How to Scale an E-Commerce Business Past the $10M Wall | Ep 962

Download your free personalized $100M scaling roadmap in under 30 seconds: https://www.acquisition.com/roadmap?el=yt-alex-486r&htrafficsource=yout In this Q&A episode, Alex advises business owners on how to overcome growth bottlenecks by optimizing ad spend, testing new keywords, and building a defensible brand. He also tackles challenges around talent acquisition, outsourcing, and improving financial forecasting to scale e-commerce businesses effectively. In this episode 00:00 Lead generation for a luxury tables business 07:50 Hiring strategies to scale a direct-response business 12:20 Building a strong brand beyond media arbitrage 18:19 SaaS pivot advice for a salon business 27:56 Scaling a luxury resale business 33:03 Buying versus building talent to boost sales 38:33 How to get the $100M scaling roadmap More Value: Join The Live Scaling Workshop In Las Vegas: https://www.acquisition.com/o-vegas Download your free personalized $100M scaling roadmap in under 30 seconds: https://www.acquisition.com/roadmap?el=yt-alex-486r&htrafficsource=youtube Discover The Easiest Business I Can Help You Start (Free Trial): https://www.skool.com/hormozi Free Books and Video Courses: https://www.acquisition.com/training Get the $100M Book Bundle: https://shop.acquisition.com/pages/100m-book-bundle Follow Alex Hormozi’s Socials: ⁠⁠LinkedIn ⁠⁠ | ⁠⁠Instagram⁠⁠ | ⁠⁠Facebook⁠⁠ | ⁠⁠YouTube ⁠⁠ | ⁠⁠Twitter⁠⁠ | ⁠⁠Acquisition ⁠ DISCLOSURE Information shared here is for educational purposes only. Individuals and business owners should evaluate their own business strategies, and identify any potential risks. The information shared here is not a guarantee of success. Your results may vary. Copyright © 2026.

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

• 0:00Alex Hormozi?

  In 2021, I sold my ecommerce company, Prestige Labs, with GymLaunch for $46.2 million. And six months ago, I broke the Guinness World Record for the fastest-selling nonfiction book and generated over $106 million in a weekend just using a Shopify store. And so in this video, I'm answering your question about how to scale your ecommerce business. And for all these questions, I have tried to do my very best to make the solutions as tactical as humanly possible so that you, watching from home, can immediately use them. So enjoy.

• 0:23Speaker 01

  Hey, Alex.

• 0:23Alex Hormozi?

  Yes.

• 0:24Speaker 01

  My name is Max. I run Elevate Customs with my wife, who's in the front row. It's a...

• 0:31Alex Hormozi?

  Elevate Customs?

• 0:32Speaker 01

  Yep.

• 0:32Alex Hormozi?

  Like, home custom solutions?

• 0:34Speaker 01

  No, we build and sell luxury gaming tables, like pool tables, casino tables, manufacturing.

• 0:39Alex Hormozi?

  Not what I was saying. Okay, got it. Yeah. That's cool. Like, cool backlight and things like that?

• 0:45Speaker 01

  Yeah, like anything, like one-off custom pieces.

• 0:48Alex Hormozi?

  Sweet.

• 0:48Speaker 01

  We're at around $2.5 million revenue a year. We want to be around 10, at least. Mostly Google Ads.

• 0:56Alex Hormozi?

  So ecommerce.

• 0:57Speaker 01

  Yeah, she sells.

• 0:58Alex Hormozi?

  Yeah, okay, so invoices, phone calls. Okay, got it.

• 1:01Speaker 01

  So how do we increase our leads 2X, 3X without breaking the bank? Basically.

• 1:07Alex Hormozi?

  How do you increase your lead flow without breaking the bank?

• 1:10Speaker 01

  Yeah.

• 1:10Alex Hormozi?

  Well, I'll ask you.

• 1:11Speaker 01

  For quality leads, basically.

• 1:13Alex Hormozi?

  So what are you currently doing? You said Google Ads.

• 1:15Speaker 01

  Yeah, around 15 to 20K a month.

• 1:17Alex Hormozi?

  Can you spend more?

• 1:19Speaker 01

  Yeah.

• 1:19Alex Hormozi?

  Why don't we do that?

• 1:20Speaker 01

  We've tried, and we weren't generating the same quality leads or necessarily getting more.

• 1:25Alex Hormozi?

  So just different keywords were not getting you more quality.

• 1:28Speaker 01

  Yeah.

• 1:28Alex Hormozi?

  Correct. This is probably a scale thing, though. Like, this is a media buying question because I can promise you that at $20,000 a month, you haven't saturated the market for cool, custom gaming stuff. Like, you could probably get to, like, $2 million a month before you even get close to that. It's probably just a... Like, who does your media buying?

• 1:45Speaker 01

  We have a company.

• 1:46Alex Hormozi?

  Okay. I would... This is a keyword thing. Like, this is three degrees down, like, super tactical, like, we're just buying the wrong words. And there's just... We'd like... I would be, how, what's your margins right now?

• 1:57Speaker 01

  20%, 500K a year.

• 1:59Alex Hormozi?

  So you just have to see this as like, we might burn $200,000 this year on bad keywords to find another six that we can scale up to $100,000 a month. And by doing that, we'll 5X the business. And so if you just see it like that of like, okay, we're going to spend $200,000 or $300,000 to take us from 2 point whatever to 10, that's how I, that's how I think about it. In general, we tend to be like scared to spend more money. And I'll say that the only thing that's really shifted for me is like from entrepreneur to investor, like kind of wearing both hats is that I look so much stuff at just like return on capital and like, what's the point? Like, if I think we can get to 10, I would rather just get to 10 faster. And I see, because I don't

• 2:38Alex Hormozi?

  live off of that $500,000 a year, I just see all of that as my, my fodder for putting back into the thing so that I can get to the next level, which side quest for everyone. If you're a service business and you have cash flow, some businesses are really obvious for where you do reinvestment. If you're brick and mortar, you save up your shekels, you open another location, very clear where your capex goes. If you're manufacturing, you buy another big machine, very clear where the capex goes, right? If you're a service business, you do accounts, you're, you have, you know, you have a law firm, you got legal people. What do you do with the extra money to quote reinvest in the business? So there's two primary sources. Number one is going to be talent and culture. So who am I going to hire? And how do I up level the team? So in service businesses in general, you can see

• 3:20Alex Hormozi?

  how good you are and how advanced you are as a service provider by the, by the price you're able to charge. And so over time, your price should always go up because fundamentally, you should have a virtuous cycle of we do good work, that generates more demand, more demand means more than we have supply, which means we can raise the price with the extras cash. We can then acquire better talent, which means we get, we do a better job, which increases our reputation, which increases our price, which allows us to charge more so that we can get better talent. And so the talent should always be going up and so should the price. And so if you're in a, in a marketplace where you're like, man, we can't charge more than other people, it's because you aren't better than other people. So we have to beat them. In order to like, we have to do better. That's point one. The second area is brand, right? It's like, how do I spend some of that extra cash to solidify the brand of me? So this is not direct response ads.

• 4:05Alex Hormozi?

  This is like, kind of the big aspirational moments, these brand moments. Like, we just did this launch, you know, two weekends ago. It's like, how do I, how do I do these big demonstrations that might cost more and might not be the normal run of business? Like, why would Red Bull have a guy jump from out of space down? It doesn't make any sense, but except it makes a ton of sense because I'm talking about it right now. Right? And so you're probably more likely to drink a Red Bull at the break. Real talk. And so anyways, it's like, how does this ladder back to selling more pool tables? For you, though, you're not in a service-based business, per se, but I thought it was a good offshoot for other people. See all of the profit that you have, whatever you don't need to live on, as your experimentation budget. And that budget is really, like, do not see it as I lost money. Like, you can't think with that perspective. You will just lose.

• 4:48Alex Hormozi?

  You have to think of that this as like, I'm going to rigorously test keywords until I find more keywords that win. And these are just investments in finding money printing machines. Because keywords, especially once you really find them, they kind of just print for you, which you guys are experiencing right now, right? You guys spend $250,000 a year and you make 2.2, right? You're getting 10 to 1 on it. Now, obviously, you have cost of goods, for sure, but like, profitable, right? And I'm sure when you found your first keyword and it started working, you were like, holy shit. It's like, great, we just need to find like another 100. And they're there. They're there. And you might need bridge pages. So you've, you may have heard of Eugene Schwartz, so famous marketer. And so when you really want to scale ads to colder markets, for those of you who went through the hooks and the goaded ads?

• 5:33Alex Hormozi?

  Anyone go through goaded ads playbook? Okay, so this, this will sound a little bit more familiar. So you have these levels of awareness that correspond with size of market. And so you've got your most aware customers here. And the reason that these levels are important is that it changes what the hook is and what the kind of click journey is for the customer. So at the very top, you've got unaware. Then you've got problem aware. You've got solution aware. You've got product aware. And then you've got most aware, which is usually your existing customers. Right? And so if you want to expand, so right now, I'll bet you most of your keywords are targeting these people. If you want to go up market, which might have 10 times more clicks, we might have to have a bridge page. After you have, like, the keyword might be more like home.

• 6:19Alex Hormozi?

  Home projects or like accessory, like I'd have to think of that. I'd use a keyword finder and then

• 6:24Speaker 01

  Would you have like the same team work on that or hire a completely different marketing team that kind of?

• 6:29Alex Hormozi?

  A really good media buyer would know this, but you'll likely just need to have keywords that a little bit broader. So you start competing against more people, but as long as you bring them to kind of like an advertorial type page and then they take the next step. And then it basically mimics the same path as this. It's like you take them from product aware to then advertorial, then to your sales page. That bridge, the clicks here might also be like one tenth the price and there's an ocean of them. And then when you get from there, it's like, okay, what's, what's above that problem where is your house boring? Right? Like, do you have an extra room that you don't know what to do with? Right? These are a problem where they have a problem. They have no idea that you're going to sell them a pool table. But we have to start with where they're at and then lead them through the journey.

• 7:11Speaker 01

  Thank you.

• 7:11Alex Hormozi?

  Yeah.

• 7:11Speaker 01

  Appreciate it.

• 7:12Alex Hormozi?

  Real quick, I'm going to show you the exact 10-stage roadmap from zero to a hundred million plus. That less than 1% of companies finish, I've now done multiple times. And so I can say with a lot of confidence that these are the stages as headcount increases that you need to get through. And I broke each of these down by eight different functions of the business, what the constraint feels like, like what are the symptoms of it when you're going through it? And then what steps we actually took to graduate and we've done this across software, physical products, service businesses, brick and mortar, all of this. And it works and it's my gift to you. It's absolutely free. And so the link's in the description, but you just go acquisition.com forward slash roadmap. Just enter info and it'll spit it right back to you all free.

• 7:50Speaker 02

  My name is Ethan. We sell direct response e-commerce products. We're all paid media. We do about $3 million a year in revenue.

• 7:58Alex Hormozi?

  Direct response?

• 8:00Speaker 02

  E-commerce products.

• 8:01Alex Hormozi?

  Okay.

• 8:02Speaker 02

  Yeah.

• 8:02Alex Hormozi?

  Like drop shipping stuff?

• 8:03Speaker 02

  Pretty much. Yeah.

• 8:04Alex Hormozi?

  Okay.

• 8:05Speaker 02

  It's more branded than that, but essentially us.

• 8:07Alex Hormozi?

  Yeah. So you have customers who are doing that or you're doing that?

• 8:09Speaker 02

  We're doing that.

• 8:10Alex Hormozi?

  Okay. Got it. And so you have a handful. How many SKUs do you have?

• 8:14Speaker 02

  Four.

• 8:15Alex Hormozi?

  Okay. Is it all the same brand?

• 8:17Speaker 02

  No.

• 8:18Alex Hormozi?

  Okay.

• 8:18Speaker 02

  Yep. So we have, uh, we're doing, it's like four months old. So we're doing a run rate of like, uh, three million a year. We have, you know, background in like paid traffic affiliate. Um, so it's not the first rodeo with that. We're trying to get to like 15 million a year run rate.

• 8:33Alex Hormozi?

  Okay.

• 8:33Speaker 02

  Um, what's stopping us right now, you know, not entirely sure, but, um, basically like we have each step for everything that has to be done. We built out teams and systems for the main priorities and those things are working pretty well. I'm happy with, uh, our talent and what they're producing. But so far what I'm experiencing is that, you know, I'm left with this, you know, list of like random chores that somehow only I can do.

• 8:58Alex Hormozi?

  Junk drawer.

• 8:59Speaker 02

  But I'm not sure how to approach hiring for this because it ends up being like a very niche, specific task. But I made, I might only need them for like, you know, 20 minutes a week or something. So it ends up being me, but with a million things.

• 9:13Alex Hormozi?

  And your founder?

• 9:14Speaker 02

  Yeah.

• 9:15Alex Hormozi?

  Okay. So let's start here. You want to get to 15 million. What stops you from spending more money?

• 9:22Speaker 02

  Uh, nothing right now. I mean, so we, we just hired a, a pretty robust funnel team and, uh, an operations guy, like a strategist. So, kind of just waiting on those things to kick in really.

• 9:32Alex Hormozi?

  Okay.

• 9:32Speaker 02

  But I'm, I'm fairly confident at least doing.

• 9:34Alex Hormozi?

  Okay. So this is more a complaint than a constraint, right? No, I'm just being, no, I'm, this is me asking for clarity. So we think we can double if we just spend more money. I'm not spending more money because I'm waiting for this thing to happen. Once this thing happens, then I'm going to spend as much money as I can.

• 9:54Speaker 02

  Sure.

• 9:55Alex Hormozi?

  Right? And in the meantime, I have stuff I don't feel like doing. You know, I'm, I'm like, this is me trying to translate back. Is that true? Is that like accurate?

• 10:02Speaker 02

  Yeah. But eventually there's going to be enough of that stuff that like, I will have to find some way to hire out for these things.

• 10:08Alex Hormozi?

  Yeah. And then there'll be more stuff that you'll still do. You'll just do the more important valuable stuff and give the other stuff to somebody else.

• 10:16Speaker 02

  Yeah, but a lot of it ends up being fairly tedious. Like it doesn't feel like high leverage or high value at all.

• 10:21Alex Hormozi?

  I mean, this is where like VAs and products, project work can come really in handy.

• 10:25Speaker 02

  Yeah.

• 10:25Alex Hormozi?

  Like, I'll give you an example. So when we made all the ads for the launch, right? I don't, I didn't need the amount of editors that I had to spin up in order to, because like I'm not going to be making 300 ads a week, you know, ongoing, I don't need to. But for the launch I did, and I wasn't going to hire an extra 15 editors full time because it's just like, I don't need that. And so we spun up 15 editors that were contractors who would then just clip and we had one person just did QA on it to make sure that it was good and then we'd ship them. Right? And so if we have something that's like one time ish work or it's sporadic, then I'm fine just having a suite or a bench of contractors that I can turn on and off.

• 11:06Speaker 02

  Sure.

• 11:07Alex Hormozi?

  As long as they do decent work.

• 11:08Speaker 02

  We do similar things like with our, with our video editors as well, but you know, some of the tasks are fairly specialized, like.

• 11:15Alex Hormozi?

  No, I understand. I was just using as an example for editors, but I'm saying like, if you have tedious work, like this is where the fibers of the world like can come in handy. And worst case, you train a contractor or VA on how to do it and then they do it.

• 11:27Speaker 02

  Yeah. Just like someone that's high level enough and like Shopify work, but we only use them for a few hours.

• 11:32Alex Hormozi?

  There's tons of Shopify contractors, like a boatload of them.

• 11:36Speaker 02

  Yeah.

• 11:36Alex Hormozi?

  And they're not that expensive and some are really good. Yeah, I like, I would just look at my list, what are the things I'm doing on a regular basis? Can I ship out most of these to a contractor who does a piecemeal? Probably. And now you're trading 20 hours for two and that's just, you just keep making that trade until eventually you've managing a ton of people. And then it's like, great, one person is managing all of these and you just trade all that time for you getting more. Because hopefully if you're doing that much work, then you should have the revenue to support that role. Have you, have you scaled e-commerce like this before?

• 12:03Speaker 02

  Yeah.

• 12:04Alex Hormozi?

  Okay. Are you, are you just running paid ads?

• 12:08Speaker 02

  Uh, yes.

• 12:09Alex Hormozi?

  Okay. Do you have influencers who are doing stuff?

• 12:12Speaker 02

  No influencers. We were looking to hire for that, but we, we have three or four channels for paid at least.

• 12:18Alex Hormozi?

  Yeah. I'll say this, how big do you want this to be?

• 12:21Speaker 02

  Uh, I mean, ultimately like the goal is we'd like to have a portfolio of, call it four or five brands that we can then exit in a couple of years.

• 12:29Alex Hormozi?

  So I have this conversation every week with somebody who's doing e-commerce. And it's almost always the same, like, I would like to have a portfolio of a handful of products that I could eventually sell someday. I have really yet to see anyone do that. And it's, I think, for two reasons. One is that as you continue to scale, your CAC will continue to go up and your gross margins will shrink. And that will get frustrating. You will then also have supply chain issues, which would become a burden. You also have dupes, if you start becoming really good, that will undercut you in price and list on Amazon and all that stuff. Do you have patent protection, like, for any of these products? And so, like, you, right now, run a media arbitrage business, and it works really well, up to about 10 million.

• 13:13Speaker 02

  Okay.

• 13:14Alex Hormozi?

  And then it will quickly stop working very well. And so I think to your point of, like, you can see a double, that's probably true. You might even triple, that's sitting there with a little optimization, more email follow-up, blah, blah, blah, blah. But you'll, you'll probably get close to capping in that neighborhood, 10, maybe 12. And then you're gonna be like, well, we're doing a million dollars a month, but we have, like, almost no margin and our cash flow is fucked. And so, what I think you want is that you want to build a brand that has a product that you really believe in, that will allow you to recruit affiliates to your cause. When I say affiliates, I mean influencers, not traditional direct response affiliates that are just mercenaries, but like, people actually believe in it. And when you do that, you will actually be able to build a brand, because

• 13:56Alex Hormozi?

  fundamentally, like, any one of the products can be big enough on their own to sell. And so, rather than saying, like, why don't we try and build four totally different products and totally different brands at the same time, it's like, why don't we just try to build one that we really like, that we think has a chance at actually, like, really helping people for whatever the problem that the product solves? That's what will build what I think you want. It's just that most people come from the direct response world, just are pure performance marketers. And I say this, being someone who comes from that world. And I had to learn the hard way that you will run into the wall that, there's a, there's a great article, you can recall the Direct Response Doom Loop, which you might have read. But basically, you just do this. Revenue goes up, margins compress, margins compress until

• 14:40Alex Hormozi?

  you're eventually here, and then you have to keep selling in order to maintain your team. And then you just run a very large, very high liability nonprofit. And it sucks. And cash flow is a huge constraint, and you've got all the supply chain bullshit. And then you're like, this sucks. And then you'd have another conversation, come back here, and we're like, hey, we're doing 12 million with 7% margins. And I'd say, okay, of the four products you have, which one is the one that's the clear winner? That's the one that's carrying all the other losers? And you'd be like, well, it's this one. And then I'd say, okay, cool. Why don't we just get rid of these three and then put all of your effort on this? Do you think you'd be able to win that way? You'd be like, oh, my God, sure. It'd be like, great. So like, why don't we do that? And then actually invest in building the brand around it?

• 15:14Speaker 02

  We definitely have, you know, we're paid traffic affiliates. So like, we're data people. Like, but so one of the things that I've thought about is like, you know, our biggest skew, it's good, but it's not like, it's not that good. Like, I know a good campaign when I see it. So like, part of the purpose of building out like, you know, our research and funnel teams is like, well, eventually we're going to find something where the market is just like 10 times better, you know? So it's like, do we keep chugging along with like the one that's like a six out of 10? Or do we find, go find the nine and then go on on that?

• 15:45Alex Hormozi?

  The skill set that you guys are deficient in is going to be brand. And that's what you have to learn how to do. And the brand is also completed with the product.

• 15:54Speaker 02

  Right.

• 15:54Alex Hormozi?

  So like, that's what completes the brand loop. Like, we make this amazing promise. We have all these great associations. People then make the purchase. And then the product either reinforces the brand or destroys the brand. And if it reinforces the brand, then the loop continues and becomes a virtuous cycle. And that's how you go from an ecommerce store that does media arbitrage into a household name that you can sell for not just 50 million, but maybe 500 million. And so it's just that, like, I have this conversation literally every week. And so I know that you're coming at this from a math perspective. It's just that it will not work at scale. And so I would rather you spend as little as you can on all of these different things to find a product that you guys really think is legit and has some level of defensibility if you can. Because if you don't have a defensible product, the only thing that you have is the brand to differentiate you.

• 16:39Alex Hormozi?

  That's the only differentiator. And so if you're competing, because like, just play it out the next step, right? Like, let's say you find your nine out of 10. No one's buying that. Like, private equity investor, not buying it because they know the game. They buy brands. They don't buy products. And so you get your nine out of 10, and then the dupes flood because they see that you're killing it. And then they undercut you on all this stuff. And then your ROAS goes down, and then you leak everything to your competitors. So either you have some sort of patent that you can actually protect, and you have a legal team that can enforce it, or you build a brand. So like, that's the long-term play. The rest of this is just making money until you figure that out. I'm being super real with you. I'd just rather save you a couple of years. But like, that is where this leads.

• 17:21Speaker 02

  Okay. I mean, so-

• 17:23Alex Hormozi?

  How do you build a brand?

• 17:24Speaker 02

  Yeah, right. Yeah, how do I do that? But, you know, we are working on like, the legal defensibility of it. You know, I didn't mean to say like-

• 17:31Alex Hormozi?

  I would lead with brand rather than legal. I would lead with brand rather than legal.

• 17:35Speaker 02

  Yeah.

• 17:35Alex Hormozi?

  Because legal, you have to like, it's still tough to like, it's, it's better to be big and then win with legal than try and be small and win with legal, because you'll just get drowned in fees. And it's, it's, it's better to just have the coolest brand and have the coolest people promoting the thing. And then people just want to buy from you, even though they see the cheaper knockoffs. But that's like, that's what you have to do. If you really want to go where you want to go. Otherwise, you're just going to be cycling through SKUs, and you're going to say you have a portfolio, and it'll sound impressive to people who don't know what you're talking about. But like, margins will do this, cash flow will get fucked, and you have co-founders, and it'll be like, this is so much work. This sucks. I wish we'd said one product that we all really believed in, that we could like, build a business around.

• 18:16Speaker 02

  Yeah.

• 18:16Alex Hormozi?

  And that's what you want to do.

• 18:17Speaker 02

  Thank you.

• 18:18Alex Hormozi?

  Yeah, you bet.

• 18:19Speaker 03

  Hi, my name is Samantha Harrison. I own a hair extension company in Australia.

• 18:24Alex Hormozi?

  Amazing.

• 18:25Speaker 03

  I have a salon and an e-commerce business.

• 18:29Alex Hormozi?

  A what in e-commerce?

• 18:30Speaker 03

  Sorry, sorry, I wholesale.

• 18:32Alex Hormozi?

  Wholesale and e-commerce. So direct-to-consumer and wholesale?

• 18:34Speaker 03

  Yeah.

• 18:35Alex Hormozi?

  Okay, got it.

• 18:36Speaker 03

  Sorry, I'm like, so nervous. I have a terrible fear of public speaking.

• 18:39Alex Hormozi?

  Have a panic attack, and then just ask a question. You're good.

• 18:43Speaker 03

  I forgot what my question was.

• 18:45Alex Hormozi?

  It's fine. You can pick another one.

• 18:46Speaker 03

  Read what I wrote down, if that's okay.

• 18:49Speaker 04

  Okay.

• 18:50Speaker 03

  So to make either business truly sellable at high valuation, it would take me years of operational restructuring, recruitment, reducing owner dependence and building systems. And even then, the multiple would be low because service-based product businesses don't scale without heavy ongoing input. I want to move into SaaS.

• 19:14Alex Hormozi?

  You think, you think this is hard? And so you're like, you know what? I could do something harder.

• 19:18Speaker 03

  Yeah. And so I guess that was the point of me coming to this seminar. Cause I know you talk a lot about like the woman in the red dress.

• 19:26Alex Hormozi?

  Yeah. Or man in the tuxedo, you know, whatever works.

• 19:30Speaker 03

  Obviously I'm fearful because it's not my niche and it's not what I specialize in. But I, obviously being in the industry, I definitely see a lack in the market and educating.

• 19:43Alex Hormozi?

  So what is the SaaS that you're trying to build or that you would want to build?

• 19:44Speaker 03

  So it's an online booking system for, well, the niche is for salons, but it can be used for service-based businesses.

• 19:50Alex Hormozi?

  There's so many of those.

• 19:51Speaker 03

  It's got AI built into it. And the, the difference between mine and say, everybody else's is it's essentially bridging the gap between revenue and profit. So giving like more of like a pull data rather than push. Having the AI built in as more as like a motivational business coach, which will give you the real-time analytics on your team, on your services, on your numbers, on your margins, like everything like that. Like for me personally, I spend every week calculating every single team member's revenue, cost of product.

• 20:25Alex Hormozi?

  Do you own a salon too?

• 20:26Speaker 03

  Yeah.

• 20:27Alex Hormozi?

  Okay.

• 20:28Speaker 03

  But the salon, so the salon and the wholesale run without me.

• 20:31Alex Hormozi?

  Okay.

• 20:32Speaker 03

  The salon does about, so the salon does about say 900,000 with 50% margin.

• 20:37Alex Hormozi?

  Great.

• 20:38Speaker 03

  And I'm happy with like, what, like I don't really want to scale salon. The wholesale year or this year has grown a hundred percent, but it's about 30% month on month.

• 20:47Alex Hormozi?

  What was the revenue of the wholesale?

• 20:49Speaker 03

  I think I'm just at 2.6.

• 20:51Alex Hormozi?

  Okay.

• 20:51Speaker 03

  So far.

• 20:52Alex Hormozi?

  And you have 30% margins on that?

• 20:53Speaker 03

  Yeah.

• 20:54Alex Hormozi?

  Great.

• 20:54Speaker 03

  So the financial overview for this SaaS, it's $500,000 build.

• 21:02Speaker 03

  Hundred and twenty grand a year to maintain, but it's serving my same audience, right? The stockists are already selling owners. They already buy from me. They already trust me. It's something that they want, use, have already subscribed to like the founders. Don't look at me like that. Believe in me.

• 21:22Alex Hormozi?

  I do, I do. I'm just trying to figure out which you to believe in.

• 21:27Speaker 03

  I'd only need a hundred and fifty subscribers to maintain costs, which I've already got. So if I had two thousand of my weekly stockists that already buy from me, subscribe, there's two million a year. It's fine, right? Tell me it's a good idea, please.

• 21:46Alex Hormozi?

  So much pain.

• 21:48Speaker 03

  You sound like Ed.

• 21:52Speaker 03

  I've been sulking all day.

• 21:54Alex Hormozi?

  So one of the difficulties that I have, like this is a, is a perfect scenario of telling someone what they want to hear versus telling them what I think. And I, Mois, it's, it's very fine line because I always want everyone to leave happy. But I also feel like I have integrity. Tough, right?

• 22:11Alex Hormozi?

  And so what I will do is I will give you a sorting question. You can pick what side you want. I can assume your position and then tell you what I would do, although I disagree with it. Or I can tell you what I think you should do.

• 22:23Speaker 03

  Okay.

• 22:24Alex Hormozi?

  Which one would you like?

• 22:25Speaker 03

  Tell me what I should do.

• 22:26Alex Hormozi?

  Okay, great. I think that.

• 22:30Speaker 03

  I'm going.

• 22:33Alex Hormozi?

  I think you getting into SaaS as somebody who has never built a software product and doing it where you're going to self-fund it. And just because you have a distribution base does not mean that you should sell every single thing that that distribution, distribution base can buy.

• 22:46Speaker 03

  What if I've already paid for it?

• 22:47Alex Hormozi?

  That's called sunk cost fallacy.

• 22:50Speaker 03

  So I just give up? I don't try?

• 22:51Alex Hormozi?

  Yeah. Some of the best money you ever spend is deciding to stop spending bad money.

• 22:54Speaker 03

  Okay.

• 22:55Alex Hormozi?

  And I say this only having done it myself. So I'm gonna, I'm gonna, I'm gonna hit from a couple of angles. So the first one is who here is organic as their primary method of getting customers? Like making content, et cetera? And it gets bigger and bigger every time. It's just the way it's. It's the way the world's working. So one of the big mistakes that people who have organic audiences make is that you grow an audience and then you sell a product and then people buy the product and you make money and that's a very reinforcing event. And so then, but they already bought the product. So then you think, well shit, I should make another product. And so you make another product. And then within two or three years, all of a sudden you have four mini businesses that serve the same pool of customers. When the real constraint of the business is you needed to grow your audience. And so the invisible beauty, or sorry, sorry, it's not, the extensions, whatever it is that you sell, right? The hair extensions that you sell, you're doing, you know, 2.6. And what's the, what's the ecommerce

• 23:40Alex Hormozi?

  side doing in revenue?

• 23:42Speaker 03

  Yeah, it's like 900.

• 23:43Alex Hormozi?

  900? That's what it's doing?

• 23:44Speaker 03

  Sorry, sorry. The salon is 900. The online is 2.6.

• 23:49Alex Hormozi?

  So, okay, so there is no, you said ecommerce at some point?

• 23:51Speaker 03

  Yeah, so ecommerce, I'm selling.

• 23:53Alex Hormozi?

  Is the wholesale?

• 23:54Speaker 03

  Online.

• 23:54Alex Hormozi?

  Is the wholesaling? Okay, got it. It's B2B on that side.

• 23:56Speaker 03

  I also sold a retail, wholesale and retail. So anyone can buy, but I do have stockists.

• 24:00Alex Hormozi?

  The vast majority is other stylists buying?

• 24:03Speaker 03

  Yeah.

• 24:04Alex Hormozi?

  Right?

• 24:05Speaker 03

  So Leila can buy from me, but also hair extension salon owners can register for a trade account.

• 24:10Alex Hormozi?

  And how many of the sales are trade accounts?

• 24:13Speaker 03

  It's about 50%.

• 24:14Alex Hormozi?

  It is? Interesting. Okay. So anyways, back to this point, which is that that business is not, not sellable. I just want to be like, you said, like, ready to start it. You're like, it's not sellable. It's operational. It's like, that's, I mean, not necessarily true kind of at all. You just need to get more customers. And extensions are a reoccurring product. Like, people buy them every eight, 16, whatever the weeks are, you know, whatever the, you know it better than I do. But I know I've seen the bill. So it's not one time. I'm sure about that. So, so all that to say, like, all we have to do is just like, you have now encountered the big hairy problem that I talked about at the beginning of today, which is that you encountered something that you didn't know how to solve and then are thinking, okay, well, there's greener pasture over here. There's a girl in a redder dress.

• 24:59Alex Hormozi?

  And if I go here, surely this grass will not be fertilized with shit. But it is indeed full of shit and significantly more shit than what your current business is. The current business is actually way more chill than the business that you're trying to get into. And the business you currently have is way more cash flow positive than the one you want to get into. The business that you want to get into, you will not make money from for many years, if you ever make money from it. So if you want to win at software, you have to commit to making no money for basically seven years. Zero. And the people you're competing against don't have two other businesses.

• 25:26Speaker 03

  I guess like my limiting belief around like I've got a very lean business. So I built a property. Couple of years ago, I ended up moving out and I run the wholesale and the salon from that house. And my expense for this salon and the wholesale is 500 bucks a week. So it's very lean.

• 25:42Alex Hormozi?

  Yeah.

• 25:42Speaker 03

  So I think for me.

• 25:43Alex Hormozi?

  So you're good at running that business.

• 25:45Speaker 03

  Yeah.

• 25:46Alex Hormozi?

  You should do something totally different.

• 25:47Speaker 03

  To scale. I'm like, I'd need to increase my pricing and I'd need to obviously move into.

• 25:53Alex Hormozi?

  On the extension side, you mean?

• 25:54Speaker 03

  Yeah, like my margins are too small for me to be able to scale at the margin set.

• 25:58Alex Hormozi?

  So why don't we just do that?

• 26:01Speaker 03

  It's like if I can.

• 26:02Alex Hormozi?

  Because you thought starting a software company would be easy?

• 26:04Speaker 03

  Well, I thought that having like a risk, uh, sorry, a reoccurring.

• 26:08Alex Hormozi?

  You do have a reoccurring business.

• 26:10Speaker 03

  Product that I would use as well.

• 26:14Alex Hormozi?

  So reoccurring and recurring, right? Have the same value. What we need to demonstrate is revenue retention.

• 26:21Speaker 03

  I would just like to make money online while I sleep and I don't want to work anymore.

• 26:24Alex Hormozi?

  That's fine. Software companies is certainly not the way to do it.

• 26:29Alex Hormozi?

  Probably the worst way to try to do that. Like, we just need to confront the business that you have right now. You need to improve the margins. And you need to go get more acquisition. So that probably means like making more content, running ads to attract. Stylists, having some sort of offset front end to get them integrated. How can you run some sort of play within their, you know, salons?

• 26:50Alex Hormozi?

  Trying to use your vernacular.

• 26:53Alex Hormozi?

  To, you know, basically make them more money using your extensions. And then by doing that, then they get converted because they make more money selling extensions than cutting color. And so it's very likely they'll keep selling it. And then you have, basically, you have a hunter and a farmer. The hunter is the one that basically closes the deal and gets them to kind of activate their base of, of. Ladies, I guess. Maybe there's hot guy.

• 27:12Speaker 03

  It's just like the constraint of the wholesale is the production time and the capital. And again, like my logic was, well, if I was to invest the same $500,000 into the wholesale, that's a $150,000. Margin, whereas I thought, well, if I invested it into subscription.

• 27:30Alex Hormozi?

  You would just lose all of it.

• 27:33Speaker 03

  Maybe that's your limiting belief.

• 27:37Alex Hormozi?

  I've built more software companies to a billion than you have.

• 27:43Speaker 03

  Okay.

• 27:44Alex Hormozi?

  All right. Two can play at that game.

• 27:48Speaker 03

  Okay.

• 27:49Alex Hormozi?

  Do you want my help?

• 27:50Speaker 03

  Yes.

• 27:50Alex Hormozi?

  Take my advice.

• 27:51Speaker 03

  Okay. I should do it.

• 27:55Alex Hormozi?

  Thanks, Amanda.

• 27:56Speaker 04

  My name is Sasha. I sell designer bags and sunglasses.

• 28:00Alex Hormozi?

  Cool.

• 28:00Speaker 04

  And we do about six million a month. No, sorry, a year, sorry, six million a year.

• 28:04Alex Hormozi?

  Still cool.

• 28:06Speaker 04

  And I would like to do thirty eight million.

• 28:10Alex Hormozi?

  Precise.

• 28:11Speaker 04

  Yeah, thirty eight million.

• 28:12Alex Hormozi?

  Okay.

• 28:13Speaker 04

  And what's stopping me is recruiting.

• 28:15Alex Hormozi?

  Why thirty eight?

• 28:16Speaker 04

  Just because I figured, you know, a hundred thousand a day, something like that, round up, down, something like that.

• 28:21Alex Hormozi?

  Okay.

• 28:22Speaker 04

  It was just a roundabout. And, I mean, obviously more.

• 28:27Alex Hormozi?

  Yeah, okay.

• 28:27Speaker 04

  But I was thinking thirty eight would be fair.

• 28:30Alex Hormozi?

  Yeah, that works.

• 28:33Speaker 04

  And it is just recruiting.

• 28:34Alex Hormozi?

  Recruiting is the bottleneck, as you're saying?

• 28:36Speaker 04

  Yeah.

• 28:36Alex Hormozi?

  Okay, got it.

• 28:38Speaker 04

  My house cleaner was my first employee and she just, and because I consumed yours and Lila's content so much that I was like, I'm gonna be these two people in one. That's me. I'm gonna be these two people. And as a result, I have a great team, a really great team. And it's just a matter of being militant in the recruiting process.

• 29:00Alex Hormozi?

  Okay.

• 29:01Speaker 04

  The, we do sell on whatnot quite a bit.

• 29:03Alex Hormozi?

  Who do you have what's stopping you?

• 29:06Alex Hormozi?

  So you make money, six million dollars if you're selling handbags.

• 29:09Speaker 04

  And sunglasses.

• 29:10Alex Hormozi?

  And sunglasses. For you to sell more handbags and sunglasses, you need more people to do that?

• 29:15Speaker 04

  Yes, because we, we only go live for about five hours a day because we get tired. It's just me and, well, me and, I have three salespeople, but it's just we get tired. We could, if we were live more often, we could create more.

• 29:29Alex Hormozi?

  You're going live on like your Instagram page or your what?

• 29:33Speaker 04

  On whatnot.

• 29:34Alex Hormozi?

  Okay, got it. And do you have like a big following there?

• 29:36Speaker 04

  A hundred and ten thousand, a hundred and thirteen.

• 29:38Alex Hormozi?

  So you're just selling to that same base? And if you just sold for longer, you would make more?

• 29:43Speaker 04

  A lot more. I could do a hundred grand in the show.

• 29:45Alex Hormozi?

  Okay. So you just need like two more salespeople who are going on camera?

• 29:49Speaker 04

  But yeah, and then the recruiting as well.

• 29:53Alex Hormozi?

  Recruiting for what?

• 29:54Speaker 04

  Packing, because we do a lot of.

• 29:57Alex Hormozi?

  You do your own three PL or not third party, but like you do your logistics? Hmm. Why?

• 30:03Speaker 04

  Why do we do it ourselves?

• 30:04Alex Hormozi?

  Hmm?

• 30:05Speaker 04

  I didn't, I didn't know you can have other people do it.

• 30:08Alex Hormozi?

  Boy, oh, boy. Yeah.

• 30:13Alex Hormozi?

  Step inside. Uh, yes. So, so functionally, like, because of the nature of the business that you're in, um, we have to think like, because we have to, we have to consolidate resources. I'm not normally somebody who's like, let's, let's cut, you know, parts of the business out. But unless your shipping is some key differentiator that you have, like, Amazon shipping became a competitive advantage, right? But unless that's like some differentiator, then shipping for the most part is pretty commoditized. And there are people who all day long, they think about like saving 15 cents on cardboard boxes and tape and packing peanuts and all that shit.

• 30:48Alex Hormozi?

  And I think that that, you having to like, think about that and run a, functionally a warehouse at the same time as running a marketing and sales and talent business slash media. That's not where the value is. The value is in the distribution and the sales. And so I would say like, can we outsource this, the logistics part? So that you can just go all, because all we had to do is you get two more salespeople and you get to a hundred thousand a day. We should do that.

• 31:16Speaker 04

  So, um, we have to physically show the product, like.

• 31:21Alex Hormozi?

  Well, no, I'm not saying you don't have like some product on hand. You just don't need a warehouse.

• 31:26Speaker 04

  No, we do need it because it's like, go, go, go, go.

• 31:31Alex Hormozi?

  Okay.

• 31:31Speaker 04

  Feed. We run probably about.

• 31:34Alex Hormozi?

  So you're like, we sold this item to this person is how you do it?

• 31:37Speaker 04

  Yes.

• 31:38Alex Hormozi?

  Okay.

• 31:38Speaker 04

  So.

• 31:39Alex Hormozi?

  Got it.

• 31:40Speaker 04

  It's kind of like a warehouse. It's, yeah.

• 31:42Alex Hormozi?

  Okay. That's fine. Um, all right. So you just need to hire more people. So what's stopping you from hiring more people?

• 31:47Speaker 04

  The talent.

• 31:49Alex Hormozi?

  The talent to hire more people?

• 31:51Speaker 04

  Well, I'm, I'm learning now. That's why I'm here.

• 31:53Alex Hormozi?

  No, no, you're good. You're good. So I'm saying like, you have two sets of roles. You've got warehouse folks and you've got people who can get on camera. Right? So what are you currently doing to get each of those people?

• 32:04Speaker 04

  Well, we had ads on Indeed.

• 32:06Alex Hormozi?

  Okay.

• 32:06Speaker 04

  But I didn't realize how militant it had to be until I came here. It's, it makes a lot of sense, right? And I know that there's that many interviews that were required. Um.

• 32:16Alex Hormozi?

  And that's more for the warehouse side, correct?

• 32:18Speaker 04

  Both, because sales is.

• 32:21Alex Hormozi?

  I think that you'd be able to find salespeople, like, I would probably look at Amazon affiliates.

• 32:27Speaker 04

  How much would you pay them?

• 32:29Alex Hormozi?

  Percentage.

• 32:31Speaker 04

  Well, that's the thing. So, okay, so it takes skill to do what we do.

• 32:35Alex Hormozi?

  Yeah.

• 32:35Speaker 04

  It takes skill.

• 32:36Alex Hormozi?

  Agreed.

• 32:38Speaker 04

  Like, for example, my girl is better than me.

• 32:41Alex Hormozi?

  Great.

• 32:42Speaker 04

  She's better than me. And not only is it mother's skills, it's presentation and entertainment.

• 32:48Alex Hormozi?

  Dude, I, I get it.

• 32:51Alex Hormozi?

  I understand. I did a live for three days. I got it.

• 32:57Speaker 04

  Uh huh. So finding and training that, that's definitely a process and takes time.

• 33:02Alex Hormozi?

  Yeah. The question is whether you want to buy or build. Do you want to buy the talent or build the talent? Building the talent is cheaper, takes longer, harder. Buying the talent is faster, more expensive. Which one do you, which one feels right for you?

• 33:15Speaker 04

  So we are profitable per show. Yes.

• 33:18Alex Hormozi?

  Okay.

• 33:18Speaker 04

  Profitable per show.

• 33:20Alex Hormozi?

  Uh huh.

• 33:20Speaker 04

  But sometimes what ends up happening is, like, let's just say it's a Wednesday.

• 33:25Alex Hormozi?

  Are you on cash-based accounting or accrual? Probably cash.

• 33:28Speaker 04

  Yeah.

• 33:29Alex Hormozi?

  So you might like, if, basically if you run a physical products business,

• 33:35Alex Hormozi?

  which you do, here, you're like, okay, we made money. Now let's take all of that profit, gross profit that we had and go buy more shit so we can sell more shit. Right? Right. So this is where like, you probably have, what's your, like, what's your financial, the financial side of the business, the financial ops look like?

• 33:52Speaker 04

  My accountant handles it.

• 33:54Alex Hormozi?

  Your who?

• 33:54Speaker 04

  My accountant.

• 33:55Alex Hormozi?

  Oh, your accountant does it. Okay.

• 33:56Speaker 04

  Yeah.

• 33:57Alex Hormozi?

  You will need to have soon, a relatively strong finance person, who can give you better forecasting so that you can, it's not just like, how much cash we have in bank account, let's go buy more shit. It's like, we can only afford to buy this much, given this growth rate that we want to have. Otherwise, you will get into these probably cash crunches that you're feeling right now. It's not that the business isn't profitable, because I'm guessing the headcount's not super high.

• 34:20Speaker 04

  So our shows will make anywhere from like five to seven thousand profit, depending on like the volume that we did that day. So we know the profit like per show. However, that's where the skill comes into play. Like if a show's not going well, we need to have that person trained to be able to do the, do the thing. And, and so that's why not knowing how much to pay them is the concern.

• 34:41Alex Hormozi?

  Doing a percentage would make sense.

• 34:43Speaker 04

  Percentage of profit.

• 34:44Alex Hormozi?

  Yeah. Like a salesperson.

• 34:46Speaker 04

  Okay.

• 34:47Alex Hormozi?

  And so you can buy or build that, right? So you buy it as I would just go to mini micro influencers who are already like on Amazon hawking stuff and be like, well, they already do live streams and they already do sell shit. And I bet I could teach them to do this for me. That is a buy version because you already know it's already proven. You're just saying, hey, do it under my umbrella. The build version is that you have to kiss a lot more toads and try and look for who has already built in a bunch of soft skills. And then you can hire for the small skilled efficiency that you know how to train.

• 35:19Speaker 04

  Okay, so Amazon affiliates.

• 35:21Alex Hormozi?

  Well, you could do either, but like, yeah, I mean, obviously this is going to be a lower risk thing and then you just have to have some agreement that they're going to only sell for you for X period of time.

• 35:28Speaker 04

  Like a contract.

• 35:29Alex Hormozi?

  Like a contract.

• 35:30Speaker 04

  Thank you.

• 35:30Alex Hormozi?

  Yes. But I would, but big picture, because I want to make sure that you're good. The Indeed warehouse stuff, that's just like commoditized. I mean, you have a warehouse, maybe you have to have it for your business, but like, I don't see that as like, that's not a core differentiator. You might, you're not different because you have a warehouse behind you. That's not special. So the roles that you have there, it's like, they need to be like, have a pulse, have a good leader there, let them just deal with it. Your, your star factor is going to be your ability to train people to sell. And so that's like, where is your, what is like, what is the true pinpoint of where the most value gets created for you as the founder, the entrepreneur, is that you need to be able to take somebody and teach them to sell.

• 36:10Speaker 04

  I, yeah.

• 36:12Alex Hormozi?

  Right. And you have to break it down in, in terms of the most concrete language you possibly can't. And so think of everything purely in terms of behavior and do, do not use any amorphous words. So it's like, I need you to have higher energy. That means nothing. I need you to raise your voice. I need you to talk faster. I need you to have your shoulders back. You have to describe things that people can see and then other people will describe them as having high energy, having charisma, having confidence. And so if you want to teach someone to present, you have to tell them what to do with their body and their voice and it will be far faster for you. And what you'll find is the training lap, the reason it takes so long for people to train or they can, where they can't train, salespeople or presentation people is because they literally do not use words that other people understand.

• 36:58Alex Hormozi?

  Like this is the problem. This is why most companies cannot teach people to do shit. Because they say, have more charisma and then the person listens and is like, I'll translate that into what I think charisma means, which who fucking knows what they think it means, right? And then we're just playing this telephone game where no one agreed on what are the behaviors I want you to do. That will compress the amount of time that'll take you to get some one up to speed and two, long-term, if you can develop the sales training, then you can have a stable of stallions that are on 24/7 for you, working in your, in your barn.

• 37:28Speaker 04

  So that

• 37:29Alex Hormozi?

  I don't know why it's animals now, but let's go with it.

• 37:31Speaker 04

  So that, that's actually, that brings up a good point. So I, I have, so my girl, like I said, she's my house cleaner, shows up at my, my door one day. She's, she's like, hey, I want to be you.

• 37:44Alex Hormozi?

  Yeah.

• 37:45Speaker 04

  And she's like, I'm a copy and paste of you. And she became me.

• 37:47Alex Hormozi?

  Yeah.

• 37:49Speaker 04

  Now there's a little bit, like, a little bit of a, how can I, because obviously I had to learn the care part, like, from Leila. So I learned the care part. And now I have it. But then I've seen her, I mean, I've seen situations, kind of like, not go the way that they should, because she's too, she's a copy and paste of me from yesterday. So I'm starting to see those.

• 38:14Alex Hormozi?

  What's the problem?

• 38:18Alex Hormozi?

  Would you put her in front of the camera, have her sell, and get her out of the building? If like, if she can sell.

• 38:23Speaker 04

  Yeah.

• 38:24Alex Hormozi?

  So let her sell. Don't have her manage people. Have her sell.

• 38:27Speaker 04

  Got it. Understood. Thank you.

• 38:30Alex Hormozi?

  This is good talk. Yeah.

• 38:33Alex Hormozi?

  Real quick, I have a gift for you. This is the $100 million scaling roadmap. It's something that my team and I put 200-plus hours into building and breaking the stages of scaling into 10 steps. All right. And so what we did is we broke down everything that got us, basically got us stuck and what we did to break free at each level of the business. And if you'd like to know what product, marketing, sales, customer service, IT, recruiting, human resources, and finance look like at the stage that you're currently at, this is a free gift. So all you have to do is go to acquisition.com/roadmap. You can plug in your business information. And if you want our help, you want my help to help you break through whatever level of scaling you're at, this is not a promise, I'm just saying I'd love to help. On the thank you page, you can book a call. Every month, we have a workshop out here at my headquarters. You actually talk to my real team that does, does our marketing, does our emails, does our

• 39:17Alex Hormozi?

  ads, does our copy, does our, does our, does our sales, does our finance, does our recruiting, the real people who do this at a very high level. And what's really cool About that is that they can typically find and spot what the constraints are in a business like that. And so it's one of the most valuable things that I could possibly do. Obviously, you know, space is limited based on our actual headquarters. But if that's interesting, on the thank you page, you can book a call. No pressure. This is a gift either way. It's absolutely free.