2X eCommerce Podcast

$40M in 5 Years: The Profit-First Obvi Playbook for DTC and Retail Domination → Ronak Shah
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Kunle Campbell: [00:00:00] This episode is brought to you by address validator stopped delivery issues in their tracks with real-time address verification that saves you money and keeps your customers happy.

Ron Shah: 99 percent DTC five years ago four years ago, 95 percent DTC. Three years ago, 90 percent DTC and 10 percent wholesale and retail. Two years ago about 85, 15~ ~wholesale retail as 15 and rest DTC. Today we're 80 percent DTC, 20 percent retail because we're nationwide in Walmart, Rite Aid , Sprouts, and a few other places.

Mhm.

Ron Shah: we would actually go into our local Walmarts and just stand in the aisle and just ask people who are picking up collagen like, Hey, just curious which one are you picking?

And why?

Mhm.

Ron Shah: I rather sell to somebody, I rather give the product to somebody who has a hundred followers, but a hundred loyal followers, because [00:01:00] for me to make my positive break even, I need somebody who posts with a hundred followers to sell to one other person. And if they sell to one other person, I make my money back

Mhm.

Kunle Campbell: So on this episode of the 2X eCommerce Podcast, I'm joined by Ron Shah, co founder of Obvi, a thriving collagen brand, as he unpacks how he scaled a 40 million business with lean resources, loyal ambassadors, and lessons learned from retail and DTC.

This is the 2X eCommerce Podcast hosted by Kunle Campbell.

Kunle Campbell: Welcome to the 2X eCommerce Podcast. Today, I'm thrilled to dive deep with Ron Shah, co founder of Obvi, a collagen brand that's taken the health supplement space by storm.

In just five years, Ron and his team have scaled Obvi million brand, keeping it lean and profitable, all the while navigating the challenges of retail and eCommerce and engaging a massive [00:02:00] active community. We'll unpack how Obvi's unique approach to user generated content Community building and collaborations has fueled their growth.

Plus Ron shares insights on retail partnerships, the evolving eCommerce landscape, and how Upfree manages profitability while experimenting with platforms like TikTok shop. Stick around for this insightful conversation and don't forget to follow the podcast on your preferred platform. Your support helps us bring on more industry leaders like Ron. Hey Ron, welcome to the 2X eCommerce Podcast.

Ron Shah: Thank you so much for having me and excited to chat today.

Kunle Campbell: It's been a long time coming. I've been really looking forward to this conversation and really getting to know more about Ogbe.

Ron Shah's Journey in the Supplement Industry
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Kunle Campbell: How did you get started?

Ron Shah: Absolutely. Myself and a little bit of my background, I've been in the [00:03:00] health and wellness supplement space for about 11 years.

After college, I graduated and worked for a supplement company. And I fa I fall, I fell in love with the fascination of being able to get instant satisfaction or results from your customers, right? There's not too many industries where you can get you can sell something to a customer and almost instantly know if they enjoyed it or didn't like it, or if it worked for them or didn't.

Food beverage is one category, supplements was a very close second, so I fell in love with that and, um. After about working at the supplement company for about four years, I started my own marketing agency where I worked with a bunch of other supplement brands, helped build them up, but I was still learning marketing myself.

So the marketing agency was almost like what I like to call my graduate program or my MBA that I started. self started and kept learning with. And then, five years ago, 2019, I had said that I had learned enough from building other people's companies. I had [00:04:00] learned enough about the industry and I had learned enough and got enough exposure on how to market differently.

When it comes to supplements, it's a very crowded space, so being unique was important. That's when I came to say, you know what, I think I have what it takes to potentially start something on my own. So June 2019, I started Obvi and five years later we've been scaling it and super, super gracious on, on how much it's scaled till date.

Kunle Campbell: I I love that story and it's wild to see that what you guys have built just in five years, it feels longer just due to the value you put to the market. I think the one thing I picked up from there is know the industry, know how to market and then perfect timing, which segues into your team.

Formation of Obvi and Leadership Team
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Kunle Campbell: You have quite tight knit leadership team on there. If could you, do you want to break down what your leadership team did? You start on your own or did you just start to pile up? How did you guys come together?

Ron Shah: Yeah, so actually [00:05:00] that first supplement company that I told you guys about, it was called shreds and it was actually one of the fastest growing supplement companies back then in 2012, but the three people under the CEO, CFO and CMO there, or myself.

I'll get my partner today and usher in my other partner today. So we were like the three guys under the three main guys. And we were handling basically operations, finance, branding and design and marketing. And it was it's almost like anytime I get to tell the story, it makes me always remember like how did this ever work out?

Like how this is insane. But us three were sitting in the roles. Of what we are today, 11 years ago, I'm doing a lot of the mechanics, doing all the tactical work. And then we, us three left together to start the marketing agency. The name of the marketing agency was called ghost three media.

We named it ghost three media because back then we thought we were super clever. And we said, if we put the word ghost, the other [00:06:00] company will never know that we started a marketing agency. But that, that didn't work out. And then, so it's actually the three of us were three best friends. Best men at each other's weddings.

Three partners. And but the reason it works is the three of us have such distinct skill sets. That either the other two almost have no level of talent near or close to the talent the other person possesses in their craft. Ashwin is the best media buyer I know on this planet. Ankit is the best designer I know on this planet.

And I will say I'm pretty good with When it comes to finance operational Excel and making sure that systems run well, and so when you put us three into anything, we feel like we can run the entire engine but it works well because we're also really not good at what each other does.

Kunle Campbell: Super super.

So brand acquisition and then ops and everything else and [00:07:00] proper, so forward thinking leadership. That's right.

Scaling Obvi: From Startup to $40 Million
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Kunle Campbell: So what's been the journey from, a value perspective from five years ago, 2019. You said June of 2019 is when you started it. Did you go full in to Opfy or were you like also servicing a few clients and then, Great question.

Ron Shah: I, we're, we were. Still at the point of where Obvi, although we believed in it, I think it's fake to say, Oh yeah, we're all in and believe like we, we believed in enough to say we'll put time into it, but we still needed our paycheck. So we were running our agency really until the first full year of Obvi.

And our first year we did about 178 K in revenue and we're like, okay, this is more than a hobby, right? We're not just selling collagen on a website. We were maybe building a brand. And then the next year we did 1. 2 million. And that year is when we said, okay, [00:08:00] it's something a little bit more real.

Let's shut down the agency. And we, move forward to putting all our time into OPI. So it wasn't really until year two where we put a hundred percent dedication.

Kunle Campbell: And what's been the trajectory since you had to today to know?

Ron Shah: Yeah. So year two, 1. 2 million year three, we did 5. 1 million year four.

We did 20. Just a little over 20 million. And then year five will this year we're on track to do just under 40 million. That's phenomenal.

Profitability and Lean Operations
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Kunle Campbell: And have you been profitable all through?

Ron Shah: Yeah, we've been profitable all through. We've we're very cash conscious. We don't know how to raise capital.

Like I don't really have a good network on how that works. I'd never learned it. We're very lean team. We're only 11 total people. So we don't have also the time to go. I can't go and spend six months raising capital. So we're super efficient. Like for example, this year, we'll probably drop down between [00:09:00] 10 to 15 percent of profit.

Kunle Campbell: That's not bad for CPG. Because that's the, what you answered my next follow on question, which was like, what kind of team are you, what kind of approach you take?

Leveraging Agencies and Performance Models
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Kunle Campbell: Do you take in house or, Or a lean sort of outsourced model. And from what you said with 11 team members, it seems like you rely on a network of agencies and helpers to support you.

Yeah, a

Ron Shah: hundred percent. We're big believers in agencies, but even agencies, we don't have big believers in like taking on a bunch of retainers. What we do is we let everyone eat if they perform well. So it's we'll create like performance model with everyone. Even our creative agencies Hey, if your ad does well and it converts well after we test it.

We'll give you a percentage of the revenue. Like we try to get aggressive with everything. And so that everybody works as if this is like their number one gig. So it almost feels like we have a lot of full time workers, but it's all coupled by really high performing agencies.

Mhm.

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Mhm.

Kunle Campbell: Make sense. You eat what you kill model.

Correct. Yeah. Yeah. Okay. So we're in 2024 now. What [00:13:00] thing are you doing now? Have you done in the last 12 months? Are you like you're kicking yourself and saying, why didn't I do this in three years? Yes, ago, sorry, why didn't I do this 3 years ago?

Ron Shah: I think there was a few things, but I would say, number 1 that I wish we did earlier was definitely going after the.

Building a Strong Community and Ambassador Program
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Ron Shah: Building the ambassador and shop model more. We always had a strong community. Our community is the largest college community on Facebook. But we never transferred them into taking action and like becoming ambassadors and sales and whatnot. And now today, with TikTok shops, we've had to been, we've been forced to build it and it's been super helpful across so many more channels than just TikTok, to have an ambassador program.

And I feel had we just put the time in of taking our community, which is 105, 000 women. Actively talking all day, [00:14:00] every day on Facebook. If we had come up with really how to figure out how to monetize that better. I think we would have been light years ahead of even when TikTok shop launched.

Kunle Campbell: How do you manage 105, 000 women talking every day around collagen and weight loss?

Ron Shah: Yeah, so we actually built a really cool program. What we actually do is for every 10, 000 women that join the group we hire a new Manager and we call them admin and the way work with the admins is we tell them we post we post in the community saying, Hey if you're looking for ways to help Obvi reach out to us or we'll reach out to customers who have already spent a lot of money with us, like in the thousands of dollars, and we'll reach out to them and say, Hey, listen, you've spent a lot of money with Obvi.

If you have any free time, like five to 10 hours a week, we'd love for you to help support our community. And in [00:15:00] exchange. I will give you unlimited free product for life.

And what people don't realize it sounds crazy, but I've already made my LTV on them. They've spent thousands of dollars. I don't need them to make more money for me, but these people who we tell them to work five, 10 hours. Some of them have committed 20 to 30 hours just because they're like, Oh, you're giving me so much product.

And they're their best supporters. What better ways than to have customers helping others. So we now have a team of about 10 admins.

Kunle Campbell: That's phenomenal but that makes a lot of sense. And they're actual customers who's CLTV is way high now that they're essentially, preaching and exactly living what they embody

Ron Shah: exactly.

I don't have to train anyone, anything where there's no training program. This is Hey. Other people are going to ask you questions. Be real with them. Some of our [00:16:00] customers even say, Hey, I didn't really like this product, but I liked this one. And we say, okay, good. Just be legitimate.

Kunle Campbell: Makes sense.

Makes sense. So I love the growth trajectory. I love that it's been profitable. I was going to ask about raising capital. You said you're a raising capital guy. What about revenue split? What was revenue split? If I had this conversation with you three years ago, I'm talking about from source. And now in 2024, how does it compare?

Things are changing.

Ron Shah: 99 percent DTC five years ago four years ago, 95 percent DTC. Three years ago, 90 percent DTC and 10 percent wholesale and retail. Today two years ago, I would say probably it was going to get, it was getting into about 85, 15 wholesale retail as 15 and rest DTC. Today we're about 80, 20.

80 percent DTC, 20 percent retail because we're nationwide in Walmart, Rite Aid, Sprouts, and a few other places.

Kunle Campbell: Amazing. [00:17:00] Amazing. Amazing. And with DTC, you mean both your Shopify and Amazon press? I consider

Ron Shah: Shopify and Amazon as. Okay.

Kunle Campbell: Okay.

Retail Expansion and Lessons Learned
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Kunle Campbell: That's blended. How Do you, speaking of Amazon, of Walmart, are you listed on any other retailers?

That's huge, by the way. Thank you.

Ron Shah: It's nationwide. We're in all 4, 400 stores. We are in bunch of other smaller retailers. The thing with Walmart is, and I think the thing with my whole philosophy on everything is there's a lot of places that want us Target, Costco, this and that. But, and I feel like it's very easy.

It's much easier to just get into places. But it's very much harder to actually sell through in places. I told myself until we're successful at two to three of them. So Walmart, Rite Aid, Sprouts, let's say until we're successful in these few and different categories, grocery, drug and a mass until we can create success in either one of those for each channel, [00:18:00] I don't want to go into another store in that channel.

So I don't want to go to target. Until Walmart successful. I don't want to go to Walgreens until Rite Aid is successful. And I don't want to go to a stop and shop or shop. Until Sprouts is successful.

Kunle Campbell: Yeah, it makes sense. Powerful costs, you get it done, that's proof of concept.

And how's the journey thus far? When did you get into Walmart and how's the journey thus far?

Ron Shah: So we're going into year two of Walmart right now. They reset every August. So we're in year two now. So I think. A few things happened year one, a lot of learnings. Year one, we got into we had three products going into Walmart.

We had our two collagens powders, fruity cereal and cocoa cereal. And then we have our collagenic burn, which is our bestselling fat burner with collagen in it. So it's beauty and weight loss. And the collagen fat burner became the number one product in the category. It beat [00:19:00] out hydroxy cut. It beat out lean amino.

It beat out pretty much all these legacy companies, mainly because we're targeting women and it was pink and a fun brand and we hit the right price point. So we were all smiles and excitement there. Our two collagen powders though, they were some of the worst performing products that Walmart's ever seen.

We were selling 0. 1 units per store per week. It took 10 weeks for me to sell one unit. And what we learned was the entire category for collagen, everyone sells unflavored, right? If you look at vital proteins, any of our competitors, they're all selling unflavored. Now, what we thought would be clever to do was to come into the market and start selling flavored collagen, right?

That's what our ethos is for online. [00:20:00] However, in store. We went in with this like a little bit of an egotistical, cocky mentality of Yeah, it sells online so well, it's gonna sell in store too. But in store, people go into the aisle and they already have hesitation to buy, right? And so they're going to go with what seems the most common, which is if there's ten other collagens that are unflavored, They're probably not going to pick up the one flavored one, right?

And had we done market research analysis a little bit, we wouldn't have made a mistake that probably costed us three, 400, 000 in inventory package. Cause the product didn't move. And when it came to year two with Walmart, we went to Walmart and said, we want these two collagens out of there. We want to replace it with an unflavored.

And now two months in, our collagenic burn is still number one, and our collagen is now number three in the category. Only [00:21:00] behind vital proteins and ancient nutrition. But it's because we studied and understood the market this time around and tried to understand how can we become more competitive in whatever is selling already instead of trying to go against the grain.

So it's important to everyone says be different. How are you going to be different? And it's important to find ways to be different, but. Not so different that you're straying away from what's moving the market to a good lesson learned.

Kunle Campbell: Absolutely. Because you're playing a game in the consumer's mind and you are out of the game with the flavored, so the game is like on flavored in, in the consumer's mind.

And then you're now in, and you're behind ancient nutrition and and vital protein, which is phenomenal. And that's going to help to sell through for the collagen, collagenic burn. Skew, which is further down the line because you bring them into the ecosystem. Question is, how did you get the insights?

Because a lot of people will be like, oh, no, it didn't work. And we're lost. We're flabbergasted. Maybe it's just [00:22:00] not our time. We'll try something else. So how did you get the insights? How'd you get consumer insights online? It's easier. You send a survey in a form. It's all digital.

You check your analytics, the CR and all of that stuff. How'd you get an in store? What would you do to get those insights and make those smart decisions as you have done?

Ron Shah: Yeah. You know what it is? It's you, we. As a young brand there's these tools you have to pay for like spins and Nielsen data and it's expensive.

It's 2, 000 a month to get access to one store. So for us to get Walmart data, we have to pay like the cost of two freelance interns, just to get data in one store.

Customer Insights at Walmart
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Ron Shah: So we took the bet paid for. We also asked a lot of people that. Or outside of Walmart, like we would actually go into our local Walmarts and just stand in the aisle and just ask people who are picking up collagen like, Hey, just curious which one are you picking?

And why? I think we probably did maybe 100, 150 different surveys like [00:23:00] that. And it just gives you indication of oh, I don't want flavored because I just want to put this in my coffee and not think about it, or I just want to put this in my green shake and not think about it. And you realize people wanted convenience.

And what we were selling was novelty and people don't go to Walmart for novelty. They go to online, they go to Amazon, they go to special stores or vitamin shop, but they don't go to Walmart for novelty. And I think as we deciphered through data, we just continued to pick up cues that said, you know what?

We can't go in this with the same mindset of being great at DTC. Is why we're going to be great at retail. And I think that mindset shift helped a lot.

Kunle Campbell: Makes sense.

Social Media Strategy for Walmart Listings
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Kunle Campbell: How did you tune up your socials? Paid social, organic social. When you got those listings with Walmart, what did you need to do differently?

Ron Shah: You we made a couple of good, we had a couple of good learnings. I don't [00:24:00] believe in mistakes. I think everything's learning, but we had a couple of good learnings. One thing when we launched Walmart, we went head over heels. And we, anywhere you looked, whether it's email, SMS, our website, our landing pages, our socials, our community, everywhere you look, we mentioned Walmart.

We were like a billboard for Walmart more than anything else. And we started to realize that our retention rate was dropping, which is makes sense. People are maybe buying at Walmart, but we also realized our revenue at Walmart wasn't increasing. And. The main reason for that is when you push down Walmart down customers throats, you realize that they may not buy online anymore because they know it's available at Walmart, but they may also not make their next trip to Walmart for some time, or maybe they don't shop at Walmart, but it's when they do shop, [00:25:00] they'll buy it then, or maybe the next trip they went to Walmart, they just forgot to go to that aisle.

There were so many uncontrollables that we generated by blasting Walmart everywhere. And we realized okay, this is why we're making this mistake of overselling. Walmart right over pushing it and I think that's when we realized that was happening We actually pulled back and stripped our website Stripped all the communication around Walmart.

Our revenue still did not change at Walmart retention came back So I think one my one lesson learned there is don't over Don't oversell your brand in exchange of, your customer base behaving how they're supposed to behave, like your customers bought online and it's okay if they stay online, you can say you weren't available in Walmart, so it's in the back of their mind.

We tried to make it [00:26:00] so that it becomes their biggest priority. And it just didn't, it backfired for us.

Kunle Campbell: That's very interesting. And is retention back to where you like it to be now? D two C?

Ron Shah: Much much more back in place.

Kunle Campbell: Okay. And so that tells me that you probably need another.

set of sort of actions from a marketing and promotion standpoint to do Walmart listings in store, probably billboards or what have you, is that the case or have you just let it organically do its thing on the aisle, on, on its listing?

Ron Shah: We have let it organically do what it needs to do We've we used to create we used to we felt like we were Overthinking sometimes oh, let's optimize this that blah blah blah and I will say like a lot of Walmart online and offline Is driven by people who have intent.

And you realize a lot of the small optimizations [00:27:00] we make an AB test online to drive better conversion is because there are people who don't have the intent, but you're driving them intent by some of the things you're doing, right? Like trust badges and testimonials and reviews and this and that before and after.

Whereas with Walmart, so much of the intent was already coming in that making certain changes, even online on the listing, or even optimizing parts of our modular and where we're placed didn't make a huge difference. It

Kunle Campbell: makes sense. It makes sense. It makes sense.

Impact of Brand Collaborations
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Kunle Campbell: One of the things I noticed from the outside was like your collaborations, your brand collaborations, what's been the impact of, collaborating with essentially national treasures from a food and beverage standpoint.

I think

Ron Shah: When you say beverage, are you talking about more of a collagen powder? I think it's the licensing. You got some licensing deals, didn't you? [00:28:00] With, yeah, we got a licensing deal. So that was, that's still our collagen powder though.

Kunle Campbell: Okay.

Ron Shah: Okay. And it was a deal with Entenmann's.

And Entenmann's is like America's favorite cookie outside of Oreo. And one of the things that really helped us was Entenmann's is a billion dollar organization, right? And when you have something like a billion dollar organization deciding to allow licensing partnership with a brand like Obvi from the outside, the optics looks much.

More in favor of Oh, wow. Obvi is partnering with this billion dollar company. It puts us on a higher pedestal. And so that partnership, I think it had less to do with sales for us and more to do with the optics of the business. And I think that part helped a lot, even securing a lot of our retail.

Kunle Campbell: Yeah. Yeah. Yeah. I'm interested in very interested. I'm loving this [00:29:00] on the final notes of this segment of the interview.

The Rise of TikTok Shop
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Kunle Campbell: Cause this, the second segment of the interview, I want to speak specifically to UGC but on, on the final note here is like your revenue splits again. I want to know what, how TikTok shop is playing, but for you guys if at

Ron Shah: all.

Yeah. So TikTok shop is about 2 percent of our revenue right now. It's nothing crazy, but what I will say is it's growing every day. And there's also a lot of things that's not trackable. So the fact that we've gotten, close to three, 4 million views now on TikTok shop through all the different people posted, there's definitely leakage into Amazon.

There's definitely a lot of leakage into other places, but we can't track all of it. What I will say is TikTok shop isn't going anywhere. And I think if anything, we're going to start molding our website, our experiences, more and more things. To accommodate that [00:30:00] type of shopping experience, which is like you watch something, you consume something, and then you instantly want to purchase and you want to have everything all natively in one platform.

And I think five years from now, I think websites are going to be antique. And I think what's going to happen is anything we're watching, even if it's an ad whatever platform it's on, that is where you're going to convert. Going to a website is going to feel ancient. It's going to feel like, wait, why do, why am I going somewhere?

You're going to have, I think, nearly instant interaction and buying power. And so I think what I think about TikTok is it's a very good precursor to, I think, which way things are going to go.

Kunle Campbell: What platform do you think is going to own it?

Ron Shah: I think Shopify still has a very good potential to build an [00:31:00] interface because their shop app actually has done a really good job. I think if they can make shop app to be, have social elements and whatnot. But until then, I think TikTok is going to own it. But the problem with TikTok is there is a lot of, there's really no moderation.

And when you have no moderation, you have a lot of entrants and a lot of incumbents and a lot of different things that make people feel like, is this real versus not? So I think a platform that can moderate The shopping experience almost need an Amazon. That's a social platform.

Kunle Campbell: Yeah. Yeah. Yeah. It's not policed well enough. The, there's a lot of misinformation. There's funny enough, there's a collagen brand here in the UK. I'm not going to mention their name. That has a, what looks like a 30 cent, 30 something year old woman. Who says she is 50 plus and she looks the way she looks because she [00:32:00] uses the collagen.

And that ad has been running for the, at least the last six months, because I know it's working as in they, they wouldn't run it if it's not working. I'm like why is it like, it's just it's just lying. It's freaking lying.

Ron Shah: It happens a lot.

Kunle Campbell: Yeah. Yeah. It's good stuff. Good stuff. Good stuff. Okay.

UGC and CGC Strategies
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Kunle Campbell: So let's get into UGC. UGC has played a huge has made it, has played a huge role in, in, in the growth of Obvi as I can imagine. What's Obvi's sort of UGC growth strategy?

Ron Shah: Yeah, I think our biggest UGC growth strategy is if we have, if we can have real people sell to other real people that we want to die on that hill.

And so for us, the minute somebody buys from us or the minute we can apply a person a minute, we can apply a human face. Thank you. To our product and [00:33:00] connect the experience. We believe people buy Obvi because of the experience they're going to gain. Not so much just the results. And so like our UGC is always focused, not just on here's what this product does for me.

It's more about I've joined Obvi, and I'm here to join their community. I'm meeting other it's almost like what Weight Watchers did, right? Weight Watchers didn't just sell you on meals and their fitness plan. They sold you on coming together as a community with like minded people. And oh, by the way, we sell this and this too.

And so RUGC really focused on, Hey, we even told some RUGC, it's okay. If you don't it's okay. If you don't, um, mention the product, but make sure you mention the impact you're getting by joining the Opfee community.

Kunle Campbell: Makes sense. Makes sense. So it's structured in a way [00:34:00] where I the actual creators, actual customers, which delivers a very authentic just an authentic sort of message or authentic messaging from them.

And then they talk about their feelings, how, the outcomes essentially. Okay. Okay. It makes sense. It

Ron Shah: makes

Kunle Campbell: sense. Yep.

Ron Shah: You nailed it. And I think one other piece to that is you're, you want to make sure I, I think we followed more CGC, so customer generated content, more than UGC And I think that is something that we will always stand by to is we didn't really go out to random places and get people who never use the product.

We did here and there to get us, some buffer between ads and different testing we wanted to do. But for the most part, it was CGC. CGC.

Kunle Campbell: Yeah. Okay. And then what about, what's your temperature on a lot of listeners or brand owners would be saying, Oh, not everybody's very comfortable with the camera.

People are camera [00:35:00] shy. How would you flip that on its head and say, Hey, with CGC, this is how we, I'm sure some of the people were promoting Obvi. were in front of a camera for the very first time. Did they, was there any resistance initially when you went for the ask?

Ron Shah: We got a lot of people like, Oh, I'm not that great on camera.

And one thing we'd always tell them is we could care less how good the video comes out. We just want you to be honest. So we had people who would like, we have some ads that are the people like drop the phone while talking or like they're walking outside and there's, an ambulance running by, or we had people who were sitting in their car talking.

And we had one girl whose video did so well for our product. Hello, goodbye. She was crying in her car outside of a supermarket. And she was just like I just want to. I just want to like, I just want to tell you guys that I feel great again because of the difference this product made in my life. And I'm [00:36:00] just here to share this story.

And when she shared that again, it was like in her Honda Civic and It didn't matter about her quality on her Android phone. Like it was I think for us, we've sided with quality just doesn't matter if the quality in the actual content that said,

Kunle Campbell: okay, it makes sense. It makes sense. It makes sense.

Content Creation and Ad Strategy
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Kunle Campbell: And then, for ads for your ads to scale and all, you certainly still lean on platforms like Intents, for instance for getting creators, how do you merge authenticity, with those platforms? And I know most of the content you'd be generating there will be specifically for Meta ads, I would imagine.

Yeah. Did you get them accustomed?

Ron Shah: Yes, we use Instance a lot, it's probably our favorite platform by far and I think the one thing that's different for us is that we do is, we're not in a rush to get the content done, so what we'll tell the creator is take the product for a week. Take the [00:37:00] product if you can every day and see how you feel.

And truly, if you believe that you can talk about this content naturally and organically from some of your experience, rather than just, Hey, I shipped you a product, open it, take a video and thanks for this transaction. We actually tell them to be part of the experience and we've actually converted certain UGC people into customers now, but I think that's that our approach changes this stuff.

Kunle Campbell: And how do you approach, how do you build, like, how'd you get ads? What's your methodology from, a content creation standpoint or your systems in place to just keep on churning, content from platforms like incense, your CGC, how does it all come? Two together. I know this is a very general, it's probably a complex answer that you're going to

Ron Shah: give me.

It's a system. It are, [00:38:00] it's a big system. Like I think for us, we really focus on, we really focus on saying if we spent about 30 K a day on ads on meta ads. And our goal is at all times, we need at least 50 to a hundred ads ready to be tested. Okay, so we look at it as a factory TV. I'm yeah, so weekly.

So if I'm looking at my bank, I need to have 100 assets in there. I need to have 100 dollars, right? If each asset is a dollar, I need to have 100 dollars in my bank account. And if the if the balance drops I'm finding somebody, right? I'm going to go figure out who didn't put their assets in.

Who would? And so we have about six people, six agencies slash freelancers that are all dropping in anywhere between 15 to 25 creatives a week into the bank account. Then from there, it goes to [00:39:00] Ash. He funnels them, gets them in testing, takes the winners, propagates that the winners also go to all the agencies and freelancers to show them what's winning.

And it's just, it's it's like a beautiful factory.

Kunle Campbell: Yeah. It's no it's not easy feet, get in. We're talking what 52, 5, 200, it's a year, but when you break it down, it makes sense it's 100 creatives, week. Yeah. And yeah, from six sources. How much of it is internal all the sources of creatives from your agencies or creators, or does someone in the incense team also have some sorts of agency in regards to our location from a creative standpoint, in the 15 to 25 creatives, they, they deliver each.

Ron Shah: We give a lot, we're very liberal here, we're very much hey, you guys know what's working, we want you to come up with some of the most unconventional and craziest concepts, [00:40:00] but then we also want you to take the winners and come up with as many cool variations to maintain the concepts that are winning and believe it or not, This is probably like our loosest part of our system where we don't provide much direction.

We believe that we have enough people that will try their hardest because we also make it a little competitive around Hey, this week, this person content one and did the best. And also none of these people take their job for granted. They know if they're, if they have eight weeks of, products that are assets that don't win.

We'll probably not continue to pay them.

Kunle Campbell: What about content diversity? Do you strict on, okay we need this many static ads. This IGC, ad, CGC what's the mix there? It doesn't really matter.

Ron Shah: It doesn't matter. I think we're right now we're 75 to 80 percent static. With the 25 to 20 to 25% video, but our tests can be everything.

We will take in whatever you want to give us [00:41:00] to test. But statics have been winning for us for a long period now.

Kunle Campbell: Okay. And do these agencies use the intent or is it a member of your team that uses intent? It's a member of our team that uses it. Okay. Okay. And then they just, and then do you stick with certain creators for a while?

If it works or yeah, we do, we

Ron Shah: enjoy sticking with the creators that work. Instance has a lot of creators that do well, so we also like to get diversification because they have a really good vetting process, but we like to stick with the ones that work as well.

Kunle Campbell: Okay. Okay. And beyond a an influencer, sorry, a creator making content for you.

Could you put them up in an ambassador program eventually, or do they just, did you just make,

Ron Shah: again, that's the part that I, like I said, I wish we'd build out better. We're working on it now, so I think it's yeah, we do. Sometimes we forget it's not a priority, although it should be, but we need to work on it better.

Kunle Campbell: Okay, just rounding up what's your take on [00:42:00] micro, nano, macro, and mega influencers? What how do you, how would you?

Ron Shah: We believe micro and nano are the best just mainly because there's something that the founder of showerhead company and water purification company. One thing that he said that stuck with us for many years was.

I rather sell to somebody, I rather give the product to somebody who has a hundred followers, but a hundred loyal followers, because for me to make my positive break even, I need somebody who posts with a hundred followers to sell to one other person. And if they sell to one other person, I make my money back.

And he's it's a lot easier for me to find people who have a hundred followers to post and take the product for free, because they'll even try harder, the content will be good, they'll probably post multiple times, they'll actually talk to the friends that DM them, they'll actually answer questions, they'll learn about the product.

Versus [00:43:00] the people who have hundreds of thousands of followers, they'll probably still be bringing sales and whatnot, but they'll also want more. Maybe they'll not have the highest quality customer coming through. Maybe they won't have as much of a reach. And since then it's so true. It's I look at, even when I post something I'll always have 10, 15 friends reach out to me saying, Hey, What is that?

Or should I buy that? Or should I get that? And I think about it, like I only have a thousand followers, and so the impact you have sometimes doesn't depend on the follower account.

Kunle Campbell: Yeah. Makes sense. Makes sense. Ron, I'm not going to take too much of your time.

Rapid Fire Questions
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Kunle Campbell: But before I let you go, I, we have a rapid fire question segments.

I'm going to ask you about five, six questions. And if you use a single sentence to, to answer it, it will be kosher. Cool. Okay. What's been the most meaningful business contact of yours in the last five years or who, sorry, who has been the most meaningful business contact in the last five years?

Ron Shah: I would say the most beneficial one has been a retired [00:44:00] lawyer that I still speak to who, I don't want to always go and pay a fee to get legal counsel.

Some things are just about checking my own morals and checking my own sanity. And there's this one one person who's been retired in the space and just amazing sounding board to lean on at times.

Kunle Campbell: What two things can't you live without?

Ron Shah: My phone and my family. Okay. What book are you currently reading or listening to?

Winning is Everything by Tim Grover. Okay,

Kunle Campbell: okay. What's been your best mistake to date? By that a setback that's giving you the biggest feedback.

Ron Shah: Best mistake, best learning till date, I would say has to be overspending on inventory to where I had to challenge myself on figuring out how I'm going to sell this inventory.

Profitably. So I can get money back in my bank [00:45:00] account quickly enough. It was the biggest challenge because we had to figure out avenues that we never even knew we knew. Final

Kunle Campbell: question. Would you ever sell your business?

Ron Shah: Yes, I think I would sell my business, but not anytime soon.

Kunle Campbell: Okay. Ron, it's been an absolute pleasure speaking with you.

I really love this conversation. Thanks for sharing all your incredible

Ron Shah: questions. Thank you for having me.

Kunle Campbell: Cheers. Amazing. Nice one.

Conclusion and Final Thoughts
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Kunle Campbell: So thank you for tuning in to this episode of the 2X eCommerce Podcast. I hope you found our conversation with Ron Shah from Obvi as insightful as I did. Ron's journey from scaling Obvi to a 40 million brand in just five years with smart lean operations and community driven strategies highlights the potential of a customer centric approach.

So if you enjoy this episode, please subscribe to the 2X eCommerce Podcasts on your preferred platform. Just support [00:46:00] helps us continue bringing in incredible guests like Ron to share their expertise. And if you found today's insights valuable, consider sharing this episode with other eCommerce professionals who could benefit until next time.

Folks keep pushing the boundary, innovating and scaling up. Thank you for listening.