Ecommerce Business Makes $1M/Year (After Rejection on Shark Tank)
do you want to start an e-commerce business and scale it to seven figures a year who wouldn't as a serial entrepreneur david did just that in 2020 by combining his brand beard head with e-commerce [Music] we'll be interviewing david who scaled his business to more than a million dollars a year and also started successful ventures on the side as well he did all this with just a ten thousand dollar investment into the first production of beard heads his brand beard heads was also featured in shark tank the tonight show with jay leno the doctors just to name a few in terms of sales for beard head how did that look like after you aired profit margins are killer what are they if you do the math we did zero ppc advertising zero advertising for i think the first four years and that brought in i don't know like 30 40 grand overnight today he's going to show us how he leveraged social media to gain popularity he's going to talk to us about how you can start your own e-commerce business and connect with magazines and influencers and a lot more how long did it take before you got the 10 grand back took about a month amazon is 80 plus percent of our overall business one day i look at our google analytics is about a month in 100 000 200 000 hits a day well before we go meet david take a second like this video subscribe to our channel so that you don't miss any of our videos and without further ado let's go talk to david and get to know about his business idea david hey how you doing i'm paul good how you doing good to meet you let's get into it sure [Music] all right you guys we are here with the owner inventor of beard head david thank you for being with us yeah thanks for having me all right well we got some questions for you in our audience and and then viewers are dying to find out a little bit about the story and and really a couple of your ventures sure uh tell me about you your company beard head and when and why and how you started the company sure well uh beard head we make uh knit beard hats with mustaches on them little strange little niche a little novelty but uh for sure you know it's been really successful we started in 2008 so it's been almost 13 years started it not too long out of college it was my first uh kind of big foray into entrepreneurship i had a couple other smaller businesses that did okay but beard head is the one that really took off got on shark tank among other things so the idea what are the ideas right right the idea i tend to work with products and create products that i feel passionate about okay and beard head kind of came when i was essentially on a snowboarding trip the whole story is i was on a on a ski lift and fiddling around with my bandana the cold wind and the snow was burning my face and the bandana kept falling down it was uncomfortable wasn't working out and if you've ever been skiing or snowboarding you have a lot of free time on the ski lift when you're just kind of like waiting there quiet serene you know so i end up thinking about god i hate this thing what can i do uh make something fun and where and and after a lot of prototypes and trying a lot of different things uh beard head was born [Music] david tell us what your first production of beard had cost and how long it took you to recoup that yeah well the first one we put in i say we uh it cost about ten thousand dollars okay how many units i think it was roughly roughly 2 000. so it was about five bucks after paying for the shipping and doing all that kind of stuff five bucks pop and then how long did it take before you got the 10 grand back and it took about a month so it was i mean like you know it it kind of we had them we're sitting on we started you know put the website up and then things just sold out stuff yeah and ever since then so everything i've ever done since then has all been financed through that very first production run you know so i haven't taken on any loans i haven't put in more money i haven't had to so everything was rolled over oh we got you know what we said it would have been uh 60 000 essentially was selling through the whole thing because they're selling at the time 30 bucks each um you know and so that was just by the next batch and then so on and so forth then it grew crew crew so yeah good 10 dollar investment i mean profit margins are killer what are they if you do the math uh eighty eighty percent gross gross you know there's uh obviously you know expenses and advertising if you do that and this warehouse yeah but generally so i would actually say insane as rule of thumb for me when i'm looking at an opportunity one i keep it usually within a 20 to 50 dollar price point because that's i feel that's the the range i understand like any more you're going to get more returns and you have to convince people more and it's not necessarily like a kind of a spur of the moment type of purchase and in that price point range i personally make it a rule of thumb to have like a four to five x markup you know so 75 to 80 gross margin um and then that gives you enough wiggle room to like make mistakes here and there you know have discount if you have to things like that when you came up with that idea how did you validate to yourself hey this is potentially a really profitable idea business etc well so first you know out on the ski slopes kind of came up with the the product idea but like how did that transition into actually jumping in and doing this business and e-commerce and i mentioned before i had done some smaller things and it's true i had an e-commerce business it was a poker jewelry business called pokerbling so i had some experience doing e-commerce and setting up a website and that kind of thing so uh when i came up with the idea for beard head and it's because of something i was interested in you know more passionate about i love snowboarding and i had produced things i should say overseas in china this was poker poker bling i made stuff in china beard head i felt oh i can i can find somebody to do this for me and at the time this is 2008 this was not as common as it is now so alibaba is huge now everyone can find source their products 2008 wasn't nearly as popular um no one really was doing that they were like kind of i guess is very risky you know did you go out for like a market research to determine anything you just no no you know i kind of this has always sort of been my way to do things and it doesn't work out for everybody um but if it's a niche product in a market that doesn't exist for instance you know like beard head the product didn't exist before i have a different product i run right now uh pet product doesn't exist prior to to me introducing it i kind of go with my gut on it because i feel like i would buy it and i spent a lot of time on reddit i feel like a lot of reddit people will buy it and reddit's the pulse of the internet so you know i i feel pretty good usually uh and i take a i i take a flyer on it so okay [Music] what about revenue for uh beard head and then um zeus nudes for 2020 and profit margin zeus news we didn't touch on that we did talk about bigger so let's let's yeah so so revenue wise um we're just under a million combined combined combined yeah um and beard head has always been kind of the papa company and zeus news was just starting because it's much younger but in 2020 zeus news because beard had had that down year especially down here and zeus news had uh you know the highest best year ever and we're growing year every year with zeus news as well because it's a new brand so it's surpassed margins um zeus news is a little bit worse worse um yeah it's less or not yeah yeah eighty percent that's nice yeah don't get me wrong they're both still really good um the zeus nudes it costs probably about the same to make a zeus nude and a beard head okay um some beard has a little bit like the fancy one the horns and all that's a little bit more expensive but the zeus news there'll be a small one which i only sell for 16 and that's a that's a much lower price point most of my beard heads range 20 to 40. right um so the lower price point makes a difference i have to offer free shipping so that cuts into the profit margin as well for zeus news at the lower price point and zeus news has a little bit higher cost of advertising because we do compete for dog costumes keywords whereas beard has very niche and specific so it's not as expensive okay [Music] why don't we ask about how the process of getting on shark tank looked for you sure in terms of sales for beard head how did that look like after you aired well was it what you expected so uh yes and no one of the biggest uh regrets and mistakes kind of failures was our website crashed happens all the time happens to everybody it seems during the airing you know they always say don't let the website crash but it's going to crash and you know leading up to it i you know i made it like my my mission don't let this website crash okay and it's still crashed so what did that do to sales or i mean we'll never really know but that's right i mean we did we did wow really really well you know we did well into the six figures just for those like next couple days um and that's with our website being down for two straight days how did you get the word out what was the marketing yeah approach for introducing us today and again you know we talked about marketing a little bit earlier and i mentioned you kind of got to be lucky well with beard head we kind of got a little lucky there i'm a big fan of if you build it they will come because it's worked for me okay and it's lucky i get it right but we built basically built the website and hadn't done any advertising at all we i think i might have sent one or two emails out to a couple blogs that i would go to basically have you ever heard of a uh thing it's not popular anymore called stumbleupon see again i'm old dude i'm 39 almost 40 so maybe that's it like i've got all these i'm throwing out like these random references of dated uh internet next um tools stumbleupon was this thing that just we one day i look at our google analytics is about a month in to selling this stuff and like it's off the charts it's not quality quality traffic but we did 100 000 200 000 hits a day from like 40 a month after you yeah so something just sort of happened and once that happens right then all the blogs they go oh pick it up write about it another blog sees that pick it up you know because that's how it is everything is always just sort of snowballs so once you get that one good hit it snowballs into other ones so that's sort of how it happened with beard head and i'll tell you we didn't do any we did zero ppc advertising zero advertising for i think the first four years just basically the popularity just i can't believe that like i was against it at the time because i want to spend money on this and now i spend a ton of money on online ads is no like that's just a huge expense but yeah i can't i can't believe how successful we got just through word of mouth essentially originally back when we first started bearded [Music] today where can our viewers any customers find you on what platforms and what platforms are generating the most amount of revenue for you sure obviously our website is uh our preferred platform so come for us at beardhead.com or zeusnudes.com i'm sure it'll be included in the description of the video also amazon both our products are fully on there you can even go to amazon.com beardhead amazon.com amazon is still our biggest uh platform in the 80 percent there yeah beard head is 80 these days it's 80 zeus news about 60. so we do really well
on our website and we're actually looking and that's actually growing so um and become more of a focus recently uh because we don't have to pay all the extra fees you know our biggest fee our biggest fee uh expense i should say overall as a as a percent of revenue is amazon fees right yeah so they definitely add up marketing what's been the best strategy for you that has the highest roi maybe what have been some flops for you where you spent the money and saw nothing coming up yeah so i mean not to harp on shark tank but obviously that had the biggest return on investment certainly because you don't you get in front of 20 million viewers right it's going to pay off especially because it didn't cost me anything um not everyone's going to get that chance but that makes sense right so barring the shark tank or the other i will say people can get big press hits though like the jay leno thing that brought in i don't know like 30 40 grand overnight and that didn't cost anything either so pr works right pr can definitely pay off it's just not it's not consistent right you can't rely on it to at least the big ones you know you're not you can't rely on getting that big hit but when it does work it's that's probably the one that's going to move the needle the most so for your pet uh products what's what's working now yeah so so outside of the crazy or like the real big hits um you know we found right now social media influencer marketing specifically for the pet products the zeus nudes has been amazing it's been a great way to build our community we've got you know right now 40 50 000 instagram followers they're all posting uh photos of the product some of them are legit photographers taking amazing product photos which we can use you know we ask them and then use them for marketing materials all that kind of stuff it gets shared and liked thousands of times so it's just that's a good roa yeah and it's fun it's fun you know we get to interact with these people we send them free stuff and you know it it's a lot of fun [Music] what are you spending on all advertisement right now for both of your products for all of your products monthly i i tend to think of things in terms of years because we're so seasonal um you know like what i'm going to spend in now in may is next to nothing you know versus what i spend in december so yearly i think we spend uh about uh 100k 100 000. yeah advertising is probably about 10 of overall revenue okay for e-commerce though is that is that where you want to be did you do i uh i probably should be higher be i should be but it's just when we start get chasing after more difficult and competitive keywords it those keywords become yeah unprofitable for us so you know at that whatever range we're at one is 10 and this is 10 of total sales not 10 of you know so it's tacos not a cost but um if i did it too much more i think like it ends up not being worthwhile so after shark tank david tell us what happened did you get a deal no deal i'm out i'm out i'm out so i'm out but i'll be watching you we didn't get the deal on shark tank it was really close i could feel robert was almost there but ultimately uh you know they kind of they pass i mean don't get me wrong i understand when you're talking to a shark who's worth millions billions you know in in some cases what is that they don't care about like a million dollar a year business that might scale to 10 million maybe you know they're looking for something a little bit bigger for the most part so i get it um no hard feelings there there actually it was a great experience so they were super nice very complimentary but didn't get the deal unfortunately okay uh but it did help the business oh yeah absolutely i mean like you know again when you get in front of 20 million people like it's gonna help you know um so it was definitely a worthwhile experience now for those who are looking to start an e-commerce business where do they start can you walk us through just the simplicity of here's what you need to do here are the steps boom it's all ready to go some simplicity that's a good one um i think well so there are two kind of different like methods that a lot of people go or tracks i should say one is they kind of do the drop shipping and or private label sort of thing and then there's what we do is we create our own products so we're sort of like a brand manufacturer on the side of things where i'm just making products just uh the website or yeah i mean platform ultimately it's going to be product you want to find the right product you want to be passionate about that product uh just you know because you have to wake up and work on it every day if you don't really care that's going to be the biggest sort of factor in whether you're going to be successful or not right to me i think um but other than that yeah you obviously you won the website after we had the meltdown and the website just blowing up after shark tank i switched to shopify amazing i love shopify no problem they don't pay me anything either but i love them um they're amazing so i i i especially if you're just starting out i would definitely suggest shopify just starting your own e-commerce business starting your own yes i would definitely recommend shopify aside from that yeah set up the shopify gotta have good product photos that's everything and then you know if if you can if you have a product that you can engage on social media that people care like no one's gonna care if you're selling a tripod and you're gonna be like you know no one's gonna be tweeting and posting about this tripod all day but if you have a product that does which i recommend you find you know that's why i purposely try to find products that can essentially be viral right beard head people want to take pictures share it zeus news who doesn't want to take a cute picture of their dog and share it so these are inherently viral i would suggest if you can try to find an inherently viral product not always easy but if you can do it that's the way to go david who designed your platform what did they cost your e-commerce site and so on it's on shopify as mentioned before so um a lot of that functionality and and the way the whole website works is comes with you know on the platform sort of base we have a premium theme i think it was like sixty dollars that's it yeah and then the rest i mean i kind of did myself fortunately we have a lot of really like amazing images you know already that we use for marketing purposes so kind of populating the website with a lot of that kind of stuff and like i said before amazing product photography you know with us we do brand our branding is like this big head sort of like over-the-top look i'm happy i'm very happy with the website and the way it looks and um yeah with shopify don't have to worry about hosting don't have to worry about the website going down yeah we know security is always going to be good so yeah okay i love it guys uh i want to i want to bring up to your attention upflip.com forward slash blog go check out our blog we've got full complete guides on how you can start an e-commerce business check it out how were you impacted by last year's large-scale pandemic yeah beard head was impacted pretty heavily you know it's a outdoor kind of snowboard skiing sort of thing and a lot of those resorts were closed so that hurt and on top of that we do a huge amount of gift business like around the holidays christmas gifts christmas parties people want to wear this white elephant gifts things like that it's actually probably the majority of our purchases are for gifts and there was just like a lot less of that uh in 2020 so that definitely hurt amazon is 80 plus percent of our overall business for beard head it's less for zeus news but for beard head it's 80 plus percent and you know during the start of the pandemic they shut down everything except for uh essential products so that that wasn't happening it wasn't fun it was a stressful time but on on the bright side of things i guess if there is a bright side at 2020 uh zeus news sales went up actually i think they could have been up even more had there been no pen you know there's a lot of issues that cause slow downs but there is something called kovid puppies if you've heard of this phenomenon a lot of people stuck at home bought puppies over the pandemic and that probably helped our our sales and you mentioned something going into the dog industry um the first question i guess is designs with beard head are you still redesigning them who controls that process sure sure how often you come out with new ones and maybe talk about your new product as well yeah absolutely we do a lot of designs i mean we have more than 200 skus for beard head wow but as of late beard head has been you know it's it's kind of the product life cycle is typically maybe seven years on and plateaus a bit and then sort of eases down a little bit and that's kind of where we're at right now with beard head but so we were tending to not spend a whole lot of time on new product design honestly like some of our classics are still the most popular so we've had a handful of new designs come out that have had some success but still nothing stacks up to kind of the staple designs the the the viking one yeah the viking one this actually these are all pretty good this one's still the best one nice um you know so we tend to do a little bit less and then your new product and then a little bit about right and as so i mentioned kind of beard head is a little easing down a little bit and uh there's been a i decide to do a bit of a product extension into the pet industry but it's not under the beard head brand because it would be weird i guess that would darn it but it's essentially it's a knit product um costume like novelty like but has some functions so that's what beard head is all about it's about functionality but also a fun we say fun and functionality if you want to okay throw the tag line on it but zeus nudes is the other brand it's like essentially a beard head for a pet without the beard but they're like animal theme you'll have like a lion a knit lion kind of hood for a for a dog or a baby alien or for a unicorn that kind of thing what are the advantages of doing direct to consumer through your website and versus wholesaling maybe just as amazing yeah i mean that's a big topic yeah i mean it's funny that you bring it up because beard head in particular because we've been around for so long for so long now we've gone through a lot of changes in our business model whereas you know when we first started out obviously just the website we're small little guys we grew that turned it into a much more of a wholesale business to one point at our highest point as far as revenue was 1.3 million wow and 70 of that was wholesale and then we kind of plateaued out around a million and uh then i decided i don't wanna do wholesale anymore because you gotta go to trade shows you gotta have sales reps you gotta follow up you gotta sometimes you know when we're doing like uh you know five grand 10 grand a day during the winter in sales direct sales to consumers and then we got like somebody who we did a wholesale thing with for 200 bucks and you know a small shop don't get me wrong they're great but they start getting on you about like oh this is this and this you know and i'm right why am i gonna deal with this i gotta deal with the sales rep too i gotta collect i gotta get this guy to send me a check and then i gotta cash that you know it's just so you're focused all on direct the consumer through your website preferably now yeah preferably through the website but amazon obvious i mean that's still good um it's still a great platform on the topic of influencers yeah how do you what's the system for reaching out to them yeah well i would say for me and this you know it depends on your business but because i love my brand i create it i personally created the brand and i love dogs uh i just try to be as authentic and genuine as possible so i and i'm the one doing the outreach most of the time sometimes we'll have i'll have uh somebody else like help out with the social media just sending messages saying i'll just find some account i like they have great photos and well does it say i love your photos your dog's super cute you want some you want a free product i don't require them to post anything i don't i don't make any demands that's interesting because if they like it they'll do it yeah they'll do it and then influence these these there are a lot of dog influencers mind you like and they're looking for content they want to post cute photos right so why wouldn't they want the cute perfect marriage exactly yeah you know interesting and it's always is that's worked so far for us i also have like we have a whole affiliate program so anyone can sign up if they refer sale they get 15 commission so that's also a strong a strong way to sort of just develop that sort of influencer affiliate network without necessarily finding those specific you know ones that you really love that create amazing stuff it could be anybody really okay just a quick snippet please take a moment like this video subscribe to our channel it really encourages us to continue to create uh all this production for you guys [Music] david looking at the entire process from manufacturing to customer support what do you do in-house what do you contract after third-party services sure especially right now as of right now i do everything myself so everything is in-house oh obviously except for the except for the production i'm not knitting all these things myself but outside of production which we do in china you know i do all the advertising i do the marketing i do the customer support i do the shipping wow um yeah this is where we magic happens man okay so uh yeah we i basically take care of everything that's by design i've kind of we've had employees in the past i've had sales reps i've had accounting i've had some of these things but with amazon sort of taking over the space a lot of that like there's no way we i could do all the shipping myself but with amazon fba with fulfillment through them and with so much of our business going through amazon these days you know i'll still do our own website shipping which can get a little crazy in the winter but um you know it's two months or so out of the year which i get a little nuts and i might hire somebody but for the most part yeah i i tend to handle everything myself zero payroll and no headaches no hr headaches nothing like that [Music] you've also been featured in quite in you know quite big publications and tv shows and things like that how did those things happen and what advice do you have for other company owners looking for you know big name publications and some exposure like that well i do have some advice which i'll get to but i will say with the caveat a lot of it's just luck you know i mean we can't control that certainly we reach out to some publications and try to get some press but all our very biggest hits have always come with exception of shark tank have come with uh just essentially them contacting us but to get those people to come and contact you you have to have some sort of presence you have to be you know you get a lot of attention just virally on social media on smaller blogs um i will say like back when i first started anyone who emailed us could be like a a mommy blog with you know 20 visitors a day or something asking hey can we have a free beard head we'd love to review it sure i would send it really because you never know who reads that blog or who might read it who might read it and maybe it someday gets to ellen right and then they're really yeah exactly so you know put yourself out there i would say um specifically though uh h-a-r-o help a reporter out haro um no that you guys haro that is it's a it's a place where journalists uh press basically put out requests like calls for experts in something so that's some way that we got a couple decent press hits you know you went through that platform yeah yeah but i mean you have to sort through a lot of stuff that doesn't you know apply to you and you know and it's a daily thing where it's a slog to get through sometimes but that's one way to you know you never know you get a good hit from that [Music] let's talk about suppliers you come up with a new design uh where does that start the process of a new design and walk us through the evolution of it showing up like this sure yeah i mean the new design just kind of looking at what's popular amongst beards you could just do simple like google searches and things like that but basically we'll get we'll get that kind of info even sometimes we'll actually do a like an instagram survey and we'll like ask oh what what kind of design would you guys like to see but and then we'll just sort of sketch it out we'll uh create something like a mock-up in photoshop i'm not the best crocheter and knitter so i mean neither am i i used to try to do it myself and then you know send the sample off to our supplier but we've been working with the same supplier since day one we were very lucky in that we found someone that worked out from the beginning and since then our relationship has really grown i've been to china several times i trust them completely at this point and we got to the point now where i could just send a sketch or even describe what i want and they'll come up with something pretty good if not in some cases better than i had originally imagined what about zeus nudes why did you decide to venture off you mentioned that a little bit but i want to dive in just a little bit more why zeus nudes is there anything else coming as well like i said before i mean i think just in general it's good to sort of diversify beard head had been slowing down already and we would get emails and and messages dms from people saying hey i want do you make one for a dog you ain't making a dog and people started reaching and we tried and it didn't really work out so much people even sent us pictures of their dogs wearing a beard head which doesn't really look quite right but you know everyone's having fun um but so you know i i also love dogs i have my own dog so i thought you know what maybe we should just let's make one for a dog and and it's kind of gone from there and it's turned into this amazing company and super strong brand with this vibrant community and it's just it's a ton of fun awesome is there any difference between the manufacturing process or is it pretty much the same because it's actually so i think like compared to when we first started beard head it was way easier to launch zeus news because we've been working with the same manufacturer so it's the same manufacturer and we don't set up and we get we have economies of scale to a certain degree when we're dyeing yarn we're making bulk yarn purchases um the same color brown for this beard is the same color brown that i use for you know our grizzly bear zeus nudes so yeah it was actually a lot easier and like i said where i could just essentially sketch something out you know and then they'll make it for me and i just the small tweaks here and there so when i first did beard head we had one style four different colors that was the first almost a year i think of products and then with zeus news i introduced i think it came out with 10 styles from yeah and now we're up to like going on 20 something like that i don't want to i don't have too many ideas for the different animals and what works and what not so we try to do like two or three maybe new ones a year for zeus news well you guys that's a wrap david it's been a pleasure um it's not an easy industry to be in however it's very profitable clearly or can be can be um guys as always we've got something very special for you from david david tell us more about that yeah absolutely everyone of uplift visitors uh video watchers please come to our website we've got a 20 off deal everything that we have uh just enter the code up flip and uh in the checkout on either zeus news or beard head entire order and we'll keep that active for i don't know forever i guess so awesome go for it thank you so much david guys we will leave all the details for you in the description below thank you so much what an incredible fun business that david is in i hope you guys took away a lot if you haven't already subscribe to our channel like this video and see you next time
2021-09-10 11:40
