My guest today is Krik Angacian, the co-founder of Candy Can. Krik’s background is first as an investment banker and then as a founder of a protein popcorn business that he sold a few years ago.

Candy Can is a phenomenal product (full disclosure - I am an investor) and somewhat addictive. If you’re like me, you’ve been known to snack on children’s gummy vitamins (it’s actually a pretty common vice, it turns out). The trouble is, that’s not so healthy.

Enter Candy Can, the keto-friendly gummy snacks packed with vitamins (but not too many) and free of junk like gelatin and nasty fillers.Candy Can is on a tear of growth right now, but it’s not from the traditional channels like Google and Facebook. It’s from affiliate marketing.

Here’s a look at what we covered in the interview:

• Where to get started and where to learn affiliate marketing.
• Should you hire an affiliate agency or go it alone (most charge $10k per month or more)?
• Why landing page is everything and what Krik has learned through testing.
• How fraud is a real issue and what to do about it.
• Why starting with low-quality traffic and then upgrading could be a good strategy for you (or even a must).
• Top affiliate marketing tools.
• Understanding the metrics behind affiliate marketing.

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Mentioned In This Episode:

Krik Angacian

   - LinkedIn

CandyCan

   - Website

   - Instagram

   - TikTok

   - Facebook ‍

Affiliate Summit East (ASE)‍

Dollar Shave Club‍

MANSCAPED‍

AdAction‍

TapJoy‍

Performcd.com‍

EatCandyCan

Transcript:

Brett:

Well, hello, and welcome to another edition of the eCommerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today is going to be a treat for you because I have a man who's a wealth of knowledge. He's building a brand right now. He's sold a brand in the past. He's running affiliate marketing. He's doing all kinds of crazy stuff. I have with me today, Krik and Jack Yin. And I met Krik through Ryan Daniel Moran and the Capitalism fund. Full disclosure, we are invested in his brand. But he is building a company right now called CandyCan. And I don't know about you, fellow listener, but you might like to snack on a child's vitamin every now and then, the gummy vitamins. I've been known to sneak a child's vitamin every now and then. So that's actually a trend. So if you do that, you don't have to do that in the closet anymore. You can do it in public, and Krik will talk about that and what they're building at CandyCan.

So Krik, welcome to the show. You were just holding up CandyCan. So tell the folks, what is CandyCan specifically.

Krik:

Brett, thanks again for having me on the show. I'm really excited about this and telling people a little bit what we're all about.

So basically, CandyCan is the world's first snackable gummy vitamin. I was selling my last company, and I was in my office snacking on gummy vitamins, OLLY, be specific. And my business partner walks in, and he's like, "Dude, what are you doing? You can't be eating them like that." And I looked at him and I was like, "Who only needs two gummies?" And right then and there, we were like, "Holy shit, this is a real business right here." So we set out to create a functional candy company.

Brett:

Yeah. I remember, so a lot of listeners know I've got eight kids. And I've showed you, we did a call prepping for this, and you saw our little duck farm, and the kids and stuff, which was awesome. But I remember one night, I'm snacking on these kids' vitamins, and my daughter, Sophia walks into the kitchen. She's like, "Are you eating my vitamins?" And I'm like, "Yeah, they're pretty good." This is I'm trying not to eat desserts. I'm trying to eat healthy. So yes, I'm snacking on a kid's vitamin. But apparently, this is a trend. People do this.

Krik:

Yeah. The New York Times even wrote an article about how gummy vitamins have exploded, but everyone is overeating them. And the problem with them is each gummy is loaded with a ton of vitamins, and they're usually made with harmful ingredients, like gelatin, which is animal byproduct of chicken beaks and pig skin. And also, they're packed with sugar. Each gummy's got two to four grams of sugar. My entire bag of 15, or actually, there's 18 gummies in this has only two grams of sugar. So and it's two net carbs. So we're not only are we functional and snackable, we're also keto, so it's a really cool, better for you product, won't spike your glucose, insulin levels at all, clean label, tastes great.

And I mean, function's gotten everywhere, from drinks and beverages to bars, and I figured why can't function go into candy? And the low hanging fruit for us was gummies.

Brett:

I love it. It's a brilliant idea. I've tried the product. We hung out in Austin a few months ago, and I love the product. And you guys are off to, on a tear, man. You're launching fast and things are going really well. So I want to unpack a few things about your success, and really want to dig into affiliate marketing and what you've learned and what you've seen there, and also why you did affiliate marketing. I want to talk about a couple other things that I think's really cool about the way you approach business. But before we do that, can you give folks of your quick background? What did you do prior to launching CandyCan?

Krik:

Yeah, sure. So I came out of college 2011, and I was ...investment banker. I was doing mergers and acquisitions. I was covering the food space. I did that for three years, and I was debating whether to go to private equity. Do I stay as a banker? Do I go to business school? And I realized I hated finance, but I really grew to love and have affinity for the food industry.

So I started my first food company eight years ago or so. We made a protein chip and protein popcorn company, built that up over about a six-year period. We sold that business about two years ago. And then while we were selling that company, we had this concept came up, and it was like, oh, our next business. Took us a while to get it off the ground for a number of reasons. One is COVID, getting off the ground during COVID's tough. And two, my business partner actually had cancer, so he had to go through chemotherapy while we were building the brand, and doing R&D, and doing all the marketing work behind it and everything before launch. Thank God he's okay now, the world seems to be quasi back to normal post-COVID, and the brand is doing fantastic, so I'm very happy about all the above.

Brett:

Yeah. It's amazing, man, and kudos to you. And so really, like I said, we want to dive into CandyCan and dive into affiliate marketing. But before we do, a lot of my friends, and even at OMG, myself and my business partner, we're looking at buying brands and doing some M&A and stuff like that. As an investment banker, I'm super interested in your perspective, and you and I talked a little bit about this when we met up in Austin about your investment banker background. But and this is not going to be the focus of the talk, but just and I'm putting you on the spot a little bit here, but any tips, suggestions, anything that you know as an insider about investment banking and private equity that you would give to the listeners who are either looking at buying or selling a business?

Krik:

Yeah. I mean, in terms of investing or buying a company, you got to look at a couple things. One, the most important, in my opinion, is the founders themselves. Like are these the guys or girls to get it done? Are these people that are trustworthy, that they're going to take your money and not just blow it in Vegas? Next is I look at macroeconomic conditions, like is this category a category that's growing? Is there an opportunity for it? And then three, it's like do you personally have an affinity for it? Do you like the products? Is this something you could actually endorse, right, and get behind? I had one or two investors not do the deal, not because they didn't like the brand, not because they didn't like the category, not because they didn't like me. They just straight up, "I don't like gummies. I'm not a gummy guy." And I was like ... that's fair. That's a legitimate reason. So I think those are always the reasons when, for me at least, when I invest or look to invest in companies, I'd look at.

And in terms of exiting a company, I mean, it's just where do you want to be, where that's you want to be your life cycle? Is there a good opportunity, like from the macroeconomic sense of the word as well? What is the environment out there today versus tomorrow? I've seen plenty of companies sell way too late. I've seen some companies sell too early. Victoria Secret's is a great one, like sold way too early. The guy walked away with $10 million, now it's a $2 billion brand. And then plenty of guys sold way too late, like Quest Nutrition. They had a $2 billion offer, they sold it for a billion. I don't think anyone's scoffing at that, but they could have got a lot more.

Brett:

Yeah, exactly, and love that. And I also love that, and you have an investment banking background, it's what you did. And the first three things you mentioned when considering whether you should invest in a brand were not really related to finance, right? They're related more to founder, and trends, and affinities. And of course the numbers and all that has to make sense, too. But I love the fact that you started with non-financial aspects, which is cool.

Krik:

Well, I mean, if the finances check out, great. But if you don't like the founder, if the founder seems a little shady to you for whatever reason, you're not going to touch it and you shouldn't touch it, and that's the end of the day. And even when I'm dealing with investors from my own company, if there's any hesitancy, I always tell them, "Don't do the deal." I want guys that are all in, and I don't want someone that's going to be calling me every week freaking out, this and that. And things do go sideways sometimes, and I want to be able to have those calls with you and not just hide behind my computer. I want to be honest with people, and be transparent, and ethical, and I think that's what most investors want as well.

Brett:

Cool.

A quick call out, a quick pause here, Jonathan. Krik, I think you keep touching the bag of CandyCan maybe, and I'm hearing a loud-

Krik:

Oh, let me ...

Brett:

... crunch every now and then. Yeah, for whatever reason, the mic is picking that up hot.

Krik:

Okay. That's a good call.

Brett:

Yeah, yeah. Okay. Cool.

Krik:

Okay. I had it in front of me, I won't touch it.

Brett:

Okay, cool.

Krik:

My bad.

Brett:

No worries.

Awesome. So let's dive into affiliate marketing, because this is a really interesting topic for me. I've got a decent understanding of affiliate marketing. It's not something I've ever run or ever done myself, but it is interesting. And you and I talked about this a few weeks ago-

Krik:

Yep.

Brett:

... that some really big brands, like Dollar Shave Club, Manscaped, Snow largely grew, or affiliate marketing really helped fuel and add some rocket fuel to their growth. But talk about why did you start affiliate marketing? Because it was not the first thing you tried, but it is the thing that's really working for you now. But why did you start it in the first place?

Krik:

Yeah, no, it's a good question. So basically, when we first launched, we didn't raise a ton of money pre pre-capital, pre-seed, I guess we'd call it, and we need to be cash created from day one. So we started running the standard CPM model, Cost Per Mile impressions pretty much, through Facebook, through Google, Instagram. And we didn't see a lot of return. We were maybe getting a 0.3, 0.5 ROAS, and I was like what's happening? Like when I used to run my last company, I put no effort in, and I get a two ROAS no problem. And everyone's telling me the same thing. It's the Facebook iOS changes. They've changed the game. And then everyone and their mother has a brand. They make a cookie in their kitchen, and they're running ads on it now. So it's just gotten so saturated, so how do you become profitable or successful in this channel? And everyone's like, oh, you got to do the LTV model, and got to recapture. I mean, yeah, sure. For a big brand, that makes sense.

But for a small guy who's just launching, doesn't have a ton of capital behind them to really just play that waiting game, we said, we have to go further down the funnel. Where's going to be more cash accretive earlier on? And then we can go into these bigger model things. And we realize that affiliate marketing is. So I only pay for conversion for a sale, and I think that is the most powerful thing in marketing today. And I know that huge brands, they don't talk about it, because it's not necessarily a dirty secret, but it's a secret of the industry. Like affiliate marketing has been around for a long time, and not a lot of guys do it. There's not a lot of agents for it. There's a ton of agencies for Facebook, and Google, for Instagram, and whatever, TikTok now, too. But very few for affiliate.

And so I had to learn it. So the affiliate marketing agencies themselves, they are charging 10, 20 grand a month. And I was saying to myself, "I don't want to pay that much. That's crazy." So I literally went in, and all hands on deck, learned it inside and out, and we've got really successful programs, and I'm really thankful that I did find it because our business is doing phenomenally well, and it's 80% driven by affiliate marketing.

Brett:

Yeah, that's awesome. And you're right. And obviously, I love Google, I love YouTube, I even like Facebook even though I don't run it. But for someone just starting out and for some businesses, the numbers don't work or don't work that well for trying to scale with traditional ads. I still think there's a way to make it work. But for some people, it's a little bit out of reach.

So let's about, so explain this process a little bit. So with affiliate marketing, I think a lot of people have a good idea of what it is. But let's just pretend that someone doesn't know what affiliate marketing is at all. How would you describe it?

Krik:

Yeah. Essentially, anytime someone drives a click or a sale to your website, you pay for it. So a CPC model, Cost Per Click, CPM, Cost Per Mile, anytime someone's an impression, or there's CPA, Cost Per Action, and the action is typically a purchase, you could do an add to cart.

So when I was running my last company, my chips and popcorn company, when I heard affiliate marketing, I thought it was through influencer. An influencer promotes your product, give them a link, discount code, whatever, and any sales driven, you give them a cut of the sale. But it is that, but it's so much more. Anytime an ad pops up, anytime, whether it's native, on the side, anytime an email list gets pinged, anytime an ad on a game, whether we call it incent marketing. If you're running an ad on your game, you're playing Candy Crush or something, and you want to, ad pops up, "Hey, get another a hundred coins, gems, tokens," whatever it is, if you purchase their product, that's incent. So they're incentivized to purchase, but you're capturing a customer for relatively cheap.

So again, for me, it just made a ton of sense, because you're only paying if there's a sale, I'm only paying if there's dollars coming to me. It's gotten more expensive like all online marketing avenues and channels. But it's still, in my opinion, far cheaper and far more cost effective for early stage companies.

Brett:

Yeah, I love it. And so the way this is working is you're partnering with people that either have email lists or they're good at running traffic, and that traffic could be display through GDN, or through native ads, or whatever. So you're partnering with people that are driving you clicks and, more importantly, customers, and then you're only paying if someone actually buys. And can you talk about what's the structure here? What platform are you using? How are you connecting with these influencers? Just how does the structure work?

Krik:

Yeah. So I got pinged by one of these incent marketers, one of the biggest ones, and they reached out to me, and they had a platform called Everflow. I'm actually now really tied into this platform, they're the tracking platform I use, but there's other ones. There's ShareASale, Impact. There's Cake. There's quite a few of these, but-

... Everflow is the group I... Pepperjam's another big one, yep. Pepperjam's a big one. Impact, Pepperjam, ShareASale I think are the biggest. I'm also on ShareASale, but I mostly do most of my stuff through Everflow. And they're just a tracking platform.

And this first company, they're called Publishers, I started seeing really good sales, and I was like, okay, what else is out here? So I just started Googling. And then what I started doing is anytime I talked to a new publisher, I was like, "Hey, introduce me to somebody else, introduce me to somebody else." And they're like, "Well, we used that through broker." And I was like, "Well, introduce me to someone that you don't broker to, that you don't get volume from." Because it's all about volume. When I call it, say volume, I mean site visitors, and how many people are going to your site and clicking. And then your conversion metrics from there dictate the CPA you pay, and your EPC and whatnot, and you work through that.

But it really was just me going in, and diving in head first, and trying to meet and talk to everyone. Like I've gone to a couple affiliate meetups now. ASE, Affiliate Summit East is actually next week here in New York. I'm very excited. My first time going. But I've been running this program for six months, a little bit less than six months, and we're seeing huge numbers, and it's in a very short period of time, and I know I've barely scratched the surface of what this could be.

Brett:

Yeah. Awesome. So I want to unpack a few things that you mentioned there and clarify a few things as well. So you talked about how, and I love this, by the way, you meet an affiliate, you get something going, and you say, "Hey, introduce me to somebody else," right? And that's just a good business tactic-

Krik:

Yep. That's the rule.

Brett:

... but I know that's leading you to others. But explain the broker situation. So some people are like, "Well, I've got these other contacts, but I broker with them." And your idea, which is a brilliant one, is "Well, then who are who we don't broker with?" But can you explain what you mean by that-

... and what that is?

Krik:

So these affiliate networks, a lot of times what they'll do is you'll pay them a $20 CPA, right? For every sale, I give you 20 bucks. Which is actually cheaper than Facebook, most Facebook CACs are 40, $50 what I'm seeing.

Brett:

Yep.

Krik:

So I'm paying $20, which is far cheaper. What they'll do is they'll pocket five of them, and then they'll broker the extra $15 to another network. So that's why affiliate's a little strange in the sense that they're secretive. So you do have to make friends, you do have to play really nice, and you do have to... It's like, "Hey, do me a favor, do me a solid." And I was the new kid on the block. It is a very closed network, and not a lot of... Everyone knows each other in this space. So I was the new guy coming with a new offer. But I don't know. I'm like, "I'll buy you a beer," that kind of thing, "Just introduce me to somebody." And it's worked out great. And this network and this industry has really welcomed me with open arms, and I think it's because I'm making money for them, they're making money for me, I'm a nice guy, and I think we there's opportunities for everybody here in this space. Maybe I'm doing myself a disservice by talking about it so much, but who knows?

Brett:

Yeah. But and the product is good, and it's working, and so you're making money.

Now, one of the metrics I know is really important to affiliates, and this is a new one, so I think a lot of people know cost per thousand, and cost per click, and cost per conversion, or CPA. But they probably don't know ECPC, right, which is it's Earnings Per Click, right? That's one of the big numbers, and I think I may have just gotten the acronym wrong, but whatever.

Earnings per click, that's a number affiliates care about. Can you unpack that a little bit-

Krik:

EPC, yeah.

Brett:

... talk about that?

Krik:

Yeah. So they want to know for every click, how much dollars am I getting? What's my CPA? And they want to see conversion rates. So for a hundred people that come to your website, how many are actually converting, right? How many are clicking, and what are you actually earning on that? So it's like Facebook, so that they're competing for the same bids, except for there's there's far less people doing it. That's the difference here. All the big companies are running on Facebook. All the big companies are running on Instagram, and they're starting to go on TikTok now.

Very few companies run affiliate, and the ones that do are, especially back in the day, they're more scammy companies. You find a lot of brain booster, libido booster landing pages and things. And those, and the market's wisened up. When I say the market, like customers, consumers have wisened up to that stuff. So that stuff doesn't do so well, as well as it used to, at least. It still exists. So real brands like me have a real opportunity to leverage this vacuum of opportunity, where they're looking for legitimate brands to actually put on their network and to sell them to consumers, because these consumers are captive. They're already on these sites. They're clicking. They're purchasing. They have intent. And it's cheap because you're only paying for conversion. And as far as I know, there's no other marketing funnel or channel that you only pay for conversion. As far as I know, it's just affiliate.

Brett:

Yeah, it's beautiful. I think you're right. I think that's the only channel. Google dabbled with a thing that was a pay for conversions model but didn't really work so well, at least not for most people.

So I love this. Let's talk a little bit about, because I think it's going to be new to a lot of people listening, how did you get started? So how did you craft that first offer? How'd you find your first affiliate? How'd you decide I'm going to pay $20 versus 50? And so walk us through how you got started.

Krik:

Yeah. So in November, one of these incent marketers guys reached out to me, and I was like I don't even know what to this. So I ran it in November, and-

Brett:

Yeah, and you've said that few times now, Krik, and sorry, you said incent. Can you spell that? What is that?

Krik:

Incentivized. I'm sorry. And so incentivized marketing.

Brett:

Yeah, I get it.

Krik:

Yeah, my bad. So someone runs an ad on a game, and you get gems, coins, tokens, arrows, swords, I don't know what the hell your people are playing, so they're incentivized to purchase your product. Which again, incent marketing is probably the lowest bucket and lowest tier of affiliate because they're incentivized to buy your product. Do they really want to buy your product, or do they just want the tokens and gems? But also, you're getting product in a consumer's hand, and they're purchasing with a credit card. So there is some intent, and then you could also re-target them, emails and Facebook, all that good stuff, right?

Yeah, so these guys reached out to me in November, one of the bigger guys, and I ran it in November. Didn't get traction. And I was like, there's something still here, though. I got an idea. So then I pinged my rep there, and I was like, "Guys, what's working? This doesn't work for me, and I'm not getting Facebook to work great. Show me a landing page that's working." And they sent me Dollar Shaves club. And I looked at Dollar Shave Club, how they're doing it, and then I started looking at Manscaped, and I started looking at these other guys and I was like, "Oh, they're doing a re-bill model with a sample kind of thing."

So we started running that, and it just paid back so much, like crazy. And now I'm like I got some guys I was just looking at this morning on their sixth, seventh re-bill because they liked the product.

Brett:

Wow. Wow.

Krik:

So it's crazy. It's all about your cohort data, right? So making sure consume... So I've got maybe 30% drop off immediately. So immediately, they don't want the product, they just wanted their coins and gems. But I got 70% staying in their first re-bill, then I got 40% staying in the second, then 15 to third, but I'm profitable on that next re-bill, and it keeps compounding and compounding. So I've got nearly 2000 subscriptions right now, and I've built that in less, in five months.

Brett:

Yeah. ...

Krik:

I don't know many companies that do that with as little budget as I have.

Brett:

Yeah, totally.

Let's talk about this. What are some of the things that you've learned through this process that you wish you would've known in the very beginning?

Krik:

Landing page is everything. I know Ezra Firestone always talks about it. It's all about your landing page. And we're still playing with ours, and I know ours could be better, so I'm still trying to get them to be optimal and always playing with them. But testing is so key, too. Having many of them, having someone on your team that can be building them constantly.

And then also just knowing your data. The Everflow platform, the tracking platform is so comprehensive and analytical, and this guy who was an ex-banker, I love it. But shameful of me not to actually take advantage of it, especially in the early months. In the past, I've only really, really started diving into my figures the past three months. The first three months, I was just running it, and I was like, yeah, $15, $20, and here's the offer. And now I'm really fine tuning it. I'm finding these little pockets of gems.

Another one I would say is fraud. Fraud is notorious in affiliate, and so you have to really be careful with affiliate, and you have to really be good about implementing fraud filters. Because especially if you're running re-bill models where you're paying $15 CPA for a $5 purchase, say, a lot of these publishers, they're like they're fake publishers, they're fake apps, and they're just picking up the Delta, they're picking up the $10 difference. So you do have to be very careful around fraud.

And then on top of that, we were always good about this, but I would still recommend anyone. If it's a re-bill model, just make sure you're really, really ethical about the way you display that there is a subscription. So we have it on four or five in places. I have it on the ad. I have it on the landing page. I have it at checkout. I have a button you have to click that says it's a subscription, confirm it's a subscription. It won't process without you clicking that button. And the email you get says it's a subscription at the very top and bold letters, "Manage subscription," and it tells you how to do it kind of thing. So we want to be super above board with that kind of stuff, because we don't want to mess with it. We want real customers. We don't want to game the system or anything. We want consumers who actually want our products.

Brett:

You want real customers. You want people to stick. You don't want to have those recharge and refund rates to get too high in some of those things, so that totally makes sense.

Krik:

Yeah.

Brett:

Can you talk a little bit about the fraud piece? Because this is a piece that we don't have to worry about as much through some of the traditional advertising channels. But what are the fraud controls, and what is it that you have to be concerned about there?

Krik:

Yeah. I mean, you get a lot of... Not a lot, but you get some frauds, so if it's stolen credit cards or prepaid cards. Just trying to, like I said, pick up the Delta between your CPA and the offer. So you have a $20 offer and the average purchase price is five, $10, that difference of $10 or whatever it is, $15, the publisher of the app is collecting it. And they'll do this at scale. So I had one weekend where I had 50, I got hit-

Brett:

So they'll just buy your offer a thousand times or something just because they're paying out.

Krik:

Yep.

Brett:

Paying out 10 and getting back 20, and so they're just making that margin, but you are not getting a real customer that way.

Krik:

Exactly. And then the re-bill never happens either, because I want it to either start on the credit card if it's a prepaid one, or they're just canceling subscription immediately. So you've got to be really careful about that kind of stuff.

So there's a couple good fraud filters out there. 24metrics is one I use, Fraud Shield's another. I have three, actually, in place at one time. This is you got to be really on top of it. IPQS, IP Quality Score is another one I use, and it's just rating IP scores, and checking to see that the billing address is somewhere near the shipping address kind of thing, making sure that legitimate email addresses, things of that nature.

And these fraudsters aren't too technical, right? They're just trying to scrape the bottom and try to find ...

Brett:

They're looking for easy wins, right? They're looking for people that are not paying attention, and not running these filters and stuff like that.

Krik:

Yeah.

Brett:

Got it.

Krik:

And for me, I wasn't the first couple months, because I didn't know. So like I said, one weekend, I had 55 hits, and that cost me, I don't know, a couple hundred bucks, and I was like five, $600. And I was like, "Oh, my God." And I had to go back to my affiliate and be like, "Hey, reverse these charges." And of course, they were pissed about it because they paid out already, and they yelled at me, like, "Krik, you've got to have better fraud filters. I can't be doing this."

Brett:

Right.

Krik:

So that's when we really start taking fraud seriously. Because we'd maybe have one or two a week here and there. But when you get hit 55 times in one weekend, that's a big problem, and that can't happen.

Brett:

Totally.

So talk a little bit about knowing your data. So you've got this platform you're using, Everflow. What is the data there that you would recommend really paying attention to and really getting to know to be able to maximize results?

Krik:

Well, it really depends. If you're running a re-bill model, whether it's on a bill or Recharge, I personally use Recharge, make sure it's integrated into there so you can see the re-bill rates.

Another good app I really, I think it's actually free, is called RAPP, R-A-P-P. It's really good for cohort data. It plugs in to Shopify, and like I said, it's free. So that's really good to get a sense of how are long people sticking around? What does your subscription business look like? And just get a sense of it, because like an LTV to CAC ratio in the industry, Lifetime Value to Customer Acquisition Costs, I'm trying to help you guys out, ratio.

Most people agree a three is optimal. I was running a 3.6, and I still am because I'm not super well funded. I've got to run profitable from day one. So I'm running a relatively conservative model because I need to be running profitably. And it's been working great for us. And going into Everflow and making sure that your publisher's conversion rates are good, and you just don't have too many publishers. Because there's sometimes we broke into each other, and it's just the race to the bottom. You got to make sure that there's not too much overlap, which there's going to be, especially if you're building a program, especially if you're doing it yourself like I did. But there's a lot of opportunity here.

And then also, don't be afraid of some of these, what I call, lower quality traffic sources. So Discount, or Coupon, or Incent, those aren't the best brand builders, but they are enough to get volume, and traction, and build a brand, and then you can scale into content, and email, and listicles, some of the higher quality affiliate channels.

Brett:

Yeah. So you have to, and then also part of this, too, is you have to prove a track record, right? So you have to prove to the better, more established affiliates, you have to prove that your model works, that the conversion rate works, and that those earnings per click are high and conversion rates are high. So maybe you start with the lower quality traffic, get your track record built up, and then you can go to the listicle affiliates and some of those other, the higher quality affiliates.

Krik:

Yeah, absolutely. And we had to do that. We did it with Men's Journal. We've done it with a bunch of email traffic. And again, I always say, look to your landing page. If your landing page isn't converting at these lower level stuff, it's not going to convert at the higher level stuff. So make sure that is really good.

And we're now testing Ezra Firestone's simplified pages now to really try and get the upsells. I actually consult on the side, and this company I was just talking to, I was like, "What's your upsell funnel?" And they're like, "Oh, we don't have one." And I was like, "Oh, that is necessary. That is a hundred percent necessary."

Brett:

Yep.

Krik:

Especially an affiliate where you're only paying for that click and that first conversion. But if there's an upsell, you're not paying for that, so that's just free cash to you. You want to make sure you have that implemented.

Brett:

And a lot of people will take that upsell, right? I'm like a marketer's dream. When there's something I want to buy and I'm in the mood, I'm like, "Ah, sure. Let's just buy two of them. Let's buy three. Let's give it a go." So those upsells. You know?

Krik:

Yeah.

Brett:

I know Ezra talks about making an instant 15% more, right, when you implement those upsells. And maybe it's more depending on your product, and your offer, and what that take rate is on the upsell. But yeah, how would you speak to that. As you started launching upsells, how'd that impact your numbers?

Krik:

Yeah. I mean, we're up about 12% uptake on it right now. So not the best, not the worst, but it's significant. I mean 12 percent's nothing to scoff at and we're happy with those numbers. We did it with the company called Conversion Bear or Honeycomb. We're actually testing out Zipify and Ezra's landing pages and upsells next. Because my next thing is I want to upsell subscriptions. I don't see why not. So Conversion Bear, Honeycomb doesn't allow that, Zipify does, so we're going to start testing those out pretty soon.

Another thing is just minimizing friction. Especially if you're running a sample page, same way that Dollar Shave Club that did it, one click, go straight to checkout, no cart, just zoom it, make it frictionless as possible. But the problem with that is, and with something we're realizing now, it lowers your AOV. So if the customer wants to buy a second product, you're cutting that. So that's what we're realizing now, that, okay, we need an upsell for subscriptions. Because we were before, we'd have two or three subscriptions. And then this past month, because we cut that cart, we're like, "Oh, no, our AOV went down." Like our orders went really high, and maybe the conversions increased slightly. But the AOV dropped so much they were like, "Okay, we got to find a way to get that back up," and we're realizing an upsell of a subscription will do that.

Brett:

Got it. So when you say upsell of a subscription, it wasn't a subscription to begin with? So they've got to click that button, though, to acknowledge the re-bill. What do you mean by upselling the subscription?

Krik:

Mm-hmm. So when you go, you can send like a, "Hey, would you like to add this to your cart as well for the next month?" kind of thing? Because right now, we do it like an upsell of a variety pack. You click it and you've already purchased your product. And the thing, "Hey, would you like to add your variety pack for another 15 bucks?" I forget exactly what it is. But instead of that, why not say, "Hey, you've just purchased a subscription. Would you like to add this subscription as well for a discounted price as well?"

Brett:

Got it. Got it

Krik:

So then the next re-bill you got both products. And of course you're cutting your margin slightly, but you're also raising your AOV, and you're moving more volume. And it's just, again, on affiliate model basis, it's free money because you're not paying a CPA for it.

Brett:

Right. Right. Yeah, that totally makes sense.

And so I want to unpack something you mentioned a little bit ago that wasn't super clear to me. You said you want to limit overlap when you're picking affiliates. Can you unpack what that means and how you avoid that?

Krik:

Yeah. So it's difficult. Because like I said, a lot of these affiliates broker out to other networks. So most of these guys are networks. What you want a lot of times, you want to look for affiliates what they have owned inventory, where they have their own websites, where they own their own apps. But even when they do, the vast majority of them still broker out deals.

Brett:

So where they own their own content, or own their own email list, or that sort of thing?

Krik:

Yeah. Yeah. Yeah, exactly.

The problem is the vast majority of these guys, not only do they have their own inventory you call it, but they also broker it out to other networks. And that's when things get a little tricky, because then you're always bidding against each other, and it just goes to the bottom. So you of want to have one or two really good email guys, whether it's like a madriva or active son, you want to have three, four really good incent guys. So AdAction, or Tapjoy, or Cactus. And then from there, you want to just go, like publishers that have good influencer lists. And from there, you kind of... Like LTK is probably the best one out there, or GRIN would be another good one. So you want to silo them a little bit.

But also like I said, when you're building it out in the early days, you just want to put it everywhere, see what sticks, see who's performing. And then once you see that, let's say you cut out the other ones, because they're probably just brokering out anyway. They don't have their own network.

Brett:

Yeah, totally, totally makes sense. Awesome.

And I know Krik has given a lot of resources and a lot of websites. I'll link to this in the show notes. So if you've go to OMGCommerce.com, click on podcasts, in this episode, I'll have links to everything here for you to check out.

So let's talk about what are some of the other keys to success? So you talked about some of the things you wish you had known from the beginning, and I know weaved throughout that with some keys to success. But what are some other really important things if someone's considering affiliate marketing that they need to look at?

Krik:

Diving in head first is always good, in my opinion. But talk to other people that have been there before, whether it's guys like me. Or I mean, I'm still learning. I'm still going to these meetups and like, "Hey, you seem like a wealth of knowledge. Can I buy you a drink later?" I've had maybe drinks since that one meetup four weeks ago, almost every single week, at least once a week, I've met with someone from that meetup just to pick their brain. I've talked my affiliates all the time about what do you think this landing page looks like? What are your thoughts on this conversion? How can we boost this slightly? Because these guys have been in the space for 15 years, the vast majority of them, and they're just a wealth of knowledge, all of them.

And like I said, affiliates, a little guarded. They're all a little scared to talk to you about things and who they're affiliated, who their partners are, which is a little strange for me, because I feel like I'm prying too much half the time. But I feel like there's a polite way to do it, and it works.

And just be willing to learn. Be willing to fail. Set caps. Like especially with new affiliates, set caps. I set a $2,000 cap with all my affiliates just because I need to vet quality of traffic. I need to vet them as an affiliate themselves, as well, just to see, do I like working with them? Is the quality ...

Brett:

So that cap is 2,000 in payouts is what you're willing to pay up front so you can then look at that re-bill rates and things like that?

Krik:

Exactly, yeah. So the first month, I cap my guys two grand. Second month, I do five. And after that, if it's good, it's unlimited.

Brett:

Beautiful.

Krik:

So I've got a couple guys that are doing 20 grand a month right now.

Brett:

That's phenomenal, phenomenal.

So as maybe the very first step, what would you recommend to folks? Like what platform to go check out? What should they read first? Where should they go first here?

Krik:

I mean, there's a lot of good resources out there. I personally lean toward Everflow. They've just been really good to me. So I'd actually reach out to them, talk to them a little bit. They have a big help guide. Perform CB is one of the biggest affiliate networks out there. They might be publicly traded, I don't recall. They've got a big PDF-

Brett:

What was the name of that one again?

Krik:

... workbook on affiliate marketing. Perform CB They've got a huge workbook, and that's really helpful, all the terms, all the ins and outs of it.

And then also maybe hire an agency, maybe higher an up Perform CB So you Perform CB actually works as their network, but they also manage your program. So if you don't want to go head first, then you can do that.

But quite honestly, like I said before, you've got to do it yourself in a way. Unless you're willing to pay $10,000 a month to one of these agencies, because that's what they're charging. I've met a few other ones, but they seem bottom the bucket. The real good ones, they're all charging 10 to 15 grand a month because there's so few of them. There's very few affiliate marketers out there. And if you're an affiliate marketer, most of them would rather just run a network. It's more profitable for them. So for them, it's why would I run an agency when I could run offers, and broker deals out, and take a cut of the CPA? Which makes sense.

Brett:

Totally makes sense. Totally makes sense.

Krik, this has been fantastic. I'm a little bit fired up now about affiliate marketing. I want to go deeper myself and learn this and check it out, so this is super cool.

Now when you and I were prepping, you talked about another superpower you have and that's been instrumental in building CandyCan, but also your previous business. So in addition to affiliate marketing, you also talked about adaptability as a superpower. And so let's talk about this really briefly, we're about at the end of our time. But you gave the example of cockroaches versus dinosaurs, right? So dinosaurs extinct, lots of theories as to why, but not as adaptable to a changing world. Cockroaches could live through a nuclear Holocaust and they would just still keep chugging along. So talk about what adaptability means to you and riff on that cockroaches versus dinosaurs analogy if you'd like.

Krik:

Yeah. Yeah. I mean, the thing about that, like the dinosaurs, this huge companies that have been around forever, whether it's even a ... or how big they were, and they disappeared and died. Or like not Arizona iced tea, they're still around, but some of these big beverage companies, but they didn't innovate, they didn't keep going. So these smaller companies that are able to change and move, like vital proteins, and they're able to constantly adapt, that's so key in being an entrepreneur.

And I came from a finance background, and then I became a food entrepreneur with chips and popcorn. And that business, maybe I did a quarter million dollars online, maybe. I mean, it was a very small part of the business. We were in 14,000 stores. We were distribution, retail heavy. We were sold in 10 different countries. We knew everything and everything about retail, distribution, promotions, slotting fees, all that stuff. By the time I sold that company, D2C took over, and that's why me and my business partner were like, "We have to build a D2C company." But shipping chips and popcorn online wasn't profitable. If you're shipping volume, it was too expensive.

So that's why we love this company and being able to ship things to consumers directly. You have direct conversation with them and it's more profitable. But we had to learn D2C. And then we learned Facebook, Google, and we learned pretty quickly this doesn't work for us. So then I had to learn affiliate marketing. So I'm constantly learning. I even look at my business partner. He's an accountant. The guy's a CPA. He's learned how to code. He's learned how to use illustrator, Adobe. He's building landing pages. So we both are constantly educating ourselves. I'm constantly sitting on webinars. I'm constantly just like YouTubeing how do I do this. TikTok, I learned how to make TikToks. I'm not a social media guy. I don't even have an Instagram. But I make TikToks. It's just constantly learning and adapting to a changing environment. Because otherwise, you won't survive, and I think that's just the difference between the ones who make it and ones who don't. It's just adaptability.

Brett:

I love it, man. I not agree more. You've got to be willing to go all in, as you said, and learn new things. Because the world is shifting, and the marketplace is shifting. And if you just key in on one thing and never look to go beyond it, you're going to struggle, and you're going to be limited, and you're likely not going to be here in five or 10 years.

And so really, really good, man. This has been a ton of fun.

Krik:

Thanks.

Brett:

For those that are listening and thinking, "You know what? I would like to try CandyCan as well," how can folks check out your product?

Krik:

You can go to eatcandycan.com. I actually killed a bag of Focus before I got on this, if you couldn't tell I was in the zone. ...

Brett:

Yeah. It felt like something was up. You were just on. You were on point. You were firing off amazing answers.

Krik:

Thank.

Brett:

So at least partial credit goes to the CandyCan product.

Krik:

Yeah. So you go to eatcandycan.com, E-A-T, C-A-N-D-Y, C-A-N.com. Check us out on Instagram, eatcandycan, TikTok, Facebook, eatcandycan. We have Sleep, Focus, Immunity? They're all efficacious. They're all keto. They all taste great.

Brett:

Awesome. Check it out. I highly, highly recommend it.

Krik, this has been a ton of fun, man. Thank you so much for doing this, and we'll have to chat again sometime.

Krik:

Yeah. Appreciate it, man. Good talking.

Brett:

All right, brother. Thank you.

And as always, thank you for tuning in. We would love to hear from you. What would you like to hear more of on the podcast, less of on the podcast? If you have not done it already, leave that five-star review. We would love that. Also, if you've not checked out my other podcast called Spicy Curry, hot takes on digital marketing and e-commerce, check that out as well. And so with that, until next time, thank you for listening.

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