https://www.listennotes.com/e/7ebf5cc8968d4b6c9aef4842747d7e3d

So this guy has sold $20, $30 million of sugar water on Amazon. And so naturally I posted on Twitter and then this Anon account pops in dude and he's like, it's not that easy, bada bada bada. And he put a chip on my shoulder. I was like, dude, it is that easy. And so then I woke up the next morning and I launched Hummingbirdfood.com I had literally built the whole thing in like 12 minutes.

It's not just like a free offer to entice them to check out $14 all AI generated 100%.

I'm going to to do it, and y'all can do it, too.

All right, this is part two of my conversation with Sam Thompson about all things e-commerce Facebook ads, video generation through AI. Hey, gen, Hummingbird nectar e-commerce business. Yada, yada, yada. You're gonna love it. You don't need to listen to part one first, but if you like this.

One, you're gonna like the one a week ago. Enjoy and share with a friend. So my mom texted me. My mom texted me a couple weeks ago, probably about a month ago at this point. and she sends me this picture of the kitchen counter at their house and she's got a bag of sugar and a pot of water and a hummingbird feeder. And she goes, it was like in our family group chat and she goes, it's hummingbird season. I'm making homemade hummingbird nectar. And I was like, oh, all right. What does that mean? And she goes, you put sugar in water and boil it. And then it is hummingbird nectar. It's like super, it's sugar.

That's it.

It's sugar. I was like, it's sugar. I was like, that's crazy. If it was me, I'd just pop on Amazon and be like, dude, I'm.

Just gonna buy some hummingbird nectar. It's sugar water, basically.

It's very thick, kind of like a syrup. Yeah, basically. It's just sugar water. Technically it's one part sugar, four parts water, or whatever amount you want to do that with. I pop on Amazon just to see, you know, as we do, just like to explore. I come across a few listings of people selling Hummingbird Nectar and you can buy it pre-made in the jug. You get 64 ounces of this, it's sugar water. Let's cut to the chase, sugar water. And they're selling 64 ounces for like 11 bucks. Right? And I click on the listing and it says 80,000 people have bought this more than once.

Wow. Okay. Now that's like, just Amazon is showing you that or a third-party tool?

Just Amazon. Just Amazon. Straight up.

More than once, 80,000 people have bought.

It more than once. They have 24,000 reviews on the product. Okay.

Real quick. They're buying it in a powdered form. So are they just buying sugar?

No, no, no. They're buying the pre-mixed water. They're buying a jug like they're buying the pre-mixed and it's loaded.

It's crap.

Loaded with preservatives and all this stuff because, you know, sugar and water left out just causes mold and bacteria, whatever. Well, okay, so 24, 000 reviews on Amazon, right? On average, one percent of Amazon purchasers leave a review. 24th. 2.4 million purchases at an $11 price point. So this $26 million has sold 20-30 million dollars of sugar water on Amazon. Sugar water. And so naturally, I take a screenshot of it and I post it on Twitter and I say, just an FYI, as a reminder, This guy, and I forget the number, I think it was like maybe 10,000 people had bought it or 20,000 people had bought it in the last 30 days. And so I was like, there's somebody making a quarter million dollars a month selling sugar water on the internet. And then this Anon account pops in, dude. And he's like, it's not that easy.

And he put a chip on your.

Shoulder and he put a chip on my shoulder. I was like, Dude, it is that easy. And so I outlined exactly what I would do if I was going to launch this in that tweet, right? The bag, the sugar, the whole thing. And it just sat wrong with me for like 12 hours. And so then I woke up the next morning and I launched HummingbirdFood.co.

Did you leave the tweet up?

Oh, the tweet's up.

Okay.

Yeah.

And so I used AI chat GPT I. I designed the bag. So I'm selling nectar mix, which is. I'll be so real. I say it on the website, too. It's just sugar in a bag.

Yeah.

Branded as hummingbird neck. It's just sugar. I literally go down to the smart and final, which is the local grocery store, and I buy 50 pound bags of sugar. For $39.97, I take a scooper and a bucket and I load these bags in my garage. And then I got a little $20 heat sealer on Amazon. So I heat seal them, I pack them. I've got probably 120 pounds of sugar in the back of my Jeep right now to drop off at UPS later. And so I start running ads. I download mock-up of the pouch. I give it to chat GPT and I say, hey, generate, you know, a woman holding this, generate this laying on a table, generate all these different scenes, all these different product photos. I turn those into ads. I use solo drop to build the store and I launched the ads. Facebook, Instagram, Facebook, or just Facebook?

Yeah, just meta, just like all meta products. Okay, let's get, let's get tactical. Are you only in the newsfeed stories?

Just let Facebook ride.

Just let it ride, dude.

I just put the, just put the creative advantage placement. Sure, I don't even really remember. I just run ABOS.

What is ABOS?

Ad set budget optimization. And so you can either do an ABO or a CBO. It's basically like, where do you want Facebook to distribute spend? And so I generally run, I like running two campaigns, each with ad sets within them that are ABOs. And so I have a testing campaign and I have a winning campaign. And then I'll go launch new sets of ads. on the testing campaign. Okay. So I'll put in, I don't know, let's just say five ad creatives at $100 a day on an ABO, meaning Facebook will decide which of those ads get the most spend because inherently Facebook is incentivized to spend your money the best so that you continue to spend them. They want to push the content that's performing the best. Yeah, just launched A quick little ABO, a couple of the ads, classic Pareto principle, a couple of the ads perform way better than the others. I move them into ad sets in the winning campaign to scale and let it ride. Oh my gosh.

Okay, well, yeah. Dude, like what was your cost per acquisition? What are we talking? And you're welcome to share your screen too, if you wanna get real nitty gritty.

Yeah, yeah, I will. So I really wanna show people the ad side, 'cause it's like, This is the stuff that's super popular. So I've done about $5,000 in sales in two and a half weeks.

Okay.

People are buying them. I've spent about- so that's a six figure business.

Yeah. Yeah.

Like if I was really gonna go run and gun at this. And so gross margin between the bags and the sugar cost me about three bucks or something around those lines to produce a unit.

Not including any labor or shipping.

That's just me messing around in the garage.

Yeah.

So like it, yeah, very bare bones. Like, let's just see if this works.

Packaging, labeling, raw materials, cogs.

Cost of goods sold, three bucks. Cogs is, yeah, like 351 or something along those lines. Selling them for 18 bucks. You get two pounds of sugar for 18 bucks. And so the math is roughly like 80% gross margin. And I'm only selling them as multi-packs.

For those listening, if you want a CPG, a consumer packaged goods product to sell on a Shopify store through Facebook or Instagram ads, you really gotta start with a 70-80% gross margin. You just have to. I don't care what the product is.

It's almost impossible. You're not gonna do it on a 30% margin.

Right.

And similarly, AOV is less than 30, just mathematically hard. like you got to get north of 50.

Yeah.

Even if you're selling like $1,000 mattress, like Casper style, your cost per acquisition is probably going to be like 400 bucks, 300 bucks. So that thing's got to cost like 200 bucks.

Yeah, 100%. Once you get through the first two, like week or two of ads, you start to get a pretty good feel for what's good. And so I was able to get up to like a one and a half X ROAS mostly because I stopped selling single packs. That was the one big learning was like, I got to I got to sell two of these specifically because the thing that's killing hummingbirds right now is shipping. Like we should actually talk about the shipping stuff because like me shipping six pounds of sugar from Los Angeles to Tennessee is costing me a fortune, dude. It's insane.

How much are you spending on shipping?

Average is like 12 bucks a shipment, which hurts, dude.

What are you shipping in? A poly bag, box?

Boxes, unless it's a one pack, then I ship it in a poly.

And how much does the product weigh? One pack?

Yeah, they're two pounds each, like 1.8 pounds each. Again, I'm not even, I'm not using a ship station. I'm not getting any discounts. You're just proving the math. Pricing, like any of those things. But what I was able to prove is that people will buy Hummingbird Nectar on the internet that's well branded at a reasonable ROAS. I'm not mad at that. It's a super seasonal business for sure. May to September. When I did classic, you go to Jungle Scout and you use that to look at the Amazon stuff. All of the purchases that are happening for any of the competitors on Amazon, it's May to September for the most part.

Oh, interesting. Hummingbird season. So your cost acquisition is going to go way down.

Yeah, presumably. Yeah, that's the, that is the, the hope. And so the shipping is its own thing, but cogs will also continue to drop as I order more volume specifically on the bag side. Cause I only ordered 250, which is if anyone is starting to do some sleuthing. The reason there's no ads running right now is I ran out of inventory and have to wait for them to ship me more bags. that cogs will, will drop shipping. I have to, like, if I could even just cut the shipping expense in half, my math will.

And so I just texted Kirk to see, like, what that should cost. And I think it's, like, as low as four or $5.

And I'm open. Like, I, like, whatever needs to go down to be able to drop that cost, if it's moving to a 3PL in Texas, like, fine. Like, I'm in, right? Like, whatever needs to go down.

You should also experiment with dropping your product weight to like 15 ounces. That way it can still be under 16 with a poly bag because that's 16 ounces is a cut off for first class shipping. And it's the difference between like $8 and like $4. Like 1.1 pound versus 15 ounces is literally like it's twice as much.

So smaller bags.

Yeah.

And even if you need to drop the price to compensate, but then your costs will go down too.

Yeah, yeah. And because I'm selling multi packs, AOV will go up because I just started doing that where like, you can't, you can't buy one anymore. But I've been with that of I want to drop, yeah, dropping from, because it's two pounds right now. Like they're heavy, like, yeah, dude, I'm sweating walking in and out of the UPS, dude. Like it's a bunch of trips with a bunch of weight.

Everything you described, I could hear a hater writing in the comments. What is he going to go to the grocery store, buy a 50 pound bag of sugar and then go online and buy some packaging with a $20 heat sealer and then put up a solar dryer and you put, yes.

Oh, and it did $5,000 of sales in its first 21 days. Yes, that's exactly what I did, dude. I filmed the whole thing. Popping the link in my Twitter bio, dude, you can watch me do it. I literally filmed the entire thing. And so, yeah, it's literally, it's sitting there. Lauren thinks I'm absolutely insane. I'm out there in the garage for two hours once a week just scooping.

She better show up to it.

I know, that's what I said, dude. And then I'm on Amazon, you can buy machines that you just pour the sugar in, you press a button and it automatically dispenses 15 ounces out the slot. And I was like, dude, it's only 1,200 bucks. Can I put one in the garage? And she goes, no. One might show up, dude. I don't know. But yeah, and then I'm just gonna go to a baking mix manufacturer or co-packer and say, yeah, I wanna do a custom baking mix. And they're going to be like, awesome, what are you making? You want cookies or a cake mix? I'm like, no, no, no, no, no. Just sugar. Just sugar in a bag would be sick. And so then they'll handle that. And what I've realized is this summer is going to be a total test thing. I'm only going to go direct to consumer next summer. You'll see me on Amazon. You'll catch your boy. I was like, dude, I think I can do a million dollars a year on this.

Of course you could. You would have like 1% of the market.

If I can get 10 to 20% EBITDA margin, like for four months of the year, I make an extra 100, 200K selling sugar. I'm going to do it. And y'all could do it too. I'm just going to do it. Like I've just decided.

All the skills you pick up in the process of optimizing your Facebook ads and launching a Shopify store, like you could use those skills across so many other businesses.

Sharpen the Sword, dude. It's why on the past episodes, I've always been like, yo, you guys should just go launch digital product Shopify stores because you'll just learn. You'll learn how to run ads on easy mode with zero COGS, zero shipping. You're not gonna have to deal with all the stuff that I'm dealing with in terms of operating an e-commerce brand. You just get to send an email as your fulfillment. you get to play with offers and you get to understand what makes things work. And you like, I'm in the middle of doing one of those right now because I'm annoyed that I got to ship units. I'm like, I'm just gonna launch a digital product and see if I can do the same thing. Like you get more flexibility on it. I can't charge $60 for a two pound bag of sugar, but you can charge 70, 60, 70 bucks for a very niche specific digital product that solves a very specific pain point.

Yeah.

We watch it happen all the time.

What do you think you're gonna be able to get your cost per acquisition down through Facebook ads too?

We've had days, times, campaigns that I'm getting purchases for like 14 bucks, which works on a, 'cause my AOV has been hovering at like 45 to 50, thanks to my in-cart bump offer, which is Hummingbird Attraction 101, the e-book for 14 bucks, $0 cogs, pushes my AOV up. Five, six percent of people.

So they're paying for that. It's not just like a free offer to entice them to check out $14.

$14. It helps. Hundred percent. It helps. Well, and then you set your, you set your free shipping threshold to incentivize that add-on in cart. Oh my God.

And so how many minutes of prompting did it take to make that ebook?

Dude, I did it during like the first quarter of the Lakers playoffs game a couple weeks ago. Like, I think I literally built the whole thing in like 12 minutes. the prompt is easy, dude. It says, I want to write a book about this. Write a detailed outline of 10 chapters, 12 chapters, whatever it is.

Right.

You gotta do the outline, then you got to take it one at a time.

And write chapter one. Sweet. Now write chapter two, all in the same chat so it knows the reference and. And builds it all out. I've done that a bunch of times. I got a digital product that's just sitting in my back pocket that I got a launch that I did that on, and so. Oh, my gosh. Here's the reality of it. It's all V1s. All of this is V1s. It's not like I'm gonna go sling this AI book forever. It's like if people are actually buying it, yes, I will take the three days and actually try to make it good. For sure. But I'm not gonna go do all of that work until I know people want it. Why would I? Let's go. If the market tells me they want it, I will build it. None of this build it and they will come stuff, dude. It's like, no, no, no. You come to me, you tell me.

You'Ll pay for it sick, then I'll build it. Absolutely. Build it and they probably won't come.

Sell it first and you know they're coming before you.

And you know what to build because they tell you. You know what to build.

Yeah.

Like, I see so many people doing it to flip, dude.

It's crazy. But the more people that listen to.

This, the less, the fewer people doing it. Look, listen. get rich.

That's right, baby.

You know?

All right. So I got a paid account for exploding topics, and anyone listening to this, if you're not, if you're not watching, I'll describe what I'm showing. But these are technology topics sorted by growth from the last three months, and they're at the, quote, exploding part of their growth cycle. Not at peak, not at regular. First of all, if you're like an ADHD, like idea, addict, this is the best thing you could do. Let's brainstorm real quick some ebook ideas that you could generate with ChatGPT and Cell that matches some of these topics that we're seeing. I'm just going to name out loud some of the ones that look interesting to me. Robotic lawnmower.

Awesome.

Interesting. Let's see. I don't know what a lot of these are. Inflatable screen projector. Cool. That's interesting. Let's see, portable neck fan, lovable exploding.

Oh yeah, there you go.

Maybe like a $19 ebook on lovable hacks.

Yeah, or a $99 how to build X app. Yep.

Or maybe like a, so mini portable air conditioner, that search term is growing 200% almost.

Dude, maybe an ebook on how to build one, dude. I thought about that for a robotic lawn mower. I was like an ebook on how to build your own robotic Smart lawn mower. Yep.

Digital planners is exploding. How to make your own digital planner with AI. You use AI to build that and sell it.

Yep.

Any of these stand out to you? Phone cooler. Devices designed to manage the temperature of smartphones during high heat activities like gaming and live streaming.

It's all the summers, dude. The summer stuff too.

I know it is like lawn mowing and- Yep. air conditioning. Let's go out.

A lot of SEO type searches. You see all those there? A lot of off page, on page, a bunch of people searching for stuff like that.

Let's do that. Let's do this health and wellness. Okay, let's do time frame one year because then it won't be seasonal. Let's look at growth exploding. Let's do non-brands.

So dumbbell bracelets. So weight almost like, dude, that's so good. You know how people have like ankle ankle weights. You just rebrand those as wrist weights.

PDRN mask, a skincare product designed to improve skin firmness and elasticity while promoting a youthful complexion. You can't tell me people wouldn't buy that. Anything.

I like, I like the Rye serum. Eyebrow. Eyebrow specific.

I like that a lot. Skin care product designed for eyebrow care.

I'm just going to tell some people what's good real quick.

Is that cool?

Yep. Okay, so. eyebrow serum. You're going to go to Suppleful.com, they have two separate products, one that is a peptide hair serum, the other is they have two different hair serum products that you can go and brand and essentially just white label. They'll do all your thing. It's drop shipping of supplements. You could go and rip an eyebrow growth serum pretty easily, like Solo Drop Store, branding in Canva, put that on the template that Suppleful gives you, connect your Shopify directly to Suppleful. What does Suppleful have to say about that? Suppleful does all of the fulfillment for shipping supplements.

Oh, okay. We've talked about that.

Yeah.

And so yeah, you could literally go and run that immediately, actually. Like you get a, you get it live today. Solo drop, Suppleful, Canva, ChatGPT, Facebook ads manager, bing bong boom, get your ads live.

Oh.

Filtered shower head, dude, I just bought one of those. Loneliness epidemic is booming.

Yep. Mop soap? We need special soap for Mops, dude. Dude, dude, you do, you have to.

You never, dude, I can't breathe.

Dude, a breathing necklace, a device worn like jewelry that helps control breath. My gosh, what it just, it blows my mind what people pay for.

Lymphatic drainage is a big one. That's it about the massage, but like a lot, I, dude, I spend a lot of time talking about the difference between offers and vehicles and I think people get them confused. Dude, right?

Go.

And so like, dude, when you think about like an offer, right? I'll use B2B just, I feel like more people listening, but, If you're talking about B2B, your offer generally is we're either going to help you make more money, save time or save money, right? Like those are the worlds that you live in. That's what people are paying for as the end result of what you're doing. So then you back that into like a service, right? Or a method. So we'll say like, we help you automate your business to save time and make more money. Now, That's a, that's an offer, right? Now there's multiple vehicles that that offer can live in, right? Like you can launch that as a service. We will do automation for you for X amount per month. You can launch that as a digital product of, hey, buy this $99 guide on how to automate your business to save time and money. Or you could sell it as a software. Zapier, that's what Zapier sells. Like Zapier sells automate your business to make more money, save your time. You could sell it as coaching, like, Hey, join this community that'll help you automate your business. There's all of these vehicles that exist similarly to form factor on CPG product. There's protein shakes, there's protein bars, there's protein Pop-Tarts now. Shout out Legendary. Right? Like there's creatine gummies, creatine powders, creatine drinks, like all of the vehicles that exist. And so when I look at these and see collagen supplement, I go, okay, what is the vehicle? Like create, trycreate.com, phenomenal. Like creatine gummies? Yeah, amazing founder, amazing product. Like, so good. And all he did, not to like water down everything he's achieved, he's a great operator, but he just changed the form factor of creatine.

Yeah.

Creatine historically has always been a power.

We need to be gummying everything. Like everything is gummy.

It's all gummy, dude. Like it's all a gummy.

It's our cake.

Like it's literally whatever. And so it's like when I look at all of this, I just implore people to explore the vehicle side of the game with different price points, different requirements of like, everyone's over here saying, I'm gonna launch a SaaS to do A, B, C, and D. And I'm like, dude, you'd probably make more money selling that as a service, a digital product, a coaching program, a community, whatever, right?

Skills.

Right.

Like you don't have to go learn, just 'cause lovable is an exploding topic doesn't mean that that's the only way for you to make money on an offer. But everyone just wants to run a software product. Any software that I've ever had success with started as a service business. Creative OS was an agency called Better Creatives three years ago. I sell the same thing that that agency sold, which is hire converting ad creatives. We were just doing it as a service. Then we sold it as a digital product, buy our template pack one time, then we transitioned it into a software have sold the whole like the same offer all the way through, but the vehicle changed. And so I'm like, start with the start with the vehicle that's the easiest software is arguably the hardest. I'm sitting here being like, dude, I might just try to sell the book top of funnel for hummingbirds.

Right.

Like it proves that more people want the thing. It's not even that we're trying to.

Do the easier thing. It's like if you choose the harder thing, then you're going to be less likely to ever get to launch.

Right.

It's just more friction.

Right. You know, like there's people that pop in saying, Hey, I want to do this as a software. And it's like, awesome. Have you ever sold this to a human being before? And they're like, no, it's like, dude, I promise you, just like go sell it as a service first. They'll tell you what to do. They'll tell you what that, like what they actually care about. And it's easier to go and update an e-book or a service or a than it is to go and make those product iterations on a software. and guys, you'll make more money selling it as a service. Like, yeah, at a thousand customers, software makes more sense. But if you're gonna go fight for 10 customers on an offer, I promise you, you'll make more money doing it as a service than a software right now. So do that first, and then use what you learn and the cash flow that you got to then invest in Automation and Technology that supports that offer in the best way. yeah. Like, what are we doing? What the hell are we doing, bro?

All right, thanks for joining us. We'll see you next time on the Kerner office.