Mark: 0:00

The second they start referring to themselves and your product, you are in the red zone.

Trevor: 0:05

There are a lot of businesses that come to us that were top dogs and they were growing and scaling and now they've plateaued. This used to work, we're still doing this. And it's like, why are you still doing that then?

Mark: 0:13

Has online advertising gotten harder since 2012? And the answer is yeah, it has.

Trevor: 0:18

Yo, what's going on, everybody? Welcome to the Unstoppable Marketer Podcast. With me as always, is Mark Goldhart. How are you, Mark Goldhart? I'm doing great. Wonderful. Excited. We're nice and warm here in Utah while the rest of the world is going through a snow apocalypse. Yeah, you will have you'll have made it out of the snow apocalypse by the time you listen to this episode, but if you're on the East Coast. South, Midwest, too, right? Yeah. Midwest into the south. Yeah, we were just talking about.

Mark: 0:46

Everything west uh or east of the Rockies.

Trevor: 0:48

Yeah, we have a team in uh Austin, and they were uh like it was like 36 degrees and snowing. They said it was like slitting to her. She said it was sleeting.

Mark: 1:00

Shuts the whole town down. Yeah, it does.

Trevor: 1:02

Yes, it does.

Mark: 1:03

They are not built for snow.

Trevor: 1:05

We need some snow, and we didn't get any of it, which was a bummer.

Mark: 1:08

So it's coming though.

Trevor: 1:10

You think it doesn't look like it is on any forecast.

Mark: 1:14

Just uh just wait. We're gonna have a really late February, March snow Apocalypse. Apocalypse in Utah.

Trevor: 1:26

I hope so. What's going on? Let's talk. Let's talk uh um I like our episode today. I'm excited to talk about it. I kind of br I've I've briefly talked about what we're gonna talk about in my own content that kind of blew up online, and so I think it's a good topic to discuss in like bigger detail than like a 60-second video.

Mark: 1:46

Yeah.

Trevor: 1:46

I think it was more like maybe like two minutes.

Mark: 1:49

But if we're being honest.

Trevor: 1:50

If we're being honest. So well, let's go through a quick e-com forecast, let you guys know what's going on this week, like things we've seen. Meta bugs. Seen a lot of meta bugs recently. You anything you want to say about those bugs outside of the fact that they're happening. Um you're the meta guy.

Mark: 2:07

No, I would just say that the meta bugs starting in the new year, we have seen four meta bugs. And they have uh impacted performance pretty dramatically on those days, although performance overall in the month has been okay. Yeah, uh, you know, most of our clientele are doing just fine, um, even with a few of those days on the bug. So just be aware of it. They're probably making updates. You know, it is what it is. Don't overreact.

Trevor: 2:43

Yeah. Once again, if you just see like performance dip one day, two day, like that is not a sign that you should flip everything upside down. No. Um, you need to see like I don't know what, four to seven-day trends before you really start making a lot of yeah.

Mark: 3:01

Our our kind of rule and recommendation for everyone is sometimes this depends on your consideration window and what you're using for optimization. Like if you're doing seven-day click or seven-day one-day view or one-day click, and there's reasons and not reasons to do all of those things, right? Just depends on your strategies. But give it at least three days.

Trevor: 3:25

Yeah. Before you go making big changes.

Mark: 3:28

Like really, you should give things like a week. Yeah. Like you should give things a whole week because it's hard to judge something off of a Wednesday, Thursday when Wednesday, Thursdays are going to perform differently than a Monday versus a Saturday and a Sunday and a weekend. So don't throw something out there and just like turn it off and be reactionary just because of a few bad days.

Trevor: 3:52

The other thing, um, and we, you know, speaking of the like snowstorm that's hitting the United States, like you're seeing a lot of people talk about how their performance is dipping. And a lot of times that will happen when a major nationwide event like that happens. Right now, and sometimes it can be on the flip. I think you brought this up this morning. Like sometimes Well, COVID's the example of that. Yeah, like everyone was inside, so people were on their phones just shopping, shopping more. Whereas in this case, people are inside, but they're like in prep mode for these few days.

Mark: 4:29

Yeah.

Trevor: 4:29

Right? Like, do I have toilet paper that I'm that's gonna last? Like I can't go to the store right now.

Mark: 4:35

Well, a lot of them spent a lot of money on supplies. Yeah, exactly.

Trevor: 4:38

So you're not they're not thinking as much about shopping.

Mark: 4:41

It's not really a stimulus check.

Trevor: 4:42

So if you um let's say when did the snowstorm start?

Mark: 4:46

Was it a couple days ago?

Trevor: 4:47

No, no, it was Friday, right?

Mark: 4:48

Friday.

Trevor: 4:49

It's like Friday, Saturday, which would have been today is the as we're filming the 28th. Tuesday. Is it the 28th?

Mark: 4:55

So it's five days ago.

Trevor: 4:56

Yeah, so if like around the 23rd, 24th, if you started noticing things slipping, that's probably why. Yeah. So pay attention to those things as well. Like have a gr grasp on what's happening in the world. Um, understand what happens to gas prices. You should probably be following either the White House Twitter account or Trump's Twitter account to see if he's tweeting something nutty. Like there, there are just these things that happen that change how people consumer behavior buy.

Mark: 5:28

Yeah. So um and guess what? We we harp on this all the time, but sometimes there's nothing you can do about it.

Trevor: 5:38

Yeah, and sometimes there's nothing you should do about it.

Mark: 5:41

So don't overreact, don't underreact, but just try to take things for what they are. Like if if it's a weekend and everybody is hunkered down because most of your consumers are on the East Coast and you see performance dip. Like, is that a reason for you to change what you're doing? And I don't have the answer to that because I'm not in your account, but oftentimes the answer is no, it's not worth changing. Yeah. Because you you have more people online, maybe they're not buying right now, but you're not gonna overreact just because you you you we already know that performance is probably gonna be weird for three or four days.

Trevor: 6:24

Yeah. Uh client win. You got a client win for us?

Mark: 6:30

Uh Uggsy.

Trevor: 6:33

Uggsy is good.

Mark: 6:35

UGC.

Trevor: 6:36

So user-generated content.

Mark: 6:42

Yes, and and Spark ads and branded content, partnership ads, whatever you want to call them, white label or whitelist.

Trevor: 6:51

Yeah.

Mark: 6:52

Uh we think going forward there's probably gonna be a a premium to this type of content with AI. A lot of people want to know that what they're seeing is coming from a person, and it's not just curated through AI. Yeah. Uh or just, you know, it's an AI model. So we have seen some pretty important improvements in accounts, including reach, better reach metrics, better conversion metrics, um using this type of content this year. And in the last, you know, we we always have, and we we've talked about it for a while, but I just think it's almost getting better because there's more and more people if commenting on ads that aren't even AI, but if they think it's AI, yeah, you get a lot of negative comments on there saying, like, oh, that's an AI.

Trevor: 7:46

Yeah.

Mark: 7:47

So the consumer's already trying to filter out AI.

Trevor: 7:51

Yeah.

Mark: 7:52

So we know that this is a trend that's just starting. How it how it totally shakes out in the next six months or two years or whatever, who knows? But it does appear that, especially on social media, there's an averse reaction to AI models. Yeah, for sure. So be careful if you're using them.

Trevor: 8:14

Yeah.

Mark: 8:15

We're not saying don't, but be careful for two reasons. One, it does appear in our accounts that people don't like them. And two, if you're using them in any kind of like testimonial way, it is an FCC violation.

Trevor: 8:32

Yeah, the FTC will come down, could come down hard on you. And the fee per violation is over$51,000.

Mark: 8:41

Which is a fabricated testimonial, right?

Trevor: 8:43

Or yeah, it's a fake testimonial.

Mark: 8:44

Yeah.

Trevor: 8:45

Right? So you can have UGC that says, we just launched uh um Apple just launched the new iPhone. Here are the colors, go check it out. That's AI generated. UGC AI. They can be AI models, fake people that are explaining the product. Yes, uh explainers, they can, like I said, uh uh product announcements. But the moment you say something your AI model says something like, I never lost more weight than when I took this supplement, or my dog loves XYZ. Or I love or these clothes look so good on me, the moment it starts to be a personal testimony, it is a lie. It is a fabrication, and you don't see the FTC cracking down a lot on this, but I would imagine that as AI models become bigger and bigger, it will be a bit like there will be a big crackdown. And if there's not a crackdown on the FTC, what will happen is you will get a lot of people.

Mark: 9:47

Well, they're start cracking down on the platforms.

Trevor: 9:50

Platforms, or there will be armies. What happens is like law firms will spit up for things just like this, and they will go out and try to find brands, companies that are doing this, and they essentially blackmail them. So they'll say something like, Hey, I see that you are running 200 AI agent ads. That's$51,000 per video violation. You can either pay, we can bankrupt you and you're gonna pay millions, or you can pay us$500,000 right now and we'll like we won't report this.

Mark: 10:26

Yeah. So the the point, and just to give you the give the actual definition here, is if you're using AI people, like you know, models, yep. You have to be very careful about anything that is a reflexive noun or pronoun or reflexive verb.

Trevor: 10:47

Yeah.

Mark: 10:48

So the second they start referring to themselves and your product, you're in trouble. You are or in the potential, you're just you are in the red zone of potentially getting a big time fine. And crap kicked. Not just a fine, but like you could also just get sued. So maybe it's not the the federal, you know, commission that's coming down on you, but it is like he said, Trevor said, it's a law firm, it's a consumer filing a complaint that you are misleading.

Trevor: 11:22

And this happens all the time. Like, I'm not gonna go into the story, but I have paid, we have paid personal money for somebody coming after us for us doing something we had no idea that we had violated, and that the rest of the whole world was doing the same thing.

Mark: 11:34

Everyone in e-comm knows about it, it's just the ADA.

Trevor: 11:37

Yeah, happened happened like six years ago. Our site wasn't ADA compliant, we had to pay 25 grand, you know, because it was a cut in half of what the FTC was gonna do to us, and it sucked big time as a newer emerging brand who doesn't have tons of capital. So anyways, let's talk about um let's let's go into our topic, okay? Uh and I am going to I want to start. I think the best way is so I I I posted a piece of content this week based off of a tweet you sent me. Right? You sent me a tweet from this guy named at Drew Fallon12 saying the honest company shuts down D to C. That's the headline.

Mark: 12:24

Sorry, Elon. Tweet is just a better word than an X or a post or agreed.

Trevor: 12:33

So yeah, so essentially what this Drew Fallon guy, he's got the uh he's got the quarterly revenue earnings uh from a screenshot from 2022 to end of 2025. You'll see the bar graph of revenue as it as it pertains to each quarter, and then you'll see a line graph that represents the marketing efficiency rate. So how efficient their marketing dollars are are going, right? Um so it's essentially revenue divided by spend.

Mark: 13:04

Spend divided by revenue.

Trevor: 13:06

Spend divided by revenue, right?

Mark: 13:07

And what you see is in mid- It's the inverse equation of ROI. ROI.

Trevor: 13:12

Um you see it at towards the end of Q3 in 2023, marketing efficiency rate is at its highest it's ever been. And it takes a massive no die nose die from 2023 all the way down to 2025. So it gets cut in half, which means that it eats majorly into their profits. And yes, revenue increases, but at the end of Q4, revenue starts to decrease in Q5. And so D so Honest, the Honest Company decides to shut their like D to C, hey, this is not profitable the way we want anymore. So now when you go to Honest or at least compared to their retail strategy. So now you can buy it in places like Walmart and you know Target. Um and if you go to their website, and and by the way, I I should have probably explained this. For those of you who don't know, Honest, the Honest Company, is like a they are a D to C, a direct-to-consumer darling. Like these guys started, I don't know if you're at your computer and you can look this up, maybe Maddox and you can see that. It had to have been like, yeah, 2010 to 2015, I would guess. And it was founded by Jessica Alba. And Jessica Alba back in like I mean, Jessica Alba was like the babe when I was in high school. Like she was the like actress of actresses when I was in high school, which was like the 06 time is when I graduated. So she started that very relevant. They were like the very first.

Mark: 14:41

So she was our generation's uh what's her name?

Trevor: 14:46

No, Megan Fox was also kind of like in that same time.

Mark: 14:51

I guess she kind of was, huh?

Trevor: 14:53

Yeah. No. I'm I'm curious what you're saying.

Mark: 14:55

Our generation's we were just talking about her. Sydney. Sydney Sweeney.

Trevor: 15:00

Oh, this generation's Sydney Sweeney.

Mark: 15:03

Our generation's Sweet.

Trevor: 15:04

Our generation was Jessica Alba. This generation is the Sydney Sweeney. Is that what you're saying? I can see that. Right. Yeah. Did you get the date? Yeah.

unknown: 15:15

2012.

Trevor: 15:16

2012. So been around for 14 years. Um, they were the like first clean self-care product for babies. I think they started in the baby space, like organic diapers, wipes, you know, diaper rash cream. Like I remember my kids, like I had my first kid in 13. So yeah. And we were using like their diaper rash cream.

Mark: 15:38

Yeah, they're the ones who proved the model that people would overspend for diapers.

Trevor: 15:42

Yeah. And then they got into like more adult self-care as well. Oh, they did. Yeah. Yeah. So you can buy like my wife has some of their stuff like that she uses for like moisturizers and that kind of stuff, you know? Um, I did not know that. Yeah. And now you've since had people like native, like native has come out.

Mark: 16:00

Native deodorant.

Trevor: 16:02

Um, and they they do the the self, you know, the the clean self-care world. And so, anyways, what happened with Honest Company is like they're this, they they they enter the market in two ways. One, hey, you're celebrity backed. Two, these products are harmful to your body, and we're gonna create something that quote unquote is not harmful to your body or less harmful to your body. So they stand out in a big way, they take off, and now in the era of I mean they were valued at a billion, they were one of the first to get billion dollar valuation in the DDC space.

unknown: 16:37

Yeah.

Trevor: 16:37

And now they're done, they've shut it off. And so the question is why? Like, why what happened to this brand whose profitability was so high, their marketing efficiency ratios were so good to come crashing down to the point where the board, the investor, say it's it's no longer worth it. Now, what we're not saying, by the way, is that the honest company is failing. Like we're not we're not saying that because they're obviously crushing it in their wholesalers.

Mark: 17:08

I think their revenue is up. It's just profitability on no revenue is starting to trickle. Is it?

Trevor: 17:14

Yes, it it definitely is starting to trickle.

Mark: 17:16

But profitability on the D to C side was profitability on the D side was dropping.

Trevor: 17:19

Obviously, it wasn't enough. Yeah, you know, based off of their op ex and everything. So the the question is what? What like why? Traeger did this same thing in October of 2025. So Traeger is the like they pioneered this like idea of if you want Texas barbecue or Louisiana barbecue, you don't have to go to Texas or Louisiana anymore. You can do this in your own backyard. We just created the smoker that allows you to do that. And you know, the technology and they blew up because before, I don't know about it.

Mark: 17:56

Kind of turned it into like a cultural thing.

Trevor: 17:58

When our when we were living at home with our parents, smokers didn't exist. You had to build your own smoker.

Mark: 18:04

Well, you build um, but you could, I mean, there was the the the smokers, you can get the add-ons for like a barrel grill. Yeah, they're few and far between. Like really hard. If those existed, it's just they were just hard.

Trevor: 18:16

So Traeger pulls out. Now, I think the reason why Traeger pulls out is a little different, just because I think people buy grills at Home Depot and Walmart. Yeah. Like that's a really big expensive thing to ship. So, but let's talk about it. Like, what are your thoughts?

Mark: 18:34

Like, my thoughts are that Traeger, I don't I don't even want to consider Traeger as part of it. But the the real question is, are these canary in the coal mines moments? You know, like are these canaries that are giving us a warning of what's going on?

Trevor: 18:52

Explain the canary in the coal mine, because I like the uh analogy.

Mark: 18:56

Do you know where that comes from? Do you know why they put canaries in coal mines?

Trevor: 19:00

I know why, but I don't know where it comes from. They put it in because canaries they die would die, and they'd sort of like the gas. If a gas was emitting and the canary stopped singing or tweeting or making noises or moving, people would go.

Mark: 19:14

Then you would know you'd have to get out. Yeah. So are these canaries in the coal mine right now where other people need to be wary of D to C as a channel? Yeah. And my take is no. I think you're talking about companies that are in just totally different situations. So Traeger, for example, we're talking about$500 to$1,000 minimum AOVs.

Trevor: 19:47

We're talking about probably more like$2,500.

Mark: 19:50

And then on top of that, you're talking about shipping. What's the cost of shipping a Traeger?

Trevor: 19:55

Oh, those things weigh so much. So by the time you're shipping a Traeger, it probably costs the same to ship a like I bet it costs us like the same to ship like a motorcycle, like like an e-motor.

Mark: 20:06

Yeah, maybe. Yeah.

Trevor: 20:07

Like I bet they weigh the same.

Mark: 20:08

So like by the time you ship an individual Traeger, the shipping costs, the margins, the advertising, well, you're probably well, not probably, you clearly are, more profitable just selling them at Home Depots.

Trevor: 20:24

Totally. Right? Because everything is shipping probably directly from Because you're shipping a thousand.

Mark: 20:29

Yeah, like it's going directly there. You can ship all of them at once.

Trevor: 20:32

You're not having to ship to your warehouse and then ship to a location. It's shipping directly from manufacturer there. Yeah.

Mark: 20:38

It's the economies of scale. So like it's just it's going to be more profitable at their size of a company.

Trevor: 20:43

Yeah.

Mark: 20:44

Now, Traeger 10 years ago, when you're just starting out and like you can't really send like Home Depot's not placing an order for 30,000 Traegers or whatever.

Trevor: 20:59

Well, it takes online chatter then success up to the U.S.

Mark: 21:03

probably at that point was fine for you to be in D to C, but at this point, look, they're pub, they're public, right? I think so. But you're just to the point it just doesn't make sense. Like it's just profitable and everyone knows who you are. So I think you're gonna pick it up. I think you're right in the sense that like Traeger's probably not the best. So I don't even like to consider them. And then if you go to Honest Company, I think it's the same story, but just different. Like they are they're very big, they're a big company now. And when they were just first starting out, like, yes, has online advertising gotten harder since 2012? And the answer is yeah, it has. But also, if you're a brand under a hundred million dollars, like no one's placing Walmart and Target and whatever, they're not placing these orders with you.

Trevor: 21:54

Especially these massive so insane orders.

Mark: 21:58

What's more profitable for you at the beginning? D to C. Yeah. It's the only place you're going to make profit.

Trevor: 22:04

Yeah.

Mark: 22:04

But as you get to a certain size, it just depends on your business model.

Trevor: 22:08

Yeah.

Mark: 22:09

And also, I would argue with Honest Company, it's expensive to ship diaper wipes. Like it's expensive to ship some of their things. They're heavy. Sure. In terms of just like the size of them and how heavy they are. Yeah. Yeah.

Trevor: 22:21

So well, and liquid, like they sell soaps and you know, yeah.

Mark: 22:26

So like when people are ordering enough, it's probably like, hey, is this worth it?

Trevor: 22:30

Yeah. With the rise of what's happening in costs.

Mark: 22:34

Yes. And the answer for them was no. Like it's more, it's obviously clearly more profitable to just go retail wholesale. So if you are a business and if you are doing and if you're listening to this podcast and if you're doing over a hundred million dollars, then a year, maybe these types of moves might make sense for your business.

Trevor: 22:57

Yeah. Especially if you're like economic like your unit economics are higher.

Mark: 23:02

Yeah, it just depends on your business and and your the cost of operation. But my bet is that most of these companies that are moving, they get to that size and you know they're kind of like, hey, this makes more sense, be more profitable, we're going over here. They're probably still advertising. They're probably still running. So it's not like they're just not running ads anymore or they're not advertising, they're just going ghost town. So the point being is irregardless of what you're doing in terms of where you're selling, you still have to market and advertise your product.

Trevor: 23:39

Yeah. Yeah. Like for example, like we looked at Traeger. Like Traeger is not running a single ad in Meta right now, which is where probably the people who are listening are running the majority of their ads.

Mark: 23:49

Right. Right? So they're letting most of their partners cover search too. Yeah. So like Home Depot.

Trevor: 23:56

Yeah, exactly. They're not bidding personally on a lot of search terms.

Mark: 24:00

So like if I go and search them right now.

Trevor: 24:02

If you type in Traeger, Home Depot is gonna pop up. Walmart's gonna pop up. Maybe they do it on Amazon. I don't know if they do.

Mark: 24:10

No, I don't know.

Trevor: 24:11

Lowe's is gonna pop up.

Mark: 24:12

Yeah, literally you type in Traeger and it's the first sponsored result for like search ads is Traeger. But if you go to which everyone just looks right at the shopping, it's Home Depot, Shields, Ace. Yeah.

Trevor: 24:31

Yeah, but what Traeger does is they have tens of thousands of creators that they essentially sponsor as athletes. Like that's how that works for them. Like you have like there's a big movement of cook people who cook, and they make sure that there are a certain amount of people who are cooking only with Traeger products, Traeger pellets, everything, right? And that's how they spend their marketing dollars, you know, on things like that, probably events as well, you know, and then probably on displays and setups within these like retail locations. So yeah. So yeah, I mean, no, I think you're right in the sense that this is not a canary in the coal mine. However, it is a, and maybe you'll have you're a you're a good analogy. Is this is that an analogy or a metaphor? It's an analogy, right?

Mark: 25:20

Oh man.

Trevor: 25:20

Come on, yeah. I feel like you would know the answer to that. Well, there's because they're very similar. It doesn't matter. Let's say it's an analogy. Okay. Okay. There is a different analogy, probably, here that it's not, it's not a canary and a coal mine, but things are changing. And how you stand out, how you stood out in 2012 is no longer how you stand out in 2026. For example, one of those changes that's taking place right now is like live selling is becoming bigger than it's ever been. And I know a lot of us have been like resistant to the TikTok shop live selling social commerce space, but it's not decreasing. It's only growing. How you used to stand out on social media was like, let me take a beautiful picture of what this meat platter looks like.

Mark: 26:18

Yeah.

Trevor: 26:19

And it used to blow up with the recipe, but instead now, like what's gonna work is actually the behind scenes footage of how somebody from start to finish smokes that meat. Or from start to finish, how somebody creates the clean product and how they use their certain ingredients that other companies aren't willing to use. This podcast is brought to you by BFF Creative. BFF Creative is a software that meets services. Any marketing collateral you need, whether that's ads, emails, print designs, or social media, all you have to do is submit a request, and one of BFF Creative's qualified designers will create a design for you and it'll be completed in two to three days. BFF Creative allows you to submit as many requests and as many revisions as you can with just one monthly fee. And the best part is that it's month to month. No contracts, no hidden fees, no nothing. And if you use promo code unstoppable30, you'll get 30% off for your first month on ice. Just go to bffcreative.co, pick your plan, and sign up today. Or there's have you heard of Vital Farms? You guys know who Vital Farms is? You know, they they The eggs. The eggs. They came out, and one of the big things that they've been doing is like there's this, you know, uh, there's a lot of organic, grass-fed-y, you know, uh organic movement, yeah. Yeah, and they are coming.

Mark: 27:56

There's also organic and there's free range.

Trevor: 27:58

Yeah, and there's a lot of controversy between like, well, what's better and what actually matters. Yeah. And but what they're doing right now with their content is like they're just showing like they're showing their chickens. Like, no one will show their chickens in that space because I can't remember what it is if it's organic or free range or what.

Mark: 28:14

Well, it's because you can say organic, but that doesn't mean the organic are often still feeding their chickens soy.

Trevor: 28:21

Yeah, they're substance.

Mark: 28:22

And they're also feeding um, anyways, it's just like it it reduces the the quality. This is what they say. Yes. It reduces the quality of the nutrition in the egg.

Trevor: 28:33

So what's happening is they're they're trying to get a butt like ahead of it to say, okay, we're actually gonna start showing our chickens and how they eat and and how things look. So it's not this like hen house of millions of chickens on top of each other eating corn, and we can slap the word organic on it.

Mark: 28:51

Yeah.

Trevor: 28:51

Right? So the point I'm trying to make is there like there are ways to be relevant, even though you might have launched a long time ago and you were the king or queen of the business, like D like you know, honest is, but there's other people who've come in and eaten a lot of that market share. And obviously, there's a relevancy that has made it so that their costs started to rise in a way that they couldn't, it just didn't make sense for them to be there anymore.

Mark: 29:24

So And maybe that has to do with the tariffs. Yeah, I'm sure that's maybe that has to do with other things that we're not aware of. So but ultimately we are seeing people succeed. Like D2C is still alive and well, and it's gonna continue to grow year over year. But where are you as a business and and what makes sense for your business is totally independent.

Trevor: 29:53

Yep. And D2C is always going to be the best place, in especially in those early stages.

Mark: 30:00

I mean, it's the only place.

Trevor: 30:02

Yeah. Unless you know someone.

Mark: 30:04

Or you have like a brick and mortar shop on Main Street or something.

Trevor: 30:07

Yeah, or like, you know, we know the founders over at Bilt Bar and they created a protein milk company called Spilt. Yep. They had built this, you know, nine-figure business in in the Bilt Bar space. And because of that, like they, I think they just went direct, like right into wholesale. I think you can buy their stuff online, they're spilt online. Yeah, but they went direct into they they they were able to get into their other channels because they had created all these relationships. So that's obviously a different scenario, you know. So there are ways, like if you know the right people, you can get into wholesale, but for the most part, you gotta you gotta go D to C.

Mark: 30:44

Well, we also just had midday squares on here. Like they started Yeah, they started online, online, yeah, slash trying to get into some stores, and he talked about one of the first people that gave them a shot in their store up there in in uh Montreal. But does it make sense for mid-day squares to be primarily a D2C company? And the answer is no.

Trevor: 31:05

No, but they are, right? I think he said like 30 or 40% of their business still is, still is, but it still means majority is not. Yeah. Yeah.

Mark: 31:14

And that's uh probably a smart thing. Like you want more and more and more space in stores for that type of product.

Trevor: 31:23

Yeah, consumables. Great space for that.

Mark: 31:26

So also being in a store is a form of advertising too.

Trevor: 31:30

Yeah, and you obviously have to pay, like, you know, we've been in stores, like I've done brick and mortar stuff, and we not only, you know, you pay to get your product in there, right? So like for example, if if my cost of goods is 20%, um, and my you know, 20% and my average order value is a hundred dollars, that means I'm making eighty dollars, right? To get into a a store, it's oftentimes fifty percent or or more is what your costs are gonna be. So like that, that's a like they call it keystone pricing. So either profit fifty, right? And then they sell it for a hundred, or sometimes it's like for Costco, it would be even more. You know, maybe like now my margins are 70% and I'm only making$30, but then they're gonna sell so many for me. Yeah. You know, so that's where your costs come into play, as well as you know, some if you want like certain like them to push it a certain way, sometimes you gotta pay a little bit more too. So for displays and all that kind of stuff. But the w the the key here is like the world's changing. Um, there are a lot of businesses that come to us that were top dogs and they were growing and scaling and now they've plateaued. And sometimes they're decreasing. The question you have to ask yourself isn't always, okay, should we pull out and just go wholesale? Because a lot of times that doesn't work, right? They might be nice.

Mark: 32:57

Or sometimes, like, are we even a viable business?

Trevor: 32:59

Yeah. So the question is like, you just have to change what you're doing. I see what happens is like you'll go and talk to some of these brands and they'll be like, Well, we this used to work, we're still doing this. And it's like, why are you still doing that then? Like, if it's not working, you gotta do something different. Even though you may have 10 years of this is how we posted, or this is how we created, or this is these are the types of offers that we were doing that made us a$10 million business, but now we're a four million dollar business.

Mark: 33:28

Yeah, let's let's just take a client of ours recently. This is like a little bit of a brag, but just to illustrate to everyone who's listening to this. Um we onboarded them last year, and they were saying they were legitimately worried that they might not have a viable brand anymore. Because they were going down year over year for four years.

Trevor: 33:56

Yeah.

Mark: 33:56

Okay, we do this might not work.

Trevor: 33:59

They were at like what 25 million?

Mark: 34:01

Yeah.

Trevor: 34:02

And now they're they they were like around 10.

Mark: 34:06

And so they were like, what are we what are we doing? Do we even have a viable brand? It's like well, you have a good product, so clearly you have something, but the strategy just wasn't in place for them anymore. And and what was happening is that they were losing new customers quickly, year over year.

unknown: 34:27

Yeah.

Mark: 34:27

And then that was compounding. It didn't look like it at first, but then it compounded into the returning customer problem for them.

Trevor: 34:33

Meaning they weren't growing their new customers year over year, and then just what naturally happens with products is like your returning customers, if it was up here, starts to dwindle.

Mark: 34:40

Yeah. Well, quarter four, they finished up, they were up 200%, you know? Or 100, 150% new customers in quarter four. And so far, in you know, we're not very far into quarter one, but so far in quarter one, same thing.

Trevor: 34:58

Yeah.

Mark: 34:58

So it it wasn't a oh no, and they're more efficient, by the way, in acquiring new customers right now than they were a year ago or two. Within the last two and a half years, they're more efficient now. Right now than they were in the past. So this idea that it's like, oh, honest companies pulling out of D2C, it's not working. It's like, nah, you just it just depends on obviously your your strategies as a company. They're a big company, they're probably in a different spot than most of the people listening to this. Um, but the other caveat here is like you said, you probably just don't have the right strategy. Yeah. And if you change the strategy, you can acquire new customers and then you can build that pipeline again. And you can do it even more efficient than was happening in the last three years. Is it gonna be as efficient as 2014, though?

Trevor: 35:52

Yeah.

Mark: 35:54

But sorry, like we're never going back. Like that's like it's not going, we're not going back to 2014. The good old days. Maybe there's an ad channel that pops up and everyone exploits it for six months and it's awesome. But like it is what it is, you know? Like it it's hard to do business. Business is hard, marketing is hard. But when you do it right and you have the right strategies and the right expectations, then you can absolutely build and start growing very quickly.

Trevor: 36:21

Yeah. Agreed.

Mark: 36:26

So, long story short, not canary in the coal mine moments. IMO.

Trevor: 36:32

But indications that you if things aren't working, you need to change your own.

Mark: 36:36

Well, indications that like profitability is important.

Trevor: 36:39

Yeah. Oh yeah.

Mark: 36:41

So don't grow and just kill yourself to grow.

Trevor: 36:44

Yeah.

Mark: 36:45

You know, if you're a subscription product, that's you have different ways of growing, but without having to be first order profitable. But yeah.

Trevor: 36:54

Great. I like it. No, thank you guys. Appreciate it.

Mark: 36:58

Also, it's an analogy.

Trevor: 37:00

That is what I thought it was. Yeah. Was an analogy.

Mark: 37:03

Analogies are used to as a logical bridge.

Trevor: 37:06

Metaphors are.

Mark: 37:07

Metaphors are just like tie is a thief. That's a metaphor.

Trevor: 37:12

All right.

unknown: 37:12

Okay.

Mark: 37:13

Because it's not literally ethy.

Trevor: 37:15

Yeah. Alright. There you go. See you guys. Thank you for listening to the Unstoppable Marketer Podcast. If there's a brand campaign strategy or marketing tactic that you want us to review, please DM me at the TrevorCrump on Instagram or TikTok or at the Unstoppable Marketer Podcast. And of course, if you got value from this episode or if you like it whatsoever, please make sure you're subscribing, you're liking, you're following, and for sure go leave us a review to let us know that we're doing a good job. We will see you guys next time.