Marketing Experts Reveal Top Strategies To

Arlen
[00:00:57]
Welcome back to the eCommerce marketing podcast, everyone. My name is Arlen Robinson, and I am your host. And today we have a very special guest Evan Padgett who is an ecommerce and subscription commerce executive with 20 years of experience. As a COO of Stealth Venture Labs, an e-commerce marketing firm, he works with brands like Crocs, HelloFresh, Factor 75, and MUD\WTR. Welcome to the podcast, Evan.

Evan
[00:01:26]
Thanks for having me appreciate

Arlen
[00:01:28]
It. Yes. And I’m excited to have you, we’re really gonna be diving deep into what’s your bread and butter. That you’ve kind of been 20 years, you know, immersed in which is subscription commerce, which is, I know it’s a lot different than it was 20 years ago. It’s really it’s exploded. And you’re gonna enlighten us a little bit about how that is, and then if any commerce business can, can implement a subscription service or offering if it makes sense for them, but before we get into all that, why don’t you tell us a little bit about your background and how, you know, how you got into what you’re doing today?

Evan
[00:01:58]
So, yeah, I’ve been doing this for 20 years. I jumped in as a kid growing up. I was always fascinated with tech. So if I go rewind it back to the nineties, when the internet came to be 2,400 bond modem, building websites with notepad and just freehanding it, I was like, this is really great. As a teenager, learning about all this applied that to a company I joined up when I was 20 years old, out of Los Angeles, as a kid from Oregon jumped over there and just learned about how to do digital advertising, that company I worked for. We, we spent a lot of time doing negative option continuity, so subscription, but probably not subscription that you see today. A lot of stuff that free trial leading into a subscription then, and little bit less desirable, right. But I got to see that change over time.

Evan
[00:02:44]
So then I just kind of grew with these people. Also mentors jumped to another company that we started that ended up becoming now known as textile fashion group, a huge house of women’s fashion brands, such as fab LX and Savage X, and just fab ran a couple companies there for a period of time jumped to thrive market. After working with those other guys for about 15 years, learned a ton jumped to thrive market as our chief marketing officer helping build that company up, getting a focus on direct to consumer acquisition, bringing in new members. And that’s a different kind of subscription model, sort of a Costco meets whole foods type business with an annual membership at about four years ago, met my business partner here at stealth. And, and now we sort of, I jumped into the service provider world, providing our service, my knowledge and our team’s collective knowledge on, on how to advertise and grow e-commerce businesses, but with a real strong emphasis on subscription, not just because a lot of businesses are subscription these days, but I do believe that subscription commerce companies can really truly scale and harness direct to consumer advertising stronger than a traditional e-commerce company.

Evan
[00:03:48]
That is from a budget perspective.

Arlen
[00:03:50]
Yeah. Yeah. True. Indeed. We, well, thank you for sharing that background definitely seems like you’ve kind of had your hands in quite a bit over the past 20 years that you’ve been really busy for sure. Which is great. You know, this, the whole internet eCommerce world is, it really has grown a lot. It is constantly changing and, and you, and I both know it it’s, it keeps us on our toes, you

Evan
[00:04:11]
On our toes at all times.

Arlen
[00:04:13]
Yeah, for sure. We gotta constantly kind of duck with the changes and keep everything moving, but yeah, it’s exciting. But you know, as I mentioned at the top of the episode, of course, we’re gonna be talking about subscription commerce and before we get dive into it, why don’t you tell us really what is subscription commerce and is it right for any direct to consumer e-commerce business?

Evan
[00:04:32]
Yeah, I think so. So subscription commerce, as I see it, another maybe more appropriate way to talk about it is creating a, a monthly or annually recurring revenue type business, right? So subscription commerce isn’t I don’t want people to think, oh, subscription commerce, I’m putting stuff in a box and just sending it over. Not really how I want people to think of subscription commerce subscription commerce is maintaining and building an authentic relationship through your product and offering to consumers. So that can be, that can be stuff in a box that could be a service that you provide on the, on your core product. So say warranty or guarantee or white glove type service programs that could just be creating consumable products versus tangible products. Like, you know, you have clothing, subscription outfits, you have food, food, and meal at home subscriptions. But in the end of the day, the root of it is how do you create a recurring revenue model that engages your, your customer base makes them a part, makes you excuse me, a part of their lives and will allow them to wanna keep buying from you, tell their friends about you.

Evan
[00:05:37]
And now you become sort of a service that releases the gravity of people’s life. And you gotta provide a service that makes their life easier or better, or ideally both.

Arlen
[00:05:48]
Yeah, I like that concise answer, you know, really makes sense. You know, one of the things that you do you pointed out though, is that when you’re thinking about doing this as an e-commerce business, you want to think of it, you know, in the eye, you gotta kind of put a different set of shoes. You gotta put ’em in the shoes of your customer, your typical customer. And we, what you’re thinking about will that offering, whether it’s recurring service, offering extended support, warranty, support, whether it’s refreshing your product every month automatically, is it something that would make sense for them or even is it things that your customers have asked for? What’s powerful that these days is, is all of this data that we’re collecting, whether you have, you know, maybe you’re doing surveys, maybe your customer support people or talking to people they’re taking notes from they’re dealing with customers, you’re gonna get a lot of input already. And so you’re gonna already kinda get an idea of what are some of the things that your customers want. And yeah, I think that’s really gonna, what’s gonna drive where, where you go with this. Yeah. I don’t think it’s something that you just kind of stick your hand out of the window and see where the wind is blowing, you know, exactly. To decide, you know? Okay. Yeah. I think we’re gonna throw a bunch of items in a box. We’ll just call this a monthly bonus kit, you know, and then charge $20.

Evan
[00:07:05]
Yeah. That doesn’t really fly anymore. I mean, your products, whatever it may be, nobody builds any eco, like just even rolling it back, say, take subscription commerce out of the equation. You don’t build an e-commerce store to sell a product to a customer one time. Now your subscription may not need to be monthly. Maybe it’s quarterly. Maybe it’s even semi-annually or it could be annually, but you don’t sit there and build a and create a physical consumer package. Good that you only wanna sell to customers one time. So when you think about that, you think about the things that people would want and especially in a consumable product. So say makeup or beauty or fashion, fashion type products or things you could eat meal at home companies, obviously on massive, vertical and subscription. When you put that all together, it’s like, what if you’re thinking about an e-commerce business, you’re already thinking about how to sell to customers and have repeat customers.

Evan
[00:07:56]
All a subscription does is cater their need to what you can provide. And then if, when you figure out that equation, your business becomes more predictable. Your business becomes attractive to venture capitalists or acquisition opportunities to acquire your company. Because everybody’s looking for that recurring revenue, annual recurring revenue, monthly recurring revenue, because you could set your clock to that sort of stuff and you could buy inventory correctly. It’s just, it’s so smooth when you get it, right. I’m not saying it’s not a challenge, but I’m saying that when you nail it, it’s a great product for your customers. It’s a great product for you operationally. You’ll be better for it. And it’ll bring out the best in any sort of e-commerce business.

Arlen
[00:08:38]
Yeah, for sure. Yeah. I mean, one of the, the big upside of course, is that cash flow that recurring revenue and, you know, that’s what everyone wants. And I think that’s why when I mentioned, you know, so many people are jumping into it. Some may be prepared, they may be appropriate for some businesses, but some may not be, they just are looking at that end goal, which is the recurring revenue. Yeah. But you know, you, you do have to make, see that it makes sense for you now with all of this and this whole influx of companies offering these subscription offerings. It seems great from looking at the outside in, but is there any downside to offering this?

Evan
[00:09:13]
Absolutely. So, and the downsides are, I will say broadly speaking as lack of preparation and I’ll go into that in a second. And then I also think that, you know, I have my opinions on certain things that I don’t think should be a subscription. You start, you know, we’re seeing more and more about say for example, you know, lecture cars or cars that have features that are subscription only there’s things like that, that I have strong negative opinions about that we won’t get into today. So like don’t force a subscription where it doesn’t need to be, but the things you need to think about with a subscription, one broadly speaking, when it comes to a planning perspective, this all kind of think about it as preparation, it takes more work. And what I mean by that is you’re building a relationship with a customer when you’re an e-commerce store.

Evan
[00:09:55]
You just want to get customers in. You usually get them back again, over email. You’re not paying for advertising usually, unless they’ve sort of lapsed like say 180 days. So you have a, you know, you’re just saying, Hey, we have a sale going on or Hey, and they, they kind of casually walk back into your store whenever they feel like it. You know, you’re sitting at 1.2 to 1.4 purchases a year for many e-commerce companies, and you’re not really having to build a relationship with the subscription. You sort of have to continuously sort of best yourself month over month, as far as the effort you put into the company, you’re a part of, and that what I mean by that is when you’re sending out emails, like you have to do a certain amount of emails that are trying to sell and upsell and generate more revenue and a certain amount talking about yourself as a brand, because subscriptions are an ongoing relationship.

Evan
[01:10:42]
I don’t like to think of it as, oh, I’m just got you on the hook and you’re gonna bill you every month. It’s an ongoing relationship. And as any relationship advice, and I’m not an expert on that necessarily, you gotta put effort into that and you gotta have the right. You gotta listen to your customers, you gotta respond and you gotta continuously improve your product over time. A real small case study in that is a lot of times subscription companies start trying to find ways to squeak out a little bit extra margin and the quality of their product. Maybe dips a little bit over time. Maybe you see a meal at home company where now you’re getting orders where the, the seal on the, on the meal or something has, has broken now a few times. And I live in, in Colorado. I live in higher altitude.

Evan
[01:11:24]
So sometimes when they pack at sea level, there’s expansion of, of like the gas that’s in there. So then like sometimes the steels popping, you start to notice those tanks and then all it takes is a few of those. And all of a sudden, you’re not gonna wanna be part of that business anymore. So there’s, there’s that piece takes more work. You have to really have intention on driving a relationship. Another one, and this is probably the biggest one cash flow and investing into that engine. So subscription is beautiful because you typically buy customers, especially when, as a marketer, you, you acquire customers at a break even, or deficit even. And you’re, you’re looking to make your money back an average sort of, from my experience, sort of seeing behind hundreds of businesses. Now you’re looking at about call it a call it three month media payback period.

Evan
[01:12:10]
And what I mean by that is that’s where the time it’s gonna take you to get the money back on the advertising customer acquisition costs that you put into it. So one thing that this is what trips people up, because you’re investing into that sort of forward looking revenue. You have a situation where, as an operator, you can get way ahead of yourself because here’s a good example. So you’re spending $50,000 a month on advertising. Broadly speaking, three month media payback period means you have $150,000 in working capital and your marketing engine to kind of keep it going, right. Well, what happens to subscription over time? You get to a point where the curve sort of flattens out on your new customer growth, because people leave your subscription. People come in, you get to a point where it flattens out. So then you’re saying, okay, well, let’s, let’s up our marketing spend.

Evan
[01:12:55]
We got some cash now. So say you start spending a hundred thousand dollars a month on advertising. Well, now you’re stuck with a situation where you need $300,000 instead of $150,000 in media to support your marketing engine, but maybe your tax go up too. And now all of a sudden that media payback, period’s like four months, boom, you go from $150,000 in working capital to $400,000 in working capital. And then also guess what you’re growing. Maybe you need another customer service agent. Maybe you need someone to help procurement and fulfillment your costs go up. And the beauty of subscription commerce is that you could plan it. The downside is if you’re not looking at all the variables, you can be caught in a situation where you’re using and spending more capital than you can afford. And then like, this is a cataclysmic type scenario, but then it’s kind of a house of cards because all of a sudden you can’t, maybe you can’t pay your vendors for your product.

Evan
[01:13:49]
Then your product shows up late and then you’re shipping it out late. And then people, more people are canceling. So you’re not getting that revenue and you over bought product. And, oh my gosh, now you’re trying to seek like bridge capital. So that’s like the biggest downfall, but it’s also like the biggest upside whistle subs is you can plan for it. The biggest downfall is if you’re not planning for it, you could get caught in a really disadvantageous position with your company capital and lead you to go out and either regress as a business and really have to slow things down and then take a few steps back or seek capital under distress. And that’s gonna be sort of given away more of the company at less terms than you like, if you’re raising money or bridge funding. And none of those are a great, comfortable position to be in. So that’s probably what I see as the biggest downfall.

Arlen
[01:14:34]
Yeah, for sure. Yeah. That makes a lot of sense. What I also see with it, aside from all of those things that kind of can compound if you’re not prepared and that’s kind of the key thing is that if you’re not ready, you’re also, if you have all of these customers and you’re getting these customers in the subscription and maybe you’re not prepared, you don’t have the quite, you don’t quite have all the inventory, you got people waiting, it also can hurt your company’s reputation. And that’s

Evan
[01:15:03]
A big way.

Arlen
[01:15:03]
That’s a big thing. Yeah. And you know, if you start to get bad reviews on social media or your Google reviews, all of that, that could really hurt

Evan
[01:15:12]
You. The BBB, Google trust, pilot, all those places like that could set you back months of night, years of reputation that you have to rebuild. And it’s so easy to do because look, you, you’re just sitting there. You’re like, oh my gosh, we’re seeing tail wisdom and customer acquisition cost. My CAC is so low right now. I could double my media spend and we’re getting a bunch of new customers. And you’re like, all right, all those revenues coming in, but all it takes is something that’s outside of your control, even as well. Like, Hey, my stuff on a boat, it’s stuck in the Harbor for an extra month. So we can’t fulfill this month’s box. And guess what? All that revenue goes, bubye. Yeah. And your reputation goes bubye with it. So you really have to resist the urge to grow aggressively without preparing and having contingency plans. And that’s, that’s the balance. But if you can do that and that’s a part of subscription coverage, so you can do that, then you’re looking at, okay, who do I need to hire? What happens if I don’t get this inventory? Who’s my backup supplier. You’re like, can we get these customers later? Like, don’t get too far ahead and you can end up putting yourself in a real bad spot.

Arlen
[01:16:17]
Yeah, for sure. Now, if let’s say a company takes he to all of this advice, they do their proper planning. They feel that they’re ready. They’ve queried their customer base and they feel okay. We’ve got a solid customer subscription model. And we think it’s a, a subscription commerce model. We think it makes sense. We’ve seen our competitors are doing it. We’re gonna go into it. Now, if they decide to go that route from a technical standpoint, what are some things that need to be in place to, for a brand to effectively have a subscription commerce offering?

Evan
[01:16:50]
Yeah. So most out of the box, I’m assuming these days, most people aren’t building from scratch their own e-commerce platform, right? So you have Shopify and recharge as a strong combination from what I’ve seen for most subscriptions. Now there’s a handful of different subscription. Plugins recharge covers a lot. You have bold, you have charge B, you have a handful of others, depending on the complexity of your subscription. You kind of need to vet subscription platforms, but those subscription platforms are necessary. If you are highly technically inclined, say you’re a CTO, founder or co-founder type situation or an arch, you know, a technical architect in your pocket, you can use Shopify’s subscription API to sort of build your own subscription app, which if you can afford, it has a lot of benefits for flexibility, for designing subscription your way. But you do need a subscription engine.

Evan
[01:17:38]
So Shopify doesn’t do that by itself, out of the gate. If I use Shopify as an example, and then you have like great joy, which has subscription on top of it, you have WooCommerce as part of WordPress. You could use that as well. So you need to pick a platform. My personal opinion, going vertical on Shopify is smart. A lot of companies do it. It works really well. And it’s easiest to set up in my experience. Yeah. So you need a, you need that. You need to design your subscription. Now, when I say design your subscription, you need to be looking at, am I a monthly subscription or a quarterly subscription? Do I have options in my subscription? Like, you know, if you’re do you get two packs every month, do you get two packs every two weeks? Do you get four packs a month?

Evan
[01:18:15]
Can people modify that? You have to just think about what people would want to change, but not too many options because you create a matrix of, oh, do I want a one pack, two pack, three pack? Do I want it on thirty, sixty, ninety, a hundred eighty days, all these sorts of you create this matrix of different options. And people just sort of be like, I don’t know right now how much I need. Just give me this stuff. You can create resistance there. Yeah. Another thing you need to do, this is probably sort of the, the hidden upside is looking at your email and sort of CRM platform say you’re on Clavio or whatever tech you’re on. I always suggest creating a lead nurture series to get more, to get customers when people give you their email and stuff like that, but also a new customer onboarding email series. That’s usually about five to seven emails deep that says, Hey, thank you for joining.

Evan
[01:19:05]
Here’s a little bit about us. Here’s what you’re contributing to. If you have a social cost behind welcoming them into the brand, nurturing them through their first order. So they know what to expect. Like, Hey, you’re gonna get an email. And the next 48 hours is gonna have the shipping information on it. And that first shipping email comes and it looks great. It’s like, Hey, you’re, you know, you’re getting them excited about the product they’re gonna get. It should be delivered on this date. If you have any problems, let us know. And then when they get it, when it actually you get the scan that it was delivered, send another email a day later, say like, Hey, we’re hoping everything would smooth with your delivery. Do you have any questions about the product? Get back to us. Then also check in with them about two weeks after their, their product was delivered.

Evan
[01:19:44]
And actually we typically recommend doing like a questionnaire about your product. So get a little bit of customer information depending on what your product is usually about two weeks out and say, you know, if you’re a fashion company, Hey, how did the clothes fit? Did everything come in? Good quality? Do you like the products that you got? Is there something you would’ve done differently and listened to that stuff? And you will get a ton of engagement on that series because you’re not calling people up every day. And if you have SMS, you have, you have a phone number. Even better. SMS is huge these days, but you wanna just have these touchpoint with the consumer as you’re onboarding them on that first order to make sure that they’re hyped about the product still to let them know that you got their back, if they’re having any issues, because that’s always what the barrier for entry for most people on E anything e-commerce or subscription commerce.

Evan
[02:20:27]
I’m not sure I’m gonna like it. I’m not sure what to do if I don’t like it. So you’ve gotta support them all the way through and then listen to their feedback and adjust your product if necessary. So that’s another thing I always recommend people do. And then last piece is honestly, just be ready to iterate and evolve because chances are when you come outta the gate with a subscription, it may not immediately be the best thing ever. You may see price resistance. You may see do, I don’t really need this every month. You, you gotta, and you gotta like, sort of weed out one noisy customer saying they don’t need it every month. When you have 95 other customers that are like, oh yeah, I definitely need this every month. So you gotta listen, but you also gotta understand that a subscriptions, not for everybody and evolve your product over time.

Arlen
[02:21:09]
Gotcha. Gotcha. Yeah. That’s, that’s some great advice going back to the platform. I’m also a huge advocate of Shopify. I think a great platform, like you said, if you don’t wanna go vertical with Shopify, if you have just a regular store, you want to add the subscription commerce, you can do that with some of the apps in their app store. Like you said, recharge bold, definitely some great apps. I’m familiar with both of those. And so, yeah, I think that’s a solid route to go. And you know, if you’re on another platform these days, that’s the beauty of it. A lot of these e-commerce platforms like the Shopifys, the BigCommerce, the equity e-commerce even Ws. Now they have all, they all have app for. So you can easily tie in these subscription systems into your store. You know, it’s kinda like plug and play these days. It’s not that difficult. You don’t really need a developer to, to

Evan
[02:21:53]
Manage. Yeah, you absolutely. Don’t it that’s a key point. You don’t need a developer. I would recommend to anybody thinking about getting a subscription, talk to peers or other people in this space and figure out which tech is right for you. Because I have seen not to, I’m not gonna talk bad about any specific tech here, but I have seen situations where brands have outgrown the technology stack that they are on for different reasons. Either the service isn’t quite there or their subscription changes and the tech platform can’t really, really accommodate. So then they have to migrate and, and we see a lot of software migrations too. I’ll just use for example, to Shopify, but that there is going to be a not insignificant cost to do that. And the bigger you are, the more expensive that cost is. So just make sure that the platform that you’re on is pretty Futureproof as far out, as you can see, I won’t hide my fandom for Shopify because I think they are a pretty Futureproof overall platform for flexibility.

Evan
[02:22:51]
Doesn’t mean you can’t try any of these other platforms, but just keep that in the back of your mind that someday you may need to put down 10, 15, $20,000 to successfully migrate your customer base over to a new platform and a new tech stack. And there’s also intrinsic costs. Like that’s the hard cost. There’s also intrinsic costs that comes in by customers not being able to get transferred properly. Things like PayPal subscriptions, don’t transfer really well platform to platform. There’s just stuff like that, that can end up costing you down the road. So just get the advice of other people in the space when you’re looking at your technology and make the decision that’s right for you.

Arlen
[02:23:28]
Yeah. I totally agree, Evan. And I’ve seen a lot of cases like that where people have gone down a certain track with a particular platform, and then they’ve reached a point where yeah, they can’t go any further where they, it’s not hasn’t matured. Like they have, it doesn’t offer the same feature set as some of the other competitors. And then, you know, they have to spend that cost to migrate. So you, you definitely wanna make a wise decision before you get into deep and yeah. Asking some other people that have done it is a great way to get feedback. For sure. Now, as we get ready to wrap things up, I wanted to see if you could highlight some examples of some e-commerce companies that you’ve either worked with, or you just familiar with in general, that have implemented subscription commerce offerings and what are some specific things that they did to achieve success?

Evan
[02:24:13]
Yeah. So, I mean, we work with a lot of great brands here at steal. So I would say all these brands that we’ve worked with itself typically come to us with a subscription. I think that a subscription, maybe if I can sort of rephrase that, that question a little bit and say the characteristic you’re looking for in a subscription business, but if you’re thinking about it or have implement implemented it, say from an e-commerce perspective to subscription commerce, we have like what we call internally here, sort of our five criteria for finding product market fit with, with a subscription business. And, and these are sort of universal truths that we’ve developed here at stealth. My business partner, Brent, literally went up into the mountains and, and thought about this for a few days and came back down and, and sort of looked at all the successful businesses we’ve been able to see.

Evan
[02:24:55]
And one of the things out of the five things, or excuse me, we go through these five things is having a passionate audience. So that means that you have people that are really excited about whatever you’re offering. So meal at home, as a good example, we work with hello, fresh, and a lot of their, they have several different brands. People are passionate about say factor 75 is a highly kedo and paleo meal at home company. So people have a passion for kedo or paleo, and then they find a meal at home service that suits their dietary needs. Then you have people that were at thrive market because they have gluten issues or they wanna shop organic, boom, you have a passionate audience and you’re delivering a product to them. That makes sense. And that passion audience also needs to be large, right? So you can have a passion, an audience use a dumb sort of cliche thing here, but underwater basket weaving those people are incredibly passionate, probably not a very large audience.

Evan
[02:25:49]
You’re gonna get couple thousand customers with your, you know, underwater subscription, underwater basket weaving subscription box, but you’re not gonna be able to grow that customer base beyond that. So that audience has also gotta be large as well. You gotta have a unique value prop. So like this means like if you’re gonna be a, me too, you gotta still have something a me too being like there’s, there’s a lot of meal at home companies that do things differently. But if you’re a meal at home company that say focuses on kedo and paleo versus one that focuses on whole 30 diets or one that just focuses on great wholesome, like dense comfort food, you gotta have a uniqueness to it. And that value has to be there. They can’t be paying more than they’re paying in the grocery store. They have to find it inconvenience. You have to sell people on like, look, food gets delivered right to your door.

Evan
[02:26:37]
How convenient is that? Like? And tell them about how mu and then like the food getting delivered to your door. Guess what? You save two hours a week in going to the grocery store, you could spend more time with your family, save money in the process, eat better, win, win, win. And then the compelling unit economics. This is a tricky piece because you gotta have a subscription business sort of universal truth. From what I see to create a scalable advertisable subscription, commerce business, gross product margins, sort of delivered to the customer, not including your SGNA or even your advertising delivered to your customer at about 40% or greater. If you’re less than 40%, you’re gonna have a hard time carving out money for advertising. Okay? So you gotta have, you know, compelling unit economics or a path to get there. When you’re starting out, you might be at 30 or 25% gross profit margins, but with volume you get volume discounts.

Evan
[02:27:30]
You get to buy more, you get to save more, you get shipping rate discounts, whatever, find a path to that, you know, sort of 40% or greater 50 is great. Anything above 50, you’re doing awesome. And then the last piece with sort of the number five here, but not a ranked of importance is it’s gotta solve a pain. It’s gotta make something. You gotta have a customer that feels better or gets relief in their life by being on your subscription. So here’s a good example. You hate going to the grocery store to, or you hate buying coffee at a, at a major coffee company. So now coffee is delivered right to your door, okay. Or coffee alternatives. You, you like, we work with a brand called mud water, fantastic mushroom infused coffee, alternative tastes great. You still get that kick in the morning, but it, now it solves the pain because instead of you being hooked on regular coffee, and now you’re on a coffee alternative and it’s delivered right to your door and competitively price fits all of that criteria.

Evan
[02:28:25]
That’s what you need to be sort of the five things you need to be focused on that we see creates success almost every time with subscription businesses. If you’re asking about an example of companies that have gone to subscription, it’s hard to find a company that doesn’t have some form of subscription. These days. One of the easier models I would say is, you know, obviously you have the behemoth that’s Amazon releasing prime some years ago, prime is inherently a recurring revenue model that gets 90. We are now a hundred and some odd dollars of margin, basically from everybody who’s on it. And you look at the perks that they’re doing. Yeah, you get prime video and you have all these things. We still gotta pay for certain movies and certain things that are free in there, but that is all basically margin dollars from them. And when you’re getting faster shipping like faster shipping just generally means things are getting bumped to the front of the line. They’re not necessarily turning heaven and earth, but the value you prop feels so strong, you gotta have prime. So like them introducing that has just opened the door for other services, such as expedited shipping front of the line, customer service, easy replacements, some guarantees and warranties, things like that.

Arlen
[02:29:29]
Yeah. Yeah. That’s for sure. Yeah. Amazon being the whole, the whole behemoth year in the e-commerce, they’re definitely a great example for sure. And you know, not only with them as overall brand brands that are selling on Amazon, we’re seeing this more and more. I get it all the time. I order different household supplies and it’s always the option to do the recurring

Evan
[02:29:50]
Subscribe and save.

Arlen
[02:29:50]
Yeah. That, that actually is almost a default on a lot of the products, like right. When you go to it, it’s defaulted at the subscribe and save, and then you have to kind of think

Evan
[02:29:59]
Twice. Yeah. You have to opt out of subscribe and say, that’s true. Yeah.

Arlen
[03:30:01]
You have to say, wait a minute, do I really need it? And then, you know, you have to opt out the switches. So yeah, it is really huge. Well, Evan, it’s been awesome. Thank you for sharing those five points. Those are definitely some key things that any e-commerce brand that’s thinking about doing this needs to take key to for sure. And, you know, lastly, before we let you go, I always like to switch gears here, just so our audience can get to know you a little bit better. You don’t mind sharing one closing fun fact about yourself that you think we’d be interested to know.

Evan
[03:30:25]
Hmm. I thought long and hard about this question. I think that the fun fact that I would want to throw out there is, you know, this is self-promoting too, but I can say for certainty, I’ve been involved in controlling over $1 billion in media spend collectively from my time from 20 years of experience, breaking that out to sort of roughly 50 million a year in different, you know, broad, different control of it and influence of it. So that’s a fun, selfserving sort of professional fact. The other side, I would say just a personal fun fact is I did not graduate college and ended up jumping into this industry with only hopes and dreams and a good technical knowledge of, of this space and just love seeing how it’s grown over the past 20 years. So.

Arlen
[03:31:13]
Gotcha. Gotcha. Well, that’s awesome. Well, thank you for sharing that Evan, you know, first of all, $1 billion is definitely nothing to sneeze at. That’s quite a comp an accomplishment over the years to be able to have managed that. And then of course, you’re not the only one that hasn’t gone through college that has still been gone on to be successful. I think the kind of key here is, you know, as long as you have a passion and as long as you’re, you’re motivated and you stay focused and set your mind to it, you can, you can accomplish anything regardless of, you know, your background or what type of education that you have. So that is some good stuff. Well, awesome, Evan. Well, it’s been awesome talking to you. And lastly, before we let you go, if any of our listeners wanna reach out to you and pick your brain anymore about subscription, e-commerce, what’s the best way for them to reach you.

Evan
[03:31:58]
So you can reach out to me at Evan stealth, venture labs.com as my direct email address. Also find me on LinkedIn. I haven’t been too prophetic on LinkedIn as far as dropping knowledge, but I’m working on that. Feel free to reach out, always jump in my email there and, and let me know, or just reach out to us in general on St. Central labs.com. See what we’re up to. We have a lot of, one of our very exciting initiatives here is actually we opened up a 5 0 1 C three, that’s called our impact lab that you can read about on stone venture labs.com focused on teaching young inner city kids, how to launch their own website brand. And we’re actually funding them $5,000 in advertising after they go through the academy to learn how to actually bring their product to life. So read more about that. There reach out to us if there’s anything that we can help with. I love talking about this stuff. I can blob babble on about this industry for, for hours. So,

Arlen
[03:32:51]
Well, I hear you well, thank you for sharing that. And, and you and me both, I can talk about e-commerce and the internet for just days and days. So yeah, it’s awesome to have another like-minded person on the podcast as well. Well, great. Well, I definitely encourage any listeners that are interested to reach out to you, check out your you guys, website stuff, your labs, and we definitely appreciate you coming on today, Evan for the e-commerce marketing podcast.

Evan
[03:33:14]
Thank you so much for having me. Appreciate it.

Arlen
[03:33:17]
Thank you.

speaker 1
[03:33:20]
Thank you for listening to the e-commerce marketing podcast. 

Podcast Guest Info

Evan Padgett
COO of Stealth Venture Labs