Building a $3,500,000 Business for a Stranger in 42 Mins | Ep 836

Wanna scale your business? Click here. Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth. Follow Alex Hormozi’s Socials: LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Alex Hormozi?

  If you wanted to hit 3 million next year, I was like, we could do 10 million next year. I would just say, we're gonna take all of our resources, we're gonna go all in on TikTok, viral, organic, and you're gonna deploy everything into TikTok Shop and get influencers to do lives for you, showing all these funny gag gifts, because the trophies are so built for shareability.

• 0:18Speaker 01

  Yeah.

• 0:20Alex Hormozi?

  What's up?

• 0:21Speaker 01

  How we doing?

• 0:22Alex Hormozi?

  Good.

• 0:23Speaker 01

  Awesome.

• 0:23Alex Hormozi?

  Let's talk about trophies.

• 0:24Speaker 01

  Yeah, so my name's Cody, Cody Shulson, I own Trophy Outlet. So, last year we did about 1.72 million dollars in revenue, mainly trophies and awards, personalization, about $110,000 in profit, 6.4% net margin, and I'm third generation owner of the company, I've been in business for almost 40 years.

• 0:43Alex Hormozi?

  That's amazing.

• 0:44Speaker 01

  Yeah, kinda fun.

• 0:45Alex Hormozi?

  So what's the, yeah, what's the goal?

• 0:47Speaker 01

  The goal is 3.5 million in revenue, I really wanna double revenue going into this

• 0:51Alex Hormozi?

  This year?

• 0:52Speaker 01

  This year, yeah.

• 0:52Alex Hormozi?

  Okay.

• 0:54Speaker 01

  I think we can do it.

• 0:54Alex Hormozi?

  So who do you help?

• 0:56Speaker 01

  So mainly coaches, event organizers, as well as businesses and organizations, which is like HR departments, business owners, sales managers, you know, people like that, as well as gag gift purchasers.

• 1:09Alex Hormozi?

  I got that, I got that vibe.

• 1:10Speaker 01

  Yeah.

• 1:10Alex Hormozi?

  Okay, so how do you help them?

• 1:12Speaker 01

  So we offer free engraving, fast shipping, everything we do is personalized to the business or the individual, something like that. They go to the website, to our platform, purchase, you know, add the personalization info, their logo, things like that, and then we fulfill it. If it's, uh, needs approval, anything like that, but most things ship in one to two days.

• 1:29Alex Hormozi?

  Sweet. So, um, how do you make money?

• 1:32Speaker 01

  How do we make money? All right, so, um, on our website, direct on our website, uh, most of our products kinda land in that 100 to 150 dollar price point. Uh, we have products that range from $4 all the way up to $900, so it's a wide range. Uh, most popular item is a four, five, and six foot trophy, um, which kinda lands about $89 to $130, and then dash plaques, which are like little car show things that guys collect when they go to car shows, and, yeah, so it's kinda like, we sell them for a dollar 25, uh, we sell minimum 50, but we sell thousands of them a year.

• 2:01Alex Hormozi?

  I've even heard of that.

• 2:02Speaker 01

  Yeah, there's like these little pieces of metal that people just they have these big boards that they set out of car shows.

• 2:07Alex Hormozi?

  No way.

• 2:07Speaker 01

  It's kind of funny, actually.

• 2:08Alex Hormozi?

  I'm always amazed how many ways to make money there are.

• 2:10Speaker 01

  Right, and that's one of the things our company was started on.

• 2:13Alex Hormozi?

  Oh, good. So how do you get customers?

• 2:15Speaker 01

  Tropea started in nineteen eighty-five, so almost, you know, this is our fortieth year. And we've launched our Etsy business in twenty nineteen, and we did about seventy thousand dollars the first year. And then in twenty thirteen, or twenty twenty-three, we launched Amazon and did about three hundred thousand dollars. And then last year, we launched TikTok Shop, and we did about two hundred and seventy thousand dollars in revenue, but two hundred and fifty of that came in December alone. So we had a video go viral with twenty-plus million views, so we went crazy. So two hundred and fifty of that came in in one month, so that was kind of fun.

• 2:45Alex Hormozi?

  And you sold those.

• 2:46Speaker 01

  We sold those, yeah, and not quite family appropriate, but yeah, little death signs that people bought for their boss or whoever it was, so kind of fun, but so I was a little crazy for December.

• 2:55Alex Hormozi?

  No, I love that. And you were able to fulfill on the amount of orders that came in?

• 2:59Speaker 01

  Yeah, yeah, we did about thirteen thousand of those.

• 3:02Alex Hormozi?

  So did you have any manufacturing set up?

• 3:03Speaker 01

  Yeah, we produce everything in-house.

• 3:05Alex Hormozi?

  Oh, all right.

• 3:05Speaker 01

  So we engrave, cut, build it all, ship it.

• 3:08Alex Hormozi?

  Sweet, okay.

• 3:09Speaker 01

  Across four different channels, most of our clients come through. Online and internal is through SEO and Facebook ads. We just launched Facebook ads in Meta about October, November with an agency.

• 3:20Alex Hormozi?

  Yeah.

• 3:20Speaker 01

  And then Amazon, we spent about seventy-one hundred dollars a month between agency and ads, and then Etsy, and then TikTok, still kind of figuring that one out a little bit since it all happened in December, but about two thousand dollars so far.

• 3:30Alex Hormozi?

  Got it.

• 3:31Speaker 01

  And ads there, so.

• 3:32Alex Hormozi?

  Well, how many customers have you have you sold so far?

• 3:35Speaker 01

  Yeah, so in twenty twenty-four, direct on our website, and I have this broken out per channel in a couple of slides, but total visits is about ninety thousand visits to our site, about twenty-five hundred orders, just a two-point-eight percent conversion rate, and about seven hundred and eighty-one products, so it's a lot of products.

• 3:50Alex Hormozi?

  So do you carry all those, or is everything everything made to order?

• 3:54Speaker 01

  Yeah.

• 3:54Alex Hormozi?

  Okay, so it's not, so it's not like you're carrying a ton of inventory, like you've got raw materials and then?

• 3:59Speaker 01

  Raw materials, most of it we bring in from our vendors, kind of as we need it. We don't carry a huge, huge, you know, except for like the death signs and stuff, we'll kind of stock those up since they look so crazy, but that's kind of an exception to the rule.

• 4:11Alex Hormozi?

  All right, then what's been holding you back?

• 4:14Speaker 01

  So I think it's marketing. Fulfillment wise, we proved that in December, we can handle about double fulfillment. I mean, with limited complexity. So, um, so I just need more people to the site, more people buying and we can fill it. So and also very product heavy with low margins. So working on the margin piece, getting profits up a little bit. So.

• 4:32Alex Hormozi?

  Do you wanna like sell this company eventually? Or like, what's the, I need to do wanna double?

• 4:37Speaker 01

  Haven't really had any thoughts of selling, but I wanna create a business that is sellable.

• 4:41Alex Hormozi?

  Yeah.

• 4:41Speaker 01

  So I have the option if I wanna sell or no, but I would love for it to be a fourth generation business someday.

• 4:45Alex Hormozi?

  Got it.

• 4:46Speaker 01

  If that's an option, but, but yeah, that's the kind of the ultimate goal.

• 4:50Alex Hormozi?

  All right. So how many locations do you have? Cause you have brick and mortar, correct?

• 4:53Speaker 01

  Well, we have one retail location now. Uh, we have two locations total. Uh, we closed the other retail location down and it's production only facility.

• 5:00Alex Hormozi?

  Okay.

• 5:00Speaker 01

  So the other retail location, um, you know, does maybe a hundred and fifty thousand dollars in revenue out of that location. So.

• 5:07Alex Hormozi?

  Just like walk in traffic and whatever.

• 5:08Speaker 01

  Yeah. Walk in email stuff.

• 5:09Alex Hormozi?

  Does it break even?

• 5:10Speaker 01

  Not really.

• 5:11Alex Hormozi?

  Okay.

• 5:11Speaker 01

  So we're kind of.

• 5:12Alex Hormozi?

  So you have a manufacturing facility in one retail?

• 5:14Speaker 01

  Yeah. Which also does some manufacturing as well. Yeah.

• 5:17Alex Hormozi?

  Is there any downside to just like consolidating to the one?

• 5:19Speaker 01

  It's something that we're actually looking at. Okay. And go more e-commerce and kind of cutting the.

• 5:24Alex Hormozi?

  Yeah.

• 5:25Speaker 01

  The retail business.

• 5:26Alex Hormozi?

  I mean.

• 5:26Speaker 01

  Most of our stuff's e-commerce anyway. So.

• 5:28Alex Hormozi?

  I mean, online retails, I don't think it's going anywhere. And I don't think many people are like, you know, I'm gonna go to the trophy store today.

• 5:34Speaker 01

  Yeah. I've never heard somebody say that.

• 5:35Alex Hormozi?

  Yeah. Yeah. Like on my list.

• 5:36Speaker 01

  Like, oh, I should.

• 5:37Alex Hormozi?

  Yeah. Returns of videotapes and then go to the trophy store.

• 5:39Speaker 01

  Right.

• 5:39Alex Hormozi?

  So these are the issues. What are the metrics you got?

• 5:42Speaker 01

  Yeah. So numbers, 1.72 million in revenue, about a hundred and 10,000 in profit, uh, 40% gross margin.

• 5:48Alex Hormozi?

  I would have expected gross margins to be higher for this business.

• 5:50Speaker 01

  And it varies per product.

• 5:52Alex Hormozi?

  Yeah.

• 5:52Speaker 01

  Tons of, you know, like certain acrylics.

• 5:54Alex Hormozi?

  I was expecting like, you know, one, like you buy these trophies and they're like, you know, a dollar and you're like, there's no like, this is made of rubber, you know, like.

• 6:01Speaker 01

  Yeah.

• 6:02Alex Hormozi?

  Okay.

• 6:02Speaker 01

  So certainly it just varies widely between the products and platform and stuff like that, but. Uh, net margin about 6.4%, uh, LTV 133 and then CAC 1190, LTV to CAC ratio 11 to one. And that's blended across all channels.

• 6:17Alex Hormozi?

  How do you come up with pricing?

• 6:18Speaker 01

  Um, guessing for the most part, or I'll look at some competitors, but there's not really good apples to apples comparison necessarily.

• 6:25Alex Hormozi?

  Do you have like a, do you like a cost plus or like?

• 6:28Speaker 01

  Yeah. So I have massive spreadsheets of all of our costs, you know, things, things like that factor in labor. And then I just kind of add my margins to it and, you know, have slowly been trying to bring that up over the years.

• 6:39Alex Hormozi?

  What percentage of customers are, are new versus return?

• 6:43Speaker 01

  Gut, I would say probably just on our website and internal customers, probably 50/50.

• 6:50Alex Hormozi?

  Okay. Cause it's a 40 year old business. So you'd think there'd be a decent amount of return.

• 6:54Speaker 01

  Yeah. A lot of our business, I mean, $530 in revenue comes just internal. So emails, calls, things like that. Most of that is revenue, is, is repeat business.

• 7:03Alex Hormozi?

  Do you have very high fixed costs in this business?

• 7:05Speaker 01

  Not too bad. No.

• 7:07Alex Hormozi?

  Cause if you have half the business comes in from word of mouth, I would expect the margins to be higher, like the net margins. Cause I wonder like, is it, I just think of, think of this as big hypothetical. It's like, if we got rid of all of the new customers.

• 7:19Speaker 01

  Right.

• 7:20Alex Hormozi?

  And we just sold the 500 and something thousand from return customers. That should be free customer acquisition and then we should make money.

• 7:29Speaker 01

  Yeah, right.

• 7:30Alex Hormozi?

  Right. But looking at this, I'd be like, I don't know if we would make money.

• 7:33Speaker 01

  Yeah. Our cogs are pretty high.

• 7:35Alex Hormozi?

  I do think there's a pricing issue.

• 7:37Speaker 01

  Yeah.

• 7:37Alex Hormozi?

  Which we'll get to.

• 7:38Speaker 01

  Okay.

• 7:38Alex Hormozi?

  Okay. This is good. But your LTV to CAC is pretty strong.

• 7:42Speaker 01

  Yeah.

• 7:42Alex Hormozi?

  It looks like.

• 7:43Speaker 01

  Yeah. It's, it's pretty decent. And I learned that a few months ago, coming here the first time. So I started increasing.

• 7:48Alex Hormozi?

  And it has, that's not like some revenue, that's like, that's gross profit.

• 7:51Speaker 01

  That's profit. Yeah.

• 7:52Alex Hormozi?

  Okay.

• 7:52Speaker 01

  Yeah.

• 7:53Alex Hormozi?

  Interesting.

• 7:54Speaker 01

  And we estimate people stay about three years excluding Etsy, Amazon.

• 7:58Alex Hormozi?

  Yeah.

• 7:58Speaker 01

  Those ones are a little hard to calculate, but through trophy outlet, they, they order yearly pretty consistently. We've got customers been with us for 30 years, you know, things like that. So, so pretty heavy repeat business there. Uh, once we get a customer, they're fairly sticky.

• 8:11Alex Hormozi?

  So with pricing, I'm going to, I'm going to hit on this one. Cause this is, I'm almost positive. There's a big pricing issue. Who was in charge of pricing that whole time? Like you took it over from your, I guess he took it from his old man. So like your third generation.

• 8:22Speaker 01

  So my, yeah, my parents ran the company and they didn't have a price structure. They just kind of.

• 8:26Alex Hormozi?

  And on an annual basis, do you review all prices?

• 8:29Speaker 01

  Every year. Yep.

• 8:30Alex Hormozi?

  Interesting.

• 8:30Speaker 01

  It's about February, March of every year is when our vendors raise prices. So then I adjust accordingly.

• 8:36Alex Hormozi?

  Got it. Was their margins the same when they were running it?

• 8:39Speaker 01

  Uh, much less.

• 8:40Alex Hormozi?

  Lower?

• 8:40Speaker 01

  Oh, way low, like not making money at all. So my mom was running it. I remember very distinctly looking at a product and the cogs on that were like fifty dollars and we were selling it for like forty five.

• 8:52Alex Hormozi?

  I mean, this is not work.

• 8:53Speaker 01

  Yeah, so I immediately raised prices, like, you know, doubled them almost.

• 8:57Alex Hormozi?

  Okay.

• 8:57Speaker 01

  And then constantly just continually up them.

• 9:00Alex Hormozi?

  Yeah, I think I have some ideas there. All right. What else you got?

• 9:02Speaker 01

  All right. So channel breakdown. So direct traffic and internal is our, you know, biggest. Thirteen to one LTV to CAC ratio. Amazon, our highest conversion rate. And nine point six percent conversion. And of course, the blended eleven to one LTV to CAC, so.

• 9:20Alex Hormozi?

  Interesting. And so you don't have LTV metrics on TikTok?

• 9:23Speaker 01

  No, couldn't quite figured that out yet.

• 9:25Alex Hormozi?

  Okay. Well, the easiest way to do it is just go total revenue divided by total number of customers. So you did two sixty two. Do you know how many customers you sold on TikTok?

• 9:32Speaker 01

  I think it was about almost thirteen thousand customers.

• 9:35Alex Hormozi?

  Thirteen thousand. So, okay, so twenty bucks. That sound about right?

• 9:39Speaker 01

  Average, yeah.

• 9:40Alex Hormozi?

  Unless they have your order value, right? So we just don't know how many times they've purchased.

• 9:44Speaker 01

  Right, which is one as of this point, you know.

• 9:48Alex Hormozi?

  Thing is, that might be artificially inflating your LTV to CAC metric because you have zero CAC there.

• 9:52Speaker 01

  Okay.

• 9:52Alex Hormozi?

  Or did you not? Did you?

• 9:53Speaker 01

  No, that's excluded.

• 9:54Alex Hormozi?

  You just skipped it all entirely from the calculation?

• 9:55Speaker 01

  Yep.

• 9:56Alex Hormozi?

  So you want to double revenue?

• 9:58Speaker 01

  Yep.

• 9:58Alex Hormozi?

  Got it. Uh, what's this I hear about you wanting to buy another business?

• 10:02Speaker 01

  Yeah, so I had a business reach out to me that's in the same industry. In the St. Louis market that we're already in. So he's getting old, wants to retire.

• 10:11Alex Hormozi?

  And what's he doing in revenue and profit?

• 10:12Speaker 01

  He does about double what we do, about three million in revenue. I don't know profits yet or anything. We haven't even got to that point yet. But he's got a, from what I understand, he does pretty decent on his margins. Just through communicating and talking to him. He does a lot more custom stuff, so which is a lot higher margin on some of that stuff. He has a lot of bigger orders, which is nice. So he can bring it in from China or from elsewhere and keeps his margins low. Or keeps his margin higher, I'm sorry.

• 10:39Alex Hormozi?

  Yeah, I got you.

• 10:40Speaker 01

  The biggest concern with him is seventy percent of his revenue comes through one customer.

• 10:45Alex Hormozi?

  Yeah.

• 10:46Speaker 01

  So that's a pretty big, uh, pretty big red flag. Wouldn't buy that?

• 10:49Alex Hormozi?

  Hmm.

• 10:50Speaker 01

  Gotcha.

• 10:50Alex Hormozi?

  I would try and find out if I could who the vendors were that he has in China for his connections for his raw materials.

• 10:56Speaker 01

  Yeah.

• 10:56Alex Hormozi?

  So that I could try and use those vendors.

• 10:58Speaker 01

  Yeah, that was actually one resource I thought was, well, if I could buy this, then it's cheap enough.

• 11:03Alex Hormozi?

  It's monstrous customer risk and especially if you have somebody retiring, that that one customer might be.

• 11:09Speaker 01

  Even if he was willing to stay on for two, three years, four years to help that transition.

• 11:14Alex Hormozi?

  Well, part of it is what kind of business do we want to build, right? So you just want to like you're you're considering closing down the first location. We have to, basically, there's a bet that we have to make, which is like, do we think that the future of this business model is lots of brick and mortar locations? If so, then we have to look at the brick and mortar model in a lot more detail with the unique economic return on capital. Or it's we're going to be online. And if you're online, then why bother?

• 11:39Speaker 01

  Which most of his stuff is shipped as well. It's not retail business.

• 11:42Alex Hormozi?

  I mean, it's not brick and mortar. Yeah.

• 11:44Speaker 01

  Yeah, I mean, he has a retail storefront, but most of his business isn't.

• 11:47Alex Hormozi?

  Is online.

• 11:48Speaker 01

  Yeah.

• 11:48Alex Hormozi?

  But 70%.

• 11:49Speaker 01

  It's not necessarily online. It's through basically wholesale.

• 11:52Alex Hormozi?

  Yeah.

• 11:53Speaker 01

  Customers that sell, you know, to large, large clients, things like that. So it's a super.

• 11:57Alex Hormozi?

  I'm not thrilled about it.

• 11:58Speaker 01

  Yeah.

• 11:58Alex Hormozi?

  Uh, one, there's the customer risk. The other thing is, it's like, it's not the business that you're, even though you're obviously in the trophy business, it's like, it's not actually how it's basically all net new. It's like B to B versus B to C. Cause we have to think about all available moves on the board, not just like this. Cause like said differently, if he hadn't emailed you, would you have approached him?

• 12:16Speaker 01

  I would have actually kind of pursued it a little bit just to get the information. It was a connection through our vent, one of our vendors. So that's how I got to know him.

• 12:24Alex Hormozi?

  Well, I'll zoom out from the from back forward, which is like, what do we want to be when we grow up? Basically, this is going to become a media slash marketing business that monetizes through trophies.

• 12:34Speaker 01

  Right.

• 12:35Alex Hormozi?

  Or you can go the B to B wholesale route, which is probably like outbound sales team that's calling wholesalers and whatnot.

• 12:43Speaker 01

  Yeah.

• 12:43Alex Hormozi?

  From what it sounds like, it sounds like you're better suited for the e-commerce direct to consumer side. That's what it sounds like. I don't like.

• 12:51Speaker 01

  Currently, that's where we're at. Yeah, we do some wholesale currently. And it's just easier.

• 12:58Alex Hormozi?

  Yeah.

• 12:58Speaker 01

  But that just kind of came naturally. It wasn't anything we pursued necessarily.

• 13:01Alex Hormozi?

  But yeah.

• 13:02Speaker 01

  Majority of it's all e-commerce and.

• 13:04Alex Hormozi?

  You might have one of the simpler plans that I have.

• 13:06Speaker 01

  Yeah.

• 13:07Alex Hormozi?

  Yeah, which is, I mean, simple doesn't mean bad. Simple is good. You know, sometimes you have like 10 things to do. It's better than three that move the needle a lot. And I think you're kind of in that situation. There's three big things, but I think we'll, um, why don't you come over here and then we'll, we'll, we'll net it out. What percentage of customers are gag gifts?

• 13:25Speaker 01

  So that's the Amazon Etsy.

• 13:28Alex Hormozi?

  TikTok.

• 13:28Speaker 01

  TikTok. That's all that.

• 13:29Alex Hormozi?

  So it's like.

• 13:30Speaker 01

  Forty four percent.

• 13:31Alex Hormozi?

  Yeah.

• 13:32Speaker 01

  Roughly. And that's kind of been the fastest growing.

• 13:34Alex Hormozi?

  Yeah.

• 13:34Speaker 01

  Since 2019. That's.

• 13:35Alex Hormozi?

  For sure.

• 13:36Speaker 01

  When we launched that. Which is all under a different brand technically.

• 13:40Alex Hormozi?

  Okay.

• 13:41Speaker 01

  We started a different brand back then because we're, we don't want the explicit vulgar to be under trophy out.

• 13:45Alex Hormozi?

  Sure.

• 13:45Speaker 01

  You know, church moms and stuff get.

• 13:47Alex Hormozi?

  I hear you. I hear you. With this business, like fundamentally, you just have, it's, you've traffic in a conversion page like, and then if you already have, let's call it for right now, not a constraint on manufacturing or anything like that. The three big kind of levers that I want to go off of is number one is consolidation.

• 14:07Alex Hormozi?

  Pricing, which also instantly has to profit.

• 14:09Speaker 01

  Absolutely.

• 14:10Alex Hormozi?

  And then media. So from a consolidation perspective, um, we have the SKUs, right?

• 14:18Speaker 01

  Yep.

• 14:19Alex Hormozi?

  And then we also have the, uh, brick and mortar locations. And then we kind of have like model. So like in terms of like how I'm thinking through this.

• 14:26Speaker 01

  Okay.

• 14:26Alex Hormozi?

  So from a SKUs perspective, if you're not carrying that, like normally I'd be like, we need to massively cut down on SKUs. But like, if you're not, if you don't have like this warehouse full of stuff and it's just like more options for people to purchase, I don't think we need to like get rid of anything.

• 14:39Speaker 01

  And a lot of the SKUs too, it's the same product, just maybe for football versus.

• 14:44Alex Hormozi?

  Yeah, right. It's a, it's a goat trophy and you just put a different plaque on it. Exactly. That doesn't bug me. And if you're like, man, that's, it's, it's super hard for my team to, to build all these different things. And I'd be like, all right, well then we should, we should look at that. But if it, it doesn't seem like you're stressed on the manufacturing side.

• 14:58Speaker 01

  But that's where my skill set lies too.

• 15:00Alex Hormozi?

  Okay.

• 15:00Speaker 01

  As operations, it's.

• 15:01Alex Hormozi?

  No, it's good to know. It's the, where's the constraint, right? So the second is the brick and mortar, right?

• 15:06Speaker 01

  Yeah.

• 15:06Alex Hormozi?

  So, um, if you have this regional location and it's basically breaking even or losing money. And that's not even the future of the business. Then to me, I would say, let's just save our fifty thousand a year in rent. And then just add that to the bottom line.

• 15:18Speaker 01

  Right.

• 15:19Alex Hormozi?

  I feel like that would be a good idea. Cause that would increase profit by fifty percent.

• 15:22Speaker 01

  Yeah.

• 15:23Alex Hormozi?

  Just like chill.

• 15:23Speaker 01

  Pretty much instantly.

• 15:24Alex Hormozi?

  Yeah. And also, there's just like the headache of like, it's this thing over here. Yeah. And you probably just take the couple of good people from there. Bring them to, bring them home.

• 15:33Speaker 01

  Right.

• 15:33Alex Hormozi?

  You know?

• 15:34Speaker 01

  Yeah.

• 15:34Alex Hormozi?

  Um, so that feels good. So the next one is model. So this is the thing that I'm really like, I don't know, torn on. At least for me, what appears to be the obvious solution is to go on the, where, where the fast growth is. Right. Which is the GAT gift thing. The problem is that there's zero kind of reoccurring nature of that. Right? So it's basically like, when you have that business, you have essentially a media arbitrage business where it costs you almost nothing. You get a customer, you make a spread. And then that's the business you're in. And every month, you're going to be looking for, how do I make new media? And that's, that's the game you're in. If you want to go, I want to just get every league in the nation.

• 16:15Alex Hormozi?

  Like if yours is like, this is like, if I wanted to make this the most valuable version of the business, not necessarily make the most money today, but the most valuable version of the business, it would be, I'm going to be really targeted with the few avatars you have, like, leagues, event organizers, whatever. And say like, these are the four avatars we have, and we're going to be targeted with our ads for those people and our SEO. And the whole business is around like, we only deal with customers. And I would probably even say, do you, do you have phone sales or anything like that?

• 16:43Speaker 01

  Or some, or email to place the order.

• 16:45Alex Hormozi?

  What's the average order value for the, for the, like a, a league?

• 16:50Speaker 01

  Uh, so internal orders, I think it's like, I want to say it was like three hundred and fifty or something like that. I mean, so it's a higher order value.

• 16:55Alex Hormozi?

  Yeah, for sure. Okay. Yeah. Cause I wonder if, um, in, in some ways you have two businesses, let alone like, if you were like, forget about the third one you're thinking about buying. Like you already have two and I'd rather have one. I'm not saying cut the one that you have. It's obviously a forty year old business, but like, I really have to make that decision. And, and that, that's actually not a me decision, it's a you decision. So I'll say it the way that I think Leila, Leila loves framing opportunities this way. Cause I always think about upside, she always thinks about downside. And so it's like, What what problem would you rather solve? So in the gag gift path, the problem that you're gonna have to solve is you're always gonna have to find new cheap forms of media. So it's gonna be like TikTok shop is what it is today and live shopping and that'll probably be good for another year or two. And then it's like that'll start to get more expensive and other people compete. And it's like, then you're gonna be in in the next, whatever the next game is.

• 17:40Alex Hormozi?

  And you're just gonna have to get really good at paid ads and creative and conversion optimization on the site, increasing average order, that kind of stuff. The other path is you build either

• 17:54Alex Hormozi?

  an outbound sales team so that they can sell these these kind of B to B offerings that are, you know, or B to C, if you want to consider the fantasy leagues. And or just like a meta, just like a simple meta ad strategy that would lead people to call the number functionally. And then there you're saying, cool, our goal is to be your trophy provider for life. And I think the fact that you're a 40 year old business sounds really good. It's like, hey, we're 40 year old business. Our goal is to be your manufacturer for life. And so of course, we're gonna do this one, but if you want, we'll also give you 20% off next year. If you make the order now or something, I don't know. I think I play around with that. But which of the two paths sounds like the the life you want to live?

• 18:33Speaker 01

  That's, gosh, that's tough, only because media for me has always been a hurdle.

• 18:37Alex Hormozi?

  Do you like it? Hmm? Okay, fair.

• 18:40Speaker 01

  I will do it, but I don't know that I love it per se.

• 18:42Alex Hormozi?

  Because you could, because like, if you wanted to hit 3 million next year, I was like, we could do 10 million next year. I would just say, we're gonna take all of our resources, we're gonna go all in on TikTok viral organic, and you're gonna deploy everything into TikTok shop and get influencers to do lives for you, showing all these funny gag gifts. Because like, the the trophies are so built for shareability.

• 19:01Speaker 01

  Yeah.

• 19:02Alex Hormozi?

  Like, and so that's, I mean, 20 million views is a monster video. I think if that was all you focused on, you would be able to figure it out, because these are funny.

• 19:09Speaker 01

  Right.

• 19:09Alex Hormozi?

  And I think having like little skit scenarios where people, you know, walk in and they see the boss is thick or they they change their their their plate or, you know, someone loses and then it just says like biggest loser, you know, like that, like the the negative versions. I think that would just make for really viral content.

• 19:26Speaker 01

  And I feel like that would be easier to replicate, just constantly doing that.

• 19:31Alex Hormozi?

  The leagues thing is like, that's like, that's the, that's the very stable version of this business. And if you did ultimately want to sell in the future, you being able to go to a potential buyer and saying like, I have 5,000 leagues that buy our trophies from us every year. And leagues on average stay for 12 years. You know, like guys who do fantasy or whatever it is, it's like, that's fairly, you know, that's a pretty, that's a pretty reoccurring business. You know, that's a, that's a, that's a pretty good business.

• 19:55Speaker 01

  Yeah.

• 19:56Alex Hormozi?

  Harder to build though, and slower. Right. That's also why it has more money. So that's the, so if, if between those two paths, the like, I would like to just make more profit now and potentially scale faster. Then we can talk about the media version of this.

• 20:09Speaker 01

  I think that's probably where I would.

• 20:11Alex Hormozi?

  Okay, cool. So first things first is we're going to consolidate attention. So we're going to shut down losing location. So that should right off the bat be a plus 50% improvement to profit.

• 20:27Speaker 01

  Yep.

• 20:28Alex Hormozi?

  Which is great. And I think it could be more than that because your attention is going to not be split anymore between two locations. Okay. The second thing, you have basically something called a cost plus model. You look at your costs and then you add a margin in.

• 20:43Speaker 01

  Yep.

• 20:43Alex Hormozi?

  And whatever. And a lot of businesses do it because it seems very logical. The problem is every business I know that does a cost plus model doesn't make a lot of money. And so you want to switch to value-based pricing, which is purely based on what someone's willingness to pay is. And that could be unlimited and it doesn't matter what your stuff costs because why do they care what it costs? Right? And so basically like as your vendors increase their costs to you. In some ways, it shouldn't have any effect on the price of what you sell. Because the price of what you sell is completely divorced of that and based on what somebody's willing to pay.

• 21:18Speaker 01

  Gotcha.

• 21:18Alex Hormozi?

  So in terms of how we can do this, there's a couple of thoughts here. So A, which will seem a little bit less scary is I would consider, and this is sound crazy, but like monthly, like 5% price increases. Like just keep going.

• 21:34Speaker 01

  Okay.

• 21:34Alex Hormozi?

  And just keep going. That is like path one.

• 21:37Speaker 01

  Yeah.

• 21:38Alex Hormozi?

  And the thing is, is that every time you raise the price by 5%, you double your profit. Or I'll say 6% if you want to be like, hey, I doubled my profit this month. Then the next month you can raise by 6% and then more than double because it's 6% times the 6%. Right? So that is, that is one way. The other way is that you just start immediately split testing kind of like 80/20 on your highest sales velocity items.

• 22:00Alex Hormozi?

  And so this is simple, right? This is simple to do. You have to do any thinking, you just add it and that's what it is. This one will probably get you more profit faster. It just takes a little bit more thought. So you'll take those four, four foot, five foot, six foot trophies. And just start like, just keep bumping the price and just seeing what conversion it looks like. Because what we're trying to optimize for, did you have an engineering background? Okay. You said you were good at the manufacturing.

• 22:22Speaker 01

  No, my dad came from manufacturing, so I picked it up there, but.

• 22:26Alex Hormozi?

  Yeah. So what, what you're trying to optimize for is gross profit. Uh, times, uh, units sold. And so if you think about it's like, you know, down here, it's like, I'll have a ton of sales velocity, but I'll have low, uh, low margins versus here, I'll have fewer, uh, you know, fewer items sold. But it's like, where's the sweet spot where I get the most amount of units sold at the highest gross profit? Oftentimes it's, it's higher than you think it is. Because where I think a lot of entrepreneurs get stuck is like, sales velocity goes down and then they get afraid. But the thing is, is that you will usually make more money before you make less money. What sales velocity drops, usually. So it's like, we sell 10 people at, you know, with a hundred dollars of gross profit.

• 23:10Alex Hormozi?

  And then when we, you know, move the price up, it's like, we sell 80 people, but we're at 150. But you're like, all the sales team's like, I don't know, dude, the price, the price seems really high. Or like, oh, the conversion on the page drop. It's like, yeah, but we're making 50% more money. We lost 20% of sales. If it were me, um, I would 80 20 this. And this is what I'm solving for, for pricing on the most sold products.

• 23:30Speaker 01

  Okay.

• 23:30Alex Hormozi?

  You can have a much faster, uh, feedback loop for the testing. And so in terms of cadence for price tests, would you do it on the site more? Or do you think you would be doing it on the phone?

• 23:40Speaker 01

  It'd be on the site.

• 23:41Alex Hormozi?

  Okay.

• 23:42Speaker 01

  Yeah. Cause that's where customers see the pricing, even if they call or anything like that.

• 23:46Alex Hormozi?

  Yeah. I don't know how many people like buy, is it a super price sensitive market?

• 23:49Speaker 01

  Trophies, yeah.

• 23:51Alex Hormozi?

  Okay.

• 23:51Speaker 01

  Like car show guys are cheap.

• 23:53Alex Hormozi?

  I'll bet you, what's interesting about this is that your recurring revenue business is very price sensitive. It makes me lean more towards the, the gag gift side anyways. Cause it's like, we can get customers for free and we have far more pricing power. Cause they're in the moment, they think it's funny. Whether it's eight dollars or it's $12 or $16, like I kinda just wanna buy it.

• 24:10Speaker 01

  Yeah.

• 24:11Alex Hormozi?

  But that's, you know, the difference between eight and 16 is monstrous, right?

• 24:15Speaker 01

  Yeah.

• 24:15Alex Hormozi?

  For the business. Um, so psych price test, and I would probably start with, uh, the gag. Gifts here and then I'll make three. Let me try one six percent on uh boring side. Now, this is the major part is if your focus is going to be media and that's going to be the direction that you're going in. Was there an influencer or something who made the video that had the trophy in it?

• 24:40Speaker 01

  They got tagged, our product on TikTok shop got tagged and we sold seventy to a hundred off of that and we did a follow up video and that's the one that had sixteen million views.

• 24:49Alex Hormozi?

  Okay. How many TikToks do you make in a month?

• 24:52Speaker 01

  Uh, right now, we're doing about uh one a day and we're trying to ramp that up to three a day.

• 24:58Alex Hormozi?

  Okay. Yeah, cuz the thing is, is like your Amazon and Etsy, I would imagine are fairly passive. Normally I would consolidate it if you were like, I'm running all these things, I would say like, let's, let's focus, but if that's like kind of on autopilot and I am familiar with like Amazon handles a lot. So the direct site traffic right now comes predominantly from SEO. So talk to me about that. Do you have an SEO firm or you go to?

• 25:18Speaker 01

  Yes, no, it's an SEO firm, agency.

• 25:21Alex Hormozi?

  How long have you been working with them?

• 25:23Speaker 01

  This one, about eight months.

• 25:25Alex Hormozi?

  Eight months.

• 25:26Speaker 01

  Additionally, I've only, I've always had pretty good success with SEO.

• 25:30Alex Hormozi?

  Okay.

• 25:30Speaker 01

  And then we stopped SEO cuz the company wasn't, previous company wasn't performing. We just let it go for several months and then hired another company.

• 25:38Alex Hormozi?

  And then when these guys came in, it started going back up again? What stops you from like doing more SEO? Or rather what stops that like if you were to say, hey, cuz I mean, when I see thirteen to one, right? I'm like, that sounds interesting. If you were to say, hey, I want you to give me like three clients worth of focus so that you can give me three times the backlinks and three times the articles or whatever it is that they're turning out for you. I, is there anything that's, cuz if you get thirteen to one, it's like, we should spend as much as we possibly can on that.

• 26:07Speaker 01

  And that's why I started Meta is.

• 26:10Alex Hormozi?

  But it's different though.

• 26:11Speaker 01

  Yeah.

• 26:11Alex Hormozi?

  Right, cuz interruption based ads versus SEO where it's intent based. Cuz it's also like, these things are things that are not taking your time. So this is like media one is SEO.

• 26:21Alex Hormozi?

  Uh, max out.

• 26:23Speaker 01

  And the SEO company wants me to do Google Ads.

• 26:26Alex Hormozi?

  Yeah.

• 26:26Speaker 01

  Throw into that mix?

• 26:27Alex Hormozi?

  Okay. Mm hmm. Yeah, especially like, these are both intent based, right?

• 26:31Speaker 01

  Yeah.

• 26:32Alex Hormozi?

  Like, at the very least, you should own your own terms, which is like all your names and derivatives of your names. Like, I've, I've rarely seen anyone in any business just own their own terms and not make money off of it. And so people are like, why do I want to pay for a click I was gonna get? The thing is, is like, you're not always gonna get the click. And so having it there, I'm like, you're gonna make the money. Like, just, you know what I mean? But then the, the, the second version of that is, you know, associated terms. That's where the, like, the long tail key, uh, keywords. And because yours, because the boring side, so this is all, this is all like the boring side of the business. Because trophies are so like, oh, I have to get trophies for the team this year. It's like, they're in this window and they're just going to buy whatever is like pretty much immediate. Yeah. So I think this all makes sense.

• 27:16Alex Hormozi?

  I don't know if people, I mean, you're running the meta ads, uh, to get the boring trophies. I would bet that that's probably, and you could do it. But this feels like, like, like, it's less interruption based, more high intent based. Now, gag gifts a hundred percent. No one's like, hey, uh, you know, fuck your move, follow the plan, uh, you know, trophy, right? Or whatever. So this is the, like, if, if we're looking at this, these are all what I would consider like black and white, very low lift, almost guaranteed to make you more money moves. Almost all of these will just make you more money. This is thirteen to one. This is probably gonna be high return. This could double the profit. This takes, adds fifty thousand dollars to the bottom line. The price is for sure gonna increase, um, on the gag gifts.

• 27:59Alex Hormozi?

  So now we can talk about the, the media side. So you're gonna go from one to three a day. I think that's a good idea. What I would suggest you do is look for, so there's gonna be you, so there's gonna be you. So we're gonna go from one to three a day. And I think that you should focus on trends and memes. So like, cause this is a gag gift brand, so it's okay for you to just like be silly and ridiculous. And so like, just hire a seventeen year old. It's a turn scroll. Yeah, I just feel like what's like, what's trending right now? You know what I mean? Like some, what's interesting is that a lot of these TikTok ones also do well on Instagram. So you could repurpose there. Do you, do you post on Instagram? Yeah. Okay, yeah. Just started.

• 28:42Alex Hormozi?

  Yeah, at least you're gonna, you'll, you'll get double, you know, you'll get double usage on that. But yeah, TikTok is like the perfect platform for you, for these, like, it makes complete sense to me. They did two hundred and fifty thousand in a month. And so when I, the reason I said the ten million is like, okay, well, that happened on accident. Let's do it on purpose. And if you can do two fifty a month, just from that, it's like, well, there's three million. I think you getting really ridiculous with the volume will get you a lot better. And I think this is one of those things that you should live close to. Like you, like these things are all things that you can do probably the week you get back. You know what I mean? This one is gonna be the, this is like the, the big commitment of what's the bet we're making? The bet we're making is that mastering TikTok, live selling, et cetera, is gonna be the way. Now, the second part of kind of like TikTok mastery is gonna be influencers.

• 29:26Alex Hormozi?

  What's nice with TikTok shop is that your stuff is automatically gonna be listed there and other people can make, make videos for it. And you're in the price point that's perfect for TikTok shop. Like twenty, thirty, fifty, like it crushes for that stuff. And it's, it's such easy videos for people to make. And I mean fundamentally, like these are basically one-time work. This is the only ongoing work that you do. And so trends and memes, and I'd be posting one to three times a day there, repurpose on, on IG, right? That's, that's just free traffic. And then the influencers will also kind of, this will, it'll be like a loop here. So it's like, they'll give you, like, they'll, they'll do something that works well.

• 30:09Alex Hormozi?

  And then that will feed, like, it'll just be this nice loop where they're also creating content for you. And then I'll put, I'm gonna put number seven on here because I think this is worth it. The TikTok ads, which you said you just started? You make the ad, right? Or sorry, you make the content. You already know where I'm going. I knew it very quickly. You're making content, that TikTok content, ten percent, go viral, whatever. And then ninety percent, flop, right? Then this.

• 30:38Alex Hormozi?

  You put ad money behind it and you send this to influencers and say, make stuff like this because this is what's converting. And then they'll make versions of this that'll also inform your content. Which you'll then try to make iterations of what they're doing. And so like you're kind of your source, like you're starting, here's the TikTok content, some does well, great, push ads behind it. By the way, guys, here's the ones that are working well. They make stuff, you can take theirs, push money behind it as well and model it and make permutations of it. And so for this stuff, um, I would be kind of hook centric. Meaning, uh, like for, well, for most short form platforms, like the hook is everything. Yeah.

• 31:21Alex Hormozi?

  And once you have a winning hook, I would like reuse it over and over again. And so like, if you have, uh, you know, whatever your winning hook is, and then you could just basically sell down the line of SKUs. Once you know. Yeah, exactly. Over and over and over again. I told you, you have, you actually have a really simple one. The nice thing is that I have a lot of confidence in your, like, there's, there's basically no, like, uh, I'm not really sure. Like site price test could easily like two X profit. Yeah. Like on its own, because the margins are so slim right now, right? Uh, six X, this is a two X on profit for sure. SEO max out, um, well, right now it's 50% of revenue is coming from that. So it's like, if maybe we get a 50% boost from them doing a better job on it. PPC will just get you good returns.

• 32:07Alex Hormozi?

  This might give you like a 10 to 20% boost. So I don't think it'll be huge, but it's like, it's free and it's a one time setup, so it's not hard to do. TikTok's going to be the big lever of like, how do we go from one million to 10 million? It's like, if you, if you did nothing else, but just say like a year from now, if all we did was master TikTok and TikTok shopping. We would win. Like if you did nothing else, this is just going to take all of your existing business and make it more profitable. So that you can take all of this cash and float into here. And the fact that you have such low margins. Excites me because when you make five or 10% improvements, you double or triple.

• 32:45Alex Hormozi?

  And the fact that you haven't liked that there was no pricing discipline, like there's no, there's no like process to pricing besides like, we'll just keep raising it when our costs go up.

• 32:54Speaker 01

  Yeah.

• 32:54Alex Hormozi?

  Usually there's just like, when I see a business like that, there's like massive unlocks. Like I'm saying 6% on boring trophies, but like you might be able to push 25.

• 33:02Speaker 01

  Yeah.

• 33:03Alex Hormozi?

  And that 4X is 5X is profit.

• 33:05Speaker 01

  Right.

• 33:06Alex Hormozi?

  And gets very interesting.

• 33:07Speaker 01

  Yeah. And the gag gifts have much higher margins.

• 33:10Alex Hormozi?

  Yeah. And, oh, let me add something else. What's the offer that you have in the box?

• 33:15Speaker 01

  Usually it's a little code that says like 10% something to order here.

• 33:19Alex Hormozi?

  Why don't you give something much better than that? So we have to come up with a really compelling offer to get people who are buying. Cause the nice thing, the important thing is, um, so is, are you doing fulfillment for Amazon sales?

• 33:31Speaker 01

  We have some FBA, but most of it's FBM.

• 33:33Alex Hormozi?

  Okay, great. So you're fulfilling most of it. That's wonderful. Okay. So, and Etsy, same thing?

• 33:38Speaker 01

  Etsy, we fulfill everything. Yeah.

• 33:39Alex Hormozi?

  Great. Okay. So that means that we can put something in the box to be really compelling to get them to, to buy something. So if now Amazon and Etsy, the purchasers who are buying there, are they more bread and butter people or are they more gag people?

• 33:52Speaker 01

  I would say more gag.

• 33:53Alex Hormozi?

  More gag. Okay.

• 33:54Speaker 01

  Cause they're more like funny, death science, funny things and stuff like that.

• 33:58Alex Hormozi?

  I would put a BOGO offer in or a, so I would buy one, get one to two free. And then just fix the pricing of the one so that it makes sense.

• 34:11Speaker 01

  Yeah.

• 34:12Alex Hormozi?

  But then the, I would basically have this little thing here. So that would be the headline on the top of my little, my little, my little doodad.

• 34:21Speaker 01

  Yeah.

• 34:21Alex Hormozi?

  You got your QR code and then I would have my top one, two and three gag gifts.

• 34:28Speaker 01

  Okay.

• 34:29Alex Hormozi?

  Cause they just bought one. So it's like, let me tell you the other gag gifts that people buy the most of.

• 34:33Speaker 01

  Gotcha.

• 34:34Alex Hormozi?

  And I would put that into every one of the boxes.

• 34:36Speaker 01

  Okay.

• 34:38Alex Hormozi?

  For them.

• 34:39Speaker 01

  And would you have that, have that QR code go back to that channel? So like Amazon or would it go back to our website?

• 34:45Alex Hormozi?

  Good question. It's a good question. Well, to make that offer, you'd probably have to bring them back to the site. Yeah. Well, the kind I'm not as worried about, we just gotta fix the pricing, but like, um, either way, I mean, it would be an interesting test. But I think this is the better, like, cause you can make a far more compelling offer.

• 35:00Speaker 01

  Yeah.

• 35:01Alex Hormozi?

  The other thing is, what do you, how big is your email list?

• 35:04Speaker 01

  For trophy side?

• 35:06Alex Hormozi?

  Yeah.

• 35:06Speaker 01

  I think we have like 10,000 contacts.

• 35:08Alex Hormozi?

  Okay, well, guess what? We just found ourselves another couple hundred grand. So let me tell you a stat that'll blow your mind.

• 35:16Alex Hormozi?

  Most mature e-commerce businesses give between 30 and 50% of revenue from email.

• 35:23Speaker 01

  We're missing out a lot.

• 35:24Alex Hormozi?

  Yeah.

• 35:25Speaker 01

  On that.

• 35:25Alex Hormozi?

  So there's probably like one and a half million sitting there.

• 35:27Speaker 01

  Yeah.

• 35:28Alex Hormozi?

  And that's all profit because there's no ad spend.

• 35:31Speaker 01

  Right.

• 35:31Alex Hormozi?

  Most e-commerce businesses basically break even or lose money on spending ads to get customers and they make it up with their email follow-up. Nine. It's gonna be email follow-up. Okay. So what do you use? Use Big Commerce? So they probably have, so you're, there's gonna be two different types of email that you're gonna do. So number one is gonna be flows. So these are based on user behavior. So when someone visits a specific product, they should get like a five email sequence. I'd be like, hey, saw that you were looking at the goat, whatever, right? And that should just, that should happen for anybody who opts in or does a two stepper abandoned carts.

• 36:08Speaker 01

  Okay.

• 36:08Alex Hormozi?

  Right? The, uh, the other piece is we need the long-term.

• 36:11Speaker 01

  All right.

• 36:12Alex Hormozi?

  So what I'd recommend is three times per week. The question is, it feels like a lot for trophies. Cause trophy is a less frequent purchase. The gag, I feel like is a, is like, if you buy one gag gift, you'd be willing to like, buy them for many people because you just think they're funny. They are separate brands though, because you have like, okay, so I would say this I'm, I'm cool with on the gag gift side. Cause right now you're not making any return sales anyways. Right? So you might as well get.

• 36:37Speaker 01

  We don't really have an email list for the gag side. Cause it's all through.

• 36:40Alex Hormozi?

  Oh, cause it's easy. Does TikTok not give you, uh, email? Okay. So I think we'll go one time a week and we'll not worry about the gag gift.

• 36:50Speaker 01

  Okay.

• 36:50Alex Hormozi?

  I think just one time a week of, and if, if your basically domain score, your domain health, your domain authority stays healthy and your open rates stay okay, your click through rate stay okay, I would increase frequency.

• 37:00Speaker 01

  Okay.

• 37:01Alex Hormozi?

  So you'll start with one a week and then you're probably thinking, okay, what am I gonna, what am I gonna email them about?

• 37:05Speaker 01

  Right.

• 37:05Alex Hormozi?

  Right? So when you have customer stories, cool trophies. Cause I'm sure there's every week, there's like one trophy or something that's just like interesting that you guys have, right? Probably stuff about recognition, uh, status and cheapest compensation. So I think if I were to, if I, if I owned your company, right? So I'd be like, okay, are we in the trophy business? No, trophy is what we sell, right? But it's really just the vehicle for giving people recognition, status and compensation.

• 37:34Speaker 01

  Right?

• 37:35Alex Hormozi?

  And so my, the things that I would email would probably be about how you could either give your team a pay raise, or you could give them a trophy and believe it or not, here's this research, the trophy is actually even more meaningful. So they like it more and you like it more as a business owner. Right? So it would be that kind of stuff that I'd be, you only have to write 52. It's not that many emails, right? You could literally probably do it in like a day and a half or two days. And I would be hitting this and then I would just weave in examples. And the examples will do enough modeling for people to basically click and then go back to the site. Cause all we're trying to do is just bring them back to the site. Now, on every one of these, these emails, I would have a PS, funniest trophy of the week. So think about like the newspapers, like they have all the articles that are serious, but then people just buy them to read the funnies.

• 38:20Alex Hormozi?

  And they read the cartoons. And so we do the same thing here because you probably have some hilarious trophies that get made, right?

• 38:26Speaker 01

  Yeah.

• 38:26Alex Hormozi?

  And then just be like explicit, you know what I mean? I think that people would find it hilarious.

• 38:30Speaker 01

  Okay.

• 38:31Alex Hormozi?

  And if you're worried about this, then don't put those ones. But like, I still think that you have funniest trophy of the week. And even it, and like, this is me taking the complete extreme stance. People, people may care about this. People might just think this is funny. And if you just did this, it's like, you're almost just sending them jokes and memes. It's the same as making content on the internet. And so if they're like, oh God, what's the, like, what did they, what did they make this week?

• 38:52Speaker 01

  Right.

• 38:52Alex Hormozi?

  Right? And then again, it's just like, I just want to stay top of mind. I want to remind them. And I think about this also seasonal. So what are all the things that are coming up? That like, that are coming up next season? Cause you know what the buying cycle is for trophies. So it's like, what are like, okay, Christmas is coming up. Okay. So there's going to be end of year bonuses for people. There's going to be, okay, fantasy, what, what, what fantasy league ends in October? So probably like hockey ends or whatever, right? Like best costume costume. Exactly. So it's like, we have to remind them of what people get status and recognition for using trophies.

• 39:23Speaker 01

  Gotcha.

• 39:23Alex Hormozi?

  That's the job of the long-term nurture. What things are people going to be rewarding next month?

• 39:28Speaker 01

  Yeah.

• 39:28Alex Hormozi?

  That we get to have to be people buy this month. And we just, every month we'd like, you look at your calendar, you're like, I have to think of four emails that apply for next month.

• 39:36Speaker 01

  Next month.

• 39:37Alex Hormozi?

  Right, and I would probably, I'd put this as like, okay, I've got my business one. I've got my, you know, season one. I've got my sports one. So these are like my buckets for my emails. So every email, it's like, it's almost like you're hitting from a different angle and reminding people of different components of their life. And so that's, that's probably how I'd have my long-term strategy and provided all of the metrics look good, I would just increase frequency. Yeah, okay. So keep it low in the beginning, just to like, get a feel for it, see how, like, the first couple of emails are gonna shake out, because you're gonna have a super responsive list. And we wanna keep these all text. You can have, I would say, link to the image, because then curiosity's gonna drive the click.

• 40:18Alex Hormozi?

  And also, image-based tend to get lower deliverability rates than like full-text one. And when people opt in, or sorry, when people purchase or opt in, they abandon cart. The first one I would have is. Reply back for funniest trophy of all time. And so as soon as someone opts in, it's a double opt-in, so to increase your deliverability. And so they'll, they'll reply back, and then it's an automation, you don't have to do anything. And then you'll send them the, the link for the, for the clickable picture. And they'll be like, this is ridiculous. And then underneath of that, so when you have the, when you have a clickable link, you wanna have it take them to a page that looks like this. And then here, you have. So like, you can have the funniest thing, but it's also a CTA to get someone to buy something. Gotcha, okay.

• 41:03Alex Hormozi?

  Just not in the email. Yeah. Yeah. They see it, and if they wanna buy it, it's right there. Right, super cool. Well, I think we found a few doubles. Yeah. In the business. Absolutely. Feel all right, a little money, money map? I think you will significantly more than double profits. Well, that gives you 50, and that's the first thing we do. This could easily double profits if we just add the 6%, right? That's all we'd have to do. If you increase SEO, you will make more money. How much more, we'll see, but more. This is free money, but this is actually the biggest, I think this is actually the biggest finding we have. Is the emails. Yeah, 30 to 50% of revenue, like Clockwork. Yep, especially, and so what's interesting is that the less ad-dependent your business is, the higher the percentage will come from email.

• 41:47Alex Hormozi?

  So like, if you have a fast-growing company that's spending more and more money every month, then the percentage by math would be smaller. When you have a more stable, older business that's coming from email, like, it'll be greater and greater. Like, I know a company right now that is 90%, they do a billion a year, 90% comes from email. Yeah.

• 42:03Speaker 01

  Okay. I would say also in that kill Facebook ads for Trophy Outlet, Trophies.

• 42:08Alex Hormozi?

  It just, it wouldn't have been my, I mean, right now, it wasn't profitable if I'm not mistaken. I'd rather redirect resources to the things that will make us more money. I'd rather just do TikTok ads instead of Meta ads, given that's like, you did 250 for free.

• 42:21Speaker 01

  Right.

• 42:22Alex Hormozi?

  Yeah. Right?

• 42:23Speaker 01

  Absolutely.

• 42:24Alex Hormozi?

  Feel all right?

• 42:25Speaker 01

  Yeah, I feel really good.