name of the product (eg. Bronze Fire Fighter Pocket Watch and search it in Amazon:
- You can scroll through and see similar items and what they are selling for. As long as the
quality of your item is good, you have an opportunity to sell it at a mark up.
- Go back to your item on WatchCount and make sure to take note of the Delivery (yellow
text) and where the item would be shipping from. Be sure to let your customers know if
there will be a long shipping time:
- Once you decide to pursue and item, you can double check the item on Google Shopping
by putting in the same search:
- Here you will find a bunch of items that are similar to what youre selling. A lot of deal sites
will come up here, and your potential customers will search here too, so you have to
position your item correctly in order to make the sale (will be discussed later on)
- Once you find your item on AliExpress, it will most likely be cheaper here and you can
contact the sellers and see what price breaks they offer for bulk sales, do they have price
breaks for 50 items, 100 items, 150 items? You can also see the suppliers feedback, how
many sales they have had, you can also see the feedback on the product itself. The
pictures used on AliExpress you can use in your Shopify store, if the images are
watermarked you can search the item on Google to see if you can find them without the
watermark or you can ask the seller for pictures without the watermark
- Lastly, eventually what you can do is double check anything that you buy ONCE youre
doing HIGH VOLUME, go to Alibaba and see if there are any suppliers here that were not
listed on AliExpress. AliExpress is made for smaller orders, Alibaba is made for bulk orders.
Target Selection
- Go to your Ads Manager in Facebook and click the button that says Audience Insights in
your navigation bar and as seen below for the example Firefighter we have the interest
firefighter (see cursor) and the gender selected as men because the majority of
firefighters are men, even though the audience was skewed towards females
- If you find an item that works, you can target women later, but for now we are just market
testing. Really refine your audience for core testing. In this instance, you can see that only
8% of the audience is age 65+, as a rule of thumb, eliminate anything that doesnt make up
at least 10% of your audience. So for this example we would segment out anyone older
than 64, see cursor below:
- Scroll down and you will want to focus on the Page Likes as shown below
- You can see the Affinity scores for each page and you are looking for something around
20x. The Affinity is how likely someone is who likes **page name(( in page likes list to like
firefighting or whatever your inputted interest is. The page likes list is automatically
sorted by Relevance which is a mixture of the audience size and the affinity.
- You want to find pages that have presences outside of Facebook. These interests were
formed outside of Facebook and then someone was like hey, you should make a fan page.
These pages wont necessarily be updated a lot. Some pages are built like marketers like us.
- For this example, the first page that comes up is firehouse.com This is a website that
created a Facebook fan page. This is an example of Brand Loyalty
- This page has 365,000 people that like it. However if you scroll down and see some of the
posts you will see that they about under 100 likes, so the engagement on this page.. isnt
the best.
- So what were going to do is rely on the fact that someone who is in the firefighting
community has liked this page. Maybe it was suggested by Facebook. A page such as I
support firefighters is a page run by a marketer and people most likely saw this page
through an ad that was run by the owner of the page. A page such as firehouse.com was
built through loyalty.
- Now we are going to dive deeper into the niche, by using firehouse.com as an interest as
shown below:
- Then remove the original interest Firefighter by clicking the x to the right as shown by
the cursor below
- This process removes noise, what is left are the core interests you want to go after. You will
use these interests when you start using ads. Either keep this window open, write these
down, or remember the process because we will be using these pages in later training.
Getting Started
MVP Model
- Home Page
- Product Page
- About Us Page
- Order Lookup (App)
- Shipping Policy Page
- ToS
- Contact Us (Can be in About Me)
- Privacy Policy
- No Catalog Page Needed (K.I.S.S.)
Until you have 3-4 items to put in a catalog
An empty catalog looks sketchy, less clicks - easier
Critical Points for Customers
- Money Back Guarantee
- Safe and Secure Checkout
- Return Policy
- Contact Information
Can they trust you?
Make it as clear as you can how long it takes to ship an item - so if people claim they
havent received the item, you can explain to them that its on the shipping policy page,
and wherever else you have it listed (eg. receipt, item description)
- Store Positioning
Who are you( About Us + Homepage)
- Small Business Located in Small Town USA
What are you selling
- Firefighter gear
Why are you selling it
- Important (eg. small farmer, been farmer for generations - now selling his own fruits
and vegetables - resonates with customers)
- eg. Im a recently retired firefighter who dreamed of opening a business to provide the
best gear possible for other firefighters
This helps explain why your store is small and you only have one item.
If you only have one product, you need to have a reason there is only one product
- We just opened our doors to celebrate, we are offering out Firefighter widget for
FREE- just pay S&H while supplies last
- We just opened our doors and to celebrate, for a limited time, offering a 2 for 1
special on our Firefighter widget!
Apps
- Checkout
Incredibly powerful for Niche sites - leverage your Master Pixel while building your niche
pixels out
PL Traffic Overview
- Take this feedback and adjust product before you start pushing website conversion
ads to it. Cheap to do- $5-$10 ads
If you have a million people and you run a website conversion ad, you know your
frequency is going to go up long before you ever reach a million people. Why is that?
Facebook takes the million people in your niche and segments them by different kinds
of optimization (conversions, clicks, engagement). Facebook takes that million person
audience and segments it like the circles shown below:
Understanding this will lead to eventually scaling up by different types of ad sets. Which
we will go over later. But you will also understand that you can hit a lot of people who
will eventually buy by hitting the people in the engager audience because there is some
overlap. When youre doing a PPE ad, you want to hit as many people as possible in the
engager category because your ad will perform better. You will still hit the people that
overlap, but you want to maximize the amount of people in the engager side so that
your ad will perform better and your cost per engagement will be lower - reaching more
people for lower cost.
- FB has announced the phase out of the old pixels in late 2016
- Right now, old pixels are still very powerful for you to be using
- The opportunity now is to leverage the old pixels to build your new Custom Audience pixel
- First you will need to go to tagmanager.google.com and setup a new account as shown
here:
- You will want to name your account, enter your domain name, and click Web, and Create:
- Agree to the terms of service and then copy the code that is given:
- Next go into Shopfy and go to Online Store in the left column, Click Themes and scroll
down to the Snippets section and click Add new snippet name the snippet googletag and click Create:
- Where the code says <body> towards the bottom, your going to type {% include
google-tag %} as shown below then click save:
- Next go back to Google Tag Manager and go to Tags and click New
- Next you will go into your Facebook and get the pixel code
- Then click advanced settings and put the tag firing priority as 9 - Dont click continue yet:
- Next you will add some more script to the box that you pasted the FB code in:
<script>
window.dataLayer = window.dataLayer || [];
dataLayer.push({
fbpixel : loaded,
event : fbLoaded
});
</script>
- This is very important because this will help you to fire the right event. So now you can
click continue, then click all pages and save the tag.
- Next you will name the trigger and choose Custom Event and then type fbLoaded into
the event name:
- Then click Add Filters and enter /cart in the last box and Create Trigger:
- Create a trigger for the product page using the same steps:
- Name your tag, choose Custom HTML and paste the snippet inside:
<script>
fbq(track, AddToCart);
</script>
- Finally you will go back to Shopify and go to Settings - Checkout and paste the code in the
additional content and scripts box:
Introduction
Overview
- Market Test our Product with Seed Traffic to Test Buyer Intent
- Buy Yeses before we Buy Sales
- Analyze the Seed Traffic
- Create PPE ads using the same targeting as before (with Link)
- We are in the Introduction stage of the Product Life Cycle, so we are at the bottom of the
curve in the graph:
Market Testing
- Establishing that our product is worth pursuing based off of potential customer reaction
Buy likes before buying sales
Use Comment YES if you would buy this!
- The better the CPE and the Comments - the greater the potential
Cost Per Engagement < .10 (lower the better)
Comments like Where can I buy and YES
- Spending $5 here can help
Anything created inside Facebook that has no brand loyalty, no website, has no traffic to
this brand or cause anywhere else other than Facebook. Were focusing on things that
are growing purely based off the traffic received in Facebook. This will lower your cost
per engagement because these people fit more into the engager category.
- Use an established fan page and post to your wall (boost post)
- Analyze your data after $5 spend
- Create a Page Post Engagement ad with a link back to the same audience who responded
to your test
Take out comment YES-esque text and insert a Buy Now! link
- In the next video we will begin scaling out our PPE ads to ramp and prepare for our growth
stage
- So our motive here is to get social interest to have our page post engagement ad hit
because these people will fall into the engager category more
For this purpose we dont want something that is more in the buying interest or the
brand loyal interest (such as a website or a physical brand that people are buying) We
will want those interests later for the website conversion ads.
- So back to the Firefighter example with firefighters typed in the interest section of your
audience insights. The page National Fallen Firefighters Foundation will come up, has a
high infinity and you can tell by the name that this page is for a cause.
- If you open this page you can see that it has over 300k likes, more than enough people to
target in an ad. And you can tell that this isnt the most engaging page, but thats because
theyre not great markets, but the cause and the community is strong.
Ads
Make sure to attach a conversion pixel to track sales and build you pixel
- If on Shopify - make sure to watch the Trackify videos and set up your niche pixels
first.
Use single interests for each PPE ad, since we are not using a pixel to optimize
- The less pixel data you have - the more control you need
Scale out with more ads using community/cause/marketer pages
Repeat the process
- So if you go to your ads manager, you can do a breakdown of the ad and here we will
breakdown by age as shown below
- So what you can see in this example is that pretty much every age group did well, but the
majority of the traffic came from ages 25-34. However, every age demographic had a very
low cost since they are all under .01 you can run a PPE ad to all of them. See below:
- So in our example we picked the interest National Fallen Firefighter Foundation to run
our $5 ad to, so that is what we are going to use for our ad with a link in it. So we are going
to go to our ads manager and create a new campaign and boost a post as shown below:
- To create a post, click on the plus sign to the right of the bottom drop down box, in this
example the box says Timeline Photos - Would you wear t
- Then you would post a photo and your text and click Publish Now as shown below
- Next you will scroll down and refine your audience. Refine your age group based on how
the 5$ ad did and insert your interest as shown below:
- If you scroll down again you will have to option to ad URL Tags so you can track this, and
then you will remove the Desktop Right Column and then click Place Order
- If you want to repeat this process for the winners, just get the ad ups and keep getting
more traffic and more eyes on your offer. Then eventually you will have to get more
interest to target. So you will go back through the interests and look for community style
pages. You can also go into your graph search (Top search bar in Facebook) and type
Communities named x here x= firefighters
- If your product is profitable from a PPE ad you can start to send traffic using CTW
- CTW is also great for retargeting
(which you need to set up from day 1)
- Since CTW does not optimize on a pixel, you need to split interests as well to give yourself
control.
This can help us get sales to mature our pixel and prime for WC
- Important!: Run a wide open test ad first then split it out
- The audience who responded by engaging is not necessarily the audience who will
respond by clicking
- So those are the ones you want to go to. In this example we use firehouse.com Go to the
Facebook page and the website and check them out. In this example firehouse.com is a
great one for us to use.
- Here is an example of a CTW campaign and what to look for in terms of good metrics and
profitability
- So this ad is Wide Open and has reached 794 people, is costing $0.19 per click and has
cost $4.84
- In this example you can see the cost varies greatly through the age groups with a very
strong presence in the 55-64 age group, also have some good clicks in the 25-34 and then
45-54. You would want to keep an eye on the 35-44 group, but Facebook will optimize
and steer traffic away from that age group but when you get into more advance typed ads
and split these out, you would not want to create one for the 35-44 age group.
- If you want to check your conversions to decide whether or not to keep a certain
demographic included in your audience based on the cost, you would go to the drop down
box that says Columns - Customize Columns as shown below:
- And then type Checkouts in the search bar, and choose Checkouts (Conversion Pixel)
and then click Apply in bottom right corner as shown below:
- The new column with the Checkouts will pop up on the right side - if you havent had any
sales - there will be no data in the column
- So, initially the Reach and Cost columns will be where you are gathering most of your
data, but eventually once you have some Checkouts or conversions its really important
to see where the conversions are coming from, not just the clicks.
- Recap
CTW
- Cost per WEBSITE CLICK below $1
- ROI is king - look for the ones converting - kill off what is not converting regardless of
how many clicks you are getting - eg. if youre making $20 per item, then if you arent
converting within $20, kill it unless you are will to push beyond that to gather more
data
- Make sure to have the same conversion pixel added as you have with the PPE ads
Growth Stage
Overview
Targets:
- Converters
Brand Loyal
We already have the
engagers and clickers being
targeted (PPE & CTW ads)
now we are bringing in the
converters
Ads
- Now go into audience insights and start at a top level, so for the example here we have
firehouse.com as the interest, and men in the ages of 25-54 this is interest we found
earlier on and the demographics we narrowed down to.
- So now look through the interests that come up here and look for those above 20x affinity
and look for the converter type interests - such as stores - make a list of these interests
- Now go to your power editor which is in your ads manager - you will see download to
power editor and then in the top left click create campaign
- Once you are here name your campaign eg. Firefighter - WC Photo- change the
objective to Website Conversions then Create New ad set called Wide Open then click
Use Existing Pixel and choose your pixel. (in example below the pixel is red because it is
just a text pixel used for this purpose. Your pixel should be green meaning that your pixel
has fired). Then Name Ad Ad and click Create
- Change the daily ad spend to $10 and scroll down and click Edit Audience the window
below will pop up and you will change the demographics to what has been working (eg.
men 25-54) and then start putting in the converter interests that you just looked for (eg.
stores) - if it doesnt show up when you search it, remove it from your list- click save
- Depending on your audience size (shown in right column - says Potential Audience)
(<1million) change the Placement (scroll down) to only mobile and desktop newsfeed
- If you have about a million people in your audience, then you can do the wide open
modified and do a lot of segmentation. You do the segmentation, just as Facebook does it.
On the first wide open modified you will segment by age - just as Facebook does it 25-34,
35-44, 45-54 - dont go too specific - dont split the mobile and desktop newsfeed unless
you already have a 25-34 segment and in that segment you have above 500,000 people
- if below that, keep them together.
- Choose the Facebook Page (eg. I Support Our Firefighters) and then click Use Existing
Post as shown below:
- So before this point you need to Post another 1200x1200 image similar to what you used
for your PPE ad but without the Tag Friends text, we dont want people tagging people,
we want people buying. Only call to action you should be using is Buy - Once you have
that posted come back to the page shown above and click Use Existing Post and select
what you just posted - example post below
- Add pixels to your Tracking section the ones shown below are red but yours should be
green - then upload
- Now if you were going to go into the modified wide open go back to the Ad Sets section
on the left side as shown below:
- Once you are here, click the duplicate button as shown with the cursor below:
- Do this a few times - you want an audience of about 200-250k for each ad:
- Change the names of the Ad Sets to your segments (eg. ages groups)
- If these audiences are still big (bigger than 250k) you can then split them into platform
(this example is already split by gender- only men - but you can also split by gender) so
you would duplicate these three ads and then have either desktop or mobile for each one
Reporting
- This is an example of a Wide Open ad for age groups 45-54 on mobile platform and as
you can see there was about $1500 spent on the campaign, the conversions are high but
its because everything was being tracked, so there are 2300 add to carts and 532 bought/
checkout (about 1/4) This item was $9.95 s/h which makes that about $5300 in revenue.
On face value that looks like a fantastic ad, but it cost about $2 to get that item to the
customer, so its really $7 x 532= $3724 is the initial margin.. So you take that initial margin
$3724 - (ad spend) 1537.84 = (profit) $2186.16. So it goes from $5300 in revenue down to
$2187 in profit
- If you scroll to the right you will see a column named link clicks and here you can see
how many times your link has been clicked. But you can usually tell from your conversions.
- If you scroll to the right, you will be able to see the actual cost per conversion ($2.89 in
example below):
- So to break this down into the certain ages, you would go to the breakdown tab as shown
below, and choose Age and Gender:
- Here you would look at the demographics that are winning. So if this is done on a wide
open ad, you would have every age demographic and gender combination, and you would
create an ad within the same campaign in a new ad set targeting the winning combination.
You want to do it in the same campaign because a lot of information is stored in the
campaign as well as the pixel. So remain in the same campaign as much as possible. You
could also do this for placement.
- Focus on finding winning demographics, if you can hit them on a deeper level such as their
ages, do it.
Scaling Up
- If the ROI dips from your scale level, then consider moving back the budget to prior level
Scaling Out
- Checkouts (100-200)
- Add to cart (when there are enough checkouts)
- Key page view (when there are enough checkouts)
Pay attention to the size of you niche to determine the size of the lookalike audiences
you can create
- Also pay attention to general rule of the action you lookalike audience on
Engagement > Clickers > Adds to Cart > Converters
Example there are 8 million nurses in the U.S.
- Engagement (8mil) > Clickers (6mil) > Adds to Cart (4mil) > Converters (2mil-1%)
- You can also add interests to bring your audience down further needed. If you niche is
less than 1.9mil I would recommend it.
- So now go to your ads account and go to the Audiences tab as shown below:
- Next choose the pixel you want to use as your Source (in example Master Checkout) You
want this pixel to have 100+ fires(preferably 200+) Change the size to what the size of
your niche is (eg. there are 8mil nurses, so drag the size to a little under 8mil, eg 7.7mil) you
would use this for a lookalike audience for a PPE ad. If you are looking for buyers with a
conversion ad, you would want to stay down towards the 1% (in example 1.9M)
- You can also change the Source or the pixel that you are using. Success has been shown
using a lookalike audience Page with a PPE(pay per engagement) ad, a lookalike audience
add to cart pixel with a CTW(clicks to website) ad, and a lookalike audience conversion pixel
with a WC(website conversion) ad.
- Next you would create the audience, it will take a little while but you will get a notification
when it is ready.
Since we started with High Affinity Targets sorted by Relevance, going further down the
list likely wont bring too many more eyeballs to our ads
We will now want to target interests in the other 2 optimization categories that we are
not currently using (Engagement, Clicks, Conversions)
Currently our ads run to interests we deemed in the chosen optimization category. Now
we will cross-target to others to hit the remaining people in those interests.
These are big broad highly targeted interests and we want to hit the remaining people
who are otherwise left out.
- Broad Targeting:
Only use once you have a fully matured pixel
100s of sales
Think slightly outside the box when going broad and dont just go for (eg Nursing - high
chance of likes by association) so go for (eg. Bachelors in Nursing, or Nursing School still broad but a little more nuance)
- Forecasting is a crucial part of advancing your product beyond the introduction stage
- Proper forecasting can save you a lot of time and money - as well as make your customers
happier
Ask the supplier if they drop ship because you have a large order that needs too be
placed and you have no other option
Ive even placed the order (not paid) but then in the notes requested a price discount for
a larger order and ePacket shipping to each person on a customer list. Where do I send
the .CSV?
- Begin running your WC ads, scaling out all ads, and let FB optimize
- Once you hit a relatively constant number per day, you can forecast out
- So lets say you have hit 100 sales per day on a single item consistently over a 4 day
stretch
- Communicate with you Aliexpress supplier or find your product on Alibaba (or other sites)
- Important things to ask right away:
How much do you have on hand?
If not much, how long does it take to manufacture? (note this)
Can you improve the quality? If so, what is the added cost?
What are the price breaks for large orders?
- Sometimes your order size will more than cover the cost of a quality improvement
(win win)
Their manufacture time is 3 days for 500 more with improved quality (.05 more per
item - $25 upcharge)
Their price break is at 500 (.03 savings per) and 1000 (.06 saving per)
- Ordering 1000 gives me $60 in savings
EMS shipping will cost $20 (dont forget to remove the ePacket cost later)
- ePacket is typically $1.8 on small items ($1,800 savings)
I am selling 100 per day - which is only 5 more days of their inventory
I could order small batches and send via ePacket (10-15 days) OR
Order 1000 (only 10 days of demand)
Wait 3 days to have the others produced
EMS takes about 4 days to arrive to a single point (fulfill house)
Have my fulfill house turn around 1000 in short time and deliver in another 3-4 days
- Total time is under 15 for 1 buyer
- Total time is 4 days or under for 7-10 buyers
Reorder on day 5-6 gives my day 11 buyers the short turn around as well
- Using a fulfill house also has other perks:
Comes in nicer packaging (higher perceived value)
Fulfill house can use their address for returns
You have a direct line of control over your inventory
of course, faster shipping
- 10 days of inventory is very lean - you can push up from there which would give more
customers the shorter shipping times
- Ive been using Ship N Grow as my fulfillment house for months now
Run by Robert Nava and Rita ONeal
- They have handled small to midsize items for me
- Their customer service is amazing and their understanding of the industry cant be
matched
- Go to: http://shipngrow.us/get-a-quote/
- Put Physical Product System in the company name section (below your company name)
so they know I sent you
Maturity
Overview
- This is the next stage in the product life cycle after the Growth stage - You will still see
some upward trends on newer ads, still lots of sales, but in this stage, your conversion rate
in your 3-4 day window will decline a little, this is because
- Your product has been running in the market for some time now
Amount of time will vary between products
You will notice a slight dip in your conversion rate and scaling should be slowed
Likely you have been noticed and people are now copying you
Your goal is to keep sales coming in the door at current market share (ad spend)
- Ads
Normally, people would being to scale back by reducing budgets and killing ads
We are going to adjust the biggest objection people have right now to boost our
conversion rate and increase revenue, without adjusting ad spend
- PRICE!
If you put the right PRODUCT in front of the right PEOPLE - the majority of the time the
only objection left is PRICE
By lowering our price at this stage we can pick up buyers who saw your product but
didnt buy before due to being expensive
We also pick up new buyers who may have bought at a higher price but havent seen the
ad yet. At this point it becomes cost effective to lower the price because the early
adopters have already purchased.
- Copy Cats
If we have done the steps leading up to this correctly, they will not have:
- Our social proof
- Our matured conversion pixel and optimized ads
- and now we are the better priced item
This is why we arent afraid of people that copy us
- Keep The Sales Coming
A lot of strategies tell you to scale back and kill ads at this stage when they become
unprofitable.
Since we have control of the selling price, we can turn theses ads profitable again and
keep selling
Remember, 34% of your sales come in this stage and the decline stage. We still have
plenty of money to make!
Video Ads
- These have worked very well for proven products as a way of targeting BROAD interests.
- We use these in the Maturity Stage when starting in a new niche for a very specific reason
We use the Add to Cart pixel for our optimization
- We run video ads as:
Website Conversion objective
Optimized for Add to Cart pixel
Targeting broad interests
- Views really dont do anything for us when needing to see directly from the ad
They are great for a video ad for views is great for a branding type video
- Product use just means showing the product in the video exactly how your customer
would use it once its received
- You will then Create a new ad, give it a name, choose Website Conversions as the
objective, Check Choose an ad set and Create New Name your ad - here you will want
to have a wide open ad but with a selected interest (eg. Bachelor of Nursing) and then
choose your Add to Cart Pixel (Will show up green when you choose yours). Then check
Create new ad and name your ad and click Create All shown below:
- On the next page you will want to click View ad set as shown below with cursor:
- Next you will change your budget to $10, change the scheduled start time to a time in the
morning as shown below:
- Change the placement to Mobile and Desktop Newsfeeds only as shown below:
- Now go into edit audience (right above the Placement section you just edited) and you
want to go broad here but with a little nuance. So, in the example below Women ages
25-54 that have the interest Bachelors in Science Nursing and as you can see (see cursor)
this is an audience of 1.4Mil people, so this is still a very broad audience but not so much as
just nursing would be (~7mil but a lot of them are likes by association) Its all about testing,
test what audiences work for you.
- Next you would create your ad, Fill in the URL to your website, what you want the link to
say, your headline, description, and then make sure video is checked as seen below:
- Next click Select Video and upload your video from your hard drive. Once your video is
uploaded you will see a preview of your ad to the right, make sure everything looks how
you want it
- Scroll down and change the call to action to whatever applies, eg. shop now:
Video Ad Scaling
This is a way of pushing your video to people who fit the profiles of the different
conversion event types (KPV, ATC, Checkout)
**Sometimes one of these will outperform the ATC conversion, its always important to
test
- Increasing budgets
Increasing your budgets is similar to the other ad types
However, we have noticed that video can be pushed higher, generally, than the other
while maintaining a lower Cost Per Conversion
Always look for the ceiling to maintain the highest ROI possible
- The example below is all the same item, just split up by demographics and a few interests.
What you can see is there are a handful of different budgets here. Youll also notice the
frequency, even after hitting all these people, is not that high. Almost half the audience has
been reached with only a frequency of 2.28 - not really worried about frequency but its
cool to see that the ad is hitting tons of people.
Frequency is now used in our favor as our ads will be shown to people who have:
- Purchased and will comment social proof for us
- Havent purchased but are still interested (we want to turn these people into buyers
now)
- Cars
- Beer
- Tvs
You can use this same pricing model with one product as other big retailers do
- Call this the CB2 theory
CB2 is the discount store that Crate and Barrel sends their slower moving inventory to.
They discount this inventory to a lower price to make sure it continues to sell and they
can eliminate their inventory
What we have found is that the right price point will spike our CR and reduce our cost
per conversion below the break even point
If your CR doesnt improve enough to justify the price drop, return to the original price
You can show sale on the item, if appropriate (you didnt previously have a compared
to price)
This is handled on a product by product basis but works great for any LEAD offer
Decline
Overview
Pricing
Reducing your budgets to maintain a good ROI
Adding value to your product (if possible)
Bringing in your next lead item(s)
Pricing
- The graph below is from an item that was specifically used to prove this pricing theory. The
item was a necklace that started selling at $9.95, and it sold very well for about 20 days,
then there were a few days with a low conversion rate, so the price was dropped to $7.95,
and you can see the spike in the conversion rate, there were several days above the highest
peak at the $9.95 price point. Then once the conversion rate started to fall again the price
was dropped to $6.95 where it peaked again, and then fell back down. This item brought in
about 30k in profit.
- The ad spend did not change until the $6.95 standpoint started getting lower and lower.
Right about where the average was the ad spend was reduced. Keep in mind the average
order value was about $8.50 and 64k revenue was made.
- Price dropping an additional time could help you in this stage, but if you arent able to
make it cost effective return to the Maturity Stage price point.
- Once the product is priced at the lowest cost beneficial price - we will begin adding value
to the product
- If you have a product with high margin, you can use types of value adds that boost
conversions during this stage
- This works well with something like jewelry - has a high margin
- Important to note: Your pricing should be at its bottom
- This is why you need to only take these steps on items with high margins- as we will be
adding to the Delivered Cost of your item
- Double check that your supplies / fulfillment house can handle this new request
- Get creative with value add ons, as different niches and products could provide new
opportunities
- Ideally this boosts your conversion rate again to overcome the added costs, so watch it
closely
Scaling Down
- At this point in the process were on the way out with this product, but thats okay because
we are about to start the cycle again with a new lead product
- Scaling back
If you have taken all the prior steps and your conversion rate is now (still) falling, its time
to scale down your budgets
Reducing you budgets can improve your ads performance, as FB optimizes your ads at
the lower budget levels
Overall, your product will eventually begin to die off due to its exposure to everyone in
the market (or most)
Your ads will have different performance levels during the earlier 3 stages
- For example
WC ad running at 100% ROI
PPE ads running at 50% ROI
Video ads at 200% ROI
- I dont scale ads back that run at 50%+ over the course of our 3-4 day review window.
- If an ad was once getting 100% ROI and now gets 75% ROI - KEEP IT
- 50% ROI day to day is a solid return for what we do!
- ** Remember: Sale Price - Delivered Cost - Ad Spend = Profit
ROI = ((Total Revenue - Total Costs) / Total Costs) * 100
- Run your ads till they reach the 50% ROI level - then begin to scale down your ad budgets
- 25%-49% - scale back 25% on your budget (meaning $10 to $7.50)
- 1%-24% - scale back 50% on your budget (meaning $10 -$5)
- If you are negative over 3-4 day period, you can drop to $1 for you ad. You may not get
much reach but an occasional sale can be made for not much risk
- Some ads could improve in terms of ROI when scaled back on budget
- Continue to run these until a 3-4 day window is negative - you shouldnt be spending
much at this point
- Kill off each ad as needed and prepare to cycle your next product!
New Lead Item
- We want to match the Decline of your current lead item with the introduction of your new
lead item - for constant traffic
- You current lead item will go into you catalog as your first item or another item
Set at full retail price
Keep positioning as a unique item, but no longer need to be on sale or limited, etc
- The graph below outlines the product life cycle. It shows who buys what and when they
buy it.
Find a:
- Similar product
- Accessory to prior lead item (bracelet to match necklace)
- Improved version of previous product (alloy to stainless steel)
Dont worry about running ads for both current and new lead items at the same time
In the introduction and the decline stages, you overall arent spending much on ads
The goal is to have one product ready for growth stage while the other is about to be
killed
We are adding proven products to our store and building a profile on the people (pixels,
custom audiences, emails) who bought our products