The 8 Biggest Stories In 2024 For Ecommerce transcript

the biggest stories of 2024 we are here to talk about them right now looking back on the Year this is hopefully be some fun listening for you kind of maybe in the midst of your holiday travels let me and my good friend Andrew Darion who I texted this morning and said do you want to talk about the biggest decom story in 2024 udarian has some of the clearest perspective on anybody on the current e-commerce spacee because he is the founder and CEO of e-commerce fuel so he is constantly in the mix with many many more e-commerce Brands than I am how you doing and oh great uh thanks Mr Ferris and by clear's perspective you mean there was four other people you asked nobody could make on short notice and I had nothing going on this afternoon but I am regardless stoked to be here to do this so this will be fun thanks for having no I racked my brain thinking like who who do I want to do like wide Sweep with the landscape with I thought like you you do I mean how many how tell people about e-com like how many people are in e-commerce fuel or what can you say about sort of the size of the community because 7 figure store owners mhm uh we have about a thousand members uh Ballpark and yeah seven eight figure and some nine fig nine figure stores and yeah and yeah it's a good it's a good uh good barometer I think for what's going on so yeah so you you have a broader mix than just like who I see tweeting which is probably not that fair of a a mix you know so um all right everybody should right now stop what they're doing go join e-commerce Fiel it's the best I've been in it for a long time it's fantastic and uh e-commerce live is the best conference in the game so um it's like the only one I try to go out of my way to go to so there you go um Daran let's talk about the biggest e-commerce stories of the year I have eight that I would really like to get to we'll see how much time we have and then maybe some rapid Fires at the end um but uh let's start with um inflation this sort of the obvious one I think um because uh it is the biggest macroeconomic issue in our space um so inflation slowdown and uh the FED cutting rates the availability of capital in the e-commerce space the buying power the consumers have are all tied up in this I'm going to give you a couple of numbers that I saw just to sort of put this in perspective and then you tell me what you think of it and see about it and you're much better at thinking about Finance than I am so you probably we'll have better perspective here fast I'm going to set you up just to say that's true uh but um the inflation peaked in the US over 9% in July 2022 this best numbers I could find um but in November the number I saw was that it was down to 2.7% and and the target inflation rate is 2% of course um with the FED starting the year at rates Benchmark rates being between 5 and a quar and 5 and a half percent and it's down a full point over the year so around four and a half percent now that's a pretty big change theoretically it will get cut more I think poly Market says that it will will get cut more soon um in all likelihood uh I could double check that but um but you know as far as like availability of capital we had this moment in e-commerce where it was like a zero interest rate environment um m&a had slowed down a whole bunch there's all kinds of implications of this where does your mind go with the state of inflation and the fed and all those things man you know how to get me hot and bothered R out of the gates here farious inflation let's talk about it um well it has to be the biggest story of the year right in some ways like CU it's it's the thing that affects every brand we deal with oh it's super important so inflation is interesting obviously no one knows the future there's a lot can go on here and apologies if anyone else uh caught Bill and M's episode and we we were talking about this but you look at uh no apologies go listen to it yeah look at Jerome Powell and he he's been huge man crush on him he has just navigated being fed chairman so beautifully uh through if you look at the US economy it just the US economy is ripping relative to almost everywhere else in the world uh stock market is on fire um doing really well and so you had this last year where you had a couple cuts um with with this last year and a lot of people were thinking hey it's going to keep happening um I think Powell just this last week he was like Hey for projecting into 2025 he's saying like hey you might get a cut or two but that's about it so I think inflation for 2025 if you had to guess I think it really depends what happens with tariffs and what happens with Trump and we're going to talk about that here in a minute if Trump goes in if he throws Down The Gauntlet and I'm not sure I think Canada is our biggest trading partner I could be wrong like everyone wants to think it's China um but I think we actually we might I might want to fact check this but we import a crazy amount from Canada it's enough to be significant so there you go oh it's huge and anyway so I think a lot of this depends on if if if Trump is really serious about this and he I mean I he's got a track record of throwing stuff down and doing his best to follow through with it if he's serious about this or if he's using this as a nego negotiation to get other concessions and other things but um if I had to predict next year I would say we're going to see uh inflation probably stay the same if not tick up a little bit is what I would guess it's interesting I mean what do you what do you think of as the primary impacts specifically for e-commerce operators of both inflation and uh rate cuts from the FED um I I just checked by the way poly Market says by March 35% chance that there's a decrease though that won't put a big number on that so right now po Market saying maybe it'll stay for a little while but anyway what do what do you think the biggest impact is uh a couple things one inflation kind of drives rates to some degree um I think it's it's good and bad like if rates do go down um so you have inflation you have rates the higher inflation goes a good fed is going to is going to to raise rates to try to get those and cool the economy down bring inflation down if you do have inflation rates go up it's going to make borrowing costs more expensive right so like everything from credit cards to your merchant cash advantages to everything to get more expensive but if you're a business owner you're probably in a better shape than your average kind of like guy on the street or or gal on the street because you can raise prices um the thing is most people don't raise prices enough like that's probably the thing that kills people prices are going up you're getting squeezed on your margin from your suppliers but your ter ver ified to do it because you have these visions of your business imploding so if you have the guts and The Bravery to do it it's workable uh but I think a lot of people don't until they don't do it enough my tactical comment about this is that every time I've ever seen somebody talk about raising prices um on their store I think two things here like first of all tell everybody you're about to do it tell all your customers and tell them what the data is because that functions like a sale in terms of driving demand but it actually has the opposite effect in terms of driving brand value because what you're actually saying is that you're going to charge more for your products not less and yet it's still a discount for the customer so uh so like any fear you have about like discounting and driving negative brand value you're actually doing the opposite there you're telling people you're about to charge more for your product while at the same time giving them discount so it's kind of a great thing secondly I've actually never ever seen a mass wave of customers get mad about a price ra raise I've never seen it operators are very nervous about raising prices and and they're just oh our customers are going to care so much they don't care they don't they're not they they actually don't think about your business that much is the thing so um yeah so I think like to your point UD Daran like the then the ability to raise prices or or the fact that you should raise prices more often I think is is significant there um I really go ahead go ahead oh very quickly I think also you're spot on but you can even take that a step further and when you raise prices use it as a way to treat your vip's uh give them give them extra love you know so maybe you tell your your list hey we got 10% off prices rise you know maybe you tell your your VIP is your top 200 customers we'd love you want to take care of you not only we're going to give you 10% but here's a stackable 10 or 15% get it before next week because we you're awesome so yeah yeah I do think the availability of capital is a really big deal in our space um you know just making it cheaper to finance things like inventory especially um is is a really big deal and so lower rates is really helpful for that obviously um I think the other thing is the m&a market where it's just like for a little while their Capital calls were going basically unanswered from investors I think and and so it seems to me that there just weren't very many big exits I wonder if there's more debt available on the uh uh on the side of um acquirers of businesses um if that will allow them to go make bigger plays to buy businesses because they can afford to finance their purchases of businesses so not that they're purchasing all of it with that but um but yeah it does seem to me there's a real slowdown and a real um depressing of business valuations based on the fact that Capital got more expensive so there's so two sides um okay let's do number two totally unrelated to that let's go back let's go to something a little a little more narrowly in our space um let's talk about sendlane breaking on Black Friday um so this was a this was a pretty big story in our space this year actually because clavio doubled their prices a couple years ago um or whatever it was right sendlane at the same time was coming up at like half the price really good service so far as anybody could tell was being um was getting big sponsorships hosting big conferences they were on the operators podcast Sean Frank talked about how much he Lov Sun Lane for a long time Jimmy Kim really public guy and then it broke on Black Friday the most important day of the year for it to work and then there's been all kinds of followup afterwards in people being very frustrated with s lane and the interesting thing about this story to me is not that a piece of software broke at a bad time that happens reasonably often but the the effect of it outside of this has been uh that people are nervous and frustrated about the way D Toc influencer relationships work um so UD Daran you're a DC influencer tell me what you think I mean what do you like what do you what do you see uh as you sort of watch this unfold yeah a couple caveats one um we've had s lane as an event sponsor before um so Jimmy and the the team they're sponsored uh I that's just as a disclosure number two um I don't know all the drama I don't necessarily like digging through all the the dirty dirty laundry I stay away from I don't really care yeah apart from the I do think the concept is interesting that you bring up uh and I do think like I think the thing I will say is I try to be very I try to have high integrity with the money that we accept and with sponsors that we accept um I know you do too you're very intentional about that and I think that also allows content that otherwise wouldn't exist to be able to come out it allows podcast and things like that to happen but nothing will help you understand how money influences your perspective or even your ability to say something or your ability to not say something uh until you actually are in a position where you are taking money from a third party like anyone that says that money does not change how you act even in a small way has never taken money from a party and then had any kind of been put in a position where even it was incredibly subtle uh and so all that I think I think it is potentially a problem like for e-commerce F podcast one thing that we're doing uh in the new year at least by the end of January uh is is very likely not doing any sponsors uh for the podcast anymore partially for a convenience perspective uh our sponsors in general have been fantastic um and our current sponsor now zipify have nothing but good things to say about Ezra and the team there but it is the idea of being able to just say hey we you know from a podcast perspective agnostic on on the sponsorship side from a convenience from a I think attention spans also are getting shorter and shorter and shorter and shorter and delivering things to people very quickly without that sponsorship I think is is more valuable but I think there's a lot of people like you alluded to that um especially on Twitter uh not everyone who should disclose if they're taking money from people do which I think is is it leads to some yeah it's a lot of mistrust I think in the space if you're building a business in econ Commerce whether you're an agency whether you are an operator anything like that you should be considering Staffing it with my friends at more Staffing more Staffing gets you access to the best talent in the Philippines that it's possible to get in your business across every part of the business that includes design video editing marketing uh uh supply chain operations project management all of it um manager director executive levels on up you can really get incredible Talent from across the board in the Philippines and if you're thinking about Philippines Staffing as just like $ an hour virtual assistant you're thinking about it wrong there's much more opportunity for you because you can pay top dollar in the Philippines Marketplace to get incredible talent that is interested and motivated to work in your business and at the same time that uh salary is still much less than you would pay for that same talent in the US it is the classic offshoring uh value proposition it makes all the sense in the world and more Staffing makes it easy for you to do that in your business it's what I've done with my business they're great people Staffing all kinds of parts of all kinds of e-commerce businesses and agency business as well so go check out more Staffing today they will help you to recruit train onboard and Coach talent and they'll even give you a one-ear guarantee so if you hire someone with more Staffing and they don't work out uh for you for a whole year they will replace that person for no additional recruiting fee go to Mor staffing.com staffing.gny.redcross.org either agencies or software Services um don't please don't tell the founder of eCommerce field but I actually don't operate in e-commerce business right now and I'm still in the community so just if you can keep that between us um it's because all the money you're paying me man that's right yeah yeah it's good point um but like I know I'm in I'm a rare person there like I know like you do allow some of it right it's not none but it's just very few based on some very specific criteria and Legacy members yeah yeah yeah right and and like I I think even anytime I've almost anytime I've tried to promote a piece of content of mine and by promote I just mean like link to it in a conversation I'll like for for the first couple times I like I think I dm' you and was like it's okay like I don't want to break the rules so you you guys are really good so I it makes sense to me specifically because it's so important that that operators have a place to talk freely is I think that's a really big deal um I I think my take on this is just that there's like a caveat empor thing here in terms of like like buy or beware right like the that so I have sponsors on this podcast I really love them like I think they're great I think you're completely right that that's colored partly by the fact that they're paying me and I'm not an idiot like I yeah I should be honest about that but I really didn't like I I don't think I've ever said anything that I didn't think was true about any of them you know um I've certainly tried not to though it is hard when they're paying you um but the thing is the the the concern that I actually feel is just that I'll say something and somebody will have a bad experience because nobody gets their service or product right all the time and that's it's not because they're bad at it it's just because the you know Amazon sometimes doesn't deliver in a day or two days or whatever they promise right like it's just like no matter how good you are at it it sometimes breaks and um and I think like there's this back and forth here of sort of recognizing that reality and and there's like these polls where like sort of people need to do their diligence on software and on services that they're talking about they need to take good calls and have a good system for evaluating them on the other hand I it's funny I actually wrote a longer tweet um about this issue before like it happened to be by a coincidence like a like a few days before this whole Sun Lane thing blew up and whatever the this influencer kind of conversation has been happening and and it was just saying separately like I know people sort of get mad about like Shilling quote unquote right and that was ex the thing you brought up at first is exactly my point which is like Shilling is really good because what I actually believe is one of the most valuable things in e-commerce is the collective knowledge of the community I think that's one of the fundamental Reasons I'm bullish about e-commerce is a fut the way I keep saying it is like the the shared the total intellectual capital on the shared balance sheet of DTC land right um the total intellectual capital on our balance sheet together is drastically higher than it used to be before and a lot of that is actually because of Shilling it's because there is a economic incentive for people to share knowledge publicly and to get sponsored for it um and and so in that respect that actually net net I think it's a massive positive in the space and I know you said something similar but to me like these little moments don't change that for me really at all no I don't think I don't think I think people understand that sponsors and advertising is kind of a is a is a necessary aspect of getting information in most cases or at least you know people are used to it it's just the way the world works I think that what people have a problem with is in small micr communities which you know DTC e-commerce kind of is on the grand scheme of things having players who are dramatically promoting things without fully uh being transparent financial interest and that I think is is is yeah so the problem that people have yeah that I think everybody agrees and also just like bad content is bad like just like just don't make bad content you know like that's another thing you know so some bum to say that thank you okay what's next you pick one what what should we talk about next we got uh we got Apple uh let's do that you had it on the list so um yeah why don't you kick that one off okay so I mean the thing about Apple is that 35 days ago if we' have recorded this episode and said our top stories of 2024 in e-commerce uh it would not have made the list because it didn't exist in our space um and it would have been a weird time to make that podcast episode on November 2nd or whatever but like like it literally it basically didn't exist despite that it's a publicly traded ad Network right like so it's a big company and then and then I I know actual people who are spending as many dollars during the holiday season on Apple as they were you know so ads on mobile game networks okay um uh as they were on meta ads and I have been Fair publicly an app 11 bull I and basically it's because of this I I think in my 10 years in e-commerce there is no ad um channel that has looked as viable as fast and as frictionlessly as Apple has it is and and it's because of a bunch of things like like let's say you want to run YouTube ads let's say YouTube is totally viable there's a huge piece of friction right away which is that you have to make you turn your vertical videos into horizontal and all of these videos that are like um like and you probably need like actual vo not just text on screen Etc App 11 allows you to take meta ads that are already working which is already the number one channel for the vast majority of brands in our space right and take those video ads that are working and just plug them in and boom go and it's and it is so early I know there are concerns about it's targets too many returning customers all these things but there's like high quality traffic coming with high time on site good metrics and there are at least some people who again didn't even know this channel existed a month ago who are spending $100,000 a day profitably um and so to me it is like it is a m it it could be it's too early to say this too strongly but this is why I'm a b it could be actually the thing that everybody has waited for for a long time which is the sort of like accessible scalable ad Channel aside from meta and it could actually Bolt right on to meta in some crazy ways I don't know a single person who has made a single piece of creative specifically for App 11 yet and people are spending $100,000 a day on it like at least some people are it's crazy man it's uh I'm glad you had a lot to sayanta because I had I had almost no knowledge in the space so that we great um a couple questions for you I there's been a tiny bit of talk in ECF about it but not a ton although maybe you know granted it's a month old in terms of impact that's probably reasonable and it's gated right you have to be you have to have been spending 20 grand a day on meta yeah yeah so I mean are you seeing is this one of those things where it's like Tik Tok you have a handful of people who are positioned well invested in the right place and they're just harvesting these massive gains based on hard work and really good brand positioning and network positioning or are you seeing you're you're in the you're in the the the space uh two or three people doing really well or you seeing you know and hearing of like you know a meaningful number of people 50% of people who hop on here and try it within 10 hours are are just rocking it and loving it probably depends what you mean by doing really well so like I have one client on it that was getting a 10 to 15 % lift and spend uh right away it's possible we could have gone bigger there I'm not sure um but we were we were just you know really trying to protect profitability at the time even while while G so we we just weren't we weren't inclined to go super risky but I'll say even that a 10 or 15% lift in spend profitably like essentially on day one uh is a very big deal so if if it even creates 10 to 20% lift it's even if it's not quite meta scale um then there's that so I I think there Brands and I think there are also brands that clearly are better suited for it and the brands that are better suited for it are anybody whose product um Works especially well with older women now the thing is that's almost everybody those are the people with the pur strings in e-commerce um and uh you know disproportionately and that because it is older women disproportionately playing it's like games like Candy Crash and stuff like that um that's who is overwhelmingly on the platform and then the other thing is um uh it's brands that at least today don't need to have very hard exclusions of existing customers uh because right now you can't exclude existing customers from your ad so the people who are most frustrated are like all the performance looks pretty good and even with incrementality studies it looks pretty good except that um except that you know it's targeting too many returning customers because you can't exclude them and so like if you think about like you know Cody plers in the public about this with Jones Road Beauty right it's like makeup you can destroy your cohort values by spending too much money on on past customers and it can can be a real you want to spend a different amount of money to sort of acquire or reacquire customers but beyond that um I will say that it is only a few people doing really well but that's also because it's only available to a few people so um so yeah we'll see what happens when they open it up which apparently is q1 Q2 cool the the thing that got all all the uh all the Ecom folks super excited before Black Friday comes out yeah interesting story and I was going to ask you too when you say a 10% lift in spend do you mean they were able to increase their overall ad spend by 10 to 15% at a similar return is that exactly yeah right yeah so if they were spending 100,000 they were able to spend 10 to 15 more and it would have been the same return yeah got it interesting great uh should we talk about AI yeah let's do it um I mean I think this is the year that AI took off right um I I I mean I feel like I the first real public thing I saw about people talking about AI with a lot of enthusiasm in the e-commerce space besides a couple sort of dreamer types was was Bill alandro um talking about it at ECF live at some point so I don't know what what's your take on the rise of AI uh it just seems like it's it's gone to new heights this year and it's primed to go crazy next year it's interesting I think AI had an amazing year when it because this is like we're like two years out I believe from when chat GPT dropped almost exactly um so it dropped everyone went bananas rightfully so and then I feel like you had like six months of where a lot happened a lot of people were really just understanding some of the use cases and then you had a 12 months of uh 12 to 18 months of where there was a lot there was more promise than I think there was uh really operational efficiencies you have some things with some uh some customer service you have uh you have some things that are making businesses more effective on the back end but I also like the other day I went and I used uh is it Sora is that the new video platform that and and I went and tried that out uh and it was cool it was kind of cool but also the results were cringeworthy right I didn't play with it a lot um but at the same time I know so so I think it the there there's I don't think it's the promised land yet in terms of just being able to feed AI something and have it run your brand for you from Crea to everything that said I am in chat GPT seven eight nine 10 times a day I am talking to it about everything um questions about life major decisions developing property um things about how do you brew good coffee like business decisions in like it has become uh a confidant of which sounds super creepy I sound like I'm in that movie where the guy falls in love with the robot maybe I am I maybe need help but the the the the power of having a if you were using it uh in the way for brainstorming for creativity for copy for decision-making as as a as a as a partner to Think Through problems it's phenomenal and I think this next two or three years we'll see those gains catch up in in the operational side of things so I think there's a lagered on like the really fancy stuff but the the good stuff that's kind of boring but super helpful I think is is wildly transforming if you use it yeah I think there's a question of Leverage versus magic I think if you're looking for magic it's not that yet I think if you're looking for leverage it is that um and I I think I have two clients who are pretty AI forward and um and I think uh I think Chris creser came on your podcast and talked about this with you some maybe uh yeah from adapt natural so he's a client of mine and he he is like he the other day spun out like uh an advertorial style Lander and a a bunch of AD copy with sort of like because his product of supplements in the health space like it require some technical knowledge because there's there's sort of this medicinal element of it he's a he was a practicing clinician for a long time so um so he he's in more involved in some of the script writing process for some of our explainer stuff than some of my other clients because you just have to have deep knowledge of the of the medical right exactly yeah or or claim something crazy yeah U anyway he like spun out like eight explainer ads and a and a long avator Lander I think in like an hour or something like that like maybe maybe less time than that probably half an hour like he's just so fast at it um and it's because he's so good at using it like that and I think that's that's what I'm seeing more of it's just like people building stuff that's pretty crazy AI avatars and ads like some of those things are are real I have I have a client who's building AI avatars for ads and they're getting 50% of our spend with a you know sixf figure spend per month uh you know probably like low mid six fig spend like they're just growing all the time so um yeah there's there's definitely a lot of those applications that I think are going to continue to that and here's here's my little like case prediction with AI um I think it's possible that there's like a looming crisis of trust that actually kind of blows up some people's use of it on the one hand I think people are going to do what you just described which is they're going to get really good at using it as a second brain on the other hand um I could also Imagine consumers going like there I could just imagine something happening that makes people I'm not talking about like a matrix scenario here I'm just talking about something that people go like you know they just kind of have some kind of reaction and listen I don't think that'll be a forever thing I think if that happens it'll just be a a part of the thing that needs to get solved but I could just imagine that doing something in a way that messed with something I could sort of Imagine Brands saying made without AI the same way that they made in the USA which is like it maybe makes it more expensive it doesn't mean necessarily even that it's better but it's just kind of a badge of honor you're running meta ads you're tracking them with some kind of software whether that's shopify's native integration or with thirdparty software and you should be doing it tracking all your events on your website with Billy it's b.

Billy is what I use with my clients for the best quality ad tracking in the game that means the highest event match quality scores in met as event manager that means when I test it head-to-head against shopify's native integration or other tools I get a higher return on my ad spend which is really good news because it's just done by better tracking which means basically that meta is getting the best data from your ads from your website back to meta so that it can optimize as best as possible go check it out today b. to get started with the best meta ads tracking available today absolutely I I think we will 100% see that it's almost like the nft people The nft Craze kind of to blew blew up for for weird reasons but I always thought that would be an interesting way to be able to have almost a digital stamp from somebody to say I created this content this was authentically me I'm saying that this is you know a genuine piece from from a human I yeah spot on I think you're spot on you and I I think have some different perspective on whether or not this is a a a a good year for brands or a bad year for Brands and what the future holds Let's do let's do your Negative Nancy perspective first and then we'll do my optimistic Rosie Outlook one um you think that one of the top stories this year is that there has been difficulty in building real Brands um and that owners are struggling U now you actually have a way better perspective on this than I do because of because of precisely the job you have so tell me what you mean by that yeah um I was prepping for this uh for the like seven and a half minutes I had for prep thank you very much went into went into the community and just kind of looked at the top discussions over the past year and and obviously it's a confidential community so I you know not going to name specifics or get get into any any weeds but uh there there's always anytime you get a thousand entrepreneurs talking about what's going on you're gonna have some stories pop up but I feel like there was just a number of more stories than average of people who were one going out and trying to build a brand the right way uh amazing product uh deeply Innovative uh marketing it uh and and building a genuine brand around it uh with with high quality uh creative advertising original content uh and how hard that was um and other people just going through just some of us being op open and honest about the psychological difficulties of of of of running a business and I think we've uh that just stood stood out to me it's just e-commerce has been hard for for different reasons you know postco there was the you know people spent a month a ton of money during Co operation it was hard to make that work and then you kind of had the postco spend at hangover and and this year I feel just it's e-commerce is maturing in a lot of new ways the game has changing and I think um I've talked about this a lot on my podcast the idea of a smaller more durable brand I think the type of e-commerce brands that stay around in five years are going to be generally smaller generally more durable uh built the oldfashioned way with a lot of empathy from the owners towards their customers uh and they're going to be more valuable because they're going to be stickier but they're going to be harder to build um so yeah I think you had the case I know Negative Nancy here but uh I think e-commerce the way we think about it is harder much harder than it was even a couple years ago but I think the ability to create enduring Brands if you put in the work is at an alltime high so yeah I I actually don't disagree with um with any of that I mean I think the olical tools real I think entrepreneurs are like that for one thing that people you're talking you're selecting for a group of people who like try to go do something really hard um I think anybody who thinks it's easy is just like ridiculous like there's just it's it's hard on a lot of levels um but the thing the reason that I'm the rosy optimistic one here is that it seems to me that like uh while that is a true and real thing you just described and this will always have an uneven set of results there are just more good quality big Brands now than there have ever been and my in e-commerce and uh and there's all kinds of reasons why that's an optimistic thing but um it it just strikes me that let me let me ask you a question you have a specific eight fig subsection eight figure plus subsection of ECF I believe you don't have to give exact numbers here but over the last year or two uh to the best of your knowledge would you say that Community has grown by has been flat 10% growth 50% growth 100% growth like how many more brands are getting past the eight figure thre than before let me put it this way um and again being sensitive to confidentiality we do end every year for our our eight figure plus and nine figureure sellers of which we have a handful we'll often break out into subgroups uh to talk about things and and masterminds uh and one thing we have noticed is that the brands that are larger have been doing better and growing faster the brands that are smaller in the a figure subcategory have been having a harder time and it's difficult it's difficult to say well is that just a is that just a selection bias right like the ones that are doing better get bigger therefore they self- select in a larger group one possibility it's also possible to say the bigger you are and I think there's also a very strong case for this as e-commerce gets more difficult as attention gets harder to buy have being a larger player in the space means that you have a larger competitive Advantage because you have more emails you have more SMS you have more brand Equity that you don't have to go you already paid the cheaper toll and now you're in it's the same effect that that you know applies to Tech right you have four so I think so that's what I'm seeing in that group yeah isn't that also though an argument against what you said about the slower more durable brand like that that sounds like an argument to try to make your big your brand bigger and faster so you get more of a mo it is yes but I think it's more difficult to do so I think both can be true you can have you have the group you can have the group of horses that are that are ahead on the racetrack but to get ahead if you're there it's yeah you know you're going to be able to stay ahead because your horses are stronger um but it's harder to get there if you're starting out from scratch or if you're kind of in the early phases yeah I the the reason I'm looking at it this way is like in my time in E conver part of this is just inflation part of this is time um these things create larger numbers but it just seems to me like the story always tells I remember the first time and I can name the brand because it was so long ago it doesn't even matter the first time I saw diff eyewear Google analytics and I think it was like it was when they you know been 10 or 20 million or something like that I was working with them when I was a Common Thread Collective you know they're way bigger than that now I don't I have no idea exactly how big they are but they're they're like a really good bigger business and I was like amazed at their Google analytics account like I I don't know if I'd ever seen an eight figure store before besides like the North Face or something you know like Legacy brand that had added D Toc later in their life stage and now I see eight I have five eight-figure clients out of six clients like basically you know like and they're varying sizes of eight figures they're varying levels of omni Channel versus to see only and something like that you know like um and so like it's it's just like it just seems to me that there are just more big Brands and actually the way I would frame the sort of like 2024 story element of it is what I would call like the rise of the new ninef figure e-commerce brand um and so it's like like I just noticed this this year that like there are now a these are not all new this year but there's more awareness and public thing of profitable nine figure e-commerce Brands if you think of like e-commerce version one e-commerce 1.0 as like the the warie Parker stage you know bonobos all those guys Venture back never profitable grew really fast ipoed and cashed out and then were horrible stocks to buy or PNG Acquisitions right like just horrible lost all their value because it turns out ecci doesn't scale that way you know that came back and I think there's still some tension where there's still a rubber band effect where people are trying to play by the old rules and stuff but almost nobody that I see anymore is really trying to play by those rules anymore like Venture money's gone you can't even get it and so it's like so the thing that strikes me is that there is but there are now a bunch of big businesses that are really profitable and really valuable in our space and and they have now taken over and so I think that's sort of the the marker that this is the year we are at like uh you know e-commerce 2.0 now they're mostly Omni Channel actually they're not they're not um D Toc peer play but I me I just did an interview last week with guys from baseball lifestyle you know they're talking about getting to nine figures in two years up from from uh seven figures or something like that you know like now that's an extreme Edge case example where they had years and years and years of growing as social following it's a really good interview but like but and and they did that with retail Mass retail distribution and some of those things but it's just like yeah I just feel like they're profitable it's a story that I've seen now and maybe part of it is because of the publicity of like the operators and marketing operators podcast where you're seeing into their businesses in in a way you didn't before but it just seems to me that there's a wave of businesses in our space that are that are bigger and more durable than there used to be and it's a striking thing to me yeah no I mean that all makes sense don't have a ton to add but I think the one thing I would say is the the baseball ones that you mentioned you know they had done to my point they had done they didn't grow years yeah they didn't grow based on scaling up with Facebook ads three years ago a lot of the big Brands were like hey let's just if you if you have the money let's put every cent into building more awareness or market share and then we'll figure out profitability when we slow down growth when we hit 9 figures yeah sounds like this crew um they they did it the old fashioned way like I was talking about that's what enabled their jump to light speed yeah yeah I think that's true I mean they didn't Build That Brand overnight at all they didn't do it in two years they did in 10 but they just made the revenue jump in two um uh okay let's do let's go back to some macroeconomics uh let's do um oh yeah let's do tariff stuff this is what the people really want they want to hear about tariffs um all right so start with di Minimus going away um before we jump into I don't know do you want to do president Trump first or do you want to do D Minimus Andrew this is your podcast I defer to you my sir my friend so what do you say okay well let's do Dom Minimus first because I didn't know what that was until you brought it up and so you should explain Dom Minimus going away what is it why is it a big deal this is one of those things that actually once you talked about to me it's like that is a big story in e-commerce for this year yeah and again um hope I get all the details here uh correct I think I've got the the broad shows correct but uh if you're importing things Dom Minimus is this idea that for a long time in the US um if you imported something into the us or shipped anything that was under $800 in value it was exemp from tariffs um which was problematic because a lot of Western sellers that they're importing from China in bulk and then reselling they would pay full tariffs on everything whereas Sellers from you know from Asia could could send things in one two at a time uh maybe through e packet or something and be you know wouldn't have to pay those fees so it didn't make for a totally Level Playing Field uh I don't know if this has been implemented yet if it hasn't I believe it will be shortly but I think it might already be in place with Biden's executive order pretty much got rid of that so saying hey everything coming in now no matter what it's going to be have to pay tariffs and you may also have to pay an additional $2 per package uh to be able to bump up some of those those things coming in on you know things like alib Bish in things like that so that's what diminus is di does that does that affect like a US seller Manufacturing in China and importing from there uh probably less so because most of those people doing that are not going to be shipping in at onesie TWY some of them might but probably most of them are going to be ordering manufacturing their products in China bringing them in by containers uh and you're they've always paid they've always paid containers so really it doesn't affect most western sellers or us sellers but it is going to uh at least do something to reduce the uh imbalance and margin because before people you know CH the teos of the world using this basically exactly right yeah Le y yeah interesting because I did see I did I tweeted and said give give me some topics for this and people wanted to talk to youu and Shen and stuff like that and yeah yeah interesting um okay so that is interesting I do you think that's why there's been a reduction in ad spend from those people so far as I can tell a reduction of presence like just that there's sort of a Arbitrage advantages going away do you have any idea about that do you mean reduction in Aspen from from sellers in China or what do you mean yeah well like I just I've seen some stuff I'm thinking of timu specifically here that like they had backed out their ad spend were extremely aggressive at one point has maybe backed off and I'm wondering if you think that has anything to do with it if they sort of if there's an Arbitrage Advantage has gone away this is speculation but I have man I have no idea that is way it's unfortunately past my I think I know they were spending like crazy to buy market share that that could have had an impact on it but I I don't know yeah yeah yeah yeah interesting okay let's talk about the other side of the Tariff coin uh which is President Trump gets elected that's that's the 2024 story um that is an e-commerce story and it's an e-commerce story because he immediately threatened tariffs with 25% with Mexico and Canada um and uh and then just I think I don't know if he' put a number on China tariffs but obviously lots of rhetoric around us manufacturing and some of those things it was a major point in the campaign I don't have to tell you that if you're listening to this podcast um the um but it is interesting to me uh to think about sort of what this does mean for eCommerce um I have recent polym Market numbers on this because I think that's the best way to judge what we think is possible because one of the things I saw right away was like is uh is this actually going to happen because apparently president Trump had threaten such things before um before his first term um that he that there would be uh some kind of tariffs and then didn't actually do it it was just like a negotiating uh lever like you alluded to earlier you Daran um so poly market right now says a 40% tariff on China has an 18% chance uh a 25% tariff on Mexico and Canada is currently the poly Market odds right now are 35% so both you know I mean one and three is not nothing for Mexico and Canada one and five for for 40% China is definitely a lot lower and then large this is this is like the I don't know how this is defined exactly but large tariffs in the first six months of the presidency is at a 36% likelihood um play market I think is just a nice way to get some probabilistic uh numbers on something like this um so I don't know maybe maybe you want to I don't know how much you talked about this bill I'm assuming you did some I haven't listened to that podcast episode yet you do a you do a predictions episode every year with Bill alandro um so yeah give give me your reaction to uh to tariffs in the US this is so crazy it's so weird so my first the first thing I think about when I look at this and I could be wrong I thought the the proposed and maybe this is a little old news but when I remember Trump talking about it recently I thought he said 10% China 10% TR on China and Mexico and Canada 35% my first thought was that seems very seems backwards from what the rhetoric often would imply and I that that made me kind of okay that's weird the other thing if you look at Mexico and Canada I I can see again from a rhetoric perspective using especially from uh as a lever to try to help control the border control some P trade policies things like that slapping a larger tariff on Mexico uh the border is much more of an issue there but to put a a 25% tariff on Canada one of our closest allies where we've got tons of uh you know I think I I was doing very rough research and again probably fact check me here I think maybe Canada tariffs imposes a a little bit more tariff heavy than the us but not dramatically but that just seems so weird to me so that was my first impression on that uh I'd be shocked if we did that uh I would be very surprised if that happened secondly Trump is one of his big things like presents himself business forward guy the the stock market is an important gauge for success for him in how he is running the country a scoreboard of sorts and if you put tariffs on those are massively inflationary maybe they take a little while to come in but if I I think any tariff would be moderated or muted because otherwise he's kind of shooting himself in the foot in terms of inflation uh the economics market dynamics and he's going to pay for it on the back and I think he's he's probably smart enough to know that so those are my those are my thoughts on tffs for when he runs for his third term you never know you never know um yeah I yeah I mean it's just funny it's like one of those things that economists seem to pretty universally hate um and and that like uh politicians like to use as a as a club um yes I mean again this is gonna get past my my depth of knowledge on macroeconomic Theory um a little bit uh but yeah I mean I think it could be a really big deal this is where like this is where like it's it's sort of too early to tell but I think um it is like it is possible that margins get seriously squeezed seriously quickly and you know you're point about it being inflationary um yeah I'm working on I've mentioned a couple times I'm starting to work on spending up a brand I haven't talked about what that brand is yet but there was a possibility that we'd have a manufacturer in Canada and so I I am I immediately went into my unit economics sheet uh call Trump yeah yeah I said buddy come on my business is going to do like probably a million bucks someday so if you want any continuing contributions from Andrew Ferris you're G to kill these immediately forget contri like tax tax dollars um so um anyway it was like my immediate thing I did is I went and was like oh I guess I'll have to raise the price like and it's just like you could just I could just feel in my instinct right there the the cries of a thousand economists being like that is all you're going to do if this happens it's just like yeah um so yeah I mean it's TBD I I think actually sort of the most interesting thing about the story in my view right now is that the strength of president's Trump president Trump's language is so different than the weighted odds from poly market like that sort of is striking to me um as as a picture of the story well I think one of the things that's super weird too is is about and again to keep this apolitical and just talk about uh just raw behaviors totally yeah uh let's jump down to Tik Tok getting banned right like you were saying po Market has a 32% chance of it getting banned yeah again if you would look at Trump's rhetoric very anti-china China's abusing us you know you know ra ra uh if you look at the the bill that went through the US Congress uh it was a wildly popular Bill bipartisan Bill to say hey Tik Tok is a national National interest National Security interest issue we need to it's got to be divested it can't be owned by a Chinese a company with ties to this the Chinese Communist party yeah Donald Trump was also in that camp but until recently when he thought that Tik Tok to help him get elected or he had a lot of followers there for whatever reason he has changed his tune a bit to soften to this app that is considered by Democrats and Republicans across the board as a viable security which just so my point being um it's it's there's a lot of I think there's a lot of uh emotional and unexpected things that could happen that aren't necessarily purely policy driven which I think makes it more complicated on the terror front yeah I I could not agree more um there yeah there's there's a bunch of layers of that uh yeah I'm tempted to to go down some political opinion route but I'm gonna withhold that because we don't have time for it anyway um [Music] um you did bait me part of the reason um part of the reason Tik Tok may get uh may not get banned of course is just that um there's another out which is that it it is sold to the US to a company in the US so um so you know whatever I wonder if the odds are like go up if it's like force a sale or get banned versus just get banned because there's there's sort of potential hope yeah it'll be fascinating to see it does it does not look like they are and again we're recording this like December 19th but it doesn't look like they are entertaining offers at this point so it'll be super interesting to see how that plays out all right um let's do a quick couple rapid fires we only got a couple minutes left um and so I I've got a few other thoughts in mind um let's see uh why don't you start what's just something that you see that you can do a couple sentences on and we can just do some rapid fire here yeah you've got these two like wildly you know esoteric uh ad spend ones I'm not even going to touch with the 10 foot pole here I'll do those for you well we'll go with we'll go with mine it's kind of my it's my daily look that is that is I I'll throw mine in here this year I saw a increase and not a wild one it wasn't like I saw you know just hundreds of people doing this but a noticeable increase anecdotally of people buying back their businesses uh a handful two or three from RE buying it back from private Equity someone buying it back from an operator who had ran it for 10 years and then just you know kind of didn't Maxim but I thought it was very interesting um and it it just stood out to me and I think part of it just kind of speaks to the uh the era of when you had aggregators and all these rollup funds buying buying companies like crazy finding out it was harder than they thought oh hey we can't operate 50 disparate brands you know with economies of scale didn't work quite out like we we penciled it on the Whiteboard um thought that was yeah I ran I ran one of them yeah yeah but I but I also thought it was interesting that some of the deals people got like I mean what's the only thing better than buying a business for 80% off Market that you ran for five years to no inside now and that you made the market price for in the first place yes yeah exactly and you pretty much you know free business more or less so right that's yeah that's really awesome okay I'll do um I'll do I don't I kind of only have this one on the list um attribution is out and incrementality is in this is a little bit of an unfair way to say it because people are still using attribution tools but for a little while there all anybody was talking about was attribution tools especially post iOS 14.5 triple whale came on the scene North beam these things didn't exist for a little while there um now I hear people reference their attribution tools but almost nobody talks about it as like this big value ad anymore they reference their mtas and their mmm and all this and and that's fine um but it's just not the thing that it was maybe because it's become old hat and standard fair and everybody uses it but I actually think it's because what people realizes that incrementality testing is a much better way to measure the effectiveness of your ads than an MTA or an mmm um and that has been I think a big story this year that incrementality testing has really gone to the mainstream with house and measured um being the leaders of that it's too expensive still for Brands uh anywhere on the like low eight figure side of things so this is also maybe partly just because brands are getting bigger at least at some place um but incrementality testing I mean some of these tools are really crazy and the idea of really being able to measure the incrementality of your ad spend in precise ways including in its value on Amazon and some of those things it's just one of the most noticeable conversations I've seen this year there's confusion around it it's valuable at the same time you're seeing smart people talk about it in a lot of ways so for for Schmucks like myself who are not in the paid world uh can you break this down in 30 seconds incrementality is this the idea of hey you have tools that can let you almost like split test ads SP different yeah run holdout tests basically so that you can actually see like not just like which ad channel gets credit and what kind of credit for a purchase but um but it's not so much that just as so much as saying like does the ad actually generate Revenue that you were not going to get otherwise and how much um relative to like the reported Rass in in the platform so it's a slight distinction from assigning credit by Channel because it's really more about um it's really more about like did the channel create clearly incremental value despite no matter matter how you sort of gave it gave uh any particular Channel credit and and that is coming with like more scientific testing that is uh yeah a more robust methodology and so um yeah I I think there are like mountains of problems with with the way people think about attribution mostly I think it's like not actually as true as people think it is and incrementality Strikes me as a much more viable way to think about this so yeah interesting okay uh what else you got uh last one I have a ton of thoughts on pmax just being terrible uh but I I'd like to hear what you think about this first Andrew um see what's that oh that's right we should do that one I didn't that there it was below the fold there yeah so this one and again this is I'm not a massive definitely not a massive Creator on either of these but from talking to people seeing Trends um it seems like Tik Tok was so on fire you know 18 months ago even 12 months ago but it seems like that surprisingly YouTube uh is is winning maybe the war in terms of incentives for creators because it seems like they pay more to creators in terms of the ad share and they're just economically it's more valuable to be on YouTube and a second point that I just want to point out we were given love to like you know Jerome the the FED share which how often do you hear about people talk about their man crush for Jerome Powell uh but I also like think about how many platforms have been around for YouTube what what's 2005ish launched you it's been for 20 years and and and in a highly relevant way um e even Facebook uh Instagram Facebook and meta has had its channels that have kind of aged in different ways and different uh different return profiles um Twitter as well but I just feel like YouTube is such an OG that is still kicking and not even just around but but just thriving and a preeminent Source online for content for search it's impressive yeah I I agree with that I mean partly just the point that YouTube if you're on YouTube You're it's like you're spending a lot more time with somebody than you on Tik Tok so all right I'll do two very last ones really quick um one of them is that is pmax tried to scoop me can't do it pmax uh Pac sucks um uh performance Max ads on Google ads looked for a minute there like it could be a competitor to be a place like I was saying about App 11 like get a bunch of D Toc spend and it isn't it sucks it's a mess it's hard to test it's hard to see if it's working increment tests that people are doing showing that it is way less incremental than the roas number uh it just looks like a nonviable channel to me for ad growth which is a big deal because people need ad channels that work and would love for them to be there besides meta the other one I'll say and this is this is uh for anybody who listens to my podcast they're not gonna I have no way of measuring this but um it seems to me that there is a massive increase in the adoption of manual bids on meta ads This is highly specific but I think it seem it seems to me that it's becoming standard practice which uh is making it more efficient for people to spend their um it's just interesting it's it's a real shift in the way people buy ads and uh I think uh certainly I've been a vocal proponent of that uh Taylor holiday and CTC they buy all their stuff that way they've grown a bunch which is by definition that means they've got more people spending on those things um you know kinship they they do it the same way they've grown a bunch like just more and more it looks like that's the way people are going to go forward with buying ads and I think it's good Andrew you said exactly what I was going to say about magx like that's why I didn't ask you a question I knew you and I were block on I can't add a thing that was that was all right man thanks for your time I appreciate this so much especially for being a last minute call here this is a fun one to do um everybody go join e-commerce fuel follow you Daren on Twitter all the spots um and uh yeah man Merry Christmas hey Merry Christmas happy holidays everyone and uh this is a lot of fun thanks for the invite Andrew thanks man huge thanks to Andrew udarian for joining me for that episode that was a really fun one to just kick that stuff around uh I would love to hear your top stories so email them to me at podcast a jf.com uh reach out to me on Twitter Andrew J Ferris that's my name uh go to AJF growth.com to see everything I'm doing and don't forget to subscribe wherever you're watching or listening to this do go check out Andrew's uh podcast and Community as well it's great e-commerce fuel is the community the e-commerce fuel podcast is the podcast it was the first podcast in e-commerce that I ever listened to um it's just really good uh all the time so thanks again to my sponsors Billy and more Staffing they are great go check them out as well I will see you next time [Music]