eCommerce Lifestyle

The Compound Effect


Today's episode will help you increase your store’s revenue and become an authority in your niche as we talk about what I call The Compound Effect. 

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What's Covered in This Episode:

Examples of things to do in your business that can compound:

  • Ads

  • 5 products on a general store vs 5 products on a niche specific store
  • More pixel data
  • Better leads
  • Ability to cross-sell and upsell
  • Suppliers
  • Directory vs. Manual Approvals
  • Content
  • Hiring
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Links From This Episode:

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What's up everybody? Anton Kraly here from, the show that is designed to help ecommerce store owners increase their revenue, automate their operations and become the authority in their niche.

Today's episode should definitely help you if you're already running a store or even thinking about it, to be able to increase the revenue that that store brings in, and definitely to become the authority in your niche, because today what we're going to be talking about is something that I call the compound effect. I truly believe that if you're going to put your time into anything, it should be something that can build on itself over time. In today's episode of the podcast, I'm going to show you exactly why that matters, and I'm going to give you me actual examples of how we really implement this compound effect into different parts of our businesses to make sure that everything that we're doing is growing over time.

The reason this is such an important topic is because I obviously get a lot of questions from people that are either growing their stores or just getting into ecommerce, and I definitely realize a theme where most of the questions I get are what I would consider in my opinion, to be shortsighted. This is not the fault of the person asking them; it's just because you don't know what you don't know when you're first getting started.

For an example, some questions I might get are what products are trending right now? Another question I get a lot is what should my test budget be when I'm testing products on Facebook ads? Another question that I get a lot is what supplier directory should I join if I want to drop-ship? Again, they're not bad questions, but they're definitely shortsighted.

I first just want to address this whole compound effect thing and what it actually looks like so it can help you really think the right way when it comes to longterm growth.

Let's just pretend there were two people and they were both getting into ecommerce and they were starting from zero. One of the people just goes with those more shortsighted questions. They try to find a trending product, they try to test it on Facebook and they're going to go from zero to making some money. It's not like they're not going to see any results at all. If they're in it for the long term, they're going to figure out some skills, they're going to get something working, but what's going to happen is they're quickly going to get to a point where they basically hit their potential and their business either flat-lines or fluctuate slightly, but it maxes out because they're not doing anything that builds on itself, that compounds on itself.

Let's just say the other person in this scenario was using this compound effect and they were doing things that built on itself. Well again, they would still be starting from zero and they might even start on that same trajectory as the other person where they get to a point where the business is growing and flat-lining in the very beginning, but as things begin to grow on themselves, their business is going to double, then triple, then quadruple, then quintuple what that other business is doing, not because the person's any smarter, but because what they're doing is building things that grow on themselves, building things that can leverage this compound effect.

I want to give you some specific examples of how we implement this in different parts of our business so that hopefully you can get these takeaways and apply them to your business as well.

Let's look at this from an advertising perspective. Let's just be easy here, and we'll say specifically Facebook ads. Again, we'll take two different people here; one person owns store one, another person owns store two.

Well let's say the first person builds a general store, a store that sells a little bit of everything. The reason they do that is because they want to upload a bunch of products and they want to see what actually sells, what takes off when they throw a whole bunch of stuff against the wall. With that store and advertising, what they're most likely going to do is go onto Facebook ads and create what is known as a CBO campaign, a campaign budget optimization campaign.

By the way, I teach how to do all this in my programs, so if you're not a member of Drop-Ship Lifestyle yet, look for a link in the podcast description.

What the person will do with the first type of store, the general store is they'll have all of these different ads in their campaign and they'll be advertising this jumble of products, this mixture of products. What might happen is maybe one of them is profitable. Let's just say products for them, one through four, don't work out and then one product does. Okay great. What can they do to get to actually grow? Well maybe they can increase their budget and keep just that product in that ad campaign or in that ad set. That's most likely what they're going to do. They're going to try to max out their budget. When it comes from a compounding perspective to ads, that's why, when you see those charts, the one that kind of flat-lines is it's because they're going to reach that relatively early on.

Now let's say again, that first store was what people refer to as a general store that sells a little bit of everything. And then let's say the second person that owned store number two, built what we build, what I teach at ... again I'll link in the description ... but they build a niche specific store. Now with this, let's also just say they only have five products. Obviously you'd have a lot more, but let's just say for keeping things simple, they had five products and all of those five products were in the same niche.

For an example, let's just say that this store was selling grow lights to make a garden in your house. They go do the same thing and they set up their ads on Facebook, they make a CBO campaign, budget optimization ad campaign, and they have five ads and each ad is for a different product. Now a different product, but a product in the same niche that's very related. Let's just say as their ads are running and money's being spent, they realize that products one through three are not immediately profitable, but products four and five are. Okay, great.

Now they have some information. They know what products work. They can do the same thing that store owner one did by increasing their budget, but because they're in this niche specific business, this niche specific store, they now have a lot more information and a lot more opportunity. This is where compounding on itself first comes into play in terms of ads. The first thing that they have here as a benefit is their Facebook pixel and the pixel data is going to be a lot stronger because instead of Facebook thinking, you send somebody to a site that sells a spatula and a back posture helper, and a little crappy projector for the wall, now they know, okay, all of these people that are visiting the store and buying from it, aren't just interested in buying trinkets online; they're interested in this home gardening, these grow lights.

First of all, you have that stronger pixel. Second of all, now that you have this data and you have these customers, you can actually build another Facebook campaign, and let's just say you do a CBO again, where instead of just offering the same product, you're now offering cross-sells and upsells, because you have this data, you have these customers, your Facebook pixel is smart now, and it knows who these people are that are buying from you. Now out of your next five products, again, it would be more than that but to keep things simple, maybe you have three more winners that are cross-sells and upsells.

So instead of that first example where you're looking for those short term solutions of how much money should I spend to test the product, or should I build a general store and try to find one winner, now in the other scenario, you have winning products on the front end, you have a smarter Facebook pixel, you have people that can be repeat customers because you're selling within an industry and now your store and your ads combined are compounding. It's going from a couple of good sellers to a whole bunch more to all of the cross-sells and upsells that you can optimize for.

That's one of the examples. The easiest way to show you when it comes to ads, instead of just doing something that might work and flat-line, this is how you can do something that can grow on itself when it comes to ads and niche specific stores.

Now the next example of the compound effect that I want to show you when it comes to growing your ecommerce store is as it relates to suppliers. Again, a big question I get from people is which directory should I join? I'm not going to name names, but people send me all these companies. I'm well aware of them, have known about them for years, if not over a decade. The way a lot of these companies work is they charge you a membership fee. They basically say, pay us X amount of dollars, you'll get access to these suppliers and these products. That is something that you don't want to do. If you do it, what's going to happen again is you might see some initial results, probably not much because there's no price controls and there's a ton of competition, but you'll be at that place where you put things into place and you basically flat-line if you even see any results at all.

Now the other way, the way that we do it again, with a way that can compound, is by basically making a manual list of yourself.

By the way again, I teach you this all in detail in the drop-ship blueprint. You can learn more at I'll link that below.

But with the manual list you're going to be out there, you're going to be reverse engineering your future competitors, and you're going to be finding all of the different brands that you can possibly sell for. Now if you go this route, you're going to, again, probably start off in the very early stages on a similar path as the person that chose a directory. What might happen is you start a little bit slow, but you're going to get to a point where what you're doing is compounding on itself and you're going to have the potential over time to really just grow far faster than any of these people that looked for that easy solution.

Now here's why. Let's just say with suppliers you're doing your research and to make things simple for your manual list, the number of brands you found that you could sell for is 20. Let's just say, you're a brand new store owner, you have no experience. Even if you use the scripts I give you in the drop-ship blueprint, let's just say in the beginning, you get approved with 10 brands to sell for. Nothing wrong with that. It's somewhere to start. It's enough to get traffic, to get sales, to make money. But those are most likely going to be the 10 easiest brands, the 10 silver suppliers that will approve the most people.

Well what's going to happen is the other ones that don't approve you, those other 10, maybe five of them say, come back when you have some more traffic or you have more sales or you're open for business. Maybe three months goes by and you reach out to those five brands that told you that, and now those five brands approve you. Now you're plus five. It's compounding on itself. Your suppliers are growing because you're staying in the game and you're doing work with what you have. You're doing what you can with what you have when you can, and that allows it to compound on itself. Now maybe three months later, you have 15 brands and five of them are going to be probably more profitable than those first 10 that you got because you're doing something that compounds on itself.

Now maybe another three months goes by, maybe even six months and those last five suppliers in your niche, the gold suppliers as we call them, now you finally can get approved with them because you have more traffic, you have a sales history, you can prove yourself and your worth to them better. Now again, you're growing and growing and growing, and your store is basically compounding with its growth because you're playing the long game and you're letting your suppliers grow over time, versus the mindset of, let me just get one company, one wholesaler, one distributor, one directory that I could pay and upload everything from day one. Again, that person might see some growth originally, but it's going to flat-line very quick. Where yours, if you implement the compound effect into your supplier strategy is going to grow and grow and grow on top of itself.

Now the next thing I want to talk about is how the compound effect in our businesses applies to our content strategy. This does include blog posts, but it's more than just blogs. This can also be things like buyer guides on your store, so unique buyer guides that you or someone you outsource to writes. This can also be things like product descriptions, so what you're saying about each product on your store. This will also be things like social show posts. So what's being posted to your Instagram account, to your Facebook account, to your YouTube channel if you have one. Even things like the about us page on your site. So the content pages that people typically think about once and then never think about again, these are all things that you should be building on over time.

Again, the short sighted way of thinking is I'm going to throw up a quick Facebook page, maybe make one post on it. Maybe I'll write a blog post. Even worse ... this is the worst strategy by the way ... the person that says I want to have three blog posts a week, so I'm just going to outsource it to whoever I find first and whatever they write every week, it's going on my blog. Now if you use that strategy with your content, what's going to happen is again, you may, you probably won't, you may see some initial traction, but the growth isn't going to be there. Whether you continue to post a bunch of crap every week, because you want to post and you think posting three times a week is a strategy, or because you posted once and thought, okay, that's enough, let's see what happens.

Now the way that we leverage the compound effects into our content strategy and the way that you should as well to see again that growth over time, that's going to far surpass anybody that's not doing this, is whenever you're posting anything, especially when it comes to product descriptions, buyer guides, blog posts, you always want to do it in a way that's not based on, I need to get something out there. You should do it in a way that's based on I want to have the best buyer's guide for a specific product type. I want to have the best product description for SKU one, two, three. I want to have the best blog posts about how to do XYZ, whatever that is.

Instead of just putting it out there and thinking, okay it's done, something that's helped us so much is focusing on what we call pillar content and revisiting that content sometimes every three months, sometimes every six months, sometimes every year. But we have posts that weren't the best in the world when they went up that had become the best through revisions over time. That's what I mean by compounding. Instead of just building a store where you put up two blog posts, and three years later, those posts are still sitting there and nobody cares about them, instead revisit what you already have..

Look at who else is ranking for the things you want to rank for and make it better. Maybe that means building it out more. Maybe that means making it more concise. Maybe that means adding images or videos, or just breaking it up more so it's more readable, but make the most out of what you have so it grows on itself. Not a strategy of just throwing stuff up there to throw it up there, but being precise about it and making what you have even better.

Now the final example I want to give you in this podcast when it comes to the compounding effect, is as it relates to hiring. This is something I'll tell you, I've made many mistakes within the past just like I think every entrepreneur has. What I see a lot of people doing is they first think they want to hire somebody and they're looking for this rockstar VA that can do everything and anything for them and they hire somebody and they might get some results again, but then they realize that the person can't do everything they thought they could because they were looking for a superman or superwoman and they get rid of that person.

They get rid of them. Then they start over and the same thing happens, and they get rid of them. Then they start over and hire somebody else and the same thing happens. They're not managing their Facebook ads and their Google ads and they're not writing their product descriptions and answering the phone and they're not making their business 100% hands-off so they fire them and restart. That cycle repeats to where the output never goes up. Time moves on. Maybe they hit an original baseline of work offloaded, but it's never increasing. There's never any compounding effect to that.

The way that we try, it doesn't work 100% percent of the time, but the way that we try to do this in our companies so that output drastically goes up over time by compounding is not just by hiring based on work experience alone, but trying to hire based on really passion and what I would call learnability, somebody's ability to learn and to want to be the best at what they do. Because what might happen here is you might bring somebody on and for the first month, three months, hopefully not, but maybe even six months that they're with you, they're nowhere near their full potential, because they're learning, they're figuring out the systems. Ideally they're going through courses and information you provide them with and the goal is to have them become the best they can be.

Again they might even start lower than the person that comes in as more of a specialist, but maybe it's month, three or six, where they're outpacing that person, and then maybe it's month 12, maybe even if it's month 18, or maybe even if it's two years, and that person that came in is now outperforming what anybody else can do that was a new hire and hopefully they're even managing a team under them. What this is going to lead to is the compounding effect when it comes to hiring and when it comes to growing. Instead of this rinse and repeat of churning through people, you're bringing people in that can learn, that are passionate, you're training them, you're working with them and you're turning them into leaders so that you can see this exponential growth when it comes to your team.

Guys that's just a few examples. I can give you a ton more and in a lot more depth. I actually do inside of our training programs, specifically my branding accelerator, that's part of eCommerce Lifestyle. So if you want to know more about that go to and click on courses. Again if you're just tuning in and you're like, "Anton, this all sounds awesome, but I am brand new, I have no idea how to start," you definitely want to go check out I will link that in the description. That is the perfect place to learn how we build highly profitable semi-automated stores.

That's it guys. Thanks for tuning in. Hope you got value. As always, if you did, I would really appreciate it if you can leave a like and leave a review over on Apple podcasts. It means a lot, and I read all of them. Thanks in advance. I appreciate you. And I will talk to you in the next episode of the podcast. See you everybody.