The Cycles Of Ecommerce (harsh reality, but not really - IMPORTANT)

Hey and what is up Rocket Ecom members!

It has been a little while. I have not been posting on here or on Youtube. Why? I got a little burnt out posting content and there are cycles to everything. Energy on. Energy off

Now it is time to get the energy back with posting, and tonight I wanted to talk about "the cycles of ecommerce".

A CRUCIAL lesson, for newcomers and those who are experienced feeling a little disgruntled.

So its March, 2024 - and myself and the team - we are feeling very confident in our ability to scale our main brand:

We had hit $250,000.00 in January. Febuary slowed down a little, but we were confident March was the month we would get to $300k-$400k.

What happened? Total shit show.

All of our ad costs were sky rocketing.

CPMs were rising.

CPCs doubling.

We went from paying $2 per click to $4.

At these levels, we did not have a business. We would have to operate negatively in order to take money on the backend/via recurring repeat business - something we did not want to do.

My brother was getting a little worried.

I told and assured him, "do not worry, this is what happens when we run a brand, it goes up, and it goes down" - you must remember the past history.

And so it did.

The lesson from this message - in ecommerce you are going to face massive ups and massive downs.

It is never going to go, simply up, up, up.

Why?

We are simply at the whim of large advertising networks like Meta, TikTok, Google.

Usually - a successful brand is always 80% on one platform.

In an ideal world it would be split equally for diversification. But it is simply not the case.

It never is.

But I learned from experience over the last 8 years, running 2 brands for 5 plus years - there are huge ups and downs.

The key is remembering this is simply an algorithm problem.

It is NOT that your product is done or your brand is done (usually). Unless you see everyone in the industry is copying you - in which case you never really had a brand.

The algorithm sometimes will massively spike your cost per sale, CPC, CPM.

Most people with little experience - will look at this and decide to shut down the business or think "I guess the product is burnt out".

The wisdom has taught me, when you are down - it is time to double down on everything.

Double down on new ad creative.

Double down on new landing pages.

Double down on different pricing tests.

While you are doing this - it generally will not even work very well.

The algorithms are giving you a shitty time.

But while this is happening, view it as an opportunity to work super hard to find new winning creative and pages - so when the algorithm switches again - you will be winning more than ever before!

That is the lesson I saw once again in March, and I have seen it dozens of times.

Most people will let the bad performance scare them.

But if your product is good.

If your brand is unique.

It will last.

It will come back.

Use this time of lower sales/worse performance to kick you in the ass, and make you work harder than ever on new creative, pages, testing.

When the going is good - its easy to sit back and do nothing - do not test anything new, do not make new creative; after all it is working and if it is not broken, why fix it?

That is what we all do.

But it is a mistake.

When the going is good, keep going and doubling down.

When ad performance goes to shit, learn to see "you know what, my brand is good, nobody else is copying me too much, and there must be at least millions more in revenue to do".

The most simple products often do $10-$100M in sales.

Oh - and that brand massively picked up in April.

So far our ROAS is about DOUBLE of March:

What changed? NOTHING AT ALL.

Simply the algorithm has changed and is starting to reward our high quality content.

Nothing at all was different - the cycles flip, and they flop.

We rolled in lots of new creative - but ultimately the old creative picked up strong.

Thanks for reading.

Jamie

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