How to Build an Ecommerce Funnel SO Good, They Beg to Buy transcript

Most e-commerce founders aren't scaling because of their product or their ads being bad. They aren't scaling because the way they think of their funnel isn't scalable. Most gurus will talk about how to plug the holes in your funnel to convert more traffic. But the fastest growing companies talk about building systems [music] to have your funnel feed itself, plug itself, and increase the value of that traffic. After working with thousands of brands, I'll share with you the nine mistakes holding most brands back from ever scaling to 500K, a million, even $5 million per month.

All right, number one is stop being platform loyal. Most founders are starting on Shopify and Meta and they're thinking of Tik Tok shop and other platforms as a gimmick and waste of time. That would be the single biggest mistake that founders can make right now and it's costing you millions by doing that. And it's the way that you think about platforms that is the issue specifically scaling brands understand the value of each of these platforms and how they serve one another.

So, let's break this down. Most of you are running meta ads right now to Shopify and you're acquiring all these customers. You're buying them. You're capturing that demand and it's a very standard structure. But a lot of you run into creative issues which prevents you from being able to scale. That is where a platform like Tik Tok shop comes into play because when you launch Tik Tok shop you can build a creator army.

And what that means is you're essentially mass sampling your product. You're building up massive creative testing where you have hundreds even thousands of UGC videos going out which is flooding the feed and building trust on Tik Tok. And all of those videos get automatically added into a GMBB Max where you can ROI gain [music] it, meaning you can guarantee yourself a 2, 3x ROI on all those creator videos. So, not only are you generating sales through Tik Tok shop as a sales channel, but you're also training the pixel and improving it over time, but you're acquiring this massive mo of creatives.

And what this allows you to do is launch massive amounts of meta collab ads where this red line begins to come into play here. We can take all of those videos, rotate them over to Meta, and start running creator collab ads where you have paid partnership ads on your Meta ad account. This allows you to get more UGC into the ad account. You're not relying only on in-house creative volume. You can then spin up more creator ads and you can launch retargeting at scale because you have enough creatives filling in the pipeline, which ends up scaling your Shopify even more because you're increasing your rorowaz from all the additional creatives you've gotten from your creator army.

But the second note to that is if you're doing 100k a month here, you've now already added another 50 to 100k a month on top of that just from Tik Tok shop alone. And if you're not on Amazon, just by having Amazon, we see an average of a 30% increase for most brands. That literally means that if you're just posting Tik Tok [music] videos, you're seeing about a 30% overflow naturally to Amazon. So just think about that for a moment.

You send out a free product, they post a video, get a few thousand views, and 30% of the overflow is driving into Amazon because some people prefer to buy on that platform. So now you have a third sales [music] channel capturing that demand, and it increases trust and the people who already trust Amazon to begin with are going to want to shop there. So just from one video, you've now launched creator cloud ads, increasing your rorowaz, having more creative volume, scaling your sales on Shopify.

You've generated more sales from the organic videos that are going viral and launching those into GMBB Max, which is increasing sales on Tik Tok. You're benefiting from the overflow into Amazon and even into retail if you're distributed into retail locations. But not only that, there's a third layer to this from all that additional awareness. People are naturally going to search you on Google. So, you want to have Google ads.

And I recommend people around like 80K a month. makes sense [music] because at that point your search traffic is good enough and people are already going to be warmed up from the Tik Tok videos. So when they go to search you, you're actually showing up where they can click on your site and go check out on your Shopify. So you're getting multiple avenues of [music] revenue from Amazon, Tik Tok, people going to Google then finding you on Shopify.

The creator collab ads that you've launched on Tik Tok that now get rotated over to Meta. All of these systems work together. But once again, most of you are just natively on one platform. And that is the hardest way to scale because once you integrate a creator army, you benefit substantially from all the additional overflow making your ad costs go down, your return ad spend going up, and it allows you to stack your revenue month over month.

Which leads us to number two, which is the three levels of the purchase. And founders that understand this concept are playing a completely different game than the rest of the market right now. It's what led [music] iMate Health to essentially grow to $120 million in just under 12 months, which is absolutely [music] insane to think about. and grooms who exited for over a billion dollars in less than three years. That is just wild.

[music] And allowed AG1 to grow over to $2 billion in sales. They understand there's three levels to this game. One is you just acquire customers on the front end and [music] make profit. You know, whatever your rorowaz is, if you can acquire a customer for less and have a 3x rorowaz, you're profitable on the front end. That is the first level of basic understanding. You're just getting a one-time purchase. And a lot of you sit in this bucket.

You just drive sales from the ads. You maintain a healthy return [music] on ad spend. and you get one sale. The problem with this level is there's a cap to it. You can only scale so much before your rorowaz drops down or you need tons of new creative assets or you start to run into return ad spend issues not because of just creative or the ad [music] campaign or the structure but because you have issues with your average order value which leads us to the second level which is you get them to buy more per purchase.

And this is where people start to understand how much [music] of an impact AOVs actually have on your return on ad spend and have on your actual growth because it [music] allows you to scale more spend. If you're sitting at a $35 AOV on a first-time customer, you have to maintain, you know, roughly a $15 cost per purchase, assuming your [music] product cost $10 to actually be profitable, right? And that's assuming that you're shipping, they're paying for it.

But with a higher AOV and you get people to buy more per purchase. This means every time you get somebody to click and go to your [music] website, they're not buying one item, they're buying the upsell. This is where you have endard upsells. You have post-purchase upsells. You have pre-upsells which pop up when somebody goes to your site and you offer an additional item. So now instead of them just buying one item at 35, they're buying two items which may get your AOVs to $75 [music] which increases your rorowaz to a 3 to 5x.

You can then scale your spin by double to triple and be at the 2x range, but now you've scaled your sales significantly. And you want to incorporate cross sales. This is where if somebody doesn't like one product, you can cross-ell them on another, or introduce them to other product lines. This is great for clothing, selling them on hats. This is great for supplements, buying an energy one, buying a nighttime one. You want to get people on your full collection.

And then bundling. This is where you actually incentivize people to buy packs. buying a variation pack, a variety pack, getting people to buy a three-pack, a two pack, [music] a fourpack. These all increase your average order value, which allows you to scale your spend. But the people who really get this, they don't just look at firsttime purchases, they look at the average order value, and then they lead to level number three, which [music] is you keep them coming back for more and more.

So that way you can stack revenue month over month. And how this works is you focus on subscriptions at [music] this level. So now you've mastered AOV. Now, you want to get people to get on subscriptions. This is great for consumable products if you [music] take it, if you drink it, if you use it in your hair, something that could be consumed, but this also translates into so many other industries like clothing. Nobody ever buys just one shirt.

If they love it, they'll keep coming back. So, you want to get people on subscriptions and incentivize loyalty programs and get people to actually buy into your brand and community to get them to return. And this is what Grunes IM8 and AG1 do better than anybody else. They offer subscribe and save because they know if [music] they can get a customer to be acquired for say 50 bucks and they lose money on the front end where they actually lost $10 on this order, well guess what?

They know that somebody's going to stay [music] around for 7 to 12 months and their profit is actually going to be $800 off of acquiring this customer. So what does that allow them to do? It allows them to take their ad spend from 30k months to $300,000 months in spin because they can outbid all of their competition because they understand that between their AOV and their [music] actual subscriptions, they can account for that as a loss on the front end and make it all back on the back end.

So, you really want to dial in subscriptions and have special offers where you actually break down whether they're getting free shipping. They can pause and cancel any time. Maybe you're offering some free gifts. And this is like a huge value ad for the customer, but it's a huge value ad for [music] you on the back end because you can make all that money back. So, let's understand the metrics here. Most of you are acquiring a customer for say 2025 [music] bucks.

And your average order value is around $35. You're sitting at a 1.4. Some of you are at 40 bucks. That's a 1.6. Some of you are at 45. This is pretty standard. You're around a 1.8 and you're getting by with minimal profit margins. This is the first tier. The second tier is understanding that you need higher [music] AOVs. And you do this by incorporating a bundle, an upsell, and incorporating cross cells, which what happens is at the same ad spend, the same amount that it costs you to acquire a customer for 25 bucks, just by having all of these additional AOV boosters, you're now making a substantially higher profit on top of this.

And that gives you a 3x. And this is where you can begin to scale your ad spin. Let's say you double or triple your ad spin. Naturally, your costs are going to rise. So, you get to $40 cost per purchase and you're back around that same range. You launch in some creatives, you optimize, you [music] bring it down a little bit, and you're sitting in a healthier position compared to without having the AOVs, but it's still not the most dramatic profit in the world.

And there's a cap to it. That's where you add in LTVs. And this is where things get interesting because if somebody returns on average for seven times on a subscription, that's a 17x LTV rorowass, which is pretty insane to think about. It cost you 35 bucks to acquire a customer and now you're making roughly $565 in profit over the course of seven [music] months from that customer. This is where cash flow becomes important for a business and how you manage it because once you begin to scale, you'll notice, well, we have a great healthy profit, but we get paid back over a [music] 7-month process on this number.

So what most brands end up doing is once they understand these metrics and they have good AOVs, well they'll begin to scale their ad spend and their average cost per customer acquisition cost ends up doubling. So they'll go from 35 to say 70 bucks and they're losing money on the front end here. Their AOVs are covering a majority of it, but they're making all their money back on the back end still from the net profit and the LTV return [music] ad spend.

So, they're willing to either break even or lose money on an LTV because they know that it's going to end up buying them more customers, [music] which is going to make them more profit and they can scale longer term. Which is why you'll see brands running hot customer acquisition costs of 150 bucks on a $40 item because they're still making a great profit on the back end, [music] which is how companies explode to $100 million in less than a year is because they understand their back-end metrics better than anybody else.

And this is what AG1 Grunes and IM8 understand that they can spend a lot more to acquire a customer because their repeat purchases are so much higher which gives them a greater profit. Same thing for Grunes, same thing for I'm8. This is what these brands are doing that you are not. And then we have number three, which is compounding metrics. The crazy part about scaling a business, it's not that hard. Everyone tries to over complicate this entire process, but for a lot of founders I work with, I've done so [music] many calls.

They're literally only a few tweaks away from being able to 2x their company, but they just can't see it. And this is the vision that it requires. Most of you get caught up in [music] the tactics on one specific thing. You're always trying to figure out why your meta ads aren't working. You're trying a different creative. Your ads drop off and you think it's the algorithm or it's a holiday or something happened with your meta ads and you get hung up on that one thing.

In reality, it's a multitude of metrics [music] that need to be tweaked so that way your meta ads can perform better. And what I mean by that is, let's just talk about meta first. If you literally just double your clickthrough rates from 7 to 1.4, you've 2xed your traffic, which can end up resulting in a 2x in sales. If you have a 1% conversion rate, if you literally just take it from a 1% to a 2%, you've effectively doubled your sales and increase your return in ad spend by doing it.

If you raise your AOV from $35 to 70 bucks, you've increased your return [music] ad spend significantly and made way more money without changing a single thing. If you just incorporate subscriptions and 2x the amount of people going to subscriptions from 10% to 20%, you've more than doubled because every month that's now stacking on top if those people [music] return up to 3 months just by reducing your churn by two times the amount and getting them to stay to 6 months versus 3 months.

You've 2xed again. And this is not just a 2x across the board. We're talking upwards of a 16x on your company just by focusing on each metric independently. Let's say that you're driving a substantial amount of clicks to your site and you're getting 10,000 people to visit. If you just focus on your clickthrough rate, taking it from a 1% to a 2%, you've now generated an additional 10,000 people, which has doubled your business to 7K per month.

Here's where things begin to get crazy. From there, if you focus on your website, improving the conversion rate tweaks that you need, adding in product breakdown images, [music] adding in all of the descriptions, adding in visuals on how to use it, adding in your shipping time, structuring your offers, showcasing exactly how your product works, and you implement all of the things that we recommend in our videos. You go from a 1% to just a 2%, just a simple double.

You've 2x your business again. From there, your product is priced at 35. And now you start focusing on your average order value without increasing your traffic at all. Just by doubling your AOVs an additional $35 by offering bundles, cross sales, and promotions to get people to spend more, you've doubled the company again. And then if you incorporate subscriptions and get people on and they stay for an average of 3 months, we went from 28K to now 84K. you've 3xed the company again because that revenue stacks month over month on subscription.

And so from here what we can do is we can come back through these metrics. Now we can raise our ad spend because we have a much healthier rorowass because at that point maybe we were spending $10,000 but without raising a single dollar in spend we're now making 84k. So we double our spend and what ends [music] up happening? We get more visitors, revenue goes up, we raise our ad spend another 5k and all of a sudden our revenue goes up.

Now, our conversion rate maybe dropped a little bit from that traffic. Maybe our average order value stayed the same. Maybe our subscriptions went up a little bit. We're at 200k a month. Well, we focus on conversion rate again, make some additional tweaks. We get to 2.4 and before you know it, you're doing $300,000 months, you start to fix your churn issues, and just by getting up to 7 months, you're already at half a million dollars per month.

It is not that hard. If you understand each of your metrics inside and out. So once you begin to understand how these metrics work and how they play off one another, you will begin to see exactly what you need to fix and not get fixated on the wrong things. Number four is volume. And this is where most of you just don't realize how much more other brands are doing that are beating you. A lot of you probably see other brands and are like, I have a better product than them.

I should be, you know, scaling more than them. They have terrible creatives or they're not very good with their messaging. So many of you look at your competitors and [music] see through them and know you could be bigger than them, but you just don't understand why you're not scaling at the same proportion. 99% of the reason is due to volume. Most of you just simply do not realize how much more they're outworking you.

[music] Having creators is nothing new. Just sending out a few products and getting a couple paid collab ads, which most of you do, you'll pay a couple of creators and just get a few videos. There's nothing new about that. It's long been around. Same thing for conversion rate. There's nothing new about making tweaks to your product images, adding banners, and consolidating the padding so that way your ad to cart shows higher.

A lot of you can do that right now and a lot of you are making adjustments and are seeing minor improvements and running ads is not new either. You can launch tons of creatives and be able to outbid and outmaneuver your campaign structure to get a better result. But that's what most regular people are doing. What they're doing is 100x that [music] they are spending a substantial amount of time onboarding creators. Not by a handful, they're onboarding hundreds of creators, thousands of videos where they literally have upwards of 980 active ads.

And then they're doing that across Tik Tok and taking all those videos and moving them to Meta. So they've 2x their creative volume. 1,000 videos posted on Tik Tok, 1,000 videos in their Tik Tok J&B Max campaign, 1,000 of those videos rotated over to Meta Ads. A portion of those videos posted to organic and distributed [music] to YouTube, distributed to Facebook, Instagram reels, Tik Tok, and all other platforms. They are maximizing by 100x the magnitude that you are.

And they're doing this with systems and automations. and they're onboarding upwards of 12,000 affiliates. Imagine that 12,000 people posting your product and then they're spending a substantial amount of time in their conversion rate. They are trying to get 0.1.2 improvements across the board because when you're spending 100K, imagine what a 0.1 does. It adds a substantial amount of revenue just by small percentages because the law of big numbers states quite literally just any minor improvement is going to yield substantial gains.

So they focus heavily on conversion rate, breaking down every detail that you could possibly think of. So that way every buyer objection is fully covered to be able to convert somebody. Their pages are substantially longer than yours. If you're not scrolling this much on your product page, you're already missing out on conversion rate. You see how long this is? This just goes to show how much more data and information they are putting in their product pages compared to others.

I literally just took somebody from a 02 to a 2.7 conversion rate and [music] they didn't think it was even possible because they were doing abs. They were like testing instead of modern living, they were testing a different word here. That's not what I'm referring to. We're not talking about minor tweaks. We're talking about substantial overhauls of information where visuals, plugins, data points, and stats, features, benefits, product [music] comparisons are all being added in here to fully get the point across for the average consumer.

Same thing for running ads. They are launching moes of creatives. Quite literal armies [music] are being deployed against you. Imagine you having 10 ads going up against somebody who has a thousand. They're going to out bid you, find better creatives, be able to scale more, and never have to worry about running out of creative and worrying about fatigue. Most of you are fighting fatigue. You were just up against a quite literal army.

And you might be saying, "Well, how do I onboard an army when I'm a small brand?" Well, you start by working small. You send out five products every day and it builds up over time and you scale spend and you make more revenue, you get better subscriptions, you get better conversion rates just like we were talking about earlier and then you stack the volume 100x. Which leads us to number five. Scaling founders 100x their time.

Making several pieces of content a week and focusing on a higher output is a great skill, but scaling founders spend the same amount of time for 100x the amount of content. [music] So, how do you do that? Well, you could make a video and edit it, but how are you going to get to 1,400 [music] ad creatives if you're editing all the videos and filming them yourselves? It's impossible. Same thing here. How are you going to reach out to all of these creators [music] and pay them 300 bucks a video and keep track of all of that manually to be able [music] to get content for your ads manager?

It's impossible. What the big founders understand is they automate all of this. They automate all of the invites. They automate the commission structures. They automate the content pipeline from Tik Tok to Meta. So that way they're getting hundreds of creators, hundreds of AI videos, hundreds of AI statics, and hundreds of in-house [music] content. So that way they can get to 2,200 ad creatives. They automate all of it with systems.

Number six, they don't just work with anyone, though. So once you automate all this creator outreach, you're not shotgun approaching it and just accepting any creator. Big brands understand that you need to build a huge top of funnel. You have 100,000 automated invites going out. Well, you're not approving 100,000 creators. What you're doing is you're distilling down to the best creators. You'll notice bigger brands also have very strong creators because of this.

They don't just send out products to creators they think would be good. They [music] find creators that have proven GMV, have proven views, and run formulas to get more leverage per creator. Because if you just approve any creator and somebody averages 90 views a video, you're not getting any sales from that. You're just giving out a free product to somebody who effectively is just making tons of videos for a 100 different brands, but has no skill [music] set whatsoever.

What you want to look for is creators who actually have a good GMV and a good view volume. So that way you can guarantee yourself an ROI. If they have 100,000 views and they're generating on average 20,000 in sales for a video, just sending them a sample is going to yield huge outcomes for you. So you want to build a massive top of funnel with your automations [music] so that way you can distill down to the best creators and approve them.

Once you have those performing creatives, this leads us to number seven. You can collaborate at scale because now you have creators posting your videos on their organic pages on Instagram, Meta, Tik Tok. They're generating sales. You found the best creators for your [music] brand. The UGC economy has grown at a massive scale in the past year and it is only getting bigger. The trust lever is no longer just making UGC and one-off videos.

That is just the minimum baseline. It is now also running ads [music] through creators at massive scale where you see it everywhere where you have all of these paid collaborator ads running inside of your meta ads. And you do that from the automations. Once you have all the creators, they're automatically going into GMVAX campaigns which is a paid collab. They're going into your Meta and Instagram accounts where you're doing collaboration [music] ads there as well.

And you're pairing that with YouTube and other platforms. So that way you can maximize that one piece of content across every stage of the funnel on every platform as well. And this allows you to run hundreds of meta collab posts and it's winning because customers, they don't feel like they're being sold [music] to from their favorite creators. They feel supported towards them and it changes their narrative towards seeing an ad.

Most of these people do not see this as just an ad. They see it as an actual collaboration or they see [music] it as native organic content which resonates and builds trust. So you want to start thinking how you can collaborate at scale and leverage the paid partnership collabs on meta. Number eight is the value of content. Scaling founders look at a piece of content from creators and understand that it's more than just a single video.

What they understand better than anybody else is that that organic video generates sales. They can take that video and put it into creative testing [music] and build an army of creative assets running in meta ads on their creatives, running in a Tik Tok G&B Max campaign. They can leverage that video and tie it to their Tik Tok shop as a demo video. They can use that same video for awareness. Whenever people search on Tik Tok shop or search on Google, that video is now showing [music] up and promoting their brand.

They can take that same piece of content, splice it up, and put it in more B-roll. They can even take that same video and place it on their website. [music] They can place it on their organic. They can put it into emails. They can leverage that one piece of content and they understand how to turn it into 10 creative assets that are mass-produced everywhere on [music] every platform across every stage of the funnel, which allows them to dramatically increase the ROI and value of that video.

If you only look at it as one video and you send out a [music] sample and they generate no sales, you've effectively lost money. You've given them a product, they posted a video, they got no views, [music] you got no orders. The bigger brands understand that is only step one in the equation. There is a through z after the fact and that's where most of you miss. So after that, you take the video, you move it to meta ads, it starts generating sales.

Didn't get views, but now you've gotten some ROI out of it. You put it on your G&V, you put it on your website, you put in your email, you put it everywhere else you can. Now, that one sample has turned into thousands of dollars on the back end. But most of you do not realize you need to leverage this across every place you possibly can to get the value out of it. That's why brands run out of money sending out product [music] or get tired of Tik Tok shop is because they shotgun approach it.

They waste the content. [music] You do not want to purge and trash all of those videos. You want to put it in a refinery that then spits it out to a hundred different parts across [music] all of your funnel to get the value out of it. And this leads us to number nine, which is the mindset shift. We need to understand founders that scale to an unfathomable amount of growth have a mindset shift at every stage. And in order to get to the next level, your mindset must shift, too.

And so, most of you are stuck in technical [music] mode. We've all been there. And it's a fun place to be because being technical and trying to figure [music] out that one little new update or if we just turn on this button or maybe it's this audience or maybe it's this one specific [music] creative or maybe it's this one word on our website that is getting down so granular and so technical in this and [music] a lot of people get obsessed with it and it's a good thing because you need to do the work and there are many tasks at hands to be able to perform these things that we're talking about and the nitty-gritty really does matter in the technical world to be able to make this work. you have to have it.

But getting stuck in the technical box, you start to miss the bigger picture. You can't see the full funnel. You get locked on one specific thing where you obsess over meta too much and then your website goes down or [music] your Tik Tok shop is lacking. There's other pieces of the funnel that you just entirely miss by being overly technical. And that's where you have to kind of shift to a manager mindset [music] where you've learned to delegate and manage people.

This is where you've removed yourself out of the technicalities. [music] You now are looking at each platform, but there's still some limitations here. Although you're a manager, you're delegating to people who are doing these tasks. Somebody's running meta, somebody's [music] running Tik Tok, somebody's helping you with your website, you have emails going. The problem with this role is though, all of these operations work in silos.

Your meta ads person isn't really talking to your email person. [music] You're looking at, hey, what is our meta performance? And you're talking onetoone with that person without taking into account that conversion rate impacts meta. And then you go to your conversion rate person. and you say, "Hey, we need to make these tweaks." Something goes wrong. And then your meta ads drop. You go back to your meta ads guy and you're like, "Hey, what happened?

Why are your rorowaz down?" And he's talking about some reason it's the meta ads. But really, it was something the website guy did. But because there's no communication flows between each person, there's no cohesive departments. There's no structure to it. You start to begin to look at this as silos. And you're working independently with people, and you're measuring them based off of their performance on the platform they own.

And this ends up becoming a disaster long term because you just don't know what's working. You're firing, you're hiring new agencies, you're switching consultants because you're just not seeing the big picture still. And this is where you have to switch into the operator mindset where you can now see the business as an interconnected flywheel. You understand that Meta, Tik Tok shop, creatives, email, SMS, website, [music] retail, Amazon, they are all one piece together.

It's a whole system that works fluidly and that all people need to be communicating and that all metrics impact one another. If somebody messes up on email or totally collapses that it can affect everybody else and that's not the meta person's fault. That is the email person's fault. So you have to be able to know what metrics are tied to what and this is where you get the flywheel approach. You know that if you're sending a ton of creatives to Meta from your Tik Tok shop, you're going to increase performance.

If you raise your overall conversion rate on the site, that's going to help everyone else. If you get more organic content out there, it's going to help [music] every stage of this. So, you do not want to look at it as a isolated series of tasks that you need to complete. Multiplying one part multiplies the next. And this is where scaling becomes [music] inevitable. So, the moment you can see the full funnel and understand the entire picture together, this is the ultimate operator approach that allows you to scale the entire business [music] as one cohesive force.

That is why when you have a creator community, we literally get on calls with them and show them our meta ads. We show them our conversion rates. We show them the metrics. Everyone is on the same page. The website guy knows what the ads are doing. The ads guy knows what the Tik Tok shop is doing. The Tik Tok shop person knows what the emails are doing. Everybody knows the exact same amount of information whether they're managing it or not.

So now that you understand these mistakes, building a perfect funnel is nothing without the traffic going through it. So I'll show you the first step in this. the ad creative system I use to 2x, 5x, and 10x the brands we work with in this next video here. So that way you can automate one piece of this pie going forward.