Digital Nomad Building a $5M+ E-Commerce Business: IntelligentLabs CEO Rus Hughes (Part 3)

Sramana Mitra: How long did it take you to get to a million dollars in revenue?

Rus Hughes: Two and a half years.

Sramana Mitra: What was your inventory strategy during this period? Did you have to finance inventory?

Rus Hughes: We were doing it organically. I kept my cost of living super low. We didn’t take money from the company until 2017.

Sramana Mitra: Were you still in Thailand?

Rus Hughes: I went from Thailand to Barcelona, to Thailand again, and then to China and Japan. I was also working with other e-commerce businesses.

Sramana Mitra: You were living the digital nomad lifestyle.

Rus Hughes: I was a digital nomad for four years.

Sramana Mitra: You were doing the pick, pack, and ship?

Rus Hughes: We were doing Amazon FBA. We now have multiple 3PO’s [purchase orders] in USA, Europe, and Canada alongside Amazon.

Sramana Mitra: In 2017, you were at $1 million in revenue. You were still a digital nomad. The business was just you and your business partner.

Rus Hughes: Right.

Sramana Mitra: The strategy is still the same. It’s still Amazon?

Rus Hughes: In 2015, I consulted with my friend’s e-commerce business called HS that was selling chess accessories. I used that experience to learn how to run our own e-commerce website and how to do FB advertising and Google ads. In 2015, we launched the first e-commerce website. By 2018, we were in 34 different countries.

Sramana Mitra: Talk to me about Facebook advertising.

Rus Hughes: It was terrible for us as a supplement brand. We created our own Facebook page. We created content. It was mostly about Crossfit at that time. We really saw ourselves as a sports brand. We would just encourage people who bought from us to like the page. We would use Facebook advertising to promote our material to get them back to our website.

Our audience didn’t respond very well to that. We thought we were a sports nutrition brand. We had the Omega 3 for recovery, but we phoned our customers to understand our customers a bit better. Our customers were 40 to 60-year-olds and were recommended our products by their doctors for heart disease and other diseases. We did a pivot from sports nutrition to complementary health. We never managed to crack customer acquisition through Facebook.

Sramana Mitra: That’s now how your audience bought. They bought it because the doctors prescribed something. How long did you tinker with Facebook advertising?

Rus Hughes: We abandoned it by 2017. We started up again as a brand strategy just to keep putting our brand out there. We stopped trying to properly acquire customers from it.

Sramana Mitra: Amazon remains the main strategy? Are there other channels?

Rus Hughes: Amazon is the biggest that works. We are entering all the other e-commerce marketplaces. The sales from our own platform is growing. We get sales from 30 countries at the moment.

Sramana Mitra: How are people finding out about your site?

Rus Hughes: Referrals and word-of-mouth. There seems to be a conscious awareness of the level of magnesium deficiency. A lot of people on Tiktok and other social media platforms are talking about that deficiency.

Sramana Mitra: At what point did you switch to a multi-product business? What was the next product?

Rus Hughes: Our second product was a glucosamine complex. That was probably at the start of 2016.

Sramana Mitra: How many products do you have today?

Rus Hughes: 23.

Sramana Mitra: How is the revenue split?

Rus Hughes: Pareto’s law. 20% of the products bring in over 80% of the revenue.

Sramana Mitra: So Omega 3 is your largest product?

Rus Hughes: Not at the moment. Our probiotic range and our magnesium range is our largest product.

Sramana Mitra: Are these other products also being prescribed?

Rus Hughes: I haven’t seen any evidence to say that doctors are recommending them. Lots of doctors recommend supplements to go with their prescriptions. I have type 2 diabetes. Over the years, I’ve had prescriptions for Metformin and insulin. The doctor has also recommended me a supplement called CoQ10. The doctor will recommend the supplement like that rather than prescribe it specifically.

This segment is part 3 in the series : Digital Nomad Building a $5M+ E-Commerce Business: IntelligentLabs CEO Rus Hughes
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