Ep 196: How To Go From $10K – $100K P/mth In eCommerce with Jonathan Gorham

Let’s face the harsh truth, without Ads, eCom businesses won’t sell big!

Anyone who owns this type of business and scaled it successfully knows exactly that creating Ads is the way to go. 

In this exciting episode, I had a chat with Jonathan Gorham and he will unveil what makes an eCom business a massive success.

Jonathan is the founder of Engine Scout, a performance-focused eCommerce marketing agency that helps eCommerce businesses scale their social ads, increase conversion rates and drive more traffic. Additionally, he runs his own successful eCommerce store to test the latest & greatest online marketing tactics.

We had a discussion on important subjects which includes the process that eCom sites undergo before they spend money on Ads and the platforms that they should try when running Ads. 

We also talked about where you should be spending your ad budget and what type of campaigns you should run? How to go from $10K – $100K p/mth or more and what those 7 figure sites are doing that beginners can learn from? How does a successful eCom business owner’s mindset work and what you can learn from them? What are the challenges you may face in growing an eCom business?

If you own an eCom biz and would want to scale it, don’t skip this valuable episode. This might be the info you need! Tune in by watching the video.


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Episode Highlights

03:10 What are the common mistakes in running Facebook Ads?

08:24 How to increase conversion rate?

14:15 How to handle customers’ objections?

16:50 How to know the business is ready for running Ads?

18:29 Which is way better when it comes to running Ads? – Google or Facebook?

19:40 What to do when you have a limited budget for Ads?

25:14 Scaling a brand to a 7 Figure business

28:25 Key elements to a successful eCom business 

30:12 Why testing Ads is so crucial?

34:23 What sets apart a successful entrepreneur from others?

40:40 Where can you find Jonathan?

Courses & Training

Courses & Training

Key Takeaways

➥ Before jumping on creating Ads, try to optimize your store first and see if you can get traffic and sales.

➥ In starting paid advertisement, start small. Whether it’s on Facebook or Google Shopping, look at where your competitors are advertising.

➥ If you have a limited budget, you can try Google Shopping and start with setting up a performance Max campaign and test it out

About The Guest

Jonathan Gorham is the founder of Engine Scout, a performance-focused ecommerce marketing agency that helps ecommerce businesses scale their social ads, increase conversion rates and drive more traffic. Additionally he runs his own successful ecommerce store to test the latest & greatest online marketing tactics.


Connect with Jonathan Gorham


Jaryd Krause (0:00)

What do you think it takes to grow an e-commerce business from $10,000 per month to $100,000 per month? Hi, I'm Jaryd Krause, host of the buying online businesses podcast. And today, I'm speaking with Jonathan Gorham, who is the founder of Engine Scout, which is a performance focused e-commerce marketing agency that helps e-commerce businesses, scale their social ads, increase conversion rates, and drive more traffic.

Additionally, Jon actually runs his own successful e-commerce Store to test the latest and greatest online marketing tactics. So it's not that just he's doing business for people, but he's in the business of what he does, so he knows what works and what doesn't work. Now, in this podcast episode, Jonathan, I talk about what you should do to your e-commerce site before you actually go away and spend your money on paid ads. We talk about the conversion rate optimization, what are some of the things that you should be doing in conversion rate optimization for your product pages, your checkout pages for your home pages and related to some other types of businesses as well, there's so much to learn in the CRO space, and we talk about fixing the plumbing to your site before spending money on paydays.

We also then talk about once you are ready, and how do you know when you're ready to spend ads? Or spend money on ads? So identifying that when you are ready? Where should you be spending your ad budget? And what type of campaigns should you be running? So what platforms should we use to be spending your ad budget on? And why? Which ones are the better ones? And what type of campaigns shouldn't you be running in this podcast, we making an example and talking about how Jonathan sees people going from 10k to 100k per month or more and what those seven figures sites are actually doing, that beginners can learn from so they can get themselves to those 100k months as well.

And then we talk about some successful e-commerce business owners and their mindset, what works? What are they doing? And what are all these successful e-commerce business owners have in common that beginners who are getting into the e-commerce space can learn from now we talk about the mindset of growing an e-commerce business and the challenges that you may face and the things that you're going to have to overcome.

Not just an e-commerce business has been an all businesses and mindset is an it's a massive, massive topic. And I actually think it's the foundation of what any business or what any good life is built on. So this is such a valuable episode with Jonathan, you're absolutely going to love it. Check it out. Do you want to build or grow your content website, niche website builders have helped hundreds of people that take their content websites from a few $100 per month to over 10s of 1000s of dollars per month with crafted content creation, buying age domains and link building strategies.

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Jon, thanks so much for your time and coming on the podcast.

Jonathan Gorham (3:13)

Yeah, thanks for having me, Jaryd excited, too excited to be here.

Jaryd Krause (3:16)

Looking forward to digging into a lot about e-commerce specifically around how to scale an e-commerce business. A lot of people come to us and like, Hey, Jaryd, I want to buy a business. And they, they, they want to buy an e-commerce business. And there's some pros to it. There's also some cons to it. The pros are scalability can happen a lot faster with an e-commerce business and say have a content site when you've got some money to put into ADS.

If you know what you're doing, when it comes to somebody who's just bought an e-commerce business and they want to build their brand. What do them what are the common things they get wrong with Facebook ads? And I know there's a lot a lot has happened in we know with iOS 14 And I've had ad accounts shut down all that sort of stuff. But where do most people go?

I'm going to have a go, I'm going to have a go and do Facebook ads myself, where do most of these people go wrong? Because I've done Facebook ads myself, and I know how hard it is. So what are the most common trips? I would say?

Jonathan Gorham (4:12)

I think the first thing is, you know, if you if you have an e-commerce store, I mean, there's so many different situations here. If you have an established business already, or it's a brand new store, and you're just looking to get some cash flow, get some sales coming through and Facebook's a great place to start and test your business. I would first like to prove that my website itself has is getting conversions.

So a lot of people will just jump on to Facebook. Let's get the traffic lets you know it's exciting. Get that traffic and stuff. But has your website proven itself that it can actually get the sales? Have you had some early conversions? Is there some ways you can you know that you don't have to, you know if you can avoid having to pay for traffic at the start just to test the store? Yes, my store is optimized for sales because a lot of people will jump in to Facebook. Grab all that traffic. There's a lot of traffic that you can get A lot of scalability on Facebook, you know, target the right audience is exciting.

But if you're paying for all that traffic to the website, it's not converting, you're going to get rejected pretty quickly, when you've spent, you know, you're spending up to, you know, 50 or $100 a day, and you haven't received a single sale, you know, you're not going to be there for long. So, I would always start with like, is my website the best possible experience? Is this product, the product that I'm selling? Or products that I'm selling? Is it proven that people want this product? These kind of validation points?

And only then would I jump into Facebook, and get started and I guess another really important thing, if you get past that first step with a conversions would definitely be with Facebook, start from the bottom of the funnel, and you need to build your way up. So to it’s really, that probably doesn't make too much sense. But um, you know, if you if you have any questions about that I'm happy to talk about.

Jaryd Krause (5:47)

We’ll dive into that for sure. Yeah. So we'll build it, build it from the bottom. But before we get to that, I want to I want to speak to you because like you said, let’s have this site converting. First, let's talk about what a good like conversions look like and what a converting site looks like, before we move into the, you know, throwing some money into the, into the Facebook fund, what's the average conversion rate for an e-commerce business?

I mean, I don't know what's going to be dependent on niches and stuff like that. But is there an average that people should be looking at before they go? Right, let's, test out some ads.

Jonathan Gorham (6:20)

Yeah, absolutely. I mean, as long as you've got, I always love Google Analytics, to view my conversion rates personally, you can see, based essentially, the average typical e-commerce store will be doing around two, two and a half percent. So every 100 visitors, you'll be getting about two sales, that's the typical average store below that, that line, I mean, it does vary depending on the product, if you're selling a very high end, expensive product, you might have a lower conversion rate, the best, you know, the killer e-commerce stores out there, they're converting as high as 10% conversion rate is, you know, so you can imagine 100 visitors 10 sales, you know, happy days.

So yeah, pay attention to that conversion rate, if you're seeing your conversion rates like 0.5%, that's probably an indication to hey, let's just put the Facebook ads on hold for a little bit here. And look at how we can improve the conversion rate. Unless you have a limited, you know, limited budget, you can tap into, you know, you want to run traffic and testing it on the fly. Absolutely. But I think most people don't like burning through money. And they're going to want to make sure they get that conversion rate up higher before they start bringing in a lot of traffic.

Jaryd Krause (7:32)

Makes sense. It's like fixing the plumbing before you put more water through it. So this is not all leaking out. A lot of people come to enjoy it, I want to buy, I want to buy a business and I want to use finance and like okay, cool. Well, do you have your own personal finances sorted? Like, are you overspending? Do you know where all your expenses are, and all that sort of stuff? Because sometimes what people try to do is they try and get finance and put a whole lot of, you know, get a whole lot more money of debt. And they just leaked that money out just as you know, just not just as fast as they put it in. But because the plumbing is not sorted.

And they don't have good habits around money. They can't they, you know, like you said they won't be in business for very long. And I liked that with this is like Plumbing if you're just going to be putting money into the pipeline, and it's leaking out because the conversions aren't working, we need to fix that. So what are some of the common things that we can do to get our conversion rate higher?

Before we start going on, you know, on minus be, Facebook might be other ad platforms as well? Are we looking at our sales copy? Are we looking at product images? You know, I've done some CRO for, you know, for econ businesses that have increased conversions, but I'd love to hear what you’re most common changes are?

Jonathan Gorham (8:46)

Yeah. So the good thing about CRO is that it can its not, you know, you're not paying for ad traffic. So if you're already getting traffic to the site, even for established shows that might have sort of half leaky plumbing, but they're getting a few sales in, you know, increasing the percentage from 2% conversion rate to 3% can increase revenue by as, you know, 50%, double the revenue.

So, it does have a, you know, a really good effect. But yeah, to get to your question, there are I mean, people buy, regardless of what product you sell, people generally have the same, you know, the same buying journey, buying psychology that people need to see when they shop on an e-commerce business. So you have to think about yourself, how are you different from a retail store? People can't touch or feel your product?

So starting with do you have really good product images? And do you have multiple product images so people can see the details? You know, if it's a bag, can you see what's inside the bag? Is there photos behind the bag, a close up photo of the material of the bag, you know, all these images really matter? So people you know they can't see it in store. Give them as much as you can. And a really good example if you don't know where to start with CRO you want to try it yourself. Have a look at how Amazon do it.

Their website is optimized for CRM, they've got all the elements they have on their reviews, you know, feed feedback from customers so much information, especially in.

Jaryd Krause (10:10)

Like, social proof is so good, isn't it?

Jonathan Gorham (10:15)

Absolutely, yeah, that's, a huge thing. And that a lot of these things can be automated as well. And some people often say to me, you know, I just have a store and I don't have any reviews, yet, I don't have any customers to give me reviews. Just create a coupon code and get a few of your friends like five or 10 of your friends to just run through the store and get them to leave a review. I mean, just to get the ball rolling there.

That's always a good start, at least you get a little bit of social proof. And then you can automate when real customers come through, send them an automated email after they've purchased incentivize them with like, you know, chance to win a free Amazon voucher for $50 or something, if you can leave us a review these kinds of things just to get the ball rolling. And that'll make a huge difference. Product images, reviews, and make sure the Add to Cart button if it say the product page itself is really clear. And it's at the top of the page. And that's the only main call to action that people have Don't overcomplicate it.

Jaryd Krause (11:09)

Yeah, I love it. I love it. So don't make it hard to buy. Like, Amazon, like you said, is a great tool or a resource to look at is like, what? What have they done to make it easy for people to buy it, there's a lot of other things that you people may not be able to do like having Amazon Prime and memberships to the e-commerce business, even though I have talked about that with other people in the podcast, having membership component of your e-commerce business.

But yeah, just I think the this is the biggest thing that I've helped people with, with their e-commerce brands is taking, like they've got big Amazon, like people come to me and say, Hey, how did Jaryd, how do I get off Amazon and start selling off Amazon. So they can have, you know, a high profit margin and not be dictated and have the whole business owned by Amazon, we describe a lot of that. A lot of that data, points of reviews, put them all over the all over the site on that their product page. And the cool thing about them being on Amazon is everybody, not everybody, but a lot of people selling on Amazon has this level of product images and product descriptions that are really, really good. So they've already highly optimized their images.

And we can just bring them over and put them straight on the site. So I would say like even people that are want to want to sell some, like sunglasses or something like that go on to Amazon and look at their images and how they're like, are they flexible sunglasses pointing to different things with like, not just the image, but also like graphics within the image of descriptions within the image of like widest materials. Good? And have you seen that Amazon have helped e-commerce brands sell better off Amazon? As well?

Jonathan Gorham (12:52)

Yeah, I mean, a lot of e-commerce stores do go down that route, especially in the US and it's becoming more popular in Australia. You know, we're at where Amazon is a big seller for them, you know, sometimes as high as 80% of their sales, and they've got that Shopify store as well, that they're trying to obviously you know, that’s their store. They're not having to pay the high fees to Amazon. And I think another around that conversion things as well is yeah, just study what Amazon doing, especially their product pages really pay attention to what are they including on that page?

And how can you migrate some of that to you know, your e-commerce store, whether it's Shopify or Woo Commerce, whatever platform and also, a lot of e-commerce owners, I think shy away from having contact information, like they want to have this online business, they don't want to have too many touch points with the customers at all. But don't be afraid to put up a phone number at the top of email, you know, returns policies clearly on the product page. Just make it look like hey, we were backing our product here.

If you're not sure about anything, give us a call chat to us online, you'll find that most people won't but they will just like to see that information’s there. Just gives them a sort of a trust point. I mean, there’s a lot of you know, just hey, this these guys obviously look legit. They got a phone number, you know they're contactable, even like here's their warehouse address or an address anything like that. It does help so that does make a difference.

Jaryd Krause (14:15)

Yeah, I love it. I love the psychology of sales in here how can we allow people to understand their fears and make them feel better even though they do have those fears?

So how do we do some objection handling with our you know our products and our you know, on our product pages for example, like you said, How much is this going to cost to ship to me? You could have the free shipping option up there What if I don't like it and the returns policy just like you said, like just knocking off those objections. Will this fit me if this doesn't fit me? What's our sizing? Sizing guide can you just can you send the shirt to me and if it doesn't fit me the way I want it to fit me Can I just send it back without any you know?

Cost to me cost me any money. Those things are like everything. I think the main thing is like putting ourselves in the shoes of the buyer? And what are the risks of that willing? What are the risks that they're taking? By purchasing that and helping them to understand that there, there isn't any risks? Would you say that's a good mentality to have?

Jonathan Gorham (15:12)

Absolutely, the less friction you can create on that front with the trust, you know, just showing all of these having. And then also, the friction in terms of, like you said before, just making it easy for people to shop. So if it's the product page, what's that main action, you want them to take on that product page, you don't want them to sign up to an email that point, all you want them to do is click add to cart and move from the product page to the cart page.

And then think about, okay, I'm at the cart page, what's the is there anything here distracting them from my main objective, which is taking them from the cart to the checkout page, just you want to guide them through one step at a time, it's not about here's the homepage, buy it now, on the homepage, it's getting them to the category page if you've got lots of products, or if you're a single product store, getting them to that product store product page. So just think about it in those steps. And you can actually see all that in Google Analytics as well.

So if you have a breakdown from say, the product page to add to cart, you know that you need to work on improving that product page, there's something not right, is that the price? Maybe you can test that? Is it somehow you don't have enough trust signals? Is there not enough information? Or the product images themselves? Not right? Do you have reviews that are showing on that product page? So you can easily diagnose the issue with CRO and you can work on the improvement? That said, if you have a store that doesn't have any traffic? That's going to be hard? Because you don't know what what's going on.

So it's a bit of a catch 22? I guess if you don't have any traffic, you might be saying how do I get conversions? Okay, then you may need to run a very sort of small sort of Facebook campaign where you can bring in a little bit of traffic and start to get some feedback and improve on that.

Jaryd Krause (16:50)

I'm glad that you brought that up. Because sometimes people don't have all the time and all the resources to do all of the things that need to be pre prepared before they start running ads. So where do you use sometimes draw the line? For example, somebody can optimize their product pages and you know, their checkout pages? But where do you draw the line before they go and start to maybe run ads?

Sometimes you tell them hey, no, you need to have an abandoned cart email sequence of maybe you should be looking at upsells and down cells and increasing customer lifetime value before you start running ads. Where do you start to draw the line before you go? No, that's good enough. Let's test some ads. Like is there? Is there any hard rule for you? Or is that just dependent on the business?

Jonathan Gorham (17:35)

Yeah, that's a really good question. And it does it is it's hard to give a definitive answer. But I would say, and it's hard if it's your store as well, because you can become so involved in it and kind of lose sight of is this site really good? Is it optimized, so it's always good to check it? And if you don't have access to say, with someone with experience with e-commerce, maybe you know, you've got some friends, at least get some friends to give you some feedback. And you may not like what they say as well.

So try to be open minded about what they say and think about, what are they thinking, you know, even if, ideally, if you can find your ideal customers and get their feedback, that's going to make a huge difference, be open minded, and you know, get the store at least operating well, I would get some feedback. And if everything's okay, start with some paid traffic, start small testing, whether it's on Facebook or Google Shopping, look at where your competitors that advertising, that's always a good start, what channels are they using? And that's probably a good way to start.

Jaryd Krause (18:29)

Do you tend to ship people to Google more or Facebook more fine?

Jonathan Gorham (18:35)

I love both Facebook and Google Shopping for e-commerce, Facebook is I find it it is a little bit more challenging, because you have to put more effort into the creatives with Facebook, so there's that element there. But if you can get Facebook ads working for you with your e-commerce store, that is a very clear sign that your products will sell on any marketing channel. Facebook is like almost the canary in the coal mine.

If it's not working on Facebook, you need to sort of go back and see what you can change what you what's not what's not working and optimize. But if you're selling on Facebook, you will 100% be able to sell on Google. So it does depend I mean, some products of just strictly b2b, where you may be better just to advertise that on, say Google. But yeah, I mean, I think both of both are warranted. Google is going to cost you a little bit more sometimes. But it does depend but I love them both. And if you do get Facebook working, if you can get that working, you're going to see good results across other marketing channels.

Jaryd Krause (19:40)

Now this next question is going to be a tough one because it's going to be depending on the business as well. But I'm talking about budget sometimes people might have $1,000 per month to start with and sometimes they might have up to $3,000 I know that some people a lot of people actually in in my at home here on the Gold Coast.

Send when I meet people whose like, I want to start doing ads, like cool, how much money do you have to spend per month, and it's not usually more than the $3,000 per month range. And your options are limited, because most of the best ad managers are charging, you know, $2,000 $3,000 minimum to just manage the ads, and that's your ad budget gone. So for somebody that has around the $1,000 to $3,000, they might be able to test spent spending in budget, would you suggest them splitting it between Google and Facebook?

And if so what sort of split? Or would you suggest them going in on one of those platforms and getting more data on just the one platform before they move to move to another one.

Jonathan Gorham (20:45)

I personally, if I was in that situation, I would start with Google Shopping for e-commerce and testing it out. So that's they're becoming more automated, I think it's easier for if you're sort of in that DIY, you've got $3,000, and you don't have the budget to pay someone $2,000 a month to manage it, because you've got $2,000. To spend, start with setting up a performance Max campaign in Google Shopping, and be prepared to a lot of people make the mistake, I'm just going to start running ads, and I'm just going to start getting sales straight away.

It can take time, like you have to be patient, you have to be willing to go Alright, I'm going to give this a proper go for at least two months, I'm going to continue to work on improve on it each week. Look at the data, the information is coming in, look at the you know, are we getting sales, are we targeting the right search terms, you could additionally, you know, take a third of that budget and put it into like a Facebook remarketing campaign where you just set up a very simple product catalog so remarket to anyone on Facebook, who has visited the product page, or added to cart but not completed the purchase.

Yeah, but I think that's getting a little bit more complex. At that point. It's not too complex. But if it's your first time, it can get a bit overwhelming. So I would start with Google Shopping, it's fairly easy to start up with, and it's going to get you good feedback, straightaway.

Jaryd Krause (22:07)

Feedback. That's the key word, right? Like people will think like you said, I'm just going to put some money in the ads that are going to make, you know, I'm going to make sell a lot more products. It's like somebody, somebody asked me last just last week, how much should I spend? And you know, I sorry, I asked them, how much have you gotten, they said how much they had. And I said, look, you can spend that on a mound of money in one month, or you can spend that amount of money in three months. And let's just say it was $3,000. And it's like one, you can do $3,000 of ad spend in one month, or you can do it in three months.

What I was taught from one of my previous marketing mentors is you want at the start, you're just getting feedback, and you’re basically getting data. And that's going to allow you what are the best campaigns allow you to know what are the best campaigns are going to run, they're going to give you the best conversions and the best ROI. And I think that's a really awesome way to look at it and think about it of like, you're paying for data and feedback at the start until you have the confidence then you can go yes, now I'm going to put more money into ads.

And I'm actually going to make this return based on confidence based on previous experience. Right? Do you think that trips people up a lot when they have when they start to first run ads, they think oh, and you think they if they had their mindset a bit different? Do you think they would be able to be prepared for the long game and be able to write about rather than because I feel like some people give it a crack. And they go damn, like they make any money. And they expected this result within a short period of time. And they didn't realize that, hey, it's about the long game here.

Jonathan Gorham (23:36)

Yeah, absolutely. I mean, I think you know, it's common to fall into that, because, you know, you get you see all the people, you know, on social media, you know, saying, Hey, we ran this, we've got these amazing results, people just show you the really good results. They're not showing you the sort of the struggle behind that you're only seeing the tip of the iceberg. So if you're starting off, you're absolutely going with the mindset, whether it's you're starting with Google ads, or Facebook ads, I'm going to give this a go for two months.

I'm going to monitor it closely. I'm going to look you know, in the first week, did we get a couple of sales? Awesome. Where did they come from? How did that work? Try to study it. Look at all the information you have Google Analytics, if it's a Shopify dashboard, if it's in Facebook and Google have their own performance dashboards as well. And then, you know, what can we improve on and just sort of making iterative improvements on a weekly basis, and don't fall into this mistake as well like checking it daily.

You know, if it hasn't, you know, changing and chopping and changing every day, it's then hard to know what changes you made that actually made an improvement.

So, you know, if you can sort of give it you know, at least at the very minimum, you know, few days check in on it, and then make some adjustments every week and then see what's working. So, if it's your first time you don't have too much experience, it's going to be hard to know what to change in terms of, you know, what type of bidding should I be doing? Like maximum conversions or chat targeting impression share and things like that.

But basic rule of thumb with Google shopping, just start with maximum conversions. And try to let it run for a while and get that feedback and then make some changes.

Jaryd Krause (25:13)

Yeah, cool. Now moving on from a couple $1,000 a month in ad spend, there are going to be people listening to me and may not be there yet. Or maybe they are but wanting to go, how do I get my e-commerce brand to seven figures? Right? For example, they might be doing 10k a month with their brand.

How do you? What does it look like in in terms of a marketing sense to take a brand from doing 10 grand a month to doing 100 grand a month? Is it mostly ads? Is it a combination of changing a few things on the site conversions is a combination of product development? Like what is it? What does it look like as a top level?

Jonathan Gorham (25:55)

Yeah, I think you know, the difference between a store that's doing sort of less than $10,000 a month versus a store that's, you know, doing over $100,000 At that point, that store $100,000 is they've got a really, you know, a website that is converting obviously, and they've got the conversions, they're looking at that they're improving their conversion rate, they're, they're advertising, you know, through paid traffic, if they if they can be just focused on paid traffic at that point, they may not even be doing organic SEO.

If its paid traffic, they're really you know, there are they're obviously spending money on Google ads, and there and their Facebook ad campaign. And they do have it optimized to the point where, you know, if they're spending $10,000 a month, they are getting back, let's call it for, for simplicity purposes, to roll ads for to return on ads ROI, as you know, return on ad spend, two times, so they're spending $10,000, they're getting $20,000 back, and they've really got their finances dialed in as well.

So they know how much the product is costing them to ship and deliver to that customer. And they know how much exact profit they're making from that ad spend there watching that closely. I think that's the big difference. And it's running, you know, profit. I mean, there's some really aggressive big brands out there that may just be running, you know, what, you know, just breakeven costs, and they make their money on that secondary purchase that follow up purchase that return customer. That's, that's a thing.

So it does depend a lot on the business, you know, the market b2b, direct to consumer, there are some variabilities I think that answered your question, how about digging, if I miss something.

Jaryd Krause (27:38)

Yeah, it sounds like to really get to that level of, you know, like high six figures, seven figures in a calm, you need to be tracking things. And you need to be knowing how to tweak those things, right, like tracking your euro as tracking your conversions. Even tracking which products are the best selling products, so you can sell more of those products or tracking which products have the highest profit margins, so you can sell more of those products that you can make actually make more profit, because that's the most important thing.

So you can put that profit back into the business and that could end up looking like more ad spend or more conversion rate optimization, right. So it sounds like this sounds like a three part you know, three important things that sounds like you've got to track stuff. That’s the foundation. And once you've tracked stuff you can work out do you need to put more time and resources into ad budget and that marketing or CRO would you say that those are three key categories? Or is there anything else that I'm I could be missing to get that?

Jonathan Gorham (28:45)

I think those are those are the main things you know, improving your conversion rate on your store, improving the ads, whether you're spending on social media, Google search, you know, improving those ad campaigns or you know the if you look a Google ads campaign or a Facebook ads campaign for a million dollar e-commerce store versus $100,000 e-commerce store the actual structure of the ads and there's nothing different the structure is exactly the same.

Okay, the million dollar stores probably testing you know, larger audiences they probably have a few more creatives that they're testing because they have more budget the structures are essentially the same so the levers that you pull Yeah, you want to make sure that you're tracking it's making money or you're at a level that you're happy with you know your costs really well you can improve your ads and your conversion rate I think those three things are that the you know the ways to just grow the e-commerce Store from those two points.

Jaryd Krause (29:45)

Yeah, cool. So when you say the ad structure is the same I'll what does that kind of look like? Are we talking about X amount of like a percentage of money goes into like discovery and you targeting and then of the percentage goes into retargeting And then there's certain campaigns within each of those. Is that what you mean? Like the similar structure? And if so what portion goes to which generally, I guess, yeah, generally.

Jonathan Gorham (30:11)

speaking, in terms of your structure with your ads, whether it's Google or Facebook, I find that the best run campaigns are the one campaigns are doing well, at any level, they're not overly complicated. So if you're finding that you're ending up with a ton of campaigns, a ton of ad sets and stuff like that, it needs that some of the best campaigns are very simple. It could even just be one ad creative that is bringing in 80% of your sales through Facebook.

So that's why a lot of people in specially in Facebook, they talk about testing different creatives, because you don't know, you're not you never assume which ad is going to do well, there could be an ad that you don't even think twice about, you sort of describe it as like this ad, why am I putting this up, and that becomes your best ad. And that could just be running on its own for like six months, it just bring in, you know, 50 80% of your sales.

So that's why a lot of people talk about putting in lots of different creative being open minded with the ads that you can use for your brand. And then once you find a winning ad, or if it might be one ad, just letting that roll up. Of course, you can scale up with budget, or you can use that same ad across different audiences in especially in Facebook. So the campaign structures and stuff are nothing complicated.

They're very simple. You know, you have a campaign, you test a few different audiences, and you're testing a lot of different ad creatives. You know, if you find an ad creative isn't working, just turn it off, kill it. And then just keep iterating until you find that, that ad that does really well.

Jaryd Krause (31:40)

For a brand that's is creative ads, and ad creative for Facebook costs, time and money. Exactly, especially if you're doing video, even if just you know images, getting good photography and stuff like that you find there's a portion of percentage spent on creative, like, if we're just looking at, if we're just zooming in on just the budget for Facebook, do you find that there's a percentage that goes to creative and there's a percentage that goes to ad spend? Yeah, I mean, you can get creative with the creative.

You don't have to, there are I mean, good creative is expensive, but you can absolutely test very simple things like you can just honestly get out your phone, camera and shoot an unboxing video of your product and test that out people love unboxing videos, it could be I love user generated content. So you know contacting getting a few influencers, there's even I forget the name, but there's companies out there where you can they organize the influencers for you, send them the product, you can get that send them a script, you know, talking about especially the benefits of this product, since they bought it, what it's done to them in their life, those kinds of videos will do really well.

Sort of that influencer or looks like a customer testimonial video I love I love those types of creatives. So they're not that expensive, and they're not high end, you know, not we're not talking high end production, we're talking video shot on your phone, images. Even just like, you know, behind the scenes of your business can do really well, you just got to test the number of these different things. And see which ones are getting the engagement, which ones are getting the sales. And then yeah, that's what I like to do for creatives. Yeah, cool. I find and I've tested stuff out before as well is.

And I've even heard from people that they will not have used their best camera with the best background and the best lighting, they will have something that's a bit more raw. And this is for, you know, YouTube ads and stuff like that, they'll just be like, this is who I am. This is the lifestyle I have, I'm not trying to like paint a pretty picture of like, everything in my life as sort of just because I'm making a couple of million a year or whatever it is, they're just like, I'm just a real person, just make good money.

Because I've got this one thing sort of outright, those ads are just like the trust is can be higher than something for people viewing can I'm just saying cannot every time can have more authenticity rather than something that's too polished, right? Like that's what I've that's what I've seen. And I want to ask you, around a mindset thing. One last question around a mindset for business owners and e-commerce brands. For those owners that have done really, really well with the e-commerce businesses.

Have you noticed traits and similarities between those entrepreneurs that are doing exceptionally well with their brands, their e-commerce businesses versus somebody that's been struggling for you know, a couple of years? Do you see is there anything that like, really, you can see that these entrepreneurs are killing or doing that? These other people aren't?

Jonathan Gorham (34:49)

But I think the biggest thing is, the people that are doing well have already made all the mistakes that the person who's struggling is and they've been in that position. They've just kept going and had been open minded, they haven't been, you know, stuck in their ways essentially, like persisted with something that you mean, it's good to persist with something.

But if it's really getting to the point where it's just not working, it might be time to go, okay, hey, this is not working, I might going to get some, I'm prepared to get some external feedback, listen to people who ask, ideally who have been successful, don't get caught up with like listening to people who haven't built any I pay attention to, is the advice I'm getting from someone who has already done that or walk this path. So if you are in that position where you're struggling, just keep testing, keep improving, and keep failing.

It is frustrating. It does require patience to get it right. You know, you may have to just burn it all down and start again with a new product. But yeah, I think the successful people they just have, they just keep going. They really, you know, dig in. They change when they need to. I mean, everyone wants like that magic formula and stuff. But it's not. It's nothing exciting. It's just patience, persistence, and being open minded and keep iterating and keep improving.

Jaryd Krause (36:08)

That's awesome. That is so good. Jon, just did the first part of what you said is like, the person that's done it and made it have made all the mistakes already. And it's so true. It's so true. Like, people, like you said, people want that formula, which is like the shortcut.

Jonathan Gorham (36:25)

It doesn't exist, unfortunately. Yeah, love to have the short.

Jaryd Krause (36:30)

We always look for it. But then you got people on the other side that are like, I don't I they're just so calculated, so analytical that they don't want to fail that can hold them back as well. Right? Like you said, it's just keep failing and fail more and more and more and more. It's not like some people, some people say people don't learn from their failures, like how can you not like if it's sometimes it can take people longer to learn, but eventually everyone's going to be like, Alright, cool. I'm not going to touch that hot stove anymore. I don't have any hand left to burn.

Jonathan Gorham (37:02)

I think like people look at, you know, you look at a successful person, you go, well, like, and what do they have? They got the magic or anything like that? They don't they're just someone that I think is exactly, they have exactly the same. You know, they do exactly the same as what you do. They're failed, just like, you know, they've failed many times. They just haven't given up, they've kept going, and they’ve kept improving.

So, yeah, it’s really, if you are in a position, like if you have an e-commerce store, you've got a website of some sort of business that isn't doing too well. I mean, every business has its different reasons for it. So it's hard to say for sure. But you know, get some expert advice from someone who has already you look up to in the business world, and you know, get out there and you reach out to them. That person might say, No, I'm busy, we'll reach out to another person and just keep going, and you will get someone to help you. It's just, really persisting and being patient and not giving up.

Jaryd Krause (37:55)

Love it. I love it. Long term, long term thinking, understanding and to make failures and read put your hand out for help.

Jonathan Gorham (38:05)

I mean, the marketing, the paid ads are aligned to the business success. It's the same not giving up testing different things. Yeah, seeing what works. You know, these things are important.

Jaryd Krause (38:16)

I love it. Jon, that's so good. Thanks so much for coming on, and sharing your wisdom around marketing and also mindset and business. Mindset pieces, I think people should really pay. I think that's more foundational than just the ads, even though there's I'm not discrediting all the information that we talked about with the ads, but like, if you don't have the mindset, sometimes you won't be able to get through the grueling process of spending a lot of money on ads, which I have been through. And it is tough.

Jonathan Gorham (38:43)

We've all I mean, everyone, anyone who's running Facebook ads and doing it well, they have failed at Facebook ads, many times especially and same like with in business and everything. So don't be too hard on yourself and just keep going and reach out to people. And I think everyone even successful people don't see themselves as successful there. They're still struggling with their own, just different issues they might have. But everyone is everyone's got struggles, and no one. No one's immune to that.

Jaryd Krause (39:09)

We all do. We're all just trying to make it up as we go and just try to learn as much as we can without spending too much money. But we ended up doing it anyway, we ended up oh, I just lost the money on this thing. But that I guess that's the good attitude to have as, as well as like you are going to spend money and you're not going to get a return from it. You're going to spend time and you're not going to get a return from it until you look back later and be like Well hang on a second. I did get a return from it because I learned from that mistake.

Jonathan Gorham (39:36)

Absolutely. I think it's funny like I find the more money obviously you don't go crazy but the more money I find I'm spending on things and I find like it brings in more you get more back as you started sort of when you start off you want to be really budget conscious but as you start if you know once you start learning and you get knowing what's working, you still make mistakes, but you know it does it does pay off and yet.

Jaryd Krause (39:58)

Yeah, I think there's some psychology around and we wouldn't have done it to go back go into this, but list the psychology around the velocity of money and how much money if you're too afraid to spend money, then how are you going to attract more money to you. But if you're, if you can become more frivolous and understand that you're going to make the money back or make the return back and might not be in money.

But some way. This is something that I've really struggled with in my life is growing up in a frugal family and working out how can I spend? How can I spend money when I have fear of losing it? But that's the psychology right? So yeah, not what I mean. Sorry, Jon, where can we get people to check out more about what you're doing?

Jonathan Gorham (40:41)

Yeah, I mean, I run a marketing e-commerce marketing agency. So my website is Engine Scout.com that to you, I would say though, if you are thinking of engaging in a marketing agency, be careful, I would advise, try running ads yourself first, so that you understand what's going on, and then hold the agency accountable for the work that they're doing.

So you're you don't have to be an expert, but you've got some level of education, you're not going in blind, that's a big mistake. You have to be careful in the ICC world Cup be a minefield, but yeah, I run an e-commerce agency called Engine Scout. I'm also on LinkedIn, you can just search my name and connect with me. They're happy to have a casual chat or answer any questions there as.

Jaryd Krause (41:21)

Well. So that's so good. I'm, as an agency owner, it's so good to hear you say, give it a crack. First, I know the how many agencies that are out there that I and I've worked with a couple that it's been tough guy. And that's, that's because at especially at the start, I didn't know what they were doing. And I didn't know if it was the right thing to do or not. So having a bit of a play can certainly help. Right?

Jonathan Gorham (41:45)

Absolutely. You know, the agency agencies can be great. And I recommend any e-commerce business as you're going through your growth. Definitely hire one or hire different couple of agencies at different stages, that's going to help you with your growth, because agencies can bring a lot of value, especially if you find the right one. The tough thing is finding the right one. So yeah, get yourself educated, really know what you want.

And when you decide to work with an agency, be proactive, don't just sit back and just let them take care of everything. Be involved. Get involved, find out what's going on, you know, have a quick call with them once a week to check in what's going on with the ads, what are we doing? It's a two way relationship. It's not just pay the money and expect everything and shot off. It's really, it's really about that.

So I think that'll give you the best results when you do work with an agency. And even then you might work with a bad one. And if that's okay, just get rid of them straightaway. There's plenty of other agencies out there that will be willing to help you and you will find a good one.

Jaryd Krause (42:40)

Love it. Jon, thanks so much, everybody that is listening. Thank you so much for listening. Please do your friends and ask Jon and myself a massive favor and share this podcast episode with them. It helps them and it helps us get more discovery as well so we can help more people prevent them from spending a lot of money and not getting a great return by not being able to find or know what an agency is doing and also learn from some of the mistakes and some of the things that we've talked.

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Jaryd Krause is a serial entrepreneur who helps people buy online businesses so they can spend more time doing what they love with who they love. He’s helped people buy and scale sites all the way up to 8 figures – from eCommerce to content websites. He spends his time surfing and traveling, and his biggest goals are around making a real tangible impact on people’s lives. 

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