4400 Flashlights Sold, $79 Price, $23 COGS, 55% Net Margin with TrueGunner CEO Tanner Larsson

tanner-larsson

In Episode #481, Nathan interviews Tanner Larsson, co-founder of 80/20 Media, CEO of e-commerce brand incubator BuildGrowsSale.com. He’s also the founder and facilitator of an exclusive e-commerce syndicate called Black Label – composed of the best and brightest marketers, CEOs, and entrepreneurs in the e-commerce space. He recently published his first book called Ecommerce Evolved which offers readers a box view of how successful e-commerce brands build, grow, and scale.

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Famous Five:

  • Favorite Book? – Rocket Fuel
  • What CEO do you follow? – Ed O’Keefe
  • Favorite online tool? —FastStone Capture
  • Do you get 8 hours of sleep?— Not even close
  • If you could let your 20-year old self, know one thing, what would it be? – “You don’t have to fund everything out of your own pocket, there are other options available”

Time Stamped Show Notes:

  • 01:27 – Nathan introduces Tanner to the show
  • 02:15 – Tanner’s ecommerce world started in 2001
    • 02:20 – Started in eBay and Tanner became a powerseller
      • 02:31 – Tanner was doing $ 50,000 – $ 100,000 a month in eBay
  • 03:00 – “There’s no reason not to sell a physical product”
  • 03:25 – Tanner and his team have a number of e-commerce brands
    • 03:36 – 2 main brands have done $6.5 million in a year
  • 03:48 – They had a problem in production
    • 04:06 – “We’ve had different bottlenecks that prevented us from growing at the rate we could have grown”
  • 04:30 – The flashlight market
    • 04:38 – Tanner doesn’t want to sell what everybody is selling
    • 04:47 – The gap they saw is between the lower price entry level flashlight and high-end flashlight
    • 05:03 – Tanner and his team develop their own flashlight and a kit
    • 05:17 – Truegunner.com
    • 05:25 – The flashlight is in a sales funnel
      • 05:34 – The funnel path
  • 06:02 – The bestseller flashlight is the M600 tactical utility flashlight
    • 06:07 – $22 manufactured price from China
    • 06:32 – They had a much higher per unit cost and much lower profit margin on the first order
      • 06:43  – First order was at a minimum which is a thousand
      • 07:03 – Total is $30,000 tied up which equals to $3 per unit price
    • 07:52 – It took 7 months before the first order started production
    • 07:58 – The back and forth from the manufacturing county took time
      • 08:05 – Shipping takes a week which includes the revises that needed on the product
    • 08:30 – “If you’re building your product from the ground, there’s a whole back and forth with the manufacturer”
    •  09:00 – Started selling on November 2015
      • 09:05 – Sold about 4400 units for 12 months
      • 09:21 – Total money in from this product is around $ 150,000 – $ 160, 000
    • 09:50 – 99% of the funds came from Tanner
    • 10:12 – The downside is some raw materials are specialized
      • 10:27 – They have to buy raw materials in advance to prevent going out of stock
  • 11:28 – Most of their sales are funnel driven
  • 11:43 – They were using ultracart but shifted back to infusionsoft
  • 12:09 – They are also using Hotjar records visitor interaction. Like heat mapping
  • 12:43 – They spend $13 per user acquisition on the front end
    • 13:03 – They breakeven in the funnel
  • 13:30 – They also have subscription plans
  • 14:01 – They have 7000 paying user
  • 14:36 – They also have drop-off rates
  • 16:00 – Connect with Tanner through his website
  • 18:30 – The Famous Five

3 Key Points:

  1. Look for alternative funding. Don’t shoulder everything.
  2. If you don’t know something, that doesn’t mean you can’t explore.
  3. Sourcing from manufacturers abroad takes patience and a lot of research.

Resources Mentioned:

  • Toptal – Nathan found his development team using Toptal  for his new business Send Later. He was able to keep 100% equity and didn’t have to hire a co-founder due to the quality of Toptal  developers.
  • Host Gator – The site Nathan uses to buy his domain names and hosting for the cheapest price possible.
  • Freshbooks – The site Nathan uses to manage his invoices and accounts.
  • Leadpages  – The drag and drop tool Nathan uses to quickly create his webinar landing pages which convert at 35%+
  • Audible – Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books.
  • Assistant.to – The site Nathan uses to book meetings with one email.
  • Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
  • Drip – Nathan uses Drip’s email automation platform and visual campaign builder to build his sales funnel.
  • BuildGrowScale.com – Tanner’s website
  • Show Notes provided by Mallard Creatives

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