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255: Cannabis Marketing: How to Make $40MM Without Paid Advertising

Posted by Austin Brawner on June 9, 2020

 

Is it possible to build a large, successful business with close to $40 million in revenue without using any paid social?

Our guest, Nate Lipton of GrowersHouse, shows us how it can be done. And, in addition to not using paid ads, he’s been able to get his customer acquisition costs to zero.

Nate shares the different approach to marketing that has helped him build several incredibly successful companies in the cannabis and hemp industries. He talks about exactly how you can use YouTube to establish yourself as a trusted brand and drive ad-free sales. 

If you’re looking for some refreshing ideas for how you can drive more revenue, this is a great episode to jog your imagination about what’s possible.

Episode Highlights: 

  • 5:54 Nate’s involvement in the cannabis and hemp industries via multiple different businesses
  • 9:44 Fixing a gap in the cannabis industry: the creation of the Growers Network
  • 12:18 The YouTube channel that lifted the veil on growing operations
  • 16:37 How Nate got started in ecommerce and his number one piece of advice for beginners 
  • 20:28 What Nate would do differently if he were building his website today
  • 22:31 The future role of video in ecommerce and common YouTube misconceptions
  • 24:58 Using video to provide clarity around what a product actually does
  • 30:42 One factor that will help you win more customers in the long term
  • 32:37 How connecting with your competitors and being radically transparent can benefit your business in a major way
  • 35:40 Other non-traditional advertising channels that Nate’s using that have resulted in zero customer acquisition costs
  • 41:05 The questions you need to ask yourself to reframe your approach to acquiring customers
  • 45:37 What you can do right now to increase your revenue

Links and Resources: 

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Transcript

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Austin Brawner: Welcome back to another episode of the eCommerce Influence Podcast. My name is Austin Brawner.

Andrew Foxwell: And I'm Andrew Foxwell. And I noticed you didn't say, what's up, right there. I was thinking, really, we should ask people more like what is up and they should tell us what's up, what's going on. I mean, what's the best way if somebody does have a thought or a comment on future podcast episodes to kind of give them an outlet to give feedback or episode ideas.

Austin Brawner: I think Twitter is probably the best place at this point. We've been if you want to hit us up on Twitter, that's a great spot to give us some feedback, we'd love to hear your thoughts on this episode, on previous episodes, ideas that's we spend a good amount of time going back and forth and where we find a lot of our guests as well.

Andrew Foxwell: Yeah, I think that's what I was thinking too. So I think that makes sense, but today's episode really an awesome one with Nate Lipton, who I really liked speaking with honestly. And I think it is an incredible episode talking about really how he creates content, and how he became kind of the main content person for a specific niche and then started selling products to that niche. And it's really, a lot of really good, actionable tips inside the episode.

Austin Brawner: Yeah. And a lot of the episodes, I feel like we get, get the same story about growth for many fast-growing companies, right? Like they figure out how to use paid social and they're able to kind of scale things up, but that's a very common story. The thing that I really like about this episode is, it's not like that at all. Right? Nate has come, he's built a really large business, I think almost $40 million in revenue, and hasn't used any paid social.

Part of it's because of his industry and part of it's because they've been able to figure out ways through YouTube to actually get negative customer acquisition costs, which is a really fascinating concept that I think a lot of you guys can take away from this. And yeah, you just gotta really get fascinating entrepreneurship story and marketing story. And I think if you're trying to come up with some ideas and are feeling maybe stuck with your business, this is a great episode to jog your imagination about what's possible.

Andrew Foxwell: Yeah, I think you're totally right. And the thing that I really like he talks about is just the way that he understands the way that everything works together. I think that a lot of us, like you said, paid socials is one place to start, and then you don't kind of see the whole ecosystem of a buyer or how that person might bounce around and look for different reviews or look for feedback. And he certainly does. So, let's go ahead and welcome him to the show.

Austin Brawner: Nate, welcome to the show, man. Really excited to have you here.

Nate Lipton: Yeah, thank you guys for inviting me. You know, quarantine is fun with friends.

Austin Brawner: It is. It's a great time to talk to people. I mean, this is the great thing about the podcast is getting to meet new people we've never met in person before. But I'm excited because I spent a lot of time just digging, like doing some research and trying to learn a little bit more about you before this interview. And you've got a really fascinating story. I'd love to hear a little bit about if you tell us a little about yourself, and maybe start with, how do you describe what you do? Because I think it's quite interesting.

Nate Lipton: Yeah, let's see. Should I start with how I got sported in eCommerce or how do I describe like what I do with my 30-second pitch?

Austin Brawner: Why don't you describe what you do? Because I think it's really interesting. And then we'll dive more into kind of how you got into eCommerce, how you got into your businesses.

Nate Lipton: Okay. So, I focus on eCommerce and digital marketing within sectors that are usually kind of orbiting the cannabis and hemp industries. I'm a person who doesn't have a growing operation or a dispensary, but what I do is sell equipment to people who grow and people that have dispensaries. And then I also have some digital marketing and marketing on YouTube and forum type sites and marketing endeavors that are also focused on growing cannabis, growing hemp. And how to help people grow better.

And ends up going down that hemp kind of trajectory, selling cannabinoid-based products, which are like federally legal, CBD, CBG, some of the things that are a little more esoteric that people might've not heard of. So that's kind of the pitch a little bit.

Austin Brawner: Yeah. I think it's, it's really interesting because, you know, we got connected through a mutual friend Andrew Darien, he was like, "Hey, you got to interview Nate, he's a really interesting guy." And I started going into doing some research and I started to realize you've got like multiple businesses that are all like a loosely tied together. They support each other in some way, but I started thinking about it and I was almost had to like draw it up in a whiteboard, how they all worked together because I thought it was so interesting.

I would love it if you could maybe give our audience some context on like the different businesses that you run, maybe explain how you got started with Growers House and what other businesses kind of surround Grower's House and how they interact and work together.

Nate Lipton: Yeah. I can absolutely do that. So it is complex. Sometimes I do tell people you do need like an organizational chart to kind of understand the interplay between the businesses. And to be honest, I probably started more businesses than I should have. But it was necessary for me too, but I will tell you, it's been exhausting at times going in so many different directions. So, let's start with the first business, which is also the main business, the one that does the most revenue and it's growershouse.com and that's the eCommerce site that sells cultivation, equipment, and supplies.

And a lot of these are hydroponics space, but we also sell greenhouse and soil and organic-based equipment. And it's everything from, we have 16,000 products in our backend system, and that's really everything from lighting to soil, nutrients, irrigation, flood tables, pumps. I mean, it is so many categories, really. I think there are 360 categories and subcategories on our site to give you an idea of the breadth.

That business, we're in 2020, and we're hopeful that we can be doing potentially somewhere on the 40 million Mark in 2020. And, what came after that was we noticed that there was a little bit of a hole in the market for people to communicate with one another about this growing cannabis industry, as it goes from something that was a little bit more of like a hobbyist kind of endeavor to actually becoming an industry. Having professionals.

Having people that have nine to five jobs, have professional degrees that are working in it. And I had such a kind of profound experience on a forum like that for eCommerce from Andrew Darien at eCommerce fuel, and I gained so much knowledge from other eCommerce professionals that I was like, "You know what, the cannabis industry needs, something like this, as it goes from kind of adolescence into maturity."

So we created growersnetwork.org and that site really is a kind of like a forum. And then we also have classes for growing, and there's a private aspect to it for people who are in the industry professionals. And then we also have a hobbyist aspect that we launched for more of the home grower and things of that sort. And, obviously, there's a blog, we write a lot of material on there to help train and keep people up to date on what is the newest technology in the cannabis industry, or, the newest maybe methodologies for growing. Things of that sort.

But we did have to separate that from growers house, the equipment side, because the equipment side we sell to government, schools, and we're not really with that business trying to go down the cannabis path. We want to be more plant agnostic. And so we needed a little bit of separation of church and state between something that was heavily focused, really acknowledging the cannabis industry and one that could sell to many different types of customer groups. So, those are two different businesses. And the thing is with the cannabis industry, it's really tough to get things like banking, credit card processing.

So having that significant volume going through Grower's House, we didn't want to put any of that at risk. So, having a totally separate entity was important for us. And, I lived in this place called the pirate mansion. And the pirate mansion was like a collaborative living space that I started with one of my friends, Elliot. And this guy, Nick Morgan was one of the people living in it in Tucson here.

And he was working for some startups. And I was like, "Hey, I have this idea for this company, but it needs someone to really run it." And he said, "Let me get my hands dirty." And he's been running that since about 2016, 2017. And then, in 2017 out of that span a new brand called Canna Cribs, which is a YouTube channel really. And the YouTube channel goes over like, "Okay, why don't we go into the largest growing operations of cannabis in the world and show you exactly what's happening.

Let's lift the hood on this and show you who's working in these operations, how they're growing. It's almost like How It Works on Discovery Channel, if you've ever seen something like that, but just around cannabis cultivation. And the cool thing that ended up happening from it is we had some, that now have over like a million views. But a lot of people in the cannabis industry, it's tough to get into a cannabis growing operation.

Like you can imagine the security, let alone the fact that a lot of these growers, they have these, it's like their secret sauce, how they grow and how they get the best plant is a little bit unique to them. And they like to keep it close to their chest, but at the same time, they want to build their brand. So they want to build a brand. It seems like a little bit more than they want to keep those things close to their chest. So they ended up telling us everything about the growing operation. And now a lot of the cannabis industry is using it as training material for new employees.

People that are getting into the cannabis industry are selling equipment, people who are graduating from college that say a plant science department, but they want to learn more about cannabis cultivation to go there. They're watching all the videos and then they're able to speak intelligently about it, which is really cool. There is one more of course because I can't, it's a little complicated, but just this last year, like December 2019, we started truepotency.com, which is a CBD company that we started just because again, we saw another gap in the market due to us just talking with these people every day.

And by these people, I mean Commercial Cultivators of Hemp and Cannabis. And there wasn't any eCommerce company out there that was the third party, independently testing hemp products to make sure they pass a battery of tests, including basically that the product actually has the amount of CBD or CBG or CBN that the markets it has, but it also doesn't have things like pesticides or molds or mildews, heavy metals things from bad manufacturing processes. So, okay. That's it. I promise.

Andrew Foxwell: I mean, the thing that I really find I like a lot about your story is obviously as Austin said, is this sort of interconnectedness of all of it, and how you saw the opportunity to take... You started one thing, saw an opportunity saw that there wasn't communication happening there, and the interrelation of that, and it's kind of continued. Also being a content producer is a huge part of this because so much of the information share that happens particularly in your industry.

And I think a lot of other industries are driven by people that are just out there being really transparent about the information. And obviously, YouTube is the second biggest search engine in the world. And so, that's a great way to find it for people and then you're the authority. Which is really, really cool. Right? And then obviously then it flows down to your products being that way.

So I think that piece of it is campy interstate. And I think if you're an eCommerce business owner, one thing to think about always is, sort of, as we say, I'm a Facebook and Instagram, advertiser and trading. Like we talk about horizontal scaling, which is similar in what you're talking about, which is, how do we create other entities that are content or sites that are going to really drive the authority into our main site grower's house for you? The one thing I'm curious about is, is clearly this is now your million dollar business, a multimillion-dollar business, really.

But on the first website that you created, you paid the developer, I think it was $2,000 in a watch. Can you talk about like the journey to your first 1000 customers, and that journey that you had and what other advice you'd give to people on their first journey to the first 1000 customers?

Nate Lipton: Yeah. And I would definitely say that people should not follow my journey if I were to do it over again, I would probably do it very differently. But I was young. I was about 20, 22, 23 jumping into starting growershouse.com. And at that point, I worked for another eCommerce company for about six months and started to understand how they work. And I understood that eCommerce was going to end up being the future of the way people shopped, and the cannabis industry and things related to it did have a pretty rosy looking future in my eyes.

Although it was uncertain back then, we're talking about 2011, 2012. And you could really see it on the horizon. And I was willing to say, "You know what, maybe this is a good place for me to focus on where I'm not entering an industry where there are people that have 60 years of experience on top of me." So, I feel like it was a little bit more of an even playing a field at that point for anyone jumping in. And what I did was you're right. My father ended up working in business in mail order, which if you really think about mail order, a lot of people don't even know what that means anymore.

But it means like you receive a catalog in the mail, like a land's end catalog. And then you're like, "Oh, that looks like a great sweater." Let me call the phone number, give them my credit card number and ship it to my house. So, he did that for consumer electronics, and he understood the business and how those things worked. And eventually, the businesses that he was participating in, ended up shifting from mail order to eCommerce. And so, I was even in one of them, like when I was 16, my first job was basically cleaning the bathrooms and vacuuming the place.

So, I will say that I did have a little bit of experience just visualizing eCommerce, although I didn't really participate in that job. It's really good to have someone who has been through it before. That's what I would say. And I leveraged my father's expertise in the business. How to work with vendors, how to manage inventory. If you don't know those things and you're jumping into eCommerce, find someone who does, and whether they're a mentor, a business partner, just a close friend, it doesn't matter, but you would need someone's ear who really understands that.

And then the really the second thing jumping into it is, yeah, we called one of the people that my father worked with in the past, who was a developer and he was at that point in time, not doing too much-taking life easy. And we said, "Hey, we're trying to start this new business. You're kind of friends. How about you help us get this site off the ground?" And he's like, "Yeah, I'll build this custom site, basically." And we ended up building like a very basic site on top of Magento platform. And we gave him two grand.

We actually flew to Las Vegas because he loved to go to Vegas and gamble. So he said, "Why don't we just meet in Vegas?" And we're like, "Yeah, sure." We didn't really want the gambler or anything, we definitely wanted a website. So we met him there and he would gamble during the day, and then develop the website at night. And yeah, my father said like, how inexpensively can we do this? And he's like, "Yeah, I really like your Movado watch. So, if you give me that and two grand we'll make it happen over the next five days while we're here in Vegas.

So that's how we built the site. And you know, if I were to do it over again today, Shopify wasn't there at that point in time, but I would definitely jump on Shopify. Or if you know that you want to do a ton of customization and you're working in a lower margin business, you might want to think of something else instead of Shopify, just because, you know, they Shopify is great for getting you up and running in one hour, but what you're paying for is for convenience. So Shopify will probably cost you more as a percentage of let's just call it software overhead.

And it would be if you said, "You know what, I'm going to end with a little bit more time and being my own developer or making some more customizations inhouse or with someone else on, let's say Magento platform or there are quite a few other ones eCommerce, things like that.

Andrew Foxwell: Super interesting. When you look at a company from the outside that has grown over a period of a year, it's like, there's so much about compound interest in a growing a business where things, you grow slowly over time, so they over time and then they continue to speed up and speed up and speed up. And one thing that I'm really fascinated about by is customer acquisition and costs. And, when you talk a little bit about Canna Cribs and that aspect of YouTube and how well you going into those channels going into this grow operations and then getting videos with like a million views.

I always enjoy looking back at the first videos that people put out on their YouTube journey and seeing kind of how far they've come. And I went back and looked at the, I think the first video from Grower's House, which was like seven years ago. I would love to hear a little about your journey on YouTube considering obviously you guys have restrictions in your industry about how you can advertise. Could you talk a little about your journey on YouTube and maybe some common misconceptions about YouTube and content creation?

Nate Lipton: Yeah, yeah. I'd love to. I mean, that's definitely one of the most fascinating realms of eCommerce right now, because the way that people ingest information is going to be more and more, either silent or audible video related. And what I mean by that distinction is like, I do think eCommerce sites, you go to a product page now, and there's a picture. In the future, I do think there's going to be something more like a gift of a product because it helps you understand what you're looking at a little bit better in the same way that video helps you understand, maybe if you're shopping for a product and you want to compare them, you can understand it better.

And it's so much easier than let's say reading a thousand-word article. It's a picture's worth a 1000 words. A video is worth 100,000. And when I started on YouTube, I saw that some other people were doing it in the kind of hydroponic cultivation equipment space. And I just said, "You know what, that's really smart, but I also think if I can do what they do, then maybe add a few more things to make it even better. What would those things be?" So kind of how I started off, and I literally ordered like a $200 video camera online.

And it was, to today's standards, it's like probably potato vision. Some of you are familiar with that. It's just meaning the very bad quality video. But the thing is, one of the common misconceptions I think with YouTube is, if you don't have good equipment, you can't be effective on YouTube. That's not true at all. I think you could use your cell phone and be effective at YouTube. It's more about what content you're putting out. And my first videos, like seven years ago, the ones that I look at and cringe, they're actually people still watching them today.

And I think one of the important things that I have to recognize, even though I want to pull them down is that, other people still find value in those. And I probably have to remove my ego from whether I look cool or not in them. And I think other people should do that too. It's more about the viewer. What can they get out of it? What kind of value can they get from watching your videos? So, I started out with product reviews. Like I knew there wasn't a lot of good information in my industry that gave you like a picture of a product, maybe one, maybe two, and three sentences about it.

That's not really sufficient for someone buying online, and it probably makes them want to go into the store. So how can I give them enough information that they say, "Oh, I understand what that product does. I like it or don't like it and I'm going to choose to buy it or choose an alternative." So, that's kind of where my thought process was when I was really starting the YouTube journey. It's how can I clarify the understanding of products for people. And so I did a lot of reviews of products and then I noticed that one really took off, and it was when I took four LEDs, LED grower lights and I compared them against one another, almost like consumer reports or a car and driver test against cars and say, "Oh yeah, three different cars, zero to 60 times when you see which one's fastest."

We kind of did that with the light meter. And these led grow lights, and people love that. It took off and I was like, "Wow, this thing is actually very powerful." And then I saw a lot of people buying the one that did best. So I was like, okay. It's sometimes hard to understand from putting a video out how it's going to translate to people. Let's say purchasing on your site or completing any action, let's say signing up for an email. But these days I think you can use UTM codes, coupon codes and some other things to be really smart and savvy with it, especially with YouTube understanding that there's such a powerful search engine, there's a lot of ways you can connect it to analytics and AdWords so that you can see the line from A to B a lot easier.

So, as we are doing more and more videos, as long as network came, I've had always wanted to do something that's focused on the cannabis side, but I couldn't do it on the Grower's House side. And Nick, who's running Grower's network also said, "Hey, wouldn't it be cool if we did this type of project where we filmed a growing operation and you know, really got people inside of it? And I said, "Yeah, that would be cool." Who do I know that has large growing operations. And we knew a lot of them because a lot of them were customers at Growers House.

And we helped them send all their equipment to these large growing operations. So, I called some of them up and said, "Hey, we have this video concept. Would you feel comfortable with letting like a whole bunch of people into your growing operations showing us what you do? And you know, maybe you don't get a lot of views and it'll help build your brand." And they said, "Yeah." They were just friends of ours. They didn't know what would come of it. And we assembled a team of I can say rapscallions out of Tucson.

This wasn't like a Call a production company. And let's make sure we get, a team is built tons of documentaries before it's like, "Hey, these were some of our friends who just graduated from the University of Arizona." Some of Nick's friends, they've used them for small projects here and there. And we brought together this group of about, I think then, it was like six or seven people. And we didn't even really know we were doing. But some of our friends were like, "Hey, you need an audio guy. You should have a director, you should have two camera guys, and then you should have a production assistant, too, to like make sure that we can run around and get everything done.

And they have to sign waivers because what if we put it out there and they say they don't want it to be up there and we have to pull the video down." So, these are things you have to take into account when you do a larger production. And we did it and you know, it kind of took off. And I will tell you as you can look at those videos, it's still that same team from two, three years ago. We're still just like, I think the average age of our teams, it's like 27, it was probably closer to 25 when we first started.

But I mean video production has gone to the masses at this point. I think anyone can really become a good video editor with like a month of dedicated practice.

Andrew Foxwell: I think that the journey about videos to me I think is... Well, let me reframe this. A lot of people feel that video is a great way to acquire customers, especially in Facebook and Instagram world. Like that's a big part of it. And you're clearly doing that. But I think what you, what you noticed or saw early on was people that are new in this like everybody loves a comparison and testimonials and reviews, right? Even if I have often sometimes like I'll be looking at a review website or something and I'm like, "That review is more meaningful to me, even though I have no idea the authority of this person, the fact that they've reviewed these two webcams, even if it's not from something like Wirecutter, I take stock in that just because it's like they've reviewed it.

I don't know. You know, it's like there's something about it that has just by nature of them doing it has authority as part of it. And clearly, you know what you're talking about, right? Like you're an expert in this, and so that's why wouldn't that just play right into it? Like, "Oh, okay, well Nate says this is the best pro lamp." Like, yeah. Because they're probably starting out or looking at it, and the ones that are, it probably ranks really well obviously now because you did it so long ago. I mean seven years is like, obviously, that's like 100 years in the internet world.

In like the eCommerce world, right? Like, I've been Facebook advertising for like 10 years and I feel like I'm literally a grandpa. And so, I just think that that's very interesting. And I think that one thing that you could do in certain industries is take more of an angle of review and even if one of their product is more expensive than yours, and maybe you like it more than yours in some sense. Like that transparency is going to win your customers more in the longterm I think.

Nate Lipton: I 100% agree with you and here's an important note again for things like YouTube, there's YouTube has made it so that reviewing products has become much more democratic. And the democracy is based on how objective you layout your process for reviewing, and can it make sense to the average person? And if you can do that, and it doesn't matter if you have a million followers or zero followers. If you put that up on a platform like YouTube where everyone's created equal, except for how sticky their content is, right?

That's how you end up getting ahead. So, you can have zero followers put up a great video, someone watches it from start to finish, which YouTube then pays attention to and says, "You know what, the average watch time for this video, most people on the average video drop off after let's say 40% through the video, but the average time people are dropping off for this video is 90%." This is good content, let's prioritize it. Next thing you know you have an extremely successful video or video channel.

Andrew Foxwell: Right. Yeah, I agree. They've made it where they like you said democratized it and they've made it so the metrics make sense and are able to translate it into more for you. And I just think that that can't be understated. Like how you saw the network of putting these things together and having like the information be the lead, and obviously having a place that you would drive people with product. But then going through and seeing the opportunity of the inner communication within the industry, which is just an absolute goldmine.

Because this is an industry that is incredibly unclear. I was thinking back when you're talking about this too, I referenced them actually in a recent podcast, too, is Matt and Meredith, our friends from Boredwalk T-shirts who, if you've been in the ECI forums, if they're the camera's feel forums, you probably know them. And the big part of what they do is speaking to other people that like they talked about how they resourced some of their products, and they spoke to other people that also sold T-shirts, like obviously.

And it makes a ton of sense, right? But I think that a lot of you will feel like they don't want to do that because it's competition. But I think you will gain more than you pull away if you start to do that, and Austin, obviously in the Coalition, in his community, that happens all the time.

Nate Lipton: Yeah, much agreed as well. I mean for example, for truepotency.com that CBD wellness site that we have, I ended up hooking up with five other CBD companies where we're literally, from the outside in, competitors. We're all selling CBD online and we're going after the same customer. But we said, "Hey, this is a new industry, we have more to learn from each other and we have monthly meetings now." And in our first inaugural meeting, we said, "This is a place where we're going to have some radical transparency in terms of the information that we share elsewhere this just is not going to work.

Everyone's going to be thinking about what they should say or shouldn't say. So why don't we just be radically transparent, and a rising tide will lift all boats. And it's been a great experience and I highly recommend it to anyone.

Austin Brawner: It's so interesting and back to like just your whole, at the beginning as you laid out all these different companies that are working together, a company like True Potency, and all of your content. I think that the thing that's so interesting about this is you've got this kind of ecosphere of information that's guiding people in the right direction for them, and in many cases, it ends up on your site, but it may also end up in other places, which is a part of that deal with creating content and good content like you mentioned if you have a process for like actual accurate reviews.

I think so much of this is based on the fact that it's really fricking challenging. If you can't just go to the traffic store like Google and Facebook. I think a lot of times people rely on, if you're in an industry where you can just go to the traffic store and buy traffic, they rely on that. If you're a lot more creative when you're not in an industry that is accessible by traditional advertising? What are some of the other non-traditional channels that you guys have tried to advertise your brands outside of YouTube that you've talked about?

Nate Lipton: So, it's important that you know, we also really focus on the Growers etwork aspect growersnetwork.org in the forum. And, if you think about it this way, overarchingly, what do I want to be and what do I want to do? So, in answering that question, we said, there's a lot of people that are really good at agriculture, traditional agriculture in the commercial sense for growing, let's say tomatoes, cucumbers, corn, that someone hasn't really stuck out in the cannabis and hemp arena. And can we be that person?

Okay. What does it take to be that person? Well, if we can sell equipment and we can educate people and we can make them better at their jobs, then we're probably going to be successful. So, basically, everything that we're doing in terms of a cross-pollinating between Canna Cribs for the video series to Growers Network forum, to Growers House, the equipment side, all of those things are part of the same solution. They're really just packaged a little bit differently. And so, the forum, we do have videos now that we started courses where we ended up teaching people, it's almost like Udemy or Coursera.

But we have, okay, you can take a class on how to grow, let's say it is hemp or cannabis in your home or how to harvest cannabis commercially. And those courses are on the site. And then people are able to talk about it with one another on the forum. And an interesting thing is if we have, let's say some new products that we want to come out with, we actually give it to the forum for them to test it out and tell us if the products are good or not. And that does two things. One of them, it obviously tells us if a product is viable for the market, but two, it starts building bugs about the product.

If it is good, they say, "Oh yeah, this is awesome. Like when can I get it?" And they start talking about on the forum. And it's a good way to really have this kind of bi-directional flow of information with your customer group. And the cool thing is, as this industry grows, everyone wants to get in front of the growers, right? So they want to be like vendors, manufacturers, they want to be part of our forum. They might want to advertise on it. They want to be in Canna Cribs. They would love to be included in episodes where they can get some visibility on their products.

And that's kind of how we fund grower's networking and Cannon Cribs. Even though when we go to visit a Canna Cribs location, we don't put products in there. It's like we just go and visit the operation and say, what are all the products you use? Cool. Then we reach out to all of those manufacturers and say, "Hey, can you help us fund this episode? And in exchange, we'll just make sure that your product has shown,sza and we'll give you a text call out box. But you know, we're not staging anything as long as we're putting anything in there."

Honestly, that would be too hard on a commercial growing operation. Like you're talking about a $10 million very sophisticated operation and we fly in for two days. Right? So by doing that, we get some of these vendors, manufacturers we work with as strategic partners to help fund us creating content, which really, as we were talking about earlier, it helps it so that our marketing endeavors don't really end up costing us anything. We're able to be basically cover our costs with advertising revenue.

And next thing you know, we have people visiting our site, and when you have people visiting your site for free, or you're doing marketing that is even slightly profitable, your customer acquisition costs becomes zero or negative. And if you think about that concept, it's like, "Let's talk about Google advertising compared to this structure we just spoke about." Google advertising is playing the commodity game, and it's unfortunate in many respects, and this doesn't go for all advertising, but let's say Google shopping.

Then let's say you're a shoe store. Let's say you sell Nike and Adidas, you're competing with a lot of other retailers selling Nike and Adidas. And what happens is, they keep looking to increase their bids to get farther into the front of the line. And all that happens over time is your margins go farther and farther down because you're not the driver of your own destiny. At any point, some company could come in funded by a big parent company and say, "Yeah, we're willing to lose money for a year to gain customers."

And you might not be in a financial position to absorb the kind of margins that, that would end up imposing on your business. So, how do you become the driver of your own destiny? You need to be creating the content that leads back to your own site. And what that content is. Everyone has to think about what makes the most sense for their customer and what helps them make a purchasing decision. Not necessarily what information they're going to go look up online and then go back to watching TV and they got the answer. It's more of, "Hey, how do I really help them in purchasing a product as an eCommerce store?" And that's what people need to think about.

Sometimes they'll write articles or make content that has a lot of search volume, but it doesn't have purchasing intent. And I think people really need to take those two things and separate them. And there is a lot of importance for top of funnel. And for people that aren't too familiar with that, it means like, how do you catch someone at the beginning of their searching experience for whatever it is they're looking for. But once you capture them a little bit, is that person just looking for information or are they looking to become a patron of your store? You need to make sure that you're not just making a whole bunch of friends.

Austin Brawner: Exactly. I mean, a classic example, I just bought a pellet smoker. Like if you rank for what is a pellet smoker that might not sell, but if you rank for the best pellet smoker of 2020, that's got a lot more purchasing intent. I want to follow up on that, because I think what you're talking about is so incredibly powerful, and in many ways, we run a similar operation here because we have a podcast that has sponsors, which also happens to drive both of our businesses. Both Andrew and I are paid to create content and picked great content that also drives our business.

I think that concept is incredibly powerful. I think that one of the reasons people don't go into it is, it often takes time. Time and consistency and energy to do that. I have a business coach named James Schramko who talks about this concept as rather than betting on a horse, like betting on a horse, which would be like a bet on Google or Facebook or a specific channel is like, it's better to own the racecourse. And that's what you own the whole ecosphere. And I think that's what you've done is a great example of owning the racetrack.

You've got the community where people are having conversations about purchasing decisions. So, rather than being reliant on all these other aspects, all these other things that are out of your control, once you own the racetrack, you've got everything within your sphere and people are playing a game within your rules, which is extremely, extremely important and cool and interesting. I think if there's one thing people take out of this, that is the most incredibly powerful reframe of acquiring customers that you can take away from this interview. So, I'm really happy that you dove into that and I don't even have like a question. I just wanted to highlight that because I think it's incredibly, incredibly powerful.

Nate Lipton: I definitely agree with that. And if you think about this concept of a zero or negative customer acquisition costs, sometimes that doesn't like sink into people a little bit, but sometimes I can reframe it this way. I create content that brings customers to our website, and I get paid to bring customers to my own website to purchase things. I don't pay Google to bring those people to our site. From those marketing endeavors, in particular, that's really the Holy grail of eCommerce. If you can end up not paying for advertising but ended up making advertising and content creation, its own, think of it as a business division with its own income statement. Its own source of revenue.

Or that revenue and income can even be realized on the eCommerce store if you realize that the amount that it cost you for your content creation is so heavily outweighed by the traffic and revenue you're bringing in from it. It's really two sides of the same coin.

Andrew Foxwell: I think this has been incredibly helpful. It's been just an absolute pleasure to speak with you. One final question for me is as an astute observer of a lot of different businesses that have been getting off the ground and everything else, you see a lot of positives and negatives and mistakes, and successes. What are some things that eCommerce business owners can implement now that you just don't think a lot of people are thinking about? That can have an impact in their revenue?

Nate Lipton: Yeah. Answer to this question is usually things that we've chatted quite a bit about during this conversation, including content creation, getting into video, even if it's something that you don't understand how it's going to work yet. The best thing is to get your hands dirty so that you can get to the other side. And those content creation ideas really start to gel where they might be very nebulous right now. Another thing that I'd probably, let me think about some of the things that had the biggest impact on me lately.

I would say joining a mastermind group, which can also just be, it really just means a group of peers where you guys can trade ideas. That's extremely important. I think you're going to learn more from that mastermind group than you are, like in 15 minutes, then you will probably 10 hours of reading about the same topic. So, if you think about your time as something that is finite and that has to be used judiciously, that's a really effective way to get information to get ahead of the competition even though you're kind of using the competition to get there.

That's something that's extremely important. And then, getting extremely close to, I would say this has really helped me out to my vendors has been awesome. One thing that I do is, I'm a little bit, you can call me, I forgot how the terminology goes, but an introverted extrovert or an extroverted introvert. I don't want to spend my time on the phone eight hours a day talking to people necessarily. I like being thick in the work. But with a lot of my strategic vendors, whether it be at FedEx, someone I do affiliate marketing with.

It could be a manufacturer I do a lot of business with. I set up a weekly call with them every week, and it's just stuck in the calendar and we chop it up. And think about this for not just someone that you like talking with because they're a good person, but the top five vendors that have the biggest impact on your business. And out of those conversations, more things start flowing and you'd be surprised at what new ideas you end up cooking up together. And those weekly calls ended up becoming extremely valuable. And every once in a while you might skip it. Sometimes the call might be five minutes, but sometimes it'll end up being 45 minutes.

That's okay. What's more important is the consistency of speaking to those people.

Austin Brawner: That's awesome. That's a really, really good tip. So many people can take away right away. Hey, what's the best place if somebody wants to connect with you or learn more about what you're doing, and what would be the best resource that you direct them to?

Nate Lipton: Yeah. In terms of reaching out, email works well, so does probably Instagram. I don't really spend too much time on Facebook or any other type of social media platform. So on Instagram, I think I'm Nate.J.Lipton and then emails just nate@growershouse.com. And I try to get back to most everyone, but I will say I'm not perfect. And these days life is pretty hectic. So, sometimes I'll respond and just say like, "Hey, let's pump this for a month from now." But that's okay, feel free to reach out. I try to talk with people whenever I have the time.

Austin Brawner: Nate thank you so much. Man, I really appreciate it, and we'll talk to you soon.

Nate Lipton:
Cool. Take care guys. Appreciate it.

Austin Brawner: Welcome back to another episode of the eCommerce Influence Podcast. My name is Austin Brawner.

Andrew Foxwell: And I'm Andrew Foxwell. And I noticed you didn't say, what's up, right there. I was thinking, really, we should ask people more like what is up and they should tell us what's up,...

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