Netting 70% Margins Selling Air Plants Online or Losing It All? – Airplant Supply Co. [1/6]

Travis Page Season 2

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[00:00:06] Welcome back to marketing tear down where we tear it up and we tear it down, we are your hosts Andrew and Travis. And today we’re going to be talking about a company called the Air Plant Supply Company. [00:00:16][10.1]

[00:00:18] And let’s dig into it. [00:00:18][0.2]

[00:00:21] So first things first we pulled up some information about their brand on Google Trends, and there’s nothing for the brand. There’s no there’s no actual data tracked to that specific brand. But we did notice that air plants in general have been growing in interest over time, peaking around about the time of the pandemic earlier this year when that sort of first hit the world, or I should say the market, when the epidemic first hit the market when the pandemic first at the world, we saw peak and interest around air plants was is really interesting, everybody sitting at home. But really, this has been growing over time this is a long term trend that’s been going on. So good for the category, but not too much going on in terms of the company itself. [00:01:00][39.7]

[00:01:02] As we get into some of the details you’ll those a few highlights their Pinterest is on fire by far their best social channel yet. [00:01:10][7.9]

[00:01:10] It kind of seems like this this one man operation. A lot of the advice that we have stems from just being too thick in it. He is absolutely like encapsulated by the brand and what he thinks the brand should be. So that’s a lot of the advice you’ll see up here. [00:01:23][12.5]

[00:01:25] So getting into it, first thing’s first, how we do we buy this? So we’ve got like online obviously one time purchase and then he kind of pushes like a wholesale model as well. . [00:01:35][10.3]

[00:01:37] He sort of, he did this in 2002, here’s how you can start your own business, wrote a little bit of content around that and has a little bit of SEO driving to those pages, retail assumedly through those wholesale purchasers. But that’s kind of a mystery. He doesn’t he doesn’t list any people that are purchasers or any like supported shops. And then other there could be other channels. Pinterest could be driving revenue if he’s selling them there. But honestly, that’s kind of fairly open ended. The nice thing is that his business model is killer, so he has a bunch of flexibility in it. The shipping rate is incredibly low. Margins on plants are ridiculous, estimated 70 plus, especially air plants, because you’re shipping roses, which they’re super delicate and get they need water, they need nutrients. They can be damaged in shipping but that gives them a bunch of flexibility. He’s got a shipping model is pretty interesting, too. He does like flat across the board, six ninety five shipping for anything 60 and below and then free above sixty dollars. And then it looks like most of the repeat purchases that he’s getting is probably from those wholesalers. But we have a couple of suggestions that you could do to kind of get into that repeat purchase revenue and then ROI models. Pretty, pretty typical. I mean, he’s he’s clearly doing a lot of cost per click. He’s doing Facebook advertising, Pinterest advertising. So for the plans for cheaper purchase them, dropship them, acquire the customers, sell them. And then now he needs to look at potentially getting a couple of different revenue streams and growing his business by… He’s Undercutting himself a ton. He gives a lot of discounts as you’ll see in a couple of slides. But yeah, yeah, yeah. [00:03:17][100.2]

[00:03:17] It’s interesting for for D to C e-commerce situation here because I mean, I think the product works really well for that kind of a model, but it’s it’s low weight. It all it needs is air and water. It’s a fucking air plant. Like it’s a very simple product, low cost. You can produce a very cheaply ship it very cheaply, it’s perfect for an e-commerce player. [00:03:35][17.8]

[00:03:36] But we are really worried, like you were saying just a second ago, we’re really worried about the margins on this, mostly because of the positioning of the brand. But we’ll talk about that in a minute here. [00:03:46][9.7]

[00:03:47] First things first, I want to highlight some good things and the good things: Business model! It’s great you can produce these plants for very low cost and you can sell them for a pretty decent mark-up. I think without digging deeper into books, obviously, if you had more information, we’d have a more informed opinion. But I think it works, pretty sure this is a pretty solid product to be selling and the model works out. It’s good. A couple of other things at work, the Pinterest, their Pinterest is awesome, I mean, their Pinterest just has incredible photography on all of these different plants. And we’re we’re laughing because the photography on their Pinterest is better than the website. And I don’t know what was going on here, but this kind of made Pinterest his his main visual display of all the products and the website’s ok, some of the photos are OK. But Pinterest, it’s it’s really incredible. You can see on the right here, these are solid clean clips. [00:04:39][52.1]

[00:04:40] But come on. That’s pretty good. It’s been pretty juicy, one might say. Last thing that I want to highlight, it’s going very well, is that I think it’s important to understand what this particular product that you’re not just buying the plants a lot of time, you’re buying the plant in context of where you want to put the plant. So it’s not that I’m just going to buy air plant and put it in the place that air plants go. I don’t know if you buy flowers that go in the garden. Right. And kind of always make sense, air plants you go a lot different places and a lot of times they’re sort of bundled into how they’re being displayed. So you’ll see these kinds of little like hanging glass balls and like little wire chandelier type looking things. I don’t know what to call them, different ways to display all of the air plants. And it’s perfect because it’s a great bundling opportunity. If someone’s buying an airplant, they’d love to throw in this kind of display and they’ll hang it up on their shelf or whatever, or they’ll put it on a little piece of reclaimed driftwood and stick it up here. And the air plant goes in here and another air plant goes up here or whatever, like it’s a whole part of the aesthetics. So that is something that’s excellent because business perspective, that’s great opportunity to bundle great opportunity to up sell. [00:05:51][71.0]

[00:05:53] That’s said, let’s roll into some of the bad things. [00:05:55][1.6]

[00:05:56] And this is where we take a turn for the worse. [00:05:58][1.6]

[00:05:59] So you’re saying a second ago that this is the biggest problem and. [00:06:03][4.5]

[00:06:03] Oh, my God, oh, my God, this kills me because he he takes the fundamental reason why this business is awesome and completely destroys it right on the homepage is the first thing you see is 70 percent off air plants and then he has a sale page as well. You’ll see it’s the second thing on the navigation and it’s pretty much, hey, here’s the cheapest stuff, I might be illustrating with some of this stuff and a lot of the things he’s probably drop shipping just due to the variety of photos that he has. Some of the photos are really nice, like the pictures that he has on Pinterest. And some of you can tell are stock dropped, but drop shipping photos. So he has I’m sure the margins are different for those two varieties, for his clients business. But I wouldn’t go with up to 70 percent of air plants as soon as you get in, it makes the brand feel cheap and not a fan of that ever. This is also super interesting. When we were looking at this pricing page and then looking at prices on Amazon for similar products, he’s undercutting Amazon, which is the weirdest strategy I’ve ever seen, because if they make it to your page, they’re not going to go back to Amazon thinking.,They’re going to go back thinking that there’s something cheaper. But if it’s more expensive and it’s easier and it’s free shipping, it’s easier decision overall. Way more reviews. Got one review right here for eight ninety five, and then the lowest of the top twenty three reviews, all five stars. It’s going to be way simpler decision for them to go up top and say, OK, I can get this bundle deal. I know it’s got a ton of good reviews. Shipping is going to be easy. I know checkout’s going to be familiar, but I’m just going to do it here even if it is a little bit more expensive. So there’s no reason to undercut Amazon whatsoever, raise those prices. [00:07:38][95.1]

[00:07:41] You know, wrapping up our first thoughts and the overall strategy, really the cheapness of the brand is the main thing, but it is a solid business and we think there’s a lot of potential here. I want to talk about the Hopkins Score real quick so we have a slightly different opinion on this one. [00:07:55][14.2]

[00:07:55] I gave it a six. You give it a seven. Why did you give it a seven? [00:07:58][2.8]

[00:08:00] I don’t know, I think overall they have enough products and if they’re driving people primarily to their Pinterest page, the strategy is solid, especially their business model that takes into account like a lot of what they can do with their brand if they’re building it up and if they have an email list is large enough, they have a lot of flexibility. I think the main thing that they could do to turn this from a seven to like an eight or 10 is just make the website look better and go ahead and just plant that price flag in the ground and raise it past 70 percent mass. [00:08:29][29.5]

[00:08:32] Yes, hundred percent, I completely agree. [00:08:34][1.9]

[00:08:34] You know, the only reason why I give it a slightly lower score is because I think that the discounting is a bigger problem than than it even seems. And it seems like a problem like that’s huge. It’s hard to crawl back from that to what once you lower prices, kind of sucks to raise prices. So there’s a big uphill battle to get that pricing flag up. So for that reason, I give a six. [00:08:55][20.7]

[00:08:55] So that sounds pretty good. On that note, let’s roll in. That’s it for the this episode of Tear Down Pluggables! If you want to plug Travis. [00:09:05][9.4]

[00:09:06] Yeah, I’m at a product over at cinebody.com. We allow you to create video with anyone on Earth. [00:09:11][5.2]

[00:09:11] So it’s used by a lot of big brands who can’t get out there and do video production right now due to covid. And you can shoot with any ff your brand influencers customers in the field and create a video at all bumps to the cloud, you can edit it and push it out within a day! Boom boom boom. [00:09:25][14.0]

[00:09:27] And I run a company called Optimotive. We help other companies launch and scale new brands, new products and enter into new markets. And we have a lot of expertize about marketing so hit us up if you’re interested in talking. And we’ll see you guys next time. [00:09:27][0.0]

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