Product Startup Podcast Episode 231: Sell Your Invention Direct

00:00:00 Kevin Mako: Hello, product innovators. Today, we learn how to sell your first products on your own website from a marketing agency founder who has managed over $100 million in ad spend for emerging brands.

00:00:09 Kevin Mako: This is the Product Startup Podcast, a show to learn from top leaders in hardware product development, prototyping, manufacturing, product selling, and everything in between. Hosted by Kevin Mako, the leading expert on product development for hardware startups.

00:00:24 Kevin Mako: Welcome back, everyone. I'm excited to introduce Hamdy Albana to the show. Hamdy is the founder of Push Analytics, a data-driven growth agency that helps brands go from zero to millions in sales on their own websites. He also studied electrical engineering back in school.

00:00:38 Kevin Mako: Today, Hamdy will share valuable knowledge for inventor startups and small manufacturers on what it means to sell product directly on your own website and how it differs from other online marketplaces like Amazon,

00:00:47 Kevin Mako: the two most critical parts of a new social media marketing campaign to drive potential customers to your website, and best practices for improving your return on ad spend so that you can profitably scale quickly and successfully. Now, on to the episode.

00:01:00 Kevin Mako: This show is produced by Mako Design, the original firm providing end-to-end consumer product development services tailored specifically to hardware startups, small manufacturers, and inventors. Take your product from idea to store shelves at MakoDesign.com.

00:01:15 Kevin Mako: Now, on to the episode. Hey, Hamdy. Welcome to the show.

00:01:21 Hamdy Albana: Thanks for having me. Excited to be here.

00:01:23 Kevin Mako: Well, we're looking forward today to talk to you about getting your first sales as a new hardware brand.

00:01:28 Kevin Mako: So as an inventor out there, whether you're launching your product or whether you're just thinking about even development and design your product, know that at some point you have to start making sales.

00:01:37 Kevin Mako: One of the greatest ways to make sales now in 2024 and onward is using your own website to drive leads to so that real customers can place orders on your actual product and you can fulfill that.

00:01:51 Kevin Mako: It's a great way to get in front of new customers, and there's all kinds of benefits to doing it this way.

00:01:55 Kevin Mako: Now, there's many different ways to sell, but today we're talking specifically about getting your orders from zero up to thousands and potentially tens of thousands and onwards just using your own website.

00:02:06 Kevin Mako: Now, before we jump into all of those things, Hamdy, just give us a bit of a background on how you became the success story that you are today.

00:02:11 Hamdy Albana: Sure. About 10 years ago, I started off brand side. I was working in advertising for a startup, and I come from an engineering background. And so we really broke down how the advertising works and how it affected the brand.

00:02:26 Hamdy Albana: We built this format of scaling a brand up to a million dollars. And after that first year, I kind of moved on to start my own agency with a couple of my partners.

00:02:35 Hamdy Albana: And since then, we've taken dozens of brands from their first sale to eight figures and also some pretty big brands from eight figures onwards.

00:02:45 Kevin Mako: Amazing. You've worked with dozens of companies, over $100 million in ad spend that you've managed. So you really know what works in terms of using ads to drive potential customers to your website and then, of course, converting them into real sales after that.

00:02:58 Kevin Mako: So let's get into it. What are we talking about in terms of selling on your own website versus some of the other channels that are available today?

00:03:05 Hamdy Albana: Sure. Yeah. One of the most popular channels right now is Amazon. So it's really easy to compare to that one. Whenever you launch a new product, it's really simple to pop it on Amazon and try and generate some sales that way. And that is a viable strategy.

00:03:19 Hamdy Albana: And you can compare it to starting your own website. So you'd use something like Shopify or Squarespace or one of these brands to launch your website and put your product there.

00:03:29 Hamdy Albana: Now, the biggest advantage to having your own website as compared to selling a product on Amazon is that you actually own your customers' information. When you sell something on Amazon, Amazon is the middleman.

00:03:41 Hamdy Albana: You send your product through them and you never get to see that customer again. But this customer is extremely valuable as you continue to grow your brand. And you want to be able to retarget them with new products, new services.

00:03:52 Hamdy Albana: Maybe you want to sell them your product if it is something that can be used multiple times. So it's extremely valuable to own your own customers. And that's the main reason people want to be selling stuff on their own website.

00:04:04 Kevin Mako: This is super important, especially for a hardware startup, because the early sales that you have as a new brand are critically important to the future of your product altogether.

00:04:15 Kevin Mako: First of all, these are the first real paying customers that pulled out their credit card to buy your actual product.

00:04:19 Kevin Mako: So you want to know them as closely as possible before you start scaling up on other advertising or additional product streams or any other methods that you can think of for scale. This is almost like your test market.

00:04:32 Kevin Mako: You're getting your first users out there, not really to make money. You're getting your first users and your first customers to learn everything that you have done up to that point.

00:04:40 Kevin Mako: All the assumptions, all the genius that essentially went into this invention, not just the idea itself and obviously all the great benefits, but also the design and engineering and great manufacturing that you've done. In order to get your innovation into their hands.

00:04:53 Kevin Mako: What better way than using your own website to control that process, get that customer information and then learn from them? So the big question I know a lot of people have when they talk about products and their own website.

00:05:02 Kevin Mako: First of all, they're a little bit afraid of the website process, but it's really not that difficult.

00:05:07 Kevin Mako: I mean, you can use any of these services that are out there to launch starter stores or hire small web development companies or freelancers to help build at least a starter website.

00:05:15 Kevin Mako: The important thing is you got to get something of good quality that represents your brand out there. But after you've built your website, you've got a great quality product. How do you get people to come to it so that you actually have real customer eyeballs?

00:05:28 Kevin Mako: Hamdy, start us from the top. What do we do to get new people, prospective customers onto our site so they can start buying our product?

00:05:35 Hamdy Albana: All right. Awesome. So one of the most popular ways, and this is something that I always recommend, is starting with social ads. Most popular platform right now is Facebook and Instagram. You're going to use a meta platform.

00:05:48 Hamdy Albana: Now, when you launch your first meta campaign, there are two really important aspects to this campaign, the audience and the content. So we're going to talk about the audience first. When you're first starting out, you have zero customers.

00:06:02 Hamdy Albana: You need to give Meta's algorithm some information to go off of, help them narrow down the audience that you're targeting. Once you scale up a little bit, and we'll be talking about this in a little bit, Meta's algorithm is incredibly smart at helping you get to that next level.

00:06:16 Hamdy Albana: But for your initial few orders, you're going to want to build an audience. Now, the main things that goes into it is things like gender, age, and then interests. And this is where it gets kind of tricky. You're going to want to know your audience as best as you can.

00:06:30 Hamdy Albana: You ask friends and family, take your product out on the streets and ask people. What you're trying to understand is what are some of the interests that people have other than just your product? For example, if you're selling a kitchen gadget,

00:06:43 Hamdy Albana: then you're probably going to target an audience that's interested in cooking and in food network, and in maybe some health and fitness as well. These are the type of things that you're going to try and include in your audience. And this is just to get started.

00:06:57 Hamdy Albana: You're going to do a lot of audience testing to figure out exactly what your audience likes. And again, this is just at the start. The second biggest part of your campaign is your content. And the content is, this is where most of the iteration happens.

00:07:13 Hamdy Albana: This is where most of the iteration happens, most of the changing in the campaigns. You're going to want different types of messaging and different ways to deliver that messaging. So you want to explain your product's value proposition. Why are they choosing your product?

00:07:25 Hamdy Albana: Why is it better than competitors? Design-wise, does it look better? Is it cheaper? Is it better quality? And you need to deliver this message in the best way possible. A few of the most popular ways is through a video demonstration.

00:07:36 Hamdy Albana: Maybe you have a static image with some colorful text that explains it. A moving image or a GIF. And each brand and each product is going to be different for what works for them.

00:07:48 Hamdy Albana: There are some brands that do really well with video content and others that really do well with static images.

00:07:54 Hamdy Albana: And the only way you're going to know what works for you is by testing, rapidly iterating, and trying out different messages and trying out different ways of delivering that message.

00:08:02 Hamdy Albana: Once you get your audience and your content down through different metrics, video watch time, how many people are clicking on your ad and going to your website, you'll start to know which combinations are doing best. Now, this process does take a little while.

00:08:15 Hamdy Albana: It takes anywhere from a few days to actually a few weeks, depending on how expensive your product is, how long it takes a customer to make a decision to purchase. I know a lot of people have seen ads on Instagram for a product that they're interested in.

00:08:29 Hamdy Albana: And they'll click on it and they'll see the product on the website, but they don't buy it right away. You need to hit them a few times. So before you get your first order when advertising,

00:08:38 Hamdy Albana: there are some metrics you could look at that let you know that these ads are taking you in the right direction. You're getting loads of clicks, you're getting loads of comments, people are watching the entire video.

00:08:47 Hamdy Albana: These are the kind of things that help you know, okay, I'm moving in the right direction. And as your messaging resonates with the audiences that you created, you'll start to see those first couple of orders come in. Since you'll be testing audiences that may not hit the mark,

00:09:02 Hamdy Albana: you know, we may think that the chef audience works really well with this kitchen gadget that we have. But we find that it actually isn't resonating really well. Chefs are really picky and they're not buying.

00:09:14 Hamdy Albana: But the health and fitness industry is really resonating with our audience, right? So we're going to spend some ad dollars figuring out where the efficiency is, where the good pockets of success are. There may be, you know, some ad dollars that we could attribute to learning,

00:09:30 Hamdy Albana: whereas other ad dollars are converting into sales. And that's how we'll start to get our first orders, finding these pockets of success where messaging meets audiences.

00:09:39 Kevin Mako: That's so powerful because I think one of the most important things for people to know if it's their first time advertising on the Meta platform or other platforms and you're driving traffic to your website, is don't be afraid of it at first. Use this to learn.

00:09:52 Kevin Mako: Similar with your first units. You're not selling your first units to make money. You're selling your first units to learn from and set precedence so that you can go after much bigger opportunities downstream with a very targeted, narrow, efficient approach.

00:10:05 Kevin Mako: It's the same thing for advertising. You can test all these different things out and you as the founder can come up with some great ideas yourself. As you're going through the product development process, the manufacturing process,

00:10:15 Kevin Mako: as you're working with your web development person or team or whatever else, as you're putting together some of your images or pictures, you're going to come up with some of the key things, some of the reasons you invented this product. You have a very good idea.

00:10:27 Kevin Mako: You've been in the product for a while. Just start putting these on paper and you can test all of this. That is the beauty about these ads. It's not like a TV commercial where you're putting all your eggs in one basket and hoping that it's going to work.

00:10:38 Kevin Mako: In this method, you're going to try 10 different messaging, some that you created, some that some of your stakeholders created, some that your customers created, and you are going to see through the data what is really working and the magic here. Talk about it, Hamdy.

00:10:53 Kevin Mako: When you start narrowing down what works, why is that magic and how can that be so valuable to an upcoming startup?

00:11:00 Hamdy Albana: I always say every $50 you spend should be more efficient than the last $50 you spent. You're always learning. You're always getting better. There is a critical point in specifically meta ads where things start to shift and it's really awesome.

00:11:16 Hamdy Albana: After 50 orders, and this is recommended by Meta, but I've tried it earlier at 35 orders and even later. There is some flexibility there, but a good target is 50 orders. The Meta algorithm starts to understand who your customer is better than even you.

00:11:33 Hamdy Albana: Meta has all these data points on every single one of its users across the internet and across Meta with all these different Meta shops. You can start to activate something. It's not so new anymore. They're called Advantage Plus campaigns in Meta.

00:11:48 Hamdy Albana: There's no audience targeting in here. You could have some control over retargeting customers. Versus going for new customers, but you don't have any of these interests anymore. Meta takes full control of the audience targeting because it knows who your customer is.

00:12:02 Hamdy Albana: I found that these campaigns are the most efficient when it comes to scaling. You still need to work on your content and your messaging and make sure that it's resonating with the audience.

00:12:11 Hamdy Albana: The difficult part of coming up with interest and trying to find these pockets of success, that part is no longer an issue. You could scale using these Advantage Plus campaigns. Now you're focusing on content, messaging, and really scaling and spending more.

00:12:27 Hamdy Albana: The more you spend, ultimately, is going to be more revenue that comes in at the end of the day.

00:12:32 Kevin Mako: The whole beauty here, too, is that concept of scale. Once you've cracked that nut, let's just assume you've got a product that sells for $50 and you're making a $25 margin on it. You realize that, look, I can spend $5 in this particular method and make a sale.

00:12:47 Kevin Mako: You now know that every $5 you spend, you're making $20 in profit on it. What do you do? Of course, you just crank that lever up until you completely saturate that. Worldwide, we're talking a massive audience.

00:13:00 Kevin Mako: It will take you a considerable amount of time to saturate a particular audience, let alone more audience members coming into that, let alone more learning happening to find additional audiences on top of that. The system is so powerful.

00:13:13 Kevin Mako: That's how you can be starting small and learning and not really getting a ton of traction, but as you're tweaking and refining, it starts to get more traction to the point where all of a sudden, it's scaling up faster than you can fill orders.

00:13:24 Kevin Mako: That's a beautiful tipping point because especially as a hardware startup, we're not reselling old stuff out there. We're not white labeling other people's technologies.

00:13:32 Kevin Mako: You as the listeners here, you've got something new and proprietary and special that you are creating that the world has never had before. You not only have another avenue here to get in front of them, but you've got something that really helps those people,

00:13:46 Kevin Mako: that target audience, better than anything else out there in the world. You own it. You own the intellectual property. That's what's so powerful about especially emerging hardware startups that have created something fresh and something new.

00:13:58 Kevin Mako: If you can crack that nut in terms of the advertising return on ad spend, ROAS, then you can absolutely just start ramping up at a very aggressive rate.

00:14:07 Hamdy Albana: Yeah, absolutely. One thing I want to mention about that is in advertising, there's always diminishing returns. As you scale, your cost per order is actually going to increase. That's okay. We expect this to happen.

00:14:19 Hamdy Albana: Once you clear your fixed costs, you can be a lot more aggressive with advertising because all you really need to cover is the cost of goods sold and the advertising cost for each product, and the rest is profit. Once you clear that, you can be way more aggressive.

00:14:31 Hamdy Albana: I always say this one thing, scale, troubleshoot, repeat. You scale, you're going to hit diminishing returns. Your cost per order is going to increase. Now, if you're looking at the right metrics, you can see which metric got affected by the scaling.

00:14:44 Hamdy Albana: Did your conversion rate drop? Was it your click-through rate or your ads not as effective at this scale? Now, you pause your scaling and you address the diminishing return metric. If it was your content, for example, you bring in new content, you try new formats.

00:14:58 Hamdy Albana: Once you fix that metric, you continue to scale and you push harder until you hit diminishing returns again. It's this back and forth, scale, troubleshoot, repeat, over and over and over again until forever.

00:15:09 Hamdy Albana: There are brands doing $100 million a year in revenue, still doing this scale, troubleshoot, repeat.

00:15:15 Kevin Mako: What a great way to go from zero and scale up to thousands and potentially tens of thousands of units sold and onward. Of course, the more that you do this, the more you are going to learn.

00:15:26 Kevin Mako: Of course, the more Facebook and Meta and any advertising platform that you're on that has AI intelligence built in, which is pretty much all of them now,

00:15:33 Kevin Mako: the more they are going to learn about what customers actually work so that they can tweak and hone and modify your ads or your targeting or a number of different factors and variables to help you. See, it's in their interest to help you as a startup as well.

00:15:45 Kevin Mako: So many people look at it and say, well, these are massive corporations. What do they care how much of my product that sells? Well, they know that if they can figure out who really wants to buy your product, you are inevitably going to spend more on their platform constantly.

00:15:59 Kevin Mako: And you're using data to verify whether it's truly working and profitable or not. So they have to write great algorithms. Otherwise, you're just going to scale down altogether. So there is a huge win-win in terms of the relationship.

00:16:12 Hamdy Albana: Absolutely. Absolutely.

00:16:15 Hamdy Albana: When you reach this point in your journey, this is where the real advantage to having your own store comes in as compared to being on Amazon, for example. Once you've gotten these few orders, 1,000, 10,000 orders, you now have a customer list of 10,000 people.

00:16:32 Hamdy Albana: You can retarget these customers using email and SMS, which is far cheaper than advertising. And if you release a new product, boom, you have an immediate top customer lead list of 10,000 people.

00:16:45 Hamdy Albana: There are 10,000 customers that you already paid for, you've already gotten these, and you hit them with an email blast, and they all already get exposure to your new product. It's one of the biggest ways that brands can expand when they've reached that point.

00:16:58 Hamdy Albana: Rather than finding new customers, which they'll always do, they release new products to their existing customers, and it allows them to increase revenue using their customers that they already have, that they already paid for.

00:17:11 Hamdy Albana: That's where the biggest advantage of having your own website is.

00:17:14 Kevin Mako: Hamdy, much appreciated. I just want to ask you a question in terms of realistic spend here. You mentioned make sure every $50 is better than the one before.

00:17:23 Kevin Mako: Just give us some real numbers about how much money is typically somebody spending early on to test out some of these things, and what does it look like to scale as a hardware startup?

00:17:33 Kevin Mako: I don't think it's big dollars, but you've obviously seen many more examples, and I want to know what does it look like for somebody that wants to just dip their toe in the water, but as they start to learn, of course, scale up a bit.

00:17:43 Hamdy Albana: Yeah, absolutely. I would recommend $50 a day, and it actually matches up perfectly because when you create a new ad account, Facebook limits you at $50 a day anyway, just because you spend before you pay, so they don't want you to spend a million dollars and then disappear.

00:18:00 Hamdy Albana: You're limited about $50 a day anyway. The reason I say $50 a day is this is a good enough amount to drive some traffic to your website. It is a significant amount of traffic to make decisions based off of that. What is this traffic doing on my website?

00:18:17 Hamdy Albana: How did they react to my ad? I can make decisions based off of this. Now, as soon as I start getting orders, I immediately want to start scaling.

00:18:26 Hamdy Albana: The reason why is because I may not get my first order for the first week or two weeks in, which seems like about $350 to $700 of ad spend, but that entire two weeks, I was warming up an audience. I want to increase the speed that I'm warming up this audience.

00:18:44 Hamdy Albana: I'm making my first touches, and the more I increase my ad spend, the more first touches I'm making, which will then trickle down to the later weeks and eventually turn into conversions. As soon as I start seeing a little bit of traction, I immediately jump on it.

00:19:00 Hamdy Albana: You can be more conservative and wait until you're profitable on each individual ad dollar. Or you could be more aggressive and say, you know what? This is showing the potential for growth. I'm going to further invest.

00:19:13 Hamdy Albana: I'm going to go to $1,000 a day, knowing that I won't get the orders for maybe another two or three weeks as I warm this audience up. Starting out, I'd say about $50 a day. Very quickly, you want to scale as much as your business allows for it, really.

00:19:28 Kevin Mako: What about geography for hardware startups? Is it better to just target customers maybe within your city, your state, nationally? So that the algorithm can work properly with that starter $50 a day budget?

00:19:41 Hamdy Albana: Yeah. For geo-targeting, unless you can only service a certain area, I would recommend keeping it as open as possible. Within the United States, if, for example, your shipping is only to the US, as you max that out, you could go global.

00:19:58 Hamdy Albana: But the reason why I recommend the largest possible audience is because the way Meta works is it is a bidding platform. So you have to outbid other advertisers. And the smaller your audience is, the more people you have to outbid for that small audience.

00:20:13 Hamdy Albana: And it just makes it more expensive. If we're shipping to the whole US, we don't really care where our customers are coming from. We want them at the most efficient price to start off.

00:20:22 Hamdy Albana: And so if, for example, your product is like a beach umbrella and it would work better on the coasts, well, Facebook's algorithm will be smart enough to know that and go there. It might also find out that a lot of people in the Midwest like to buy it for when they go on vacation.

00:20:39 Hamdy Albana: You don't know that. That's why we let the algorithm kind of choose where people are. It is a lot smarter than any of us could really get to in terms of finding these audiences.

00:20:48 Kevin Mako: That's helpful. Now, before I let you go, just talk a bit about what you do at Push Analytics to use data to help scale these initiatives.

00:20:57 Hamdy Albana: Yeah, sure. So in the past couple of years, I'm sure you heard of it. Tracking has been a huge issue when it comes to advertising and iOS 14.5 update, you know, stop people from tracking on the website.

00:21:09 Hamdy Albana: And as you can imagine, knowing what your customers are doing on your website and where they're coming from is a huge part in knowing the efficiency of your ad spend. So what we do at Push Analytics is we have the cleanest, best traffic that you could possibly get.

00:21:24 Hamdy Albana: This is first party data that we're collecting off the website, not like Google Analytics, which is very limited in what it could gather.

00:21:31 Hamdy Albana: We can see a customer's journey all the way from the first time we show them an ad to when they make it on the website and all their next visits. And we can very clearly see where customers are getting held up and release those bottlenecks. And it really helps unlock growth.

00:21:47 Hamdy Albana: We've gotten to the point where a lot of our clients, the main bottleneck to growth is actually inventory. We have to wait for more products to come in because, you know, the customers are there and we fine tune our funnel to work so well.

00:21:59 Hamdy Albana: And now it's just about supplying that demand.

00:22:02 Kevin Mako: Hamdy, amazing. What's the website so that folks who want to learn more about it can take a look?

00:22:07 Hamdy Albana: Yeah, it's pushanalytics.com. Simple.

00:22:10 Kevin Mako: Simple. Much appreciated. Of course, I'll put the links below for anyone who wants to click through. Hamdy, thanks again for all your words of wisdom. Go from zero to potentially millions of dollars of sales just using your very own website. Thanks again.

00:22:22 Hamdy Albana: Thanks for having me.

00:22:23 Kevin Mako: Take care. Thanks for tuning in to this episode of the Product Startup Podcast. If you found some value in the show, please do us a huge favor and hit the like button and subscribe.

00:22:34 Kevin Mako: If you have any questions, guest suggestions, or anything else, feel free to reach out to us anytime at our email, podcast@MakoDesign.com. This show is hosted by Kevin Mako, North America's leading expert on product development for hardware startups.

00:22:50 Kevin Mako: And the podcast is produced by Mako Design. The original firm providing end-to-end consumer product development services tailored specifically to hardware startups, small manufacturers, and inventors. Take your product from idea to store shelves at MakoDesign.com.

00:23:05 Kevin Mako: That's M-A-K-O Design dot com. Thanks for joining and see you again soon.