Unpacking Ogee's Success in the Saturated Skincare Market: Alex Stark

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‍Adam: We are live on LinkedIn. I'm joined by my friend and the co-founder of Ogee Organic Skincare, Alex Stark. So, Alex, let's dive right in. Can you give us a background on how you started OG and how you've managed to stand out in a saturated industry?

Alex: Hey, Adam, thanks for having me. Ogee is a luxury certified organic skincare company. It was started by myself and two other people. One of my co-founders came from a luxury fashion background, owning a fashion company previously, which gave him a keen eye for design and branding, as well as a strong business sense.

My brother, another co-founder, worked at a contract manufacturer for skincare for 12 years, developing formulas for some of the biggest skincare companies in the world. I brought a strong background in operations and logistics to the table. We combined our knowledge and decided to start a skincare company.

The trend in skincare is leaning towards clean beauty, especially since up to 60% of what you put on your skin is absorbed into your body. With food trends moving towards organics, we saw the importance of catching up in skincare. However, there's a lot of trickery in the industry, with products claiming to be clean and healthy but actually aren't.

We aimed to create a product that's certified organic, safe, effective, and with a luxury design. We noticed many organic products had a neutral, hippie-ish color scheme and didn't perform well. Our goal was to position our products as luxury, competing with synthetic brands, but without the harmful chemicals.

Adam: That's really interesting. The luxury, premium appeal of the products definitely stands out. Did you have a background in e-commerce, or was this a completely new venture for you?

Alex: It was completely new to me. I came from a background in shipping, driving, and managing crews on large cargo ships around the world, which is 100% different. However, this experience showed me that you can completely change your career path and excel if you dedicate time to learning. It took time to learn Shopify, digital marketing, and all aspects of e-commerce, but it's possible to become as proficient as anyone in the industry if you're willing to put in the effort.

Being a business owner and achieving success in life, in general, means continually moving forward. If you encounter something you don't understand, you have to figure it out. Starting a business is overwhelming because of all the unknowns, but you find ways to overcome these challenges. It's been an incredible learning experience.

I remember seeing a post on LinkedIn by Oliver Cookson, who started Myprotein. He talked about the importance of learning how to do everything in the initial months so you can then hire people to do it the way you want. That's something I've learned as well; knowing enough about each aspect of the business to judge if the people we hire are doing a good job.

In the beginning, we didn't have this knowledge and trusted experts to handle things like digital marketing. But as I learned more, I realized some weren't performing as well as we expected. It's crucial to have a foundational understanding of each area of your business to ensure you're getting the quality of work you need.

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Adam: Later on, we'll delve into the topic of red flags when hiring freelancers and agencies. I'm definitely interested in picking your brain on that. But first, did you ever encounter pirates during your time on the ships?

Alex: Yes, I actually did get captured by pirates, not once, but twice in West Africa, for ransom. These weren't the classic Somali pirates; it was actually our own crew members who orchestrated a mutiny for money. They took over the ship twice to get money from our company. After the first incident, we paid the ransom and fired everyone involved. However, in West Africa, no one got arrested for this hostage-taking, so word spread around Angola that our company would pay a lot of money if you held them hostage with fire axes from the ship. Owning a business can sometimes be equally stressful, not life or death, but it feels like it sometimes.

Adam: That's a fascinating story. I read somewhere that the capital city of Angola is the most expensive place for an expat to live. Why is that?

Alex: It's because of the oil, gas, and mineral industries there. They know they can charge a lot because we all have to be there. It's incredibly expensive; I remember apples being like eight dollars each. If you don't want to pay for a $700/night hotel, you don't want to see the other option because there isn't one. They've got you, and they can charge whatever they want.

Adam: Our friend Peter just commented that you held the crew members hostage and demanded a pay rise. I guess that's where the money for Ogee came from?

Alex: Yeah, that's right. I had events that I don't talk about often.

Adam: Going back to Ogee for a minute, the skincare industry is very saturated. How have you managed to gain leverage and get the ball rolling in the beginning?

Alex: We knew we needed a point of difference. We stood behind our values of being certified organic and having something that backed us up as safe and effective. For branding, we had to make a huge pivot in our design because it wasn't where it needed to be for the luxury market. You just need to get started and be willing to make quick pivots if those points of difference aren't there or strong enough. We started on a different custom website platform and realized it wasn't working for us. We wanted to be a digital technology company that sells skincare, so we switched to using cutting-edge software and website tools.

Adam: That leads us nicely to the next question. You're on Shopify now. Was this a transition because you started off on a custom-coded solution and realized you needed a better alternative?

Alex: Yes, exactly. We were talked into a custom platform, and it was a nightmare. It took forever to build, nothing worked correctly, and every time we needed to add a simple feature, it took months and a ton of money, and it still didn't work correctly. With Shopify, they've thought of everything. You can add a $10/month app for what you need, whereas a custom site on a custom platform can cost thousands for something as simple as a special button, and then it might not work correctly. Shopify integrates with everything out there, making it a much better choice for us.

Shopify integrates with everything, like fulfillment centers and essential tools like Klaviyo, making it incredibly user-friendly for e-commerce businesses.

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Adam: Absolutely. Speaking with Ronak, the CEO of Obvi, last week, I realized Shopify simplifies the selling process, which is why it's become the market leader in e-commerce. Shopify has conducted extensive split testing and conversion rate optimization, especially on their checkout process.

With billions of dollars processed, you can trust their best practices, unlike custom sites where you're often guessing what might work. Have you considered Shopify Plus and its benefits for your business?

Alex: We are on Shopify Plus. It offers great features that we utilize, such as enhanced support. Downtime in e-commerce can be costly, especially during peak times, and Shopify Plus support is excellent, providing help 24/7. This significantly reduces potential downtime. Additionally, the reduced credit card processing fees on Shopify Plus can offset its cost. I recommend Shopify Plus to businesses that reach a certain revenue threshold.

Adam: Samuel mentioned he's glad they started on Shopify. Considering the costs associated with plugins and apps, how do you manage to ensure a return on investment and avoid getting carried away?

Alex: It's easy to get carried away with Shopify apps because they're so accessible and affordable. However, it's crucial to choose only the apps you really need, as they can slow down your site and cause issues. We've pared down our apps significantly over time. Key apps we find indispensable include an upsell/cross-sell app like Nosto, which uses AI to recommend products effectively, a loyalty program app like Swell, which offers extensive customization, and a review app to display product ratings and reviews. These apps are essential for enhancing the customer experience and driving sales. And then, outside of that, I would add them, others very carefully. Obviously, you need the plugins like Klaviyo and those types for the external software you're working with.

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Adam: Yeah, Charlotte's got a good question, actually. I've seen this asked a lot recently in some conversations. At which point in revenue would you look at Shopify Plus?

Alex: Well, I guess I would do it on two factors. I can't quite remember the difference in pricing, but I would look at the difference in credit card processing fees for Shopify Plus versus Shopify and see at what point it makes sense just based on the credit card fees where Shopify Plus is then a better value because of the money it's saving you. And then the other part I would look at is how much an average 24 hours of downtime would cost you and say, okay, if Shopify Plus can save us 24 hours of downtime for every three months or every six months or whatever, then factor that into the decision as well.

Adam: Interesting. Let's talk a little bit about marketing strategies. I know you do a lot of Facebook ads. Give us an overview of all the stuff that you have going on, what's been most effective, and also what's been least effective as well, which you wish you hadn't put so much time into.

Alex: Yeah, well, what's been most effective for sure with Facebook ads is running ads to cold traffic. So when we say Facebook, we're talking about Facebook and Instagram ads. They're all controlled by the Facebook Business Manager platform. But running ads to cold traffic, yeah, that lead them to like a pre-sale page essentially or a blog-type page that kind of warms up the people that haven't heard of your brand to the product you're selling them with where you can give them more information because the goal of an ad is to look relevant and then bring them to your website.

But a lot of times, the problem with that, if they've never heard of the brand or the product, you bring them to a product page which you can't put enough information on where if you bring them to like a landing, a pre-sale landing page, you can give them a lot more information, a lot more facts about the product, customer testimonials, PR testimonials. The landing page was huge. The landing page in between the product page was a game-changer for us.

And I think what I wouldn't put so much time into is, with Facebook and Instagram ads, you see a lot of noise, a lot of gurus out there saying like, "You gotta try this, you gotta do this. Don't optimize for conversions, optimize for traffic." And you won't get the return today, but in six months, you'll have all these people in your funnel. But that's all these crazy guru tactics. Almost the majority don't work, and you'll spend a lot of money, a lot of time, and they'll post screenshots and stuff sometimes, but you have to filter out a lot of noise in advertising and know the people.

Like, if you're in a Facebook group talking about ads, they can be really helpful, but you need to know the people in those groups that have good information and know who to listen to and then ignore everything else. We'll come on to that again towards the end of this live because I want to talk to you about red flags with gurus and freelancers and agencies as well.

Adam: This is a good question, actually, just to go off and back to Shopify before we move on from that. Is there any disadvantage with Shopify? Because I know we can fall into the trap of just raving about it, but there are some disadvantages as well, right?

Alex: I think, yeah, I think a disadvantage would be if your site looks like every other site out there. But, and that was, you know, when we got sold a custom platform early on, part of it was like, that you can't customize your Shopify site, which isn't true at all. We use Rainy City Marketing, and they transferred our site from this custom platform to Shopify and made it look very custom, made it look beautiful. They did a great job with it. And so we got the custom-looking site still on Shopify.

So like, you just don't want to use the most generic out-of-the-box thing that every other Shopify site that uses the generic out-of-the-box theme looks like, which is easy to achieve. So that, I'd say, would be the main disadvantage, if your site looks like everyone else's. But to be honest, like Shopify, that was one of the best decisions we made for Ogee early on. I can't recommend it highly enough, switching to Shopify.

I can't recommend highly enough switching to Shopify, and I want to tell you about how many problems it will save you from. If you don't have Shopify, for sure, the one site platform they will integrate with is Shopify. Everything else might not, and you'll have to pay a lot of money to connect that with other services or platforms if it's not Shopify.

Alex: Yeah, I suppose it's the market leader for a reason. It just goes back to simplicity and keeping things simple, not trying to reinvent the wheel all the time. Samuel loves it; it's like the Apple of websites. It's like this one piece of thing that just works really well, and they've finessed it to be great. I completely agree.

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Adam: Alex, what social media platform have you had the most success with driving traffic and sales to your website?

Alex: Well, for paid advertising, definitely Facebook and Instagram ads. We've tried everything else, you know, Snapchat, Pinterest, Twitter, and for paid traffic, nothing has compared to Facebook and Instagram ads. I want to diversify ad spending away from Facebook and Instagram, but for sure, nothing can do it as well as Facebook and Instagram ads right now.

I do think that TikTok has huge potential. We're putting a lot of time and effort into getting more organic reach on TikTok specifically and reaching out to influencers to try our products and post about us. Organically, I think Instagram has been the best for us, and I think TikTok will be really big for us.

Adam: Are you not worried at all about becoming too dependent on Facebook and Instagram for your business?

Alex: Well, yeah, I am worried about that, which is why I was working hard on doing more lead generation campaigns on Facebook this morning. Email has stood the test of time; it's still hugely powerful. A big part of Facebook and Instagram ads working at a profitable level is having the whole digital ecosystem in place, part of that being email. They might not buy the first time, but if they sign up on a pop-up on your site, we can get them to buy 20 days later because our emails are good. I'm trying to generate as many good emails as possible, not just a lot of garbage emails from lead gen, and build our email list and an SMS list as well.

SMS is doing really well for us. We're trying to acquire as many pieces of customer information as we can so it's not all just owned by Facebook and Instagram. If Facebook and Instagram stop working as well, something will replace it. Before Facebook and Instagram, it was Google ads, which we still do, but you can't drive as much cold traffic as you can with Facebook. People are still going to need to buy, and they're going to need to see your ads somewhere. We're always trying to be on the cutting edge and on the upside of the next big wave in marketing.

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Adam: Definitely. The danger is that some people look at channels individually and get sucked into isolating the data, only looking at it through one lens, where, as you said, it is an ecosystem, and you have to consider the lifetime value. You purchase that data from Facebook; it might not have been profitable immediately, but it becomes profitable over time.

It might not have been massively profitable, but you've got a new customer through the door. They try your products, they tell their friends about their words of mouth, and then also you're able to re-market them in a much more cost-efficient way as well.

Alex: Yeah, that was actually another huge thing, like this blended return on ad spend. You know, not just looking at Facebook in a bubble, not just looking at Google in a bubble, not just looking at email in a bubble. They're all working together, and they're all lying to you in a sense as well. They all tell you what their return on ad spend is, and like we realize with Snapchat and Pinterest, they say you have an amazing return on ad spend, but they're just stealing the attribution of sales from Facebook ads. And yeah, so like tracking your numbers really closely and comparing them to one source of truth, like Google Analytics for Snapchat, Pinterest ads, Facebook ads, to make sure that what they're telling you is true. Facebook, funny enough, underreports the return on ad spend, where every other platform over-reports it heavily.

So, tracking your numbers to get a blended return on ad spend across all advertising spend versus all website and Amazon sales if you're on Amazon too. And knowing, like if Facebook's your main advertising channel, what return on ad spend you need in Facebook to be profitable. And knowing that whatever Facebook is telling you for return on spend isn't a true ROAS, but knowing what you need, regardless if it's true or false, to scale.

Adam: Definitely. It's funny actually, that light came through; you look like the second coming of Jesus.

Alex: I know, I feel like the second coming of Jesus

Adam: Hold on one second. You must have been taking the Ogee skincare products all of a sudden, halfway through.

Alex: It's true. That's what Ogee will do. That's the one takeaway I really want people to pull from this live chat, is that you should go and amuse immediately by Ogee from Ogee.com, and you'll be the second coming of Jesus.

Adam: Yeah, you've just lost that glow now that you've taken the problem going back to marketing strategies. So we talked about some of the good things that obviously have worked well for you. Do you ever feel as though there's been some missed opportunities recently? I've spoken to a couple of e-commerce owners who've said they wished they would have put more emphasis into things like SEO, even though it's a long-term play, they feel as though if they would have started at the beginning, that might have started to pay off now. How do you feel about that?

Alex: Well, with SEO specifically, we were really focused on that in the beginning, and the same thing, like I said before, there's a lot of gurus out there that want to charge a lot of money for SEO. And SEO is really tricky because you can't tell if what they're doing is actually helping for a long time. So, yeah, at least in Facebook ads, you can see, like, alright, I spent $100, like I got sales from it, but SEO is like, alright, pay me a lot of money to consult for you, and then maybe six months down the road, you'll see something happening, and you won't know if it was because of us.

But so, I haven't been that focused on it. Honestly, and I don't feel it's that important for us, but maybe I'm wrong on that. I do wish that we've been more focused on lead generation for emails from the beginning, you know, like we've, like Facebook, we're always doing conversion ads trying to get purchases right away, and you can get leads cheap, and a lot of people aren't doing that anymore because they think it's all about conversion, which is the same I've thought.

But now, we're going to try a lot harder to get email capture and doing that all along because that's like a long, uh, that brings in like a lifetime a lot of revenue if you're adding a lot of new email addresses every day.

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Adam: How are you doing about what ads are you serving to those people, what's the incentive to opt in?

Alex: We're doing a giveaway, and honestly, like, we aren't great at it, but I keep hearing people that I know in the e-comm space that are doing really well with it, and we've kind of tried it a little bit but haven't put enough focus on it. So, that is a short-term goal to really get this going for us, and doing a giveaway, like saying on the ad that sign up to win $500 in free products. And the ad then brings them to a landing page where they enter their email and phone number for SMS.

So that's the incentive for them to sign up, and then once a month we do a drawing out of those people to give the products away, and then the next just keep it kind of ongoing. What about the quality of those leads because one thing I've noticed, this might be quite interesting to you, is when we lead in on the websites with a pop-up, if we go with 10% off, the leads always tend to, there's a very high return in terms of person that goes through to purchase and also engage with the emails.

When we've run the sweepstakes, it generates a lot of leads, sometimes much more than the, um, arbitrary discount off the first order, but they're also less likely to convert and also take up storage space inside the account and become unengaged very quickly with the emails. Like, how do you have a plan to mitigate that, or is it still being monitored at the moment?

Alex: It's going to be monitored and try to use the best audiences to show the ads to try to get the best people, but that we did it on a small scale a long time ago, and that is kind of what happened; we got a lot of low-quality leads. So, the goal is to track it more closely and segment these people out to see what they're actually buying from us.

So I think to do really good targeting with ads to get the people on the list and then also to really keep a close track of the people that sign up because I think we didn't track them well enough, so it was hard to say scientifically what they actually did.

Adam: What about things like quizzes for skincare consultations and stuff like that?

Alex: We've thought about that a lot. Hannah and my team would love to hear you saying that because she's wanted to do quizzes for a while. I do think they're a good idea, and that could be a really good idea to incorporate into the lead generation to qualify them more.

Adam: Yeah, I think Beardbrand is one that does quizzes quite heavily on their homepage. I've seen some brands do it and not really pull it off; it's just very generic. And then I've seen others that you can tell they've probably invested a lot of money into it as well, and it's a key part of the funnel, at least on the front-end acquisition front.

Alex: That's like, if we do it, that's the hard thing with, I guess, owning any company, is like there's so many different things you can do and put your time and energy into, and we want to do everything really well and not do it like mediocre. So, it's like, yeah, deciding where to put your energy into. Like, I love the quizzes, but we have a small team. We have a really good team of people, but we're like small. It's hard to do everything.

Adam: Definitely. Yeah, let's talk a little bit about—we touched base on in the beginning—we mentioned like gurus. Being burned by agencies and freelancers, unfortunately. Like, what are the red flags that you should look out for immediately?

Alex: Well, I would say that big agencies, in general, have never worked for us. The bigger, more famous agencies for digital advertising, for email marketing, they charge the highest prices, and you get the lowest quality work. But the problem is, with the really big agencies, they look so good on the outside.

All their marketing is really sexy, and they have the biggest brand you've heard of. You're like, "Oh my God, they're doing Nike. They've got to be great." But I will say, any company that's doing a massive, some of the biggest brands in the world, what that means is they're going to pay no attention to you and devote all their energy to that big brand that they're advertising to you with. And so, with these big, I just am really down on big agencies, to be honest. They bring you in because they look so good on the outside, and then they assign your account to someone who has very little experience doing it.

We've had much better luck with small agencies and using your intuition, like with the founders of the agencies, like you with your email marketing. Getting to know the people that run the agency and that actually will be spending time with it because they're a small agency and they still work with the clients is the way to, using intuition, being like, "Okay, I trust this person, and I know that he's actually going to spend a lot of time on my account." Whereas the big agencies, they'll have high-level people on the calls to suck you in, but then in the end, who's actually working on your account is like an intern that doesn't know what they're selling you, unfortunately.

Adam: I have heard that a lot. It's not something, again, where it goes back to what we were saying before the call, that's the business model we're trying to work against, and also why we're trying to increase our prices to become more profitable and provide a better managed service because this is just my personal goals.

I don't want to manage tons of people and have that stress of the churn of constant revolving door, and you know, haven't had to sail so hard. I'd rather have really strong relationships with a core group of people who stick with us for the long term. I think that just makes more sense, but a different business model completely.

I think with services, that is always an issue. The more you want to scale it and grow it, you need to recruit more people, and then the quality of the work becomes diluted, and ultimately everyone ends up unhappy. But yeah, a completely different business model altogether.

Alex: Yeah, I would say that your agency model is like the ideal agency we want to work with. We either work with someone like you or try to hire someone in-house to do it because, but not at a big age. Like, we want someone like you that doesn't want to just turn a ton of new clients every month to bring in more revenue. Like, we want you to, we want someone like you that has a limit that charges a premium because they do a good job, and that you stay with because they do a good job.

Quick Fire Questions and Answers:

Adam: What are some of the best ways to increase average order value?

Alex: Shipping threshold testing for sure. Interesting, keeping thresholds. The best way to set it, like 15 to 20 above your average order value currently. So if your average order value is $100 now, try setting your free shipping threshold to like $115 or $120.

Adam: Best way to increase conversion rates?

Alex: Go through your website as a customer many times, checking out on mobile, desktop, different browsers, and see anything that feels weird to you. Would try to do it with fresh eyes. Try to get friends to do it with and refund their orders too because a lot of times, we overlook things that are problematic.

Adam: Best way to increase customer lifetime value?

Alex: Email marketing, customer loyalty program like as well. Email, yeah, but email marketing would be number one for sure.

Adam: Advice for new e-commerce owners or anyone who wants to cut their teeth new to the game?

Alex: To use Shopify, like no question. Don't get tricked by people. And to be careful who you listen to as gurus. Glitz, mom. Cool. Well, don't drop the gurus with Lamborghinis, I would say.

Adam: How can people contact you, Alex?

Alex: They can add me on LinkedIn, and I'll try to check LinkedIn more often and respond.

Adam: We'll leave a tag in the comment section here, so if anyone wants to follow up and pick your brains a little bit further, they can't do. But mate, it's been a pleasure. There's been so much knowledge involved there, and I'm definitely looking forward to reposting this and sending you some spliced segments so that we can repurpose it and give more people more value. Thanks for your time; I appreciate it a lot.

Alex: Great, thanks for having me on, Adam. It's been good.

Adam: Yes, mate. Thanks very much.

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