Typically, I break down direct-to-consumer e-commerce businesses, but today I am going to take a look at a B2B e-commerce business. Swag.com is a website that allows you to find, design & purchase custom promotional products for your company.
The business was started by Jeremy Parker and Josh Orbach in 2016, however, they did not release their website until 2017. They spent the first year talking to customers and figuring out what they want and what they need to run their swag program. Unlike traditional promotional product websites with thousands and thousands of products to pick from, they curated a small list of high-quality products that the end-user would want to keep (rather than just ending up in the trash like most promotional products).
How Much Business Are They Doing?
In 2017, Swag.com generated $1.1M in revenue. In 2018, they grew that to $3M. In 2019, they did $6.9M. In 2020, they were on pace for $14M; however, the pandemic caused their growth to slow. In 2021, they expect to generate $11M in total revenue.
How are they doing it?
95% of their orders are self-serve orders processed right through their website. Their average order value is approximately $2,000 (that is not a typo). A customer shows up on their website, picks the products they want, uploads their logo and checkouts.
How They Got Started
Swag.com started with an order for Facebook. However, the most important order they did was for WeWork. WeWork ordered t-shirts for their summer camp (5,000 people were invited). As you may know, WeWork is a collection of startups and small businesses. Swag.com did whatever it could to win this order. Inside the t-shirt, on the label, they printed their name and slogan: “Swag.com We Made This”.
Swag.com got 100 new customers from the people that WeWork handed the t-shirts out to. Essentially Swag.com is handing a business card to every end-user of the product that is endorsed by the brand that gave them that product.
To spread the name of their business even more, every packing slip that comes with an item that Swag.com distributes says “Powered by Swag.com”. And Swag.com often gets 5 or so new customers for each program they fulfill.
ASI and ESP (The Inner Workings Of the Promotional Product Industry)
ASI is the trade group for the promotional product industry. If you want to start a promotional product business, you signup to get your membership number with ASI. The basic membership costs $29.99/month.
This membership gives you access to tens of thousands of suppliers that manufacture promotional products. You even get access to ESP, a searchable database of hundreds of thousands of promotional products, and the contact information for the suppliers that manufacture them.
Swag.com’s curated list of products
With the backend setup for ASI and ESP, it is simple to put up a website with hundreds of thousands of promotional products. However, when you give consumers too many options, they can get overwhelmed and not make a purchase.
Swag.com went through all of these products and curated a list of products that people actually want. They even went and sourced high-end brands that were not offering their products for customization.
Online Swag Closet
Swag.com is an entirely custom-built e-commerce website. Their customers needed features that were not available on platforms like Shopify, or Bigcommerce, or Magento.
On the back end of Swag.com a customer can log in and manage their entire swag program. When placing an order, the customer can choose to have the products be sent to one location (like their office) or they can have it sent to Swag.com’s warehouse for distribution when they need it.
Example: Google puts together a welcome swag box for all new employees. They can have these swag boxes ready for distribution sitting in Swag.com’s warehouse. When a new employee is hired, the HR manager can login to their online swag closet on Swag.com and have a box sent out to the new employee.
Cash Flow
My first full-time job out of college was as the controller for a promotional product company. I loved how this business model worked. Since everything needs to be custom-made, everything can be ordered on demand (meaning you do not need any inventory). When your customer places an order, they pay you upfront for that order. Then you go source that order from one of the tens of thousands of suppliers you have access to. Some suppliers may require a deposit from you (but you can use the cash from your customer to put up the deposit). You can start a promotional product business with next to no money (only a few hundred dollars to get your industry membership, access to suppliers on ESP, and spin up your website).
Swag.com’s Digital Marketing
Swag.com got their first few customers from cold calling and networking. They then used Google Ads to grow their customer base. However, competition is high for google ads for promotional products and swag. This makes the bids to get your ads seen and clicked fairly expensive (in the $3-$15 range).
Top Paid Keywords for Swag.com:
- promotional products (CPC $13.00)
- swag (cpc $1.90)
- 4imprints (cpc $0.90)
- custom mig (cpc $8.00)
- swags (cpc $1.20)
- corporate gifts (cpc $10.00)
Facebook Ads:
Swag.com has 28 active ads on Facebook (but only two different types of creative).
Overall, their Facebook Ad effort looks very unimpressive.
Content Marketing
After they had about 200 customers, Swag.com transferred their focus from Google Ads to Content Marketing. The number two landing page on their site is a blog titled “75 Company Swag Ideas That People Will Love in 2021” (number one landing page is their home page).
In August, they posted 10 articles to their blog (July had 9 articles). It appears Swag.com CEO, Jeremy Parker also is a frequent guest on podcasts (a free way to get noticed).
Swag.com has 8.2K followers on Instagram (@swagdotcom). In August, they posted 23 times with very low engagement.
Here are their audience demographics:
These demographics have the tell-tale sign of followers having been purchased. There is no reason for their audience to be 74% in Russia and when I see Philippines, Kazakhstan, and Ukraine rounding out their top 5 locations, it most certainly means followers were purchased.
Purchasing followers may be a nice vanity to metric when starting out and you may think it gives you credibility. But doing that, you limit your ability ever to use that account to get organic interest in your brand. Fake followers do not engage with your content. Instagram will only feed up content to the users on the platform that they think the users want to see, and if your content is not getting engaged with, Instagram will not feed it.
Can you bring the playbook for a DTC company to a B2B Ecom Business?
This is not a question I have an answer to, but I am curious if you take the digital marketing playbook of a DTC business and apply it to B2B business, will it work? Can you leverage influencers, content marketing, growing social accounts, and email marketing to grow your B2B brand? While Swag.com is clearly doing very well (their growth rate is very impressive), could they be doing more to engage users online to generate more leads?
