Lost Empire Herbs Update: How We Increased Our Net Profit By 280%

$300K
revenue/mo
3
Founders
12
Employees
product
Lost Empire Herbs
from Watsonville, California, USA
started May 2012
$300,000
revenue/mo
3
Founders
12
Employees
388K
alexa rank
4.66K
followers
413
followers
market size
$123B
avg revenue (monthly)
$416K
starting costs
$14.9K
gross margin
25%
time to build
14 months
growth channels
Word of mouth
business model
E-Commerce
best tools
Instagram, Facebook, Facebook Ads
time investment
Side project
pros & cons
35 Pros & Cons
tips
24 Tips
Discover what tools Logan reccommends to grow your business!
Discover what books Logan reccommends to grow your business!
Start A Supplements Company

Hello again! Remind us who you are and what business you started.

Hi! I’m Logan Christopher, co-founder, and CEO of Lost Empire Herbs. Along with my two brothers, we started an eCommerce company focused on “Performance Herbalism,” which is helping people to get healthier and perform better with herbal supplements that they can actually feel a difference from when taken.

Our best-selling product is Pine Pollen, which is a hormonal powerhouse especially effective in today’s day of xenoestrogens and other endocrine disrupting chemicals. It’s known mostly for helping men but is quite helpful for women too (after all they use and need testosterone too).

Our main demographic is older men, as many only seek out alternative solutions to the Western medical system when things start breaking down, and those solutions aren’t working for them. That being said we have something for everyone and are working to expand our demographic out, especially to more women.

Our company is roughly at the same level as the previous update revenue-wise, over $3 million per year. As with everyone in 2020, we went through some big changes that will be explained below.

Tell us about what you’ve been up to! Has the business been growing?

While revenue went down slightly in 2020 (about $3.15 million) from 2019 (about $3.7 million), our net profit went up 280%. I don’t know about you but I’ll take profits over revenue any day!

We’ve slowly been building back our marketing, like hiring a dedicated affiliate manager recently. We should not only set a new high in revenue for 2021 but with healthy net profits this time.

Whatever happens, just keep moving forward. Look at what your options are and make the best decisions you can. Then be sure to spend some time reflecting on your decision-making process and results to continue to sharpen it.

After repeated ad accounts being shut down, we stopped even trying to advertise on Facebook. They don’t like anything to do with men’s hormones. In fact, with the direction, Big Tech is going and increasing censorship we plan to use them less and advertise in other ways.

Our main marketing goal has been to build out and dial in the numbers for our one penny + shipping/handling pine pollen offer. One affiliate earned $1.75 earnings per click with over 12% conversion on this! We’re also testing this out to cold traffic via Google PPC (yep, we’re still using this Big Tech platform) and rented email advertising.

Something that has worked for us is direct mail to our own customers. This postcard cost us about $5,908 to mail to almost 10,000 customers. And it brought in $68,242 in sales for a 1155% ROI. It’s our winner so far but many other pieces have gotten a 400-500% ROI for us too.

how-we-grew-our-net-profit-280

how-we-grew-our-net-profit-280

We’ve been working to make our website more user-friendly for the average person that arrives there. Our Herbal Quiz helps to point people in the right direction for whatever benefits they’re looking for.

Another channel that has grown for us is producing a private label supplement for another brand. As they’ve seen good growth this has become a decent additional revenue stream for us. (We plan to do more private label work in the future.)

Right now, we’re in the middle of moving our warehouse from California to Missouri. Since the last time, we’ve taken fulfillment back house which saved us thousands of dollars every month.

What have been your biggest lessons learned in the last year?

A big mistake that we made was trying to expand in every direction all at once, biting off more than we could chew! The truth was that we got overly bloated. This constrained our time and money so that we were digging ourselves more of a hole throughout 2019.

Our attempt to switch to using NetSuite was a six-figure mistake! Not only were their high software costs, but this led to us hiring a project manager just to get this project moving.

As it turned out, the pandemic turned out to be a blessing in disguise for us. With the uncertainty in the early days of March 2019, we decided to lay off about one-third of our team and finally say “screw it” to NetSuite (though we still had the contract to pay off through the rest of 2020). This all was a very difficult choice but turned out to be the right choice for the business.

This allowed us to not only survive but right our ship. In hindsight, some of these drastic measures should have been taken even sooner.

Much of the layoffs were on the marketing team. While our revenue did go down from doing so, much of this was “plate-spinning,” in other words, an activity that resulted in being very busy, but without really helping out the bottom line.

That wasn’t all that 2020 brought. Personally, I had my home burn down in one of the California wildfires. This picture shows just my power rack left standing where my home used to be.

how-we-grew-our-net-profit-280

And that wasn’t even the worst thing to happen to my family that year, though the other events are a long and complicated story! So in addition to business struggles, there have been some big personal ones too.

All of this has helped to focus on what is essential and important, and do less of anything else. Thankfully I’m surrounded by a great team that continued to move the business forward when I was far from operating at 100%.

I feel our team has really learned these lessons well. We make sure we’re not growing too fast in multiple directions at once to avoid the compounding effect that this can have. We’re content to move a bit slower in doing so.

What’s in the plans for the upcoming year, and the next 5 years?

After much contemplation, I came up with our flywheel (as discussed by Jim Collins). Basically, this shows the master plan of growth for our business. Note especially the different sizes of the wheels. The big red wheel is harder to move, but sets in motion bigger benefits, ones that set us apart from the competition.

how-we-grew-our-net-profit-280

I mentioned that we brought fulfillment in-house from outsourcing which is part of that integration. Earlier this year we leased a new facility in Kansas City, Missouri will allow us further cost savings (compared to expensive California). This in turn will help us to expand more.

Our plan involves doing more on the production side of our herbs as part of vertical integration. Right now most of our products are finished extracts bought from other suppliers. But in the last year, we launched two products produced in-house, our Goji & Schisandra Tincture and the Elderberry Liquid Suspension.

how-we-grew-our-net-profit-280

But in doing more of the work ourselves, scaling up our team and equipment to do so, we’ll be able to further stand out from the crowd, such as in producing high-quality spagyric tinctures.

This will allow us to not only grow the Lost Empire Herbs brand but offer our production and fulfillment services to other companies too.

Have you read any good books in the last year?

A couple of standout business books I read in the last year include The Scrum Fieldbook which got me doing Scrum much more effectively than past attempts.

Also, Perry Marshall’s short book Detox Declutter Dominate: How to Excel by Elimination was very helpful in keeping me focused on what is important and ditching so much of the rest.

Honestly, I don’t spend that much time learning about business anymore. Much more of my time is spent trying to understand how the world really works with books such as The Shock Doctrine, Dark Money, The Crime and Punishment of I.G. Farben, and Poisoner in Chief.

Advice for other entrepreneurs who might be struggling to grow their business?

Keep moving forward! 2020 brought us a pandemic with incredible government overreach. That’s not over.

2020 also brought crazy natural disasters. These are seemingly only getting bigger each year. I personally suffered in the California wildfires last year.

ADAPTABILITY is key as we move forward in the new roaring ’20s. Unfortunately, I think we’re in store for a lot more craziness.

Whatever happens, just keep moving forward. Look at what your options are and make the best decisions you can. Then be sure to spend some time reflecting on your decision-making process and results to continue to sharpen it.

While there is a time and place to keep your head down and get to work, there’s also a time and place to look at the wider world for where things are trending. Doing this has led to Lost Empire Herbs putting some of our cash reserves in cryptocurrencies as an example. (You don’t have to be Tesla to do so.)

More rocky economic times are ahead of us. And that is when businesses really have potential if they’re in good positions to handle the hard times and not collapse because of them.

Are you looking to hire for certain positions right now?

We just hired a new affiliate manager. In our plans to grow smartly and slowly, we’re going to focus on that position and make sure it works well before hiring any big new positions soon.

Where can we go to learn more?

You can reach me directly at email.

The best way to see what we’re up to is to signup for our email newsletter here.

You can follow us on social media, though to be honest we’re not the most active of companies there (censorship being a growing problem).

I’ll also mention that I’ve been doing some citizen journalism on the side especially around the topic of the problems in our medical system. You can grab my Medical Monopoly Musings report as well as a video of a special presentation on the Systematic Corruption of Modern Medicine here.

If you have any questions or comments, drop a comment below!

-  
Logan Christopher,   Founder of Lost Empire Herbs
Pat Walls,  Founder of Starter Story

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