Setting the Foundation: May 2020 Brand Update

Dave Nash

Hi everyone. This the first of many posts outlining the strategies and struggles of building my DTC beauty brand. For me, this practice will serve as a log of what I was thinking at certain points in my life. For you, these posts will allow you to see into the process of growing a 7-figure DTC company. To future readers: this is where it begins. I hope you enjoy the journey :- )

Where the brand currently stands

Let’s start with a shopify screenshot and I’ll explain it right after.

Feb 2019 – May 2020 Shopify Revenue

I started the brand in Feb 2019 with my business partner, Josh. It started as a dropshipping store, but quickly moved to a bulk order + 3PL logistics model after validating the winning product (more about this process in a future post).

Since then, it has done about $500k in top line sales, with most of the revenue coming from April 2020. A few factors played into this massive, and semi-unexpected growth. Obviously, COVID hit and the country was forced to stay indoors. Our products are meant to be used inside of the home, so demand increased as the number of people staying at home also increased. Around this time is when we decided to go all-in on the brand and re-invest a good chunk of the earnings back into the brand in order to improve a variety of aspects:

What happened in May of 2020?

We ordered $50k worth of inventory, at cost, to arrive in the US.

Up until now, our logistics model was sourcing inventory from Chinese manufacturers off of Alibaba and storing the inventory in a Shenzhen-based 3PL. Now, we are weening away from the Chinese 3PL and will begin utilizing an American 3PL moving into June.

The reason we utilized the Chinese 3PL in the first place was for a couple of reasons:

  1. Fastest possible switch from a dropshipping model to utilizing a 3PL. Using a US-based 3PL would delay that goal by 3 weeks.
  2. We thought that international orders would be a larger chunk of our business. In this case, China-based 3PL is better from a cost perspective because international shipping from the US is expensive. (We later found out that US was our primary market.)

Paying a Chinese supplier, whom I’ve never met, the equivalent of my old after-tax annual salary seems like quite the bold move. In context, it’s the only move that makes sense. We need to take risks in order to grow the brand in a massive way. Ordering 1-2 months of US-based inventory is simply a prerequisite to implementing a full-fledged growth strategy.

We started asking for help.

Prior to April 2020, this brand was a two-man show. Just two co-founders casually running a low-maintenance, 1 hour-of-work-per-day company. After watching our revenue explode in April 2020, and realizing the potential of the brand… we decided to take it a lot more seriously.

So, we on-boarded two virtual assistants based in the Philippines to help with CS + fulfillment.

We worked with a packaging designer and website designer to improve our brand image and visual impact.

We reached out to a dozen agencies in hopes of starting assistance in some marketing channels I’m not as experienced in, namely paid search + SEO + email marketing.

We’ve started working with a couple of product photographers to create amazing assets to be used on the website, socials, and email marketing.

We reached out to influencers to partner with so that we could drive traffic as well as acquire solid user generated content (UGC) for both social feeds and facebook ads.

We invited Fiverr gigs to work with us to make great content for our paid social ads.

Suddenly, a company that ran itself has turned into a multi-faceted beast requiring our full attention.

We spent too many hours sending DMCA’s and copyright infringement notices.

If you do a boolean search for any sentence in our product descriptions, you’ll literally find dozens of carbon copies of our product pages, copy and assets included.

I was forced to report these copy stores to Shopify through their DMCA submission page. One store in particular would not give up, even after their product page was taken down over and over again (not sure why Shopify wasn’t banning them after 8 infractions). They are still advertising to this day.

What’s next?

We’re currently waiting for the inventory to arrive through both the air and the sea. The first SKU out of seven SKUs has arrived in our US based 3PL. Within the next 2 weeks, we should be seeing the rest touch down in the US, as they departed the China sea ports in mid to late April.

We have a variety of marketing partners from influencers to ambassadors as well as photographers and fiverr gigs that are waiting for this inventory.

It’s a waiting game. Once the wait is over… 7-figure revenues will be right around the corner.

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Comments

  1. Incredible, so inspiring to see the growth from humble beginnings. What strategy did you use to launch the store in the beginning?

  2. Nice post and nice business ! Good for you 🙂 I was wondering how you found the products ? Do you buy them oversea and then rebrand them ? Or do you buy them as is in bulk and resell them with a markup? That part is still unclear to me. Thanks !

    1. Thanks! For some products I buy them overseas and rebrand. For some products I buy them overseas, as-is, and resell them as a markup. Both work depending on the desired outcome!

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