eCommerce vs. Digital Marketing: Which is the Better Business Model?

Joe Troyer 0:48
What is the better business model? In your opinion, ecommerce, digital agency, which model is more sustainable, more hands off, easy to scale up, etc? So I think it's important to, to kind of break this question down a little bit, because it is not a one size fits all answer. If you are a beginner to digital marketing. You don't know SEO, you don't know PPC, you don't know retargeting, you don't know, Google Tag Manager, right? Like you don't know, the major platforms and how to run them. Right? You don't know WordPress, if, if that's you understand that.

For me, I think you're a beginner in this digital marketing world. I would never recommend that you jump into E commerce as a beginner in this digital marketing world. So I believe that if you're a beginner, if all those things are foreign to you, you wouldn't know how to go in and launch a campaign in the next 30 minutes on any of those platforms. And no, it was going to do okay. You're a beginner. That's okay. I'm not saying that to talk down to you. But if you're a beginner, I believe that there's not a better model than learning and creating income at the same time you learn how to do it, you create income, and that's via an agency. Right? performing services as an agency. Right? Where else right?

It's like a frickin high paid internship. Where else can you be a high paid intern like this, have your own business, make your own schedule, right? Learn how to do all the marketing and create an income. So I think if you're a beginner, that you should be doing some type of consultative services. Okay, while you are learning how to do things should why because you can make make money, make bank bro, right, you can pay your bills, okay, and you can get paid to learn. I started as a beginner right here, doing this exact same thing, right learning and creating my income. And what has always worked best for me. What has always worked best for me is my agency.

My agency has been the most sustainable business that I've ever had. Right? My agency has been the most repeatable business that I've ever had. It has been the business that once it's set up and going, the processes may change a little bit, but they don't change that fast. And when you have key people in place in the agency, they go update that documentation, giving my advice to you guys, most scalable, and leverage could really be either E comm or an agency depending on your execution. Okay. I think that the easiest for me and my skill set is definitely agency. That doesn't mean that I haven't invested in some e commerce businesses.

I've built quite a few econ businesses. And before we move on, I'll kind of give you guys a little bit of feedback or criteria. About ecom, though, e commerce specifically. So just so you can think it through. If had ecom businesses that worked for like years, and then fell apart in my face. And so I'd like to share kind of my takeaways from that. If I were to do e commerce again today. These are the things that I would think about, see the smile. I'd stay away from brand controlled markets. Okay.

What I mean by that to take it a step further is I wouldn't be drop shipping other people's brands. I've gotten myself in big trouble, drop shipping other people's brands, because when you drop shipping other people's brands, you're completely reliant on them for your markup, what you're going to make for your supply, right they also help control the demand. I would focus on creating your own brand. So now you're talking about ecom, creating your own brand, your own packaging, your own formulation, your own product, right.

And now there starts to be a whole lot more work involved then like building this E comm drop ship, do seven figures in the next four hours business that everybody seems to be toting these days, I would not be doing drop shipping, you won't be able to compete, you won't be able to be able to compete with the big drop with the big box stores, right? How can you offer free shipping on an item that costs you 60 bucks to ship can't, right, and you're not going to be able to compete in price either, because they're buying in ridiculous quantities.

The other thing with E comm is so I had a master distributorship with a company and then some basic distributor ships with some other companies all under one brand serving one market. And we're crushing it an E comm. This was many, many years ago, shortly after I got my start. Did the agency that went well it went great. We kept growing the agency and the agency resources. When we had extra time in that business, we would work on our E commerce assets that we were building.

So we built up these businesses from scratch, they were going frickin fantastic. We were in markets that weren't fads and weren't just gonna, you know, go like this and then just, you know, completely fall on their face after we were dropped shipping. We were in quote unquote brand controlled markets. And we had, you know, 60% markup, something like that. And guys, it all came crashing down in my face, because it was controlled by those brands, those brands decide that you no longer part of their bigger vision for where you're going as a company, you're screwed, right? I didn't own my own brand.

I didn't have my own product. And so I just literally lost everything with the Econ. What really sucks is that I was in the middle of actually selling the Econ companies. So they were going to give me a two year multiple on earnings. And I lost the distributorship that made the whole business work. Right, they just yanked it from me. And instantly, I went from having a huge payday. As soon as this deal was done to having nothing, it was literally worth nothing. Okay, so those are kind of my learnings from E commerce, I tell you that because I don't want you to feel bad for me, I tell you that because like I got burned, like raw dog, like really frickin bad.

And I don't want that to obviously happen to you. So if you're gonna go into ECOM, I caution you think about those things. But make sure that you have huge crazy margins, become your own brand and be reliant on fucking no one. That is the only way I would ever get back in to e comm. Okay. The other lesson that I want to talk here about the agency is that I've had local agencies and agencies of, you know, kind of different types.

Honestly, over the years, I have had agencies where I was the face, right? Where without me, like, nothing would work. Like I was the sales guy, right? I was the guy that then like, was the go to or the in between person and had all the meetings while fulfillment was happening. When a project was wrapped up, I was the one as well, right? Getting the sign off and everything were like, literally, if it wasn't for me, they wouldn't know anybody else in the business. Right? And like ever, all paths lead to me. Trust me when I say that, that sucks. Okay. I've also had businesses where I wasn't the face, by all means I sold a couple of deals here and there.

But in the grand scheme of things, out of all the total sales, I sold, maybe 2% of the sales, right? That's where it's at. Okay, so if you can build it in a way where you not all roads lead to you. Right, then by all means, you'll have the opportunity down the road to not only sell into exit, but it'll be a much more scalable and leveraged business for you while you're in it as well. Thanks for tuning in and show me the nuggets.