New TikTok Shop Spurs BK Beauty

Paul Jauregui had a lot to have a good time when he first appeared on this podcast in 2020. BK Magnificence, the cosmetics firm he co-founded together with his spouse, Lisa, had reached $1 million in gross sales in its first 12 months. He returned in early 2022 with extra excellent news: The corporate had launched a thriving online marketing program and bypassed the Fb advert meltdown from iOS 14.5.

He’s again, having surpassed a whopping $10 million in annual income, bolstered by early success on TikTok Store. On this our third interview, he shares BK Magnificence’s development challenges, constructive TikTok vibes, and extra.

All the audio of that dialog is embedded under. The transcript is edited for readability and size.

Eric Bandholz: You’ve reached $10 million in annual gross sales in simply 4 years.

Paul Jauregui: Sure. Three years in the past, we have been celebrating crossing the $1 million mark. Final week, we simply crossed into eight figures. Managing that comes with challenges. We’ve discovered quite a bit. Our enterprise has three parts at any given time — provide, demand, and supply. Alongside the best way, we’ve had supply-related issues, forecasting glitches, and stock shortages.

On the demand aspect, paid buyer acquisition was an enormous a part of our current development. Going from $5 to $10 million in annual gross sales throws the provision equation out of whack. We’re doing achievement in-house, so our capability to ship items and packages to our prospects and get them out the door is reaching a degree I by no means anticipated. Final month, we shipped over 20,000 packages. We’ve a day by day baseline however nonetheless expertise big spikes with numerous occasions and launches.

Bandholz: You’re now promoting on TikTok.

Jauregui: We’ve been on TikTok Store for a few month and a half. These are the pioneering occasions. Once we joined, it was earlier than Shopify rolled out its native integration. We discovered some preliminary success. We have been additionally onboarding into Amazon. We have been halfway by way of the method and dealing with Amazon’s rising manufacturers staff. Nonetheless, a couple of days in the past I emailed Amazon to push that launch into 2024.

As an alternative, I must give attention to an space of the enterprise that aligns extra with our DNA. We’ve all the time labored with content material creators on social platforms. TikTok Store aligns nicely with that effort. We’re seeing a whole lot of success. It makes up about 15% of our whole income on any given day, and that’s rising.

Nonetheless, TikTok is spending some huge cash extending reductions to patrons on the platform — roughly 20-40%. We don’t pay for that. It drops on to the underside line. TikTok additionally provides free transport, which works into my pocket too. Each of these — reductions and free transport — are serving to with conversions.

There are a lot of advantages to getting in now with TikTok Store. We anticipate heavy promotions by TikTok through the vacation buying interval in three key areas: retailers, shoppers, and content material creators.

We’ve been working an associates program through ShareASale. That’s how we’ve compensated of us on platforms like YouTube. Nonetheless, it was not straightforward to have an affiliate hyperlink on TikTok. There’s no description field under the movies, and never everybody goes into the feedback. We’d see a video on TikTok about us, and our YouTube natural visitors would surge as a result of of us needed to Google us to study extra and purchase our merchandise.

All of that now takes place on TikTok. People watching the movies can examine us out proper there. Earlier than TikTok Store, dozens of outstanding creators on that platform talked about our merchandise. However, once more, there was no form of clear path to purchase. I checked out it as top-of-the-funnel consciousness.

Now TikTok captures the precise transaction. The gross sales come from content material creators speaking about merchandise they love. TikTok has enabled them to monetize that extra successfully and share it with the shoppers with out leaving the platform.

One in every of our prime movies on TikTok has about 1.7 million views. A content material creator put it out a couple of weeks in the past. It’s generated low 5 figures in gross sales and a great deal of commissions for her.

Bandholz: Is that course of just like Meta’s retailers?

Jauregui: No. We’re on Fb and Instagram retailers. We’ve adverts working on these platforms. However it’s not getting a lot of my consideration. Ecommerce is a precedence for TikTok. They’ve their very own native associates program, checkout, and talent to create demand and consciousness. There’s even a TikTok achievement. It’s all self-contained.

TikTok’s ecosystem is exclusive. Meta’s promoting platform is the world’s best buyer acquisition resolution. TikTok has that, too, but it surely’s enabling creators to earn a fee, incentivizing them to supply extra content material. Meta creators don’t get commissions that I’m conscious of — not less than not in an easy means.

So our focus now could be educating creators on TikTok and getting them onto TikTok Store. Many creators haven’t tried it. To assist, our staff created a information. We’re contacting creators already speaking about us on TikTok. That’s the place we see probably the most success.

Bandholz: The place can of us attain out to you?

Jauregui: Our website is I’m @pauljauregui on Twitter. I’m additionally on LinkedIn. Attain out, and I’ll ship you that information.

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