Eugene and Michael Ravitsky, brothers, found the perfect air purifier to relieve their allergies. They launched FactoryPure and expanded their business to include generators, heaters, air compressors and other household machinery. Eugene discusses their eight-figure success story in a low-cost, high-margin industry on Shopify Masters.
Why a low barrier of entry isn’t always the best option
Felix: Tell me about the origin of your business.
Eugene FactoryPure was originally an air purifier business when it was founded in 2013. FactoryPure was born from this. It was easy to start with air purifiers using a dropshipping model. It was easy to set up a website. Many brands were open to working with companies without any sales or track record. It was easy to get started.
It’s very difficult to be competitive, as we quickly discovered. It’s very easy to start, and there are no barriers to entry. After many pivots, we settled on the current business model which focuses primarily on power equipment generators. Although we offer many other products, generators are the mainstay of our business.
Dropshipping is not an option for manufacturers who have generators or heavy equipment. Our father had a warehouse, which we happened to be able to use. We were able to take advantage of this resource that many other companies did not have. There was less competition at the time because equipment had to be stored somewhere and you needed machinery to transport it. Shipping rates had to be competitive with the big guys. It worked better than air purifiers when we recalculated.
Felix: The low barrier to entry was mentioned by you. Your background? What is your background?
Eugene : This business was started by Mike and me. FactoryPure was founded by Mike and Eugene. We had an ecommerce business that sold electronics before we started FactoryPure. FactoryPure was much easier to scale than the other businesses. Shopify, and others similar, allowed us to build a scalable website ourselves that did all the backend analytics, administration, and support.
Felix: Which foundational skills were necessary to be able to pivot and manage multiple businesses?
Eugene The main thing was to learn about ads. Google ads was the main way we began advertising and it is still our primary method of doing so today. Google ads can be very expensive and you may not see a return on your investment. It was all about nurturing the Google shopping ads’ tactics, figuring out which keywords people are searching for and removing keywords that don’t convert. This is the same for every ecommerce shop.
Profitability with a high-cost product and distribution model
Felix The logistical pivot from generators was more difficult, so there was less competition. How did you get started?
Eugene We were required to create 10 generators for our first account. That’s what we decided to do. We knew we had a warehouse. We didn’t have shelving or storage. We said yes. They could ship the generators. We have a warehouse where they can be stored. We realized that we didn’t have a forklift and didn’t have the means to either unload it from the freight truck, or package it to ship outbound. We quickly searched Craigslist for a forklift while the items were being shipped. We were able to find one in the nick of time.
Our father’s warehouse was our first stop. We were able to use a few of his offices. Without that, I don’t think we could have moved forward with this venture. We had this in place so we could reach out to companies and tell them we had somewhere to store your product. Let us know your price. They were generally very open to our suggestions.
Felix: How did you make sure this model didn’t go too far in the red?
Eugene The original order actually consisted of refurbished generators. Each one costs around a thousand dollars. These companies require an initial purchase of $30-50,000. It was significantly less than it was at the time. Although we had the funds, it was not enough. It was worth the risk.
Felix: Who are the original customers?
Eugene It was all business to consumer. Our website was already up and we were already selling air purifiers. We created a category for generators and then listed the products for the consumer.
Felix:Did air purifiers’ target market transfer well to generators?
Eugene Different traffic and demographics are certain. It’s easy to change the type of person you are targeting with Google ads. It was easy to create a variety of product types with different demographics.
How to determine what is best for you business, organic versus paid acquisition
Felix: What mix of organic and paid traffic did you get?
EugeneIt was mostly for paid ads. We tried to increase our SEO link juice by guest posting. Writing took us six to eighteen months. We were working on air purifiers and were creating articles. They would then include our links in guest posts. Some organic traction was achieved. We decided to stop scaling to new products and to spend more time on advertising. It was a mix of both ads and product, with a lot more ads as we added new product types.
Felix Why do you think guest blogging wasn’t as popular? Did it have to do with the industry?
Eugene It took a lot of time. It is very tedious. It is very manual. You need to research higher authority sites that allow guest posting. Then you have to contact them. Only a small number of people actually respond and let you write guest posts. Next, you had to actually create them. It took a long time. This is not unusual for SEO. You may not see traction for six months, one year, or two years. We didn’t abandon it, it was just that it didn’t work.
Felix You’ve decided to use Google Ads. Are you still using Google Ads?
Eugene We rely heavily on Google ads. Recently, we tried Facebook ads. This is more laborious than Google because each one must be rolled out separately. Mostly ads.
Felix: These initial customers were all Google Ads.
Eugene This was definitely all from ads because we had just listed the generators. Organic SEO guest posts were not something we had done, especially towards generators. All it took was ads.
This is the fastest way to build trust with your partners
Felix: Increasing revenue was the largest source of trust. What was the catalyst for that trust?
Eugene I found the answer to be quite simple. Over the years, we have developed incredible keyword analysis. We won’t target keywords that everyone else is targeting. You’ll see an increase in revenue for the brands we already carry. Over the years, we’ve learned what keywords do. Negative keywords have been a challenge.
We were pushing refurbished a bit more, but when you typed in “refurbished generators” into Google, we were the first result. We were the first and 2nd results. It was our main page, then it was our generator page.
Felix: These were all ads?
Eugene This is organic. We were able to use our keywords because there wasn’t much else that had done the refurbishment. We were able organically to climb quite high with these keywords because there isn’t too much competition. It was a mixture of both. Even a probationary period was acceptable to allow us to show them what we could do. It worked sometimes, and it didn’t always. Despite all the sales we make today, there are still brands who don’t give us accounts.
FelixLooking at the most popular items in your collection, you will see a coupon code right on the product page. Do you think there is a psychological reason for doing this?
Eugene It is clear that there is a point. We will put a coupon code on some products because people often ask for discounts. Some products are MAP products, so you cannot advertise it in Google lower than a certain price. However, you can still sell it below that amount. These are the reasons. We put the coupon code on some products because it is impossible to advertise the product for less than the price that it’s listed at.
Pay acquisition strategies that prevent wasted dollars
Felix: You had great success using Google ads. Where should someone start if they are completely new to paid acquisition?
Eugene If you are selling products, Google Shopping is a great place to start. Shopify gives you a data feed that shows all of your products, which can be imported into Google. It’s simple. It’s easy to put all your products in Google and get traction that way. There is no need to create individual manual ads, as you would with text ads. You can also include the entire data feed with shopping ads.
You will need a hierarchy to organize your campaigns once you have done that. It is best to hire an agency to do this for you. You can then manage it yourself, or pay them to do it for you. Google can be very costly if you don’t target the right keywords or remove keywords that don’t convert. You can use negative keywords to your ads. These keywords will not show up when someone searches for those keywords.
One example of this would be if someone is looking for a product guide, or troubleshooting information. Because they aren’t shopping for a product, you don’t want them clicking on your ad. Other traps include generalized keywords. If someone is searching for something extremely vague, this could be a trap. Water heaters are what we sell, so it’s unlikely that someone is actually looking for one. The same goes for manuals and troubleshooting. They might be searching for a water heater, but don’t know what they need.
We aim to target long-tail keywords because people are more advanced in the process and know what they want. They are not searching for a water heater; they are searching for a brand, a size or fuel type. If people search for the phrase you are trying to sell, the more keywords you can combine together, the more likely they will be ready to purchase. If you have $50 per day to spend on advertising, you would want that $50 to go towards longer-tail keywords than someone searching for water heaters.
Felix This method is highly reproducible for your competitors.
Eugene It is possible to reproduce it in some way. You can use free keyword tools to see what people are looking for. They don’t know what converts. While they can see which customers are visiting your site, they don’t know which ones convert. Only you can know this. Then you can reinvest more in campaigns that convert.