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Episode 1: How I Made a hundred and fifty grand Selling a Meme.

In this episode of Startup Gems, we share a remarkable startup success story. Two entrepreneurs transformed a viral internet meme, the nut button, into a thriving business, generating over a hundred grand in revenue in just a year.

They initially invested twelve hundred and fifty dollars each to order a thousand nut buttons from Alibaba. Their simple, high-conversion website and paid social media ads didn't yield immediate results. However, a viral video on Twitter, featuring a dog playing with the nut button, catapulted their sales.

To handle logistics, they automated fulfillment through Amazon, expanded into European markets, and experimented with pricing. Their business continued to grow, and they even sent holiday bonuses to the Chinese factory workers who produced their nut buttons.

This startup's journey is a testament to creativity, perseverance, and seizing unconventional opportunities, inspiring aspiring entrepreneurs to act on their ideas, regardless of initial doubts.

Let’s get into it.

I’m telling this story in hopes to inspire young entrepreneurs to take action on their seemingly stupid ideas, because the stupid ones are the best ones.

I think most people are familiar with the nut button meme. It was popular back in 2016, which is ancient in terms of the Internet’s attention span.

Despite the meme’s old age, my friend and I have done over a hundred fifty grand in sales by leveraging its virality, focusing on simple SEO, and expanding aggressively. We made that 2D meme into a real product, a simple push-activated sound button, and automated our sales across FBA.

Here are our numbers.

A hundred fifty thousand dollars revenue in 2018 over 6 Countries,  a 60 percent profit margin, 4 hours a week of work maximum, and tens of thousands of nuts in this world.

This isn’t so much a guide, rather just how we did things and what we learned along the way

This is our Inception-to-Market, and how we sold our first thousand units.

My friend and I always spit-ball stupid ideas off each other, hoping something might stick.

One day he called and said how has nobody made a real-life nut button; let’s make it ourselves. It sounded stupid at first, but the more we talked it out the less stupid of an idea it became.

Here’s why we thought it Might Work.

The marketing was already done, but the product wasn’t there. There were millions of shares and views of our soon-to-be-product by ways of the meme, and brand recognition was there.

Our Risk was only twelve hundred and fifty dollars each for the first minimum order quantity of a thousand units. 

After all that, we calculated our upside to be about 4,000 dollars each.

After running through why it could work, we decided to look at the other side of the story of why it might not.

We figured if we took a chance and it turned out to be an outdated or irrelevant meme, that was the only way we could lose.

The juice was worth the squeeze we figured. And if we failed, we could just hand them out on the street or at school for fun. So we found a manufacturer on Alibaba, negotiated a price in broken English, and a thousand nut buttons were at my doorstep about a month later. I still remember cutting into the first box, and feeling a mix of excitement and extreme self-doubt which I think that mix means you’re on to something.

I bought our domain for 10 bucks and set up a SquareSpace site with all the high-conversion rules that I had read on Google. With as few frictions as possible in mind, the site contained

For one, a single call to action. This read, Buy Now.

Secondly, it contained a price, 11 dollars and 99 cents, which we decided was fair.

Number three, we included a Product title and brief description.

The fourth thing we added was Big hero images of our product.

Lastly, we added Meta descriptions with SEO keywords to help people find the site.

And nothing more.

Our site was live and our nuts were hot and ready to sell. But how were people going to know that we were selling?

We were severely outranked by the actual meme in any early Google search, so we opted for some paid advertising. We scheduled a few posts with quasi-popular Instagram accounts for 75 to a hundred fifty dollars per post, and a 10 dollars a day ad budget on Facebook.

We waited.

Our first day we got zero orders. Our second day we got one order, and celebrated. Each day, sales were slowly dribbling in, and by week two we were doing five sales a day and felt like Bill fucking Gates.

Next, Let’s break down our logistics. 

We bought ourselves a label printer, 500 yellow bubble mailers, and a ShipStation and Stamps account for discounted USPS rates. My college apartment was right across the street from the post office. Every morning before class, I would print out labels, pack the nuts, and drop them off at USPS. Eventually the post office people started calling me Mr. Nut when I was dropping off huge garbage bags full of nuts.

At the same time I had set up an Amazon storefront for only 40 dollars a month, and we were in the process of sending inventory to FBA distribution centers.

I also set up an eBay page for International orders, since eBay has their own global distribution center and deals with customs and shipping themselves. I was surprised by the amount of people paying 20 dollars plus on shipping alone to have a nut button sent to their country.

We also realized that this product would be super easy for a big fish to produce themselves and undercut us. So we spent a good amount in the beginning on legal fees, trademarks, and IP protection to protect us down the road. Definitely worth it.

Our goal was alway to get the nut button viral, but that seemed out of our power. Our paid Instagram posts were met with hostile comments like get out normies, this isn’t 2016. We were still getting around 5 orders a day so we could take the heat.

Sometime in November of 2017, a video of a Jack Russel Terrier playing with the nut button was posted. Within a day, it had hundreds of thousands of views and shares on Twitter, and was soon reposted to Barstool with over 5.5 million followers. Our phones were popping off with order notifications. We watched our Amazon seller charts go from 5 orders a day to at its peak well over a hundred a day. We were selling more than we anticipated, so many in fact that we were about to run out of inventory, right before Christmas.

How we made the move to Zero-Inventory Sales.

It would take 30 days to have new inventory rush-produced in China and sent to us, but we were going to run out of inventory much sooner than that. We did not want to lose our momentum, especially during the holiday season. It was mid November, and the manufacturer told us that we would have our new batch of 5,000 units, which we negotiated for a much cheaper price by December 11th, which would give us time to fulfill all Christmas orders.

We were totally out of inventory by the end of November.

So my partner and I agreed to continue taking seller-fulfilled orders on Amazon and our website, but we messaged each buyer explaining that we were back ordered and we guaranteed that their nuts would come before Christmas with a free surprise gift, it was a nut sticker. Otherwise, they could get an immediate refund, no questions asked. Is it illegal to take orders without inventory? I have no idea. But surprisingly very few orders were canceled.

December 11th was around the corner, and we were devastated when tracking info started showing delays. We didn’t even consider the possibility of not fulfilling hundreds of Christmas gift orders that we “guaranteed.” At the same time, I was still in college and finals were approaching so I was stressed as fuck. Lesson learned, be as prepared for the best-case scenario as you are for the worst-case.

I was taking a finance final exam when a truck dropped off our palette of nuts, and my house-mates accepted the 20 or so 40 kilogram boxes of nut buttons. There were over a thousand orders that could finally be fulfilled.

I hired three of my friends to help me with packing, and compensated them 15 dollars an hour, or offered to pay them in nut buttons. Yea, they chose cash. We worked into the night printing labels and packing nut buttons. By midnight, my room had become a sea of yellow mailer packages. I had to trudge through them to get to my bed.

The next morning I made about twenty trips to the post office. The lady working there looked on in horror as I dropped black garbage bag after black garbage bag full of nuts onto her desk.

We were so happy that we got everything sorted out in time that we decided to give back. We found out there were 7 workers at the factory in China where our buttons were made, so we sent each of them 20 dollars for the holidays. In return, they sent us great pictures of themselves, and handwritten thank you notes. The minimum wage in the city where the factory is located is about 2 dollars and 90 cents an hour, so I think that 20 dollars means much more to them than it does us.

It’s been a little over a year since we started this. Every other day I still pack nuts from our website orders and drop them off at the post office, but 95 percent of fulfillment is automated by Amazon these days. We were recently accepted into an Amazon program called Small and Light which enormously reduced our fees and increased our profits.

We also decided to test out different price points. So we tried 14 dollars and 99 cents for a couple days to see what kind of effect it had on sales. Weirdly enough our sales for that week were actually greater than they were at 11 dollars and 99 cents, so we haven’t looked back since. Maybe it's a perceived value thing? Or The Nut Button just has really inelastic demand.

We’ve also expanded via Amazon EU into the UK, Germany, France, Spain, and Italy. Despite the annoyance of VAT taxes, we’ve added roughly 15 percent to our overall sales. Since last holiday season, we’ve improved total sales by about 75 percent and steeply improved our margins.

This coming January, my partner and I planned a trip to China, where we’ll go meet the factory boss and employees, and give them another holiday bonus!

Thanks for joining us on this journey through the world of startups and innovation. We hope you've uncovered some valuable gems to fuel your entrepreneurial spirit. Don't forget to tune in next time for another inspiring story that will keep your entrepreneurial fire burning. Until then, keep exploring, keep innovating, and keep shining bright with Startup Gems!