128: How to Build a 9-Figure Brand

0:00Rinse takes your laundry and hand delivers it to your door. expertly cleaned and folded so you could take the time once spent folding and sorting and waiting to finally pursue a whole new version of you like tea time you or this tea time you or even this tea time you said you hear about Dave or even tea time tea time tea time you so update on Dave it's up to you we'll take the laundry rinse it's time to be great

0:33When did making plans get this complicated? It's time to streamline with WhatsApp. The secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Hey, everyone, and welcome back to the Rich Habits Podcast, a top 10 business podcast on Spotify brought to you by public.com. Today's episode walks through Robert's nine-figure framework for launching new online brands.

1:13My name is Austin Hankwitz, and I'm joined by my co-host, Robert Croak. Robert is a seasoned entrepreneur with lifetime revenues of over 300 million, and I'm a multimillionaire in my late 20s with a background in finance and economics. As the show name might suggest, every episode we talk about rich habits as they relate to business, finance, and mindset. So Robert, what are we going to be talking about in today's episode? Today's episode of the Rich Habits Podcast is going to be a blast because we're going to share the exact step-by-step framework I use to launch Silly Bands and continue to use to this day.

1:45So whether it's a beauty product, a garden tool, or some trending idea, I use this step-by-step framework for every launch to ensure we cover all of our bases and give ourselves the best chance for success, and hopefully it'll help you along the way as well. Since Silly Bands in the early 2010s, I've launched a clothing organizer product, sanitizer bracelets in response to the 2020 crisis we dealt with, and most recently, a travel puzzle company. All three of these products came with their own teachings and challenges that have helped me tweak this framework into perfection, and I am here to share it with you today.

2:23Yeah, this is going to be a fun episode because I think a lot of people listening right now are ready to kick off that entrepreneurial journey, but don't want to go buy a big cash flowing business and go hundreds of thousands of dollars into debt, right? So instead, this could hopefully be a framework that'll help you take an idea from zero to one and begin to make a little bit of money on the side. I have a friend named Charlotte. She actually came up with an idea a couple years ago when she was in college to have charms on water bottles. And now her product is in Target, Dick's Sporting Goods, Academy Sports, and she was recently featured on Shark Tank.

2:58She's doing like$10 million a year in revenue right now, and it was literally an idea she had in college. And so we share this example to inspire you guys to think like charm on a water bottle. Well, that doesn't make any sense. A bracelet that turns into Batman, silly bands, right? That doesn't make any sense. No idea is too small, too silly, too crazy to like go try and figure it out and have some fun. So hopefully this episode can help you go from idea to execution. I remember the stories with silly bands. People are always like, man, I can't believe that took off. And I would always just say to them, well, you thought the pet rock was crazy too.

3:34You have to go with your gut on an idea. You know, who would have thought that Silly Bands could go on to be this global company for shaped, cool, fun rubber bands and do what it has done over the last 15 years? So I really like that line of no idea is too silly or too small to explore. So by the end of this episode, you'll understand the due diligence process. That means coming up with an idea, doing your research, understanding your competition, the legal work around launching a new online business. will have taught you all about the manufacturing process, finding them on Alibaba, doing the manufacturer's agreements, the non-disclosures, as well as the timeline it takes to have a product created and delivered to you.

4:15And then finally, the distribution and scaling of this product, right? You want to sell tens of thousands, if not hundreds of thousands of units. So we'll give you some ideas on how to do that as well. So Robert, let's jump into the due diligence process. Every successful business started as an idea. If you have an idea for something, write it down. I keep all of mine in a notepad. If you can't come up with an idea, look around, go shopping, talk to your friends, talk to your family. What trends are there that are happening that you could take advantage of? What is out there that solves a problem?

4:48And it doesn't have to be a huge problem. It could be a niche that you see that is something for kids or dogs or pets. That's a huge category. I get new ideas every single day. And whether I jump on them right away or sometimes they can wait, I still want to make sure that I have that framework of where the idea came from, when did I think of it, and get myself involved in it mentally by writing it down and keeping track of it because then you have a record and you can remember it and not forget what could be an important product down the road. I don't take all ideas to market and neither should you.

5:23There is only so many hours in a day. Coming up with an idea can be the hardest part. sometimes an idea could be something you see your friends do and you're like, man, I could invent something or, oh my gosh, like I bet if you did this and this instead, it could be better, right? So like just having that investor owner type mindset, not just that consumer mindset. Of course, when it comes to owning stocks and things like that, but that really opens up your sort of third eye, as you will, into all of these different things, including online brands and businesses and products and things of that nature.

5:56So coming up with an idea, I feel like is probably the easiest part of this entire process. Now that you've got the idea, you've done what we talked about, it's time to research. This is one of the most important phases. Before you get ahead of yourself, you need to understand the growth potential and the competitive landscape because you won't want to waste too much time and money without understanding what you're up against. How big is the market? How much of the market do you believe you can get with your iteration of this product, or if it is a brand new idea that's never been done, understanding what you think the target market is for the product and how big could that be.

6:34So I like to use TikTok, Instagram, YouTube, Google, Amazon, and even Etsy for my own research, because then I can poke around. On Amazon, I can look at bestsellers. On Etsy, I can do that as well and really try to figure out where in my research this product could fit and how big is the market and is there too much competition because the point of the research is to ensure that your idea has legs and can make you thousands per month maybe even ten thousands per month of profit if you can outwork the competition maybe you build a better mousetrap you market it better you do some value adds but all of this has to happen before I move forward.

7:18I would be like, okay, does something similar exist? And how well are they doing? Right? Is this a really popular thing? Like blue light blocking glasses, I know was a really popular product online that does a ton of sales on an annualized basis. Maybe I could come up with a new idea around that, spin it around a little bit, come up with some new thing, but making sure that I'm operating in a niche that has some legs and has some real growth potential in the future? There are many categories out there. There's beauty, there's supplements, there's hair care, there's all of them out there. You don't have to come up with a brand new idea or a brand new sector.

7:53You don't have to do that. You can iterate on something that already exists and still make millions and millions of dollars. Because as I have said for decades now, yes, I love real estate. Yes, I love investing in the S &P 500, cryptocurrency, gold and silver. But in my opinion, one of the best ways to build real wealth fast is to create a product, an online product like we're talking about today, because you can go from zero to$10 million a year in sales pretty quickly. And that is what I love about the consumer products market and this episode kind of spilling out my framework of what I've used to build all of these brands on my own.

8:34So that brings us to the next part. We have an idea, we know it has legs, but it's time to come up with the name and the brand surrounding the product. I like to look at it from not only finding out a name that works, but take it into consideration the virality aspects of the name. Can I get a good URL for the name? Because that's important as well. Are the social media handles available for the name? So that's what I like to do is really understand the totality of how to put together a really successful name for this concept and this product. So what I generally like to do is I use word recognition.

9:10I will take an idea and say, all right, this is the product. This is what I think the search words are going to be. These are words that associate well with the product. Generally, I'll come up with 30, 40, 50 words that I believe can fit the product category and the demographic and use that as a reference point to come up with the name. You could use ChatGPT for this. You could use Grok for this to give you some concepts and ideas. I love using AI now to get us started and give us several options. But from there, we will refine the name, the logo, the branding, and the colors through traditional graphic design and color selection.

9:50You can really do a lot of research and make sure this point you do handle. Don't just pick colors you like. Really do the research and find out what colors really work well for the demographic that will help you get better sell through when developing this product. Because if it's a female product, the colors might be totally different than a male-dominated product. So make sure you understand that. So now that we have a name and a logo, let's talk about the website and the social media accounts. Walk us through the different types of platforms you use and how you approach acquiring them as well as getting the handles for social media.

10:27Yeah, we use very specific platforms. And for the websites, we would generally either build them on WordPress or Shopify. But it really starts with nailing down the URL so you can secure that. And my favorite platform for URLs is enom.com. E-N-O-M dot com. I think they're awesome. They do a really good job. They're very secure. And the reason I don't use a GoDaddy or those is just because they have so many upsells. It's not as secure in my opinion. And a lot of times you could search something on GoDaddy, not buy it at the time you want to buy it. Or maybe you come back to it a couple weeks later and it's gone.

11:08And GoDaddy will actually take those URLs and make them as sold so they can charge more for them. And also, Enom is much less expensive for yearly updates of those URLs. Recently, we even had Harley Finkelstein, the president of Shopify, on the show. Highly recommend listening to that episode and using Shopify, especially if you're selling a specific physical product. They do a wonderful job. The add-ons and everything that you can do to upgrade your website are very intuitive. The UX is great. When it comes to social media handles, I really like to make sure we secure all of them on the prominent platforms like YouTube, Instagram, TikTok, and LinkedIn right out of the gate.

11:53A lot of the marketing is going to revolve around social media and you want to make sure you have really good social media handles. You have a bunch of iterations that don't ring well with the brand name and don't work well with the URL of the website. it's going to be harder for people to find you or worse, find you again if they have to search for that brand. So I think that's very important as well. I largely agree with a lot of that there. Now thinking toward like competition, I'd imagine you'd start thinking about looking up, you know, existing products on Amazon, maybe using Google keyword, things like that, niching down even on Amazon to better understand the best sellers and how different competitors are marketing the product or type of variation of the product category you wanna compete in.

12:38I know Etsy is a really great platform as well, especially using this domain plugin called EverBe. I've heard it helps you better understand how many sales specific products and storefronts get on designs and different things of that nature. So there's a ton of different ways that you should be thinking about looking into your competition. How are they selling their products? How are they getting their marketing across? And are they using Amazon? Are they using Google? How are they getting in front of their customers? And how much are they actually doing? Right? Because if you're seeing an Etsy shop that's trying to sell a product similar to yours, and they're only making a couple hundred bucks a month, maybe this product niche is too small, right?

13:15Maybe it's not worth your time. That is one of the most beautiful things about today as we film this episode. I think back to when we built custom silicone bracelets back in the day. And even in the early part of Silly Bands, it used to cost me$15 ,000 to$20 ,000 to launch a website and build a shopping cart. Now, entrepreneurs right now as we film this episode can literally have$100 and launch a brand, maybe even for free. I'm not sure. Maybe you could do everything for free now, but you don't really need any money. You need a good idea and a little bit of hard work and elbow grease. You can go get a Shopify website for free.

13:53You can go get your social media handles for free. You can set up YouTube for free. You can use AI, a free trial to do your logo and branding. So we have never had a better time for people to create that side hustle and really work on building their own brand and taking their own product idea to life. It is so simple and the tools are so incredible now compared to when I got started back in 2000 where everything cost tens of thousands of dollars to launch. So you had to be pretty sure it was gonna work. Now you can test and iterate over and over and try different ideas until you find one and strike lightning in a bottle.

14:34Researching the competition, make sure you guys all understand. It doesn't have to be a direct competitor. You could be doing a supplement maybe in a category of weight loss and you have a better idea. You're going to add moringa or you're going to add some other ingredient. You're going to change it up a little bit because you found some research that this combination could be better for this type of product. You can still use the competitors, what they're doing. What is their ad strategy? What is their affiliate marketing strategy? How is that all working as a way to better judge your opportunity moving forward?

15:10And is there enough room in this category and in this product niche for you to go ahead and take the plunge and launch this product? So the final step for me in the due diligence process is the legal. This means everything from your LLC and your operating agreement to a potential trademark and patent searches and making sure you have all your licenses in order, if applicable, in order for you to move ahead. And for many other products, you're going to want to look into a design or utility patent if necessary, because it depends on your specific product and what's needed to ensure you bulletproof yourself from the competition so they don't steal it and knock you off.

15:51This is very, very prevalent in modern society. People see that something's working on Amazon. They see that something's selling like crazy on TikTok shop. They're going to come for you. And the better your protection, the better off you're going to be. So to summarize the due diligence process, you're coming up with an idea. You're looking around you. You're trying to scheme with your friends and family as to what they might need problems solved. And don't forget, any idea matters. Write it down in a notebook. Keep track of it. Once you have an idea, it's time to research. This is arguably the most important phase because it tells you if it's going to be a waste of time or not.

16:27Research might include understanding the competition landscape, different types of branding, different types of naming, all the different things that go into taking an idea from an idea to an actual product. Once you have that idea for a product, you've done your research, it's time to build a name, a logo, a website, the URLs, the social media handles, and all that fun stuff. After the fun stuff's over, it gets more complicated with legal, but that's what we have lawyers for. And chat GPT if you're anything like me. Now let's jump into the manufacturing process. How you do it, who's going to do it, different types of agreements you're using with these manufacturers, how you vet them, the whole process there.

17:05Before everyone gets ahead of themselves and starts contacting firms, you want to make sure that you have a really solid manufacturing agreement ready and a non-disclosure agreement and a non-circumvent agreement ready before you start sharing your concepts and your drawings. This is huge, huge, critically important because too many people are just so excited about getting started. They get on Alibaba. They start sharing with random people on there without knowing what they're doing. So I love to get those contracts in order, say, hey, I'm looking for a manufacturer to do XYZ for a product I have.

17:40Would you mind signing a manufacturer's agreement and this NDA agreement with me? Because I want to make sure that I'm protected if this product is highly successful. Now, I use a lawyer, but you can likely get away with ChatGPT, feed it some really good prompts, or maybe even find a template online that you can put into ChatGPT and modify it for your liking. cover your bases, and you are fully protected before you release what could be this multi-million dollar idea because you want to make sure that you have total ownership and protection over your intellectual property. When we started Paragon Puzzles, we went to Alibaba and I started researching potential factories to handle that manufacturing.

18:23When doing this on Alibaba, make sure you understand the difference between a manufacturer and a trade partner. A lot of times when you're researching, you will see when you research puzzle companies or skincare products or whatever it is you're researching, you will see in the name XYZ manufacturer or XYZ trading partner. If you can, you want to avoid working with a trading partner because all they are is a middleman advertising on Alibaba to get your business. And so for me, I found for Paragon puzzles, a manufacturer. And one of the first steps I do with any manufacturing, like I talked about, is getting those documents in place.

19:04So moving ahead, one of the things I like to do is do a phone call, preferably a video call right out of the gate. You've got the manufacturing agreement in place and you're ready to move forward. I like to put the onus on them and say, Hey, I'd really like to see your factory. I'd really like to see the equipment used to make my product because you want to verify, do they actually have the equipment needed? Are they a real factory? Because there are a lot of scams online and I want to make sure you don't have that happen. So I always do a Zoom call, make them walk the factory floor, show me the equipment, show me the staff.

19:39So after you found your manufacturer and after you found sort of the factory you wanted to use, talk to me about like the sizing, talk about how many orders, how many units, how long it took and going from sharing the ideas to delivery and time to start selling. I like to start small. When we launched Paragon Puzzles, we had six designs and we bought only a hundred units of each to start. Why do you ask? Why is that important? Because I see so many people that make the mistake of ordering thousands of units because they get baited into this price break. And I think that is a horrible idea, ordering thousands, maybe tens of thousands of units of inventory, and you end up losing money because you haven't proved the concept yet.

20:26You don't know if there's good product market fit. You don't know if people love the product. You don't know if you have to change things in the product. Maybe you made a mistake and you want to change it later. That is why in almost every instance, I start really small because in that first order, that first production order, you shouldn't be so worried on how much profit you're going to make on the units. You should be worried about getting the processes dialed, making sure the product is perfect. Yes, you already got your samples. You check them out. They work. They fit. You know, everything is what you want, but you still don't know what the customer's reaction is going to be.

21:04So I like to start with very small numbers of inventory so I can make sure to get it out there, test the market first, and then worry about price breaks for higher inventory splits that you would get when buying your product for your second order. when you're at this stage of the process, buy just what you need to test and sample, get it out to influencers, get it out to distributors, and let people see, touch, and feel, and use the product first before you go spend tens of thousands of dollars. From sharing the designs with the factory to taking delivery, the puzzles took two to three months.

21:42And make sure you're keeping that into consideration when you're considering your launch strategy or you're trying to figure out your cash flow and all of that because the timelines vary dramatically from different products to different products, but also whether you're flying in the product and you're going to do air freight or you're going to vessel ship. A normal vessel shipment is going to take four to six weeks, maybe eight weeks, depending on what part of the country you're in. Now, the manufacturing process, Robert, seems pretty straightforward. We've got some designs, we've got some renderings, we've got some ideas we've come up with.

22:14We're putting them and we're giving them to the different manufacturers in China via Alibaba. But before we do that, we're making sure that we have our agreements in place. We're making sure that they're not copying us or selling anything behind our back. We're working directly with manufacturing, not third-party trade partners or people who are going to be doing this for us. We want to do it ourselves. And when we want to make that first order, we're making a small order. We don't care about how much we're going to save if we go order 10 ,000 units. We want to make sure we have a couple hundred units, test the market, sell it, see how our customers react and go from there.

22:48All right, Robert, let's now talk about the final process of launching an online brand, the distribution and the scaling. Talk about how Paragon Puzzles made their first$10 ,000 online and what you're doing today to ensure that becomes hundreds of thousands of dollars a year. What we like to do right out of the gate, we like to start by seeding the product, especially if we're selling predominantly online. So what we do is we ship the product to a list of micro influencers who we've worked with in the past. They're going to help us get those eyeballs and get our first bit of momentum. Next, we look at TikTok shop.

23:22It's a great place to push a product right now. Get that TikTok shop set up. Get the approvals done. This can be a very arduous task. There's a lot of paperwork. You've got to get a lot of approvals. But once you get that done, then you can start affiliating with creators on the platform. You're going to have a list of maybe 10 or 20 of these creators that fit well within your budget, but also their content in their audience fits well with the product. So if you have a fitness product, you want to make sure that it's not basket weavers that are pushing your product. You want to align your product with the right type of people.

23:57So you get the right eyeballs from your TikTok shop, because you're going to use that user generated content to not only build sales, but use that content elsewhere. It might be posting it on your Amazon page. It might be posting it on Instagram or wherever else you're going to be pushing the product to build your story. And then finally, we like to give ourselves a window of 60 to 90 days to start building up those sales and that momentum organically and through TikTok shops. Then it's time to start testing digital ad strategies and for Paragon Puzzles, we started out with Facebook ads and we budgeted$50 a day and we tested a ton of ad sets because at the end of the day, you have to test, test, test.

24:45You don't want to just have one set of ads. It doesn't work. And then you give up. And then once you find the ads that are working and you're getting good conversion, you're getting the ROAS that you desire. That is when you ramp up the ad spend. When someone asks you what's your budget for ad spend, it doesn't matter. You'll spend whatever it takes. If the ROAS is there and you're getting the return on your ad spend, that is key. 18 months later, this brand is doing passively thousands of months in sales is on autopilot with my team. But keep in mind, we are always testing new strategies and affiliates with all of our brands.