Alex Hormozi

So that's, we're going back to front.

They make the stuff, right?

They have some trade secrets or unique partners that they get their ingredients from, and or they have a unique way of combining unique ingredients, which makes them incredibly difficult to copy.

They have great logistics in terms of pick, pack, ship.

On top of that, they have a very lean organization

team on the paid ad side that is a performance marketing team that is done in tandem with a team that understands brand first approach.

And so what does that mean?

The most successful companies that persist over a long period of time in e-commerce tend to have a 70-30 split in terms of how they spend their money.

70 going towards top of funnel and brand awareness and associations, and only 30% going to direct-to-purchase.

And most companies that are starting out, and the vast majority of the ones that I talk to, it's basically 100% just straight-to-purchase.

You are building a dropship company that has no competitive moat, and you will always complain about the dupes and the Chinese companies that are going to come in and undercut you because they're in China and they have some of these other competitive edges that you don't have.

And so you have to know the game you're playing, because if you know the game you're playing, you'll know how to win.

And the last piece of this kind of competitive advantage that I would have in this perfect e-commerce business, assuming they have invested that extra money to have these premium brand associations, they have strong performance marketing.

We then have two more components to it.

One is we want strong brick and mortar retail partnerships so that you have 50,000 retail stores that are pushing your stuff out, or you choose to long-term create your own pop-up stores that actually are your own.

What's interesting is that nowadays the model has reversed.

It used to be,

build a huge brick and mortar presence across many, many states, and then start an online store.

The last kind of version of that was like Lululemon.

that I would say that was more popular and that I can think of at least.