why you aren't able to scale your brand to $1,000,000/yr

if you aren't currently doing a million pre- in sales with your Ecom brand or Drp Shipping Store this video is for you I'm going to break down why you aren't able to scale to a million per year and give you some actual real business knowledge so anyways this is actually going to breakdown while you aren't able to scale a million per year because I was stuck there for a long time which will break down here and um there's a few keys and actually two of them only really that really took me from scaling to not really being able to get to a million pre or being stuck there going up and going down consistently to being able to consistently now do over a quar million a month running this brand for over 3 years now we're doing 3 million plus per year um and by the end of this year we'll be at like 67 total million Revenue so that's kind of cool and it's because I understood and fix these things so if you're trying to scale and you get stuck and you can't because you're stuck in the same Loop of what everybody preaches online of find a trendy winning product run some ads it dies go back to square one run it it dies go back to square one you shouldn't be doing that you should build a long-term brand that's sustainable that the producers profit profit fits for you consistently month over month for years years when I found out that my winning prodct quote unquote would always die I realized that there would be a better way and that better way is called building an actual brand and a real business that's built to sustain so here's why you aren't able to scale to a million per year so let me paint a picture of the problem many Brands face things are looking good you're starting to scale you are able to scale a bit and you increase your ad spend but after a couple weeks or days your profit margin drops off a cliff falling from 25% boom straight down to 5% you don't understand why you were trying to force scale your way up you're frustrated you want to scale I get it we've all been there and I've definitely been there many many times in fact for like years at a time and months for a time we're a long time in fact when I first started e-commerce it was like four years straight of just going broke losing all my money in my bank account trying to make it work buying courses Etc but you have to realize why this is happening so you understand how to actually fix it to then be ble to scale consistently so when when you fix the problem this is what it looks like once again scaled up a bit boom back down to zero then I'm like okay cool I figured it out this time I did it scaled up scaled up scaled up and then it went to fast it dropped hard from 200k a month all the way down back to like it was like 40K a month and I was stuck there for months and months and months I couldn't figure it out but then when I properly fixed this problem it's been consistent growth month over month since then continuously growing consistently consistently and very sustainable this is the key that I'm sure a lot of you watching want this you want to get 2 million per year but you want to be there you want to get there and you want to stay there you want you don't want to get there and then drop like I have to do here you want it to look slowly and all the way up like that okay so it really comes down to only two things one your creatives can't handle that scale when you're trying to scale and two you rely too heavily on first order profit now these are Concepts you don't hear people online talking about why cuz either one they don't know them or two because they're boring to talk about but if you listen to this it will help you CU this is actual like proper advice that changed my business forever and quite frankly my life so first your qu can't handle that scale so here's an example here's your target audience you're trying to Target on Facebook with your ads and you should be targeting broad but that's for a different video here's your target audience when you try sorry and here's your low budget so when you're on a low budget you know you're reaching a small group of audience and maybe it's converting but when you try scaling and you expand this out and reaching a bigger and bigger audience a broader audience you're unable to convert them because your creatives aren't good enough to convert that broad audience right and you have to understand this because it means one your creators may not be broad appealer enough or two even if they are they're just not good enough to convert cold traffic and this is why the people who are able to scale to big numbers the fastest are great at marketing and specifically direct response marketing they're really good at that skill because this is how you convert ice cold traffic and you need to be able convert cold traffic to scale into a broader audience here if this pen works here hello there we go into a broader audience right this part here because know you're only targeting here and you expand outwards you need to be able to Target that audience and convert them now if you're watching this and you're not doing million per year yet most of your ads are probably just replicas of your competitors copy and paste versions of it or maybe you're changing some stuff here and there and that will not get you very far that that will get you to he that's it you won't go further than that that's it and most of your ads probably when you really look at them 50% plus of the ad is probably focusing on the product in fact more like 80% plus and what that is it's a product aware ad or a problem aware or most likely a solution aware ad it's not really an unaware ad that's actually converting a colder audience problem aware ads will do this better maybe with a problem Weare ad you'll get to like this part here maybe but realistically most of the ads are probably running if you're not a million per year yet or just solutionware or product aware ads and this is going to limit you cuz your ads only attract and convert people who know about the product or already know about a solution but to really scale and get into cold traffic and convert them you need winning ads for problem aware and unaware audiences and the better you get at converting those audiences the faster you'll scale and the broader of an audience you'll be able to hit and Target right you'll be able to Target out there and you'll be able to expand that outwards now the thing is the colder the audience you're trying to convert the harder it is to convert them this is why anybody with a decent product can put up a simple ugc ad copy paste from their competitors and get some sales like that part is not difficult because it's product aware and the algorithm so good it'll show you people who are interested in the product who are looking for the product who are in the market for the product and if your ads decent you'll convert them right but to actually scale and increase the ad spe you need broad appeal ads that convert cold audiences and if you aren't at scale it means your current creatives can't handle your current scale right if you continue trying to scale you try increasing your budget and it doesn't work and you can't scale and your CPA drops off a cliff your creatives aren't good to handle that scale and you need to have better broad appeal of creatives okay hopefully that here and this little explanation this beautiful egg looking drawing makes sense so what you need to realize is that to scale into a bigger B audience you need craves that convert that broader in colder audience this is why becoming good at direct response marketing is key you can also test landing page that help convert older audiences right realistically if you're talking to an unaware audience someone who's never even heard of the problem they even know they have a problem and you're trying to educate them you know you're not really going to go from hey you have this problem here's the solution here's the product please buy from me in one ad and get them to buy yes some people will but realistically this is where landing pages advertorials listicles and tools like this call them tools if you want come into play to help convert the colder audience because the whole point of these is they spend more time with you they watch more content they read more they get educated and now you take them from unaware to problem aware to solution aware it's a product aware to aware and then they buy you have to bring them down that funnel okay now converting underwar audiences is hard as I was saying it's not easy and requires lots of testing and this is why most can't do it and why most can't scale to big numbers because they continue testing these product Weare solution Weare ads and they just like have hundreds of them they only test that forever because they just don't know otherwise and then they can't scale and they're like oh my product died like no you just need ads that are brought up heel that can actually scale and the best thing is too side note is when you could actually crack like the unaware and problem aware ads that are colder audience they last a long time a long time because if you're in a broad market right and that ad converts the traffic cold that ad will run for a long time and work very well especially CU most of your competitors aren't able to do that so it's it's kind of like a blue ocean it's a blue ocean where it's super difficult to crack into but once you do it scales you big and it works very well very well okay now it's hard and that's exactly why you should do it because that itself is a moe right that itself is a moe that you can get into now you need multiple ads with multiple angles in your ad account because this lets it scale horizontally by reaching different pocket audiences so you should have multiple versions of winning ads as this gives Facebook more options to work with you aren't going to scale to 10K per day and spend with one ad maybe if you have some magic ad that's insanely insanely good then maybe but I've never seen a case where someone's spending that much per day with one single ad in their ad account right you need multiple versions because it gives Facebook's more options to work with and different ads with different messaging attracts different Target audiences and different pockets and that's how you scale horizontally because we should be targeting broad now you need to look more full funnel versus individual ads do you have ads covering all stages of awareness are they all working well which can be improved the most as I was say here's another illustration for that here's your total target audience add one maybe targeting this part add two add three at four and they all target different Pockets based off of the messaging in the ad the Avatar in the ad the script Etc this is why your messaging needs to be clear as then the algorithm will show your ads to those people based off of how clear the messaging is in that ad so when you're messaging super clear the algorithm will have an easier time showing your ad to those buyers of what's looking for which is also why once again because the algorithm is really good if you have an ad let's call it ad two here and it's more solutionware it's like uh let's pretend it's like a dog product or something you have uh dog parents are going crazy over this new bed then you say wow here's the new bed Feature Feature benefit benefit social proof great CTA and that's your ad well it's very product focused and so it's going to convert because it's product focused and will convert pretty well but at low scale right because the target the the pocket audience is targeting Facebook is giving that to people who are interested in dog beds so of course it's going to convert but how many people are in the market looking for a dog bed right now a decent amount and that's why you can get to a decent scale but if you want to get to massive scale Millions per year six figure months 500k plus per month Etc you need to crack into the market of uh dog anxiety or dog health or whatever that's a broader Market where then you could bring people in educate them and then sell them on the dog bed right so hopefully that's making sense so your creative testing SL content output increases as you scale that's another important Point as you need even more new content new ads Etc to not just maintain the same scale but then scale even further so for example when for starting out you can get away with testing four or six ads a week when spending a couple hundred a day but you will hit a cap and then you need to increase that to 10 plus 15 plus Etc in other words as you scale your creative output also needs to scale so once again if you're spending 100 bucks per day and you're three ads that may cut it for you but then to scale to $500 in ad spend per day you may need four or five right and not necessarily the number of ads you don't need more number of ads live in the ad account but your testing needs to increase if you're spending $1,000 a day versus 10 grand a day you need more new content more creative output to supply the ad account to not only maintain it but then to continue scaling this is why the biggest brands are testing hundreds of pieces of content every single week you go look at the ad library of pet lab Co DrSquatch he hexclad Ridge they have lots of creatives and they're consistently testing a ton for that reason because they're spending a ton and you need to increase the creative output as you scale now you may have heard me say this before if you seen another video of mine but 99% of the time when I talk to Brands and they are struggling to scale you just aren't testing enough you just aren't testing enough you need to be testing a lot and consistently you cannot just take a product rip three ads four ads and be like oh no it doesn't work oh my gosh e-commerce dead oh my gosh it doesn't work like that please people it's not 2016 it's not 2014 Drp Shipping come on please put some effort test more it is incredible how little people test and you could pretty much beat 80% of the People by just out testing them like that's it if you out test people you will win and people are not testing so just Test Pro tip of the day for you there now secondly you rely too heavily on first order profit so ad platforms are only getting more expensive and whoever can spend the most will win plain and simple so for this reason you need to realize that 78 figure Brands aren't making the majority of their profit on the front end when acquiring new customers they make their profit on the back end which means they don't need to profit as much on day one and therefore can spend more and that means they win right this increases their scale it lets them outspend competition and make even more money on the back end and this is why Brands doing Millions per year like myself run their new customer acquisition at break even or close to break even which often means running actual the channel of Facebook at a loss loss and quotation marks and here's an example to illustrate this so we have scenario one we got Bobby and scenario two we got Chad we got we got a Chad who's Chad scaling over here right some giga Chad now scenario when we got Bobby so day one this is getting a new customer one purchase let's say your aob is 100 bucks cost you $25 and you have a cost per purchase of 55 you're left with $20 profit 20% yay go Bobby amazing now in this scenario Bobby has no returning customers and no backend in place of his business he only gets purchases from Facebook and needs to make all of his profit on day one right all his only his only profit comes from new customers on Facebook and so all his profit is just aov minus cogs minus CPA equals his profit this is where he makes his profit so he needs to profit 20% on the first purchase to make 20% profit pretty straightforward with me so far so pretty much the result of this is he can spend up to a $55 CPA this is his Target let's say because if he spends up to a $55 cost per purchase he makes 20% if he goes over it he makes less now in other words he has to run his ads at a 1. 8 row ass to make 20% profit so if he spends 55 to get back 100 he has a r of 1. 8 and that gives him the 20% profit so he has to run his ads at a 1.

8 ra okay with me so far so Bobby here which is most of you watching this needs to run at a 1. 8 to make 20% profit your break evens maybe a 1. 4 or 1.

5 or 1. 35 whatever and you need the 1. 8 or 1.

9 or two whatever it may be with your numbers to make 20% profit now here we have gigachad and gigachad understands this concept which you'll see here and day one of acquiring a new customer he has the same aov the same cogs but he spends up to $75 versus 55 and he makes zero on day one and you may be saying how is this gig Chad big brain plays so stupid anyways and I'll explain to you here so he makes Zar on the new customer but the same day because he has email flows and Google search and organic and he has the back end of his business built out he has returning customer Revenue so we also has someone come back and buy again and the aov of this purchase is 75 let's say as an example it's a different product let's say it's 75 bucks the cogs is 20 and CPA is zero because it's a returning customer he didn't have to spend money on ads to get it so he profits on this purchase here $55 and you can see overall total sales for the day the 100 and the 175 you got 175 and the total profit for the day is 55 he made zero here he made 55 here his total profit for the day is 55 so he has a higher cost per purchase he spent more to get the purchase 75 and he made zero and yet somehow he still ended up with more profit and more sales how does this work right well in this scenario the experienced gigachad understands that having returning Revenue means he doesn't need to profit as much on the front end so he has built out a great product and the back end of his business to get returning customers and the result is he can spend up to a $75 CPA and still make the same SL more profit in other words he can run his ads at a 1. 33 rash and still make the same profit at a 1. 33 R Us right spend 75 to get 175 I mean sorry spend spending 75 to get 100 and he breaks even at 1.

33 he spent 75 to get 100 but he still makes 30% overall profit that is why you need to build up the back end of your business if you fully rely on day one ads and day one profits you simply won't scale because guess what I have my business set up like Chad Chad told me to do this and I listened and then I ended up scaling versus everyone is a Bobby and Bobby is not making money and he's having trouble scaling because he could only scale to a 1. 8 R but I can scale to a 1. 33 row and who's going to win the person that can spend more and let me tell you if you could spend to a 1.

33 Ross on Facebook versus a 1. 8 you will be able to not be able to spend just a little bit more you'll be spending a ton more a ton more okay and with more spend means the back end does better it means you have more returning customers which means your profit grows which means your other channels get better which means your ads learn faster which means everything improves as a whole as well you have more learnings testing gets done faster and you scale even faster because of it as well so this is how big Brands scale their Facebook quote unquote at a loss or break even and they run out a 1. 33 1.

2 1. 1 1. 4 whatever it may be and yet they still make 20% 30% profit on their business even though they're breaking even or close to break even or just losing money slightly on acquiring a new customer this is how you win you spend more and this is how you do it and you have to understand this and you need this in place and so if you're trying to scale and you can't and you're stuck right and you're not able to get to a million per year One have creatives that can actually handle scale that are bought a peal and convert at scale and two make sure you actually have your back end built out you can't just you ecom's getting harder day by day you can't just take a product steal some ads run it and be like why am I not making money and have a million dollar business it doesn't work like that it doesn't work like that anymore it's not 2014 it's not 2016 you need to build a backend of your business and have some sort of actual returning Revenue there or email flows and stuff like this to actually get some Revenue back and it's not difficult you just need to put it in place okay and when you do this you're able to do this and this is how you spend this is why people can copy my ads they can copy my products and they can try running the same thing and then they go to a business two months later and yet three years later I'm still running the same ads and the same product and the same offer and scaling because of this okay so this is a key concept that took me way too long to understand you need to understand this if you want to build a long-term cash flowing brand you do not want to rely on day one profits not only will you increase your sales and profits by building up your backend and and not relying as heavily on day one but it will let you spend more spending more means your other channels will improve like Google email SMS organic Facebook will get better faster you'll get through creative testing faster you'll find new winning creatives faster you'll get through split test faster Etc essentially everything will be able to improve faster due to the increased traffic which then compounds you into being able to scale even more you can see how this compounds Bobby here is stuck at 1.

8 trying to be like Oh yay Facebook making new ads 1. 8 yay scale a little bit wow but meanwhile gigachad is scaling spending more to 1.