HOW you sell matters just as much —if not more — than WHAT you sell.
After selling $450 million, here are the two best pricing strategies I’ve discovered.
I’ve used these strategies to sell $200M in an online coffee brand business and $200M in an online education business.
Athletic Greens (or AG1) uses one of these to sell $600M per year of a greens powder.
The Ridge uses one to sell $200M per year of wallets.
ClickFunnels used one to build a $100M+ software business.
In summary, these work for any business selling any product in any market.
What really matters
Meta, parent company of Facebook and Instagram, has 3.9 billion monthly active users. That’s half the world’s population.
It’s the best platform to get customers.
That’s why almost all $10M businesses use it.
With Facebook Ad Library, it’s easy to see exactly what ads other businesses run and what landing pages they use.
Traffic and conversion are now commoditized.
I currently advertise across three unique businesses on Meta. All pay somewhere between $20 to $40 per 1,000 impressions.
Costs for all businesses go up incrementally each year.
What REALLY matters is which business makes the most per visitor.
This is the 9-word secret to scaling any business:
Make more money per visitor than all your competitors.
Do that, and you win.
There are two ways:
Method #1: Bundle
Sell as much as humanly possible upfront (on the first purchase).
Even with a great product, 75% of first-time buyers are never coming back.
All the money you ever make from 3/4ths of your buyers is made on their first and only order.
So load em up.
Here’s how:
- Raise your prices to as high as possible until conversion rates tank
- Add multi-packs and bundles to get customers to buy more than one unit upfront
- Add high-perceived value bonuses which cost you little to give away as incentives to load up and pay higher prices
YETI sells $1.8 billion per year of coolers and drink ware.
YETI grew by convincing people to pay 3X+ more to keep their drinks cold.
True Classic scaled to $500M by convincing customers to buy up to 10 t-shirts at a time.
With a much higher average order value (AOV), True Classic and YETI could scale their marketing faster and more profitably than all their competitors.
Method #2: Subscription
The whole point of selling a product on subscription is to get customers to buy more.
You receive less money upfront as compared to bundling, but you receive as much, if not more, money per customer over the long-term because of automatic repeat purchases.
Athletic Greens (AG1) grew to $600M in revenue by only offering subscription to purchase its product.
ClickFunnels, a software business, grew to $100M by combining both bundling (with lots of bonuses to buy its product) and subscription (an annual or monthly license).
The worst type of business
The business you don’t want to be in is one selling a low-margin one-time purchase product.
That’s almost all Amazon sellers.
Back in the day, when we starting teaching people to sell on Amazon between 2012-2017, Amazon was easy. You could get so much traffic at zero cost (ads didn’t exist for the first few years).
It was like a repeat purchase business.
Then it wasn’t.
Ad costs went up. Competition went up.
And everyone kept selling low-margin one-time purchase products, getting nowhere.
How I’d scale to $10M
If I were starting over today, here’s what I’d do:
- Pick a huge market that can easily support another $10M business
- Create a product (or service) as good or better than what’s currently offered
- Keep making the product better every year
- Either sell with a huge bundle, requiring customers to buy a lot upfront, or sell via a subscription in which customers are automatically refilled until they cancel
- Drive traffic with Meta (Facebook) ads
That’s it. Nothing more, nothing less.
To aiming high,
Matt