Cody Shilson
Appearances
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Uh, so internal orders, I think it's like, I want to say it was like 350 or something like that. So it's a higher order value.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
And then dash plaques, which are like little car show things that guys collect when they go to car shows. And yeah, so it's kind of, we sell them for $1.25. We sell minimum 50, but we sell thousands of them a year. I haven't even heard of that. Yeah. There's like these little pieces of metal that people just, they have these big boards that they set out of car shows. It's kind of funny actually.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Gosh, that's tough. Only because media for me has always been a hurdle. Do you like it? Okay, fair. I will do it, but I don't know that I love it per se.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
And I feel like that would be easier to replicate just constantly doing that.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
I'm always amazed how many ways to make money there are. Right. And that's one of the things our company was started on. So how do you get customers? Trophialis started in 1985, so almost, you know, this is our 40th year. And we've launched our Etsy business in 2019, and we did about $70,000 the first year. And then in 2013, or 2023, we launched Amazon and did about $300,000.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
No, my dad came from manufacturing, so I kind of picked it up there, but –
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Yeah, because that's where customers see the pricing, even if they call or anything like that.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
I don't know how many people like buy. Is it a super price sensitive market? Trophies? Yeah. Okay. Like car show guys are cheap.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
And then last year, we launched TikTok Shop, and we did about $270,000 in revenue, but $250,000 of that came in December alone. So we had a video go viral with 20 plus million views. So we went crazy. So 250 of that came in one month. So that was kind of fun. And you sold those. We sold those, yeah.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Our product on TikTok shop got tagged, and we sold 70 to 100 off of that. And we had a follow-up video, and that's the one that had 16 million views. Okay. How many TikToks do you make in a month? Right now, we're doing about one a day, and we're trying to ramp that up to three a day.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
No, it's an SEO firm agency.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
This one, about eight months. Eight months. Additionally, I've always had pretty good success with SEO. Okay. And then we stopped SEO because the company wasn't, previous company wasn't performing. We just let it go for several months and then hired another company.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
And not quite family appropriate, but yeah, little death signs that people bought for their boss or whoever it was. So kind of fun. But I was a little crazy for December.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Oh, it's a turn scroll.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
And you were able to fulfill on the amount of orders that came in? Yeah. Yeah, we did about 13,000 of those. So do you have manufacturing set up? Yeah, we produce everything in-house. Oh, all right. So we engrave, cut, build it, all it, ship it. Sweet. Okay. Across four different channels, most of our clients come through. Online and internal is through SEO and Facebook ads.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
We just launched Facebook ads and meta about October, November with an agency. And then Amazon, we spent about $7,100 a month between agency and ads. And then Etsy and then TikTok, still kind of figuring that one out a little bit since it all happened in December, but about $2,000 so far in ads there. Got it.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
What's up? How we doing? Good. Awesome. Let's talk about trophies. Yeah. So my name's Cody, Cody Shilson. I own Trophy Outlet. So last year we did about $1.72 million in revenue, mainly trophies and awards personalization, about $110,000 in profit, 6.4% net margin. And I'm third generation owner of the company. We've been in business for almost 40 years. That's amazing. Yeah. Kind of fun.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
We have some FBA, but most of it's FBM.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
And would you have that QR code go back to that channel? So like Amazon, or would it go back to our website? It's a good question.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Yeah. So in 2024, direct on our website, and I have this broken out per channel in a couple of slides, but total visits is about 90,000 visits to our site, about 2,500 orders. There's a 2.8% conversion rate and about 781 products. So it's a lot of products.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Raw materials, most of it we bring in from our vendors, kind of as we need it. We don't carry huge, huge. Except for the desk signs and stuff, we'll kind of stock those up, since they look so crazy. But that's kind of an exception to the rule. All right. Then what's been holding you back? So I think it's marketing.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Right. Super cool.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Fulfillment-wise, we proved that in December, we can handle about double fulfillment. I mean, with limited complexity. So I just need more people to the site, more people buying, and we can fulfill it. And also very product heavy with low margins. So working on the margin piece, getting profits up a little bit.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
I haven't really had any thoughts of selling, but I want to create a business that is sellable. Yeah. So I have the option if I want to sell or not. But I would love for it to be a fourth generation business someday. Got it. If that's an option. But yeah, that's kind of the ultimate goal. All right. So how many locations do you have? Because you have brick and mortar, correct?
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
We have one retail location now. We have two locations total. We closed the other retail location down and it's a production only facility.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
So the other retail location... you know, does maybe $150,000 in revenue out of that location, so.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Yeah, walk-in email stuff. Does it break even? Not really.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Is there any downside to just like consolidating to the one? It's something that we're actually looking at. Consolidating and going more e-commerce and kind of cutting the retail business. Most of our stuff's e-commerce anyway, so.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Yeah, yeah, like on my list. Or walk by, like, oh, I should go to the trophy store.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Right. So these are the issues. What other metrics you got?
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
yeah so numbers 1.72 million in revenue about 110 000 in profit uh 40 gross margin i would have expected gross margins to be higher for this business and it varies per product tons of you know like certain acrylics i was like expecting like you know one like you buy these trophies and they're like you know a dollar and you're like there's no like this is made of rubber you know but yeah okay so it just varies widely between the products and platform and stuff like that but
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
And net margin, about 6.4%. LTV, 133. And then CAC, 1190. LTV to CAC ratio, 11 to 1. And that's blended across all channels.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
I'm guessing. For the most part, or I'll look at some competitors, but there's not really good apples to apples comparison necessarily. Do you do like a cost plus or like? Yeah. So I have massive spreadsheets of all of our costs, things like that, factor in labor. And then I just kind of add my margins to it and They've slowly been trying to bring that up over the years.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
What percentage of customers are new versus return? I would say probably just on our website and internal customers, probably 50-50. Okay, because this is a four-year-old business, so you'd think there'd be a decent amount of return. Yeah, a lot of our business, I mean, $530 in revenue comes just internal, so emails, calls, things like that. Most of that is repeat business.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Do you have very high fixed costs in this business?
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
So what's the goal? The goal is $3.5 million in revenue. I really want to double revenue going into this year. This year? This year, yeah. OK. I think we can do it. So who do you help? So mainly coaches, event organizers, as well as businesses and organizations, which is like HR departments,
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Yeah, our COGs are pretty high. I do think there's a pricing issue.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Which we'll get to. OK.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Yeah. It looks like. Yeah, it's pretty decent. And I learned that a few months ago coming here the first time, so I started increasing.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
That's profit, yeah. Okay. Yeah. Interesting. We estimate people stay about three years, excluding Etsy, Amazon. Yeah. Those ones are a little harder to calculate, but through Trophy Outlet, they order yearly pretty consistently. We've got customers that have been with us for 30 years, you know, things like that, so. So pretty heavy repeat business there.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Once we get a customer, they're fairly sticky.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Yeah, my parents ran the company. They didn't have a price structure. They just kind of.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Every year. Yeah. Interesting. About February, March of every year is when our vendors raise prices. So then I adjust accordingly. Got it. Was their margins the same when they were running it? Much less. Lower. Oh, way low. Like not making money at all. So my mom was running it. I remember very distinctly looking at a product and the cogs on that were like $50 and we were selling it for like 45.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
I mean, this does not work. Yeah. So I immediately raised prices. It like, you know, doubled them almost. Okay. And I'm constantly just continually up them. Yeah. I think I have some ideas there. All right. What else you got? All right, so channel breakdown. So direct traffic and internal is our biggest 13 to 1 LTV to CAC ratio. Amazon, our highest conversion rate at 9.6% conversion.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
And of course, the blended 11 to 1 LTV to CAC. Interesting.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
in the St. Louis market that we're already in. So he's getting old, wants to retire. And what's he doing in revenue and profit? He does about double what we do, about $3 million in revenue. I don't know profits yet or anything. We haven't even got to that point yet. But he's got a, from what I understand, he does pretty decent on his margins just through communicating and talking to him.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
He does a lot more custom stuff, which there's a lot higher margin on some of that stuff. He has a lot bigger orders. which is nice. So he can bring it in from China or from elsewhere and keeps his margins low or keeps his margins higher. I'm sorry. Yeah. I got you. The biggest concern with him is 70% of his revenue comes through one customer.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
business owners sales managers you know people like that okay as well as gag gift yeah purchasers I got that I got that vibe yeah okay so how do you help them so we offer free engraving fast shipping everything we do is personalized to the business or the individual something like that they go to the website to our platform purchase you know add the personalization info their logo things like that and then we fulfill it if it's a needs approval anything like that but most things ship in one to two days so
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
So that's a pretty big, pretty big red flag. I wouldn't buy that. Wouldn't buy that? Gotcha.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Yeah. That was actually one resource I thought was, well, if I could buy this, then it's cheap enough.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Even if he was willing to stay on for two, three years, four years to help that transition?
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Which most of his stuff is shipped as well. It's not retail business.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Yeah. I mean, he has a retail storefront, but most of his business isn't. Is online. Yeah. But 70%. It's not necessarily online. It's through basically wholesale. Yeah. Customers that sell, you know, to large, large clients, things like that. I'm not thrilled about it.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
I would have actually kind of pursued it a little bit just to get the information. It was a connection through one of our vendors. So that's how I got to know him.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Currently, that's where we're at, yeah. We do some wholesale currently, and it's just easier. But that just kind of came naturally. It wasn't anything we pursued necessarily. But yeah, the majority of it's all e-commerce.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
So that's the Amazon, Etsy, TikTok, and all that. So it's like 40%? Yeah. Roughly. And that's kind of been the fastest growing since 2019. That's when we launched that. Which is all under a different brand, technically. Okay. We started a different brand back then because we were... We don't want the explicit vulgar to be under trophy out. Sure. You know, church moms and stuff get. I hear you.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
Sweet. So how do you make money? How do we make money? All right. So on our website, direct on our website, most of our products kind of land in the $100 to $150 price point. We have products that range from $4 all the way up to $900. So it's a wide range. Most popular item is a four-, five-, and six-foot trophy, which kind of lands at about $89 to $130.
The Game with Alex Hormozi
Building a $3,500,000 Business for a Stranger in 42 Mins
No, but that's where my skillset lies too. Okay. Or his operations. That's.