Good morning!
Here are today’s highlights:
Could the conventional wisdom about business sellers accepting an earnout be wrong?
Construction costs and labor shortages are sending retail construction to record lows.
Gene Marks gives examples of how AI is helping construction companies overcome those challenges.
The labor shortage is especially serious in Florida.
MARKETING
Consumers are discovering new products on TikTok Shop: “Jared Mortensen got a preview of what might be possible on TikTok Shop back in 2023 while he was in Guangzhou, China, visiting both a factory that produces his Real Men Apparel Co.’s underwear and a friend who sells a clothing line to Chinese women. The friend was live streaming on the Chinese social media platform Douyin, owned by ByteDance, then the owner of TikTok. ‘They were doing like $60,000, $70,000, $80,000 an hour, selling women’s apparel,’ Mortensen recalls. ‘I was like, Holy crap. They’re printing money.’”
“Mortensen returned home to Wichita, Kansas, and created a TikTok Shop account for his brand in October 2023, just a month after the shopping platform launched in the U.S. Today, he has 11 livestreamers and ‘content creators’ on his staff of 25, as well as contracts with about 2,000 independent TikTok creators to generate videos for his underwear line, which features pouches sized A to D, the way women’s bras are sized. Meanwhile, a live TikTok stream from Mortensen’s home allows him to interact with shoppers.”
“‘The thing is with TikTok, you have to post a lot. It’s very intense,’ Mortensen says. ‘You have to throw a lot of spaghetti at the wall.’ Among his spaghetti strands: Videos showing which items (including a jar of salsa and a butternut squash) do or don’t fit in Real Men’s pouches. ‘It’s entertainment, fundamentally,’ Mortensen observes. ‘People don’t go to Amazon to be entertained. They go to TikTok to be entertained.’”
“But do they go to TikTok to buy? Even Real Men, with its TikTok video machine, still does just 15 percent of its $10 million of annual sales on TikTok Shop, compared to 50 percent on Amazon and 35 percent on its own web site. Yet Mortensen says of TikTok, ‘It saved my business.’ He credits it with raising his brand’s profile and sales (including on other platforms) when he was facing a cash crunch at the end of 2023 and the start of 2024.” READ MORE
