Thoughts On DTC FC Goods Acquisition – Key Learnings

Recently, I heard that FC Goods (a brand by 4X400) was sold for $1.2 million.

This really piqued my interest – as the eCommerce brand that I am working with has the same characteristics as FC Goods.

Similarities of Both Brands

  • Gifting industry (People are buying gifts for either themselves or for their loved ones)
  • Low LTV (Low Customer Lifetime Value – Customers do not see the need to buy multiple/repeated purchases)

Our Advantage

  • Business is not as seasonal as FC Goods (which is reliant on Xmas & Father’s Day). Our products are generally more evergreen in nature, meaning that customers will have the need to buy them anytime throughout the year.

Our Weakness

  • Not able to ship internationally to a certain degree
  • The product is extremely big and bulky (comes delivered in a huge box)
  • The product also needs to be personalised, which takes up time (and margins)

Scaling an eCommerce business in 2021 is so much different as compared to 3 to 4 years ago. You can’t just rely on paid acquisition.

Key Learnings #1: Having A Great Product With A Great Story

If you are selling a product that commands a premium, you will need to pair that product with amazing storytelling.

The product has to sell itself, with minimal ambiguity.

Key Learnings #2: Clarity

People need to know exactly what they are getting.

Not just the product, but the returns policy, the delivery timings etc.

The clearer it is, the less friction your customer will face. And this results in an increase in conversion rate.

Key Learnings #3: You Can’t Scale On Paid Acquisition Alone

Looking back at FC Goods, they had a ROAS figure of 2.0.

And an MER figure of 2.8.

For the eCommerce brand that I am working with, they have a ROAS of 3.0 and an MER of 5.0.

We have been overly reliant on paid acquisition, that we didn’t have the capacity to think about our non-paid channels. For example:

  • How can we get our existing customers to buy more?
  • How do we get an organic flywheel to get more people talking about our brand organically?

These are important questions that I hope to solve. And as what Andrew from 4X400 says: “What I would do is try to solve that problem better, sooner, and faster.

Here’s the link to Andrew & Taylor’s organic flywheel Podcast:

Good examples of DTC brands which have a non-paid acquisition strategy:

Key Learnings #4: Limited Edition Product Drops Are Powerful Marketing Techniques

This is a strategy that frankly I do not have much experience in.

I know that my buddy Leon (who runs BOLDR Watches) is using this exact same strategy with great success.

Part of my to-do list to get this started.

PS: For the full list, you can check out: