Hey everyone. Scott Austin here.

And, in this week's episode, we have a first. And that first is we have a repeat guest. So we're talking to JT, owner of to Chip, who was on our show about two years ago. Welcome back, JT.

You know, two years ago when we talked, we'd been working together for about a year and a half at that time. And the episode was titled had a five extra Shopify business. And because you had five extra your monthly revenue over that time frame. And then I actually looked at the podcast episode this morning before we kicked off here, and I said in it that we're not gonna be back in a year and talk about another five, because that would be impossible.

And I was totally right. But two years later, we're back because you five do it again, right?

So you've grown your revenue like 25 X in three and a half years time. And that's what I love to talk about today is, you know, the stuff that you've learned in the past couple of years to grow your revenue and I assume profitability in that, which we'll talk about a little bit, I'm sure.

So wanted to start off in, in explaining first what rifted ship is, what your brand's about and why you're different to your customers.

I like that subtle.

You know, I know what you're doing there, and I'm sure the audience will know really soon. Like, you just gave the answer. Or one of the answers of how you've grown so much in that you've, you know, pivoted your focus a little bit.

If you look at, you know, the past couple of years of growth, what buckets would you put, you know, of effort that you put in, have gotten you that return to continue that growth curve you've been on for the past few years?

Yep, yep. Now, when we had talked to two years ago, we had talked a little bit, quite a bit, actually, about how you had finally grown your business enough to be able to hire your first marketing person. And I was like a big milestone. You know, you just mentioned your marketing team. How big is that team today?

Nice. And those three are now dedicated full time to marketing.

And that's that concept I was called operationalizing your spend. Where as you make more revenue, then you can invest more of that back into your business. And, you know, keep that flywheel going.

Let's talk about your expansion of your catalog, because I do think that was a really good move. You did probably about two years ago. Now. What made you think about doing that in how did you expand your catalog, and what's the result of that?

Yeah, because I think one of your your brand value props or messaging is, you know, that you guys are reptile keepers and you're making products for reptile, you know people and therefore you care about the quality and you have good judgment,

You know, so you took that expertise or that judgment that you have went into the, you know, products that are not yours and pick the ones that meet your quality bar and then you give that to your audience. That's part of the service you provide is you're doing that evaluation, you're doing the testing, you're doing the judgment, and you're giving that assurance to your customers that, hey, these products, these new ones I'm bringing in, you know, they meet the same quality bar they're used to from our brand.

I always love, people that like, there's podcasts I listen to. And in the podcast they'll be talking about their favorite products, like Klaviyo or something. Right. But then their house ad is not klaviyo, it's another email provider. And I'm like, I don't trust you anymore kind of thing.

Yep, yep.

So how did you, know, find these partners? And were they willing to partner with you, or was there some work involved to make that happen?

No.

Are you entering into wholesale agreements where you're stocking inventory, or is it more of a job dropshipping type scenario?

Do you see do you see a price or margin difference from your providers when you dropship versus wholesale?

Yeah. Especially because, you know, some of your shipped items are such large, you know, volume. It takes up a lot of Rackspace.

Now do you actually do you have formal contracts with these people or is it more informal? How did that work out?

Yeah.

Now, how much of your revenue mix today do you think is your manufactured product versus other people's manufactured product?

It's nice.

Now, I would assume that you, of course, make higher margin on your own product than you do on reselling other people's. But what sort of benefits do you see in expanding that catalog? You know what you know. Besides, you know the top line revenue, but it's less profitable. But it's still better for your business because why?

Now, is there anything in hindsight with this expansion of the product catalog that you would do differently?

I.

Well in not being afraid to fail. Right. Because you know, I believe that most people learn their best values when they're wrong or when they make mistakes or when they fail. And you know, you're like, have a great idea and you try it out and you give it your all, and then you have that honesty to say, you know, it was a great idea, but it's the wrong great idea. let's stop doing this. Let's, you know, do something else and put our effort behind some other initiative kind of thing. And I've seen you do that a lot.

Yeah. Over 20 years ago now. Because I'm so frickin old. I was running the merchandizing team at MSN shopping, and most people don't know what MSN, I'm sure is anymore. one of the things I did right was I had this team and they were merchandizers and they were, you know, trying to sell products, you know, on behalf of our vendors,

And I had to establish this best practice of celebrating failure because people were afraid to try something because they thought if it didn't work, it meant they weren't doing their job right. And we actually would, you know, get together as a group each week and explain what we tried and what failed. And then the most important part, what we learned from that, we'd all clap and that kind of stuff and really don't force it, which is hard for me to do because I don't like forcing things, but force people and the whole team to embrace that concept.

So it's totally 100% okay. That's your job to try a whole bunch of different things because you just don't know what's going to work. And the more you try, the more you'll succeed, even though you're also failing more at the very same time.

Yeah, yeah. Well, you know, there's there's ten paths. Once you eliminate nine, you know which one works. Right kind of thing.

Yep, yep.

Now so that was the, you know, the catalog expansion, which has been a big driver of your revenue growth in the past couple of years. Let's talk about, you know, another one. And I want to go into some detail on this one because it is so complex. And that is advertising. Explain to me your journey with advertising for a little bit, what platforms you picked, what worked, what didn't.

know I'm looking at your scorecard right now and most of your ad looks to be coming from CPC. So that would be Google. Is that accurate.

Nice. Nice I like when people learn or at least when I can help people learn.

So you've got Google, you've got meta. Are those are the two main platforms because those are the two biggest ones. But are you in any of the smaller platforms or just in the two big ones.

And you'd mentioned that you would start it off. You, the owner of the business on a really small team was the dedicated only ads person. Are you still the dedicated person for ads?

Do you have any sort of formalized process where you learn as a group? Is it like recurring meetings or feedback loops or post-mortems?

Yeah, I'm just a total aside here. I'm looking your your scorecard that, you know, comes from Google Analytics and your CPC traffic. Year over year. This is for the month of August. Last month only grew 6%, right? Year over year. So a very large number of your traffic, but your revenue has doubled.

So you've got just a little bit more traffic coming in 6% more. But you're so much more effective that in the past year that the revenue from that has doubled. Right. And that just to me is a sign of you guys just getting smarter and smarter about your business and your spend and getting more efficient with it.

So, you know, talk to me about JT's Google School. Where did you get this knowledge from? How did you acquire it?

It sounded like you're very data focused in measuring the performance of your ads. Are you using the metrics that are inside of the Google ad in the meta ads tools, or do you have your own scorecards that you use?

Yeah. And I think that's one of the biggest challenges for small brands is these engines are so complex. And you know, Google is in its own learning curve that you need a master's degree to understand. Meta ads is its own learning curve. You need a mother master's degree to understand. And as a small brand, you know, you don't have the time to be dedicated and know that as well as a big brand who dedicates a person or a whole team just to Google, So it's much harder for small brands to get into the ad space

the other side of it is, you know, and I fully believe, you know, they should get into it themselves. they can't hire ad agency because they're too small. Right? An agency wants you spending $100,000 a month before they manage your ad spend for you, or whatever number they have, but that that level is usually way too high for the small brands.

Yeah. To make sense. And you know, I think that the hardest thing in any e-commerce business is customer acquisition, right? You know, it's absolute table stakes. You have a great product. It's absolute table stakes. You have great service. So the only way you going to differentiate.

Yeah. Because if you don't you're gone, Gone are the days you can just buy cheap crap, you know, off a boat or whatever and sell it for lots of money. People are really, you know, sophisticated. Now see through those things. So your customer acquisition strategy, because everybody's good, everybody's great, all your competition. It's not like you're better than them at making product or customer service. You're probably just as good, maybe a little bit better. But that's not your big differentiator. Your big differentiator is how to talk to that audience. Build your brand, acquire that user base. And it's hard. And it takes serious amounts of work, which is, you know, what I've always loved about you is you're never afraid to put in that serious amount of work.

You know. as you were talking about with, you know, you're figuring out your own metrics, you're learning, and it's just I can't express this enough for small brands. You guys are nuts to be in the e-commerce space. First of all, although I appreciate it. Right. And I'm here to help you out with that kind of stuff. But it is so hard to be successful as a small brand in this highly competitive space, because the internet has made it so easy for anybody to be able to do this. So the only ones that are going to succeed are the hardest working, right? You know, you've read books and there's terms like grit. Lean into it whatever you want. Right? It's that quality that's going to make you successful. It's not the idea. It's not the coolest product. It's doing that frickin hard work every day, year after year.

Yep.

Yep yep. Which I'm going to get back to that because I think it's one of the differentiators in your brand from other brands I see. But I'm going to hold that for a minute. I'll get back to it.

Because I want to close out on this advertising conversation. You had mentioned. Top of funnel, middle of funnel, bottom of funnel. It sounds like you're now sophisticated enough in advertising. You know, just like in Klaviyo with flows, you're actually thinking about the different levels of interaction with your customers and where they are in their customer journey. Can you talk a little bit about how you've put that map together, at least in your in a mental map, it's not a physical map. And how you guys talk about that.

Now I want to shift back to the thing I was thinking about because a lot of my clients, not a lot, but many of them, right. So, you know, it's not more than half, but it's a significant proportion have this huge challenge to the growth of their business that I haven't seen. You have. It's not easy for you, but it's not as hard for you. And that is employees. Can you talk to you a little bit about how you acquire up employees and how you grow employees and, you know, build that knowledge base of people that you can trust and build a brand with you.

You know?

Yeah.

Yep.

Yeah. That that's awesome. And that's really Good advice. As with everything you're talking about right. It's knowing how it works for you right. Because everything is always different. Right. And the smart people are going to be watching and learning and responding as they learn.

I think another nice thing for you in the employee pool space is, you know, a complete accident on your part or maybe not an accident, but you're in San Antonio, right? Which is a city of how many people, I'm guessing a million.

Yeah. And what's amazing to me when I talk to other brands that are in, you know, the middle of nowhere, right? Their passion, location, and they always are like, I can't get people to interview for my job. So I'm like, yeah, you're in a town of 3000 people, advice to small e-commerce brands that are thinking about doing stuff. Please move to a major city to get stuff, to get employees.

Yep. Nope. Not at all. And no matter what city, we're not talking Manhattan or San Francisco, right? You can move to Saint Louis, you can move to Reno, you can move to wherever. But you don't want to be where, you know, the average person drive 60 miles to get to your place. And there's only 14 of them that are available to drive that distance.

Yep.

exactly.

So let's move on to that last bucket you had talked about of, revenue growth. And that was email. And what have you been doing in the past couple of years with email?

World.

Yeah, I one of the things I love about, your campaigns is tell everybody your biggest sale of year.

Yeah. Yeah. I love that.

Well, and we just have to insert here, right? For those who don't recognize the name, Steve Irwin is the crocodile hunter, right? So he's he's the number one reptile guy in the planet, even though he's past now. So it's, like, totally authentic to your brand.

Yeah. And, you know, you just, you know, as you keep saying, you see you getting smarter and smarter about your emails and learning more and more like with everything. It's a common theme here, right? Is you just keep trying. You just keep trying. You don't know the answer, but you're going to figure it out as you go. You know, as we look at these three different buckets of revenue growth, one being, you know, expansion of the product catalog. Second one getting deep into advertising and the last one, continuing your evolution in email, you know, how and how much do you think each one contributes and how much effort do you think each one takes is, you know, is it equal or are you moving all the bulls forward at the same time? How do you balance between these priorities?

Well, and it is I think about you answering that question. know, one of the things I realized is, you know, you started off with email, which I think, you know, most brands should start off with email, right? And then you got into ads. Right. And the reason you want to email first is very few brands are going to make a return on their ad spend because ads are so expensive today. On their first purchase, you're gonna need multiple purchases to make that happen. The way you get multiple purchases is through an email cam, you know, process. You have to have a really good email process. So you do email first, then you introduce ads.

And I think you realize that advertising coconut substrate is not sexy and it doesn't draw on the eyeballs. So then you move to the catalog expansion to show really cool cage set ups and things that were sexy to your audience to draw them in. And then you now they're on your email list and then you can sell them substrate later after the fact, you can see the logical sequence those things took. But it wasn't like we thought about that ahead of time. Right?

Yep.

Yes. Yeah.

Ooh.

Yep. Yep.

you know, the summary there is like, you had to do all three of those things to grow your revenue, right? If you just focused on one, it would not have worked, right. Everything interweaves. Unfortunately, things are complex. Things are hard,

Yeah.

Yeah. Yeah, yeah. In looking at Reddit when I was doing research around the AI stuff, which is the Shopify space, and you see lots and lots of people posting, you know, they watched the stupid YouTube video of the guy, the Ferrari, saying, I can make $1 million in 14 days on, you know, dropshipping kind of garbage. Which anybody was on this podcast for more than three seconds. This, I think is absolute, utter crap, right? Yeah. But then you see them on Reddit and they're like, I just built my store and I'm not making any money. You know, please come tell me for free. What one silver bullet I should be doing that I miss so that I become a millionaire. Like, yeah.

one silver bullet you missed is you don't know how to work hard for years to build a brand, right?

That's.

Yep, yep.

Lady Gaga. What? She won her Oscar, I think. Stood up on the stage and said, everybody thinks this is easy. You have no idea how hard this is and how hard I've worked to get to this point.

it's.

yep.

to the audience, still listening? Thank you very much. what parting what party message would you give them to think about as the summary of the success advice?

I couldn't agree more. Thanks for your time today, JT.