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Alex:

Hey everyone, this is Alex and Mike with Sage Digital Agency here today with Gino Bongiorno, born and raised in Las Vegas, Nevada. He spent many years at a very high level in the hospitality industry and in 2019 when the farm bill was approved, Gino saw an opportunity to enter the world of CBD. So Gino left the restaurant industry to start his own company as the founder of CBD 101. Since Gino’s inception of CBD 101, he just exploded onto the scene and has one of the largest organic social media followings in the CBD industry. He’s very well versed in some of the challenges you’ll face in the industry and he’s here to share some of his successes and what he calls his “opportunities”. Gino, thank you very much for joining us today.

Gino:

Wow, that’s a lot. Thank you guys for having me on. I appreciate it. I’m just really happy to be on chatting with you guys. Just happy to share my experiences. In the short time I’ve been in the CBD world, it’s definitely been a rollercoaster of ups and downs and I’ve really learned a lot and I’m happy to share.

Alex:

Gino, you and I have been together since the inception of CBD 101. Michael has I think had a couple of discussions with you. He knows you not as well as I. Can you take us for a brief overview of what CBD 101 is all about, why you started it, and where you’re at with it today?

Gino:

I started my company as a social media, as a Facebook group. I have a good friend that does very well with different niches and Facebook groups and he said, “Gino, you have to start one with CBD.” So I took his advice and the rest is kind of history. There’s a very calculated, that growth that I had, I had just exploded to 10,000 members very quickly. There’s definitely certain steps that you take, but it’s very organic way to start a company. I created the audience first basically. Right now I do a lot of consulting for different CBD brands and first thing I ask them is, “Tell me who your audience is. Not about your products, just tell me who your audience is and what’s your message as a company?” You’d be shocked at how many people just get stumped and can’t answer that question. That’s why so many in our industry, and many industries will fail, especially right now what’s going on. Unfortunately they won’t be here at the end.

Michael:

One thing that I’ve seen that’s really changed over the last, I guess specifically six months is with a lot of the merchant processors now being open to accepting payment for CBD related products, which for many years was a major problem where-.

Gino:

Very tricky. Yeah, very difficult.

Michael:

Or you’d have to find an alternative payment provider that was taking 10 to 18% in some cases to process those payments. I guess as an industry it’s come a long way. From your standpoint, obviously for your business and the businesses that you’ve worked with, once you start growing often times companies see the scale come very easy. However, it’s getting the first 5, 20, 100, 2,000 followers to get on the list.

Gino:

Definitely. I mean, things start to snowball as it gets larger and one person tells another and two people tell their friends and it just snowballs from there. But as far as the challenges, banking still needs to catch up a little bit. Still have issues with my corporate bank account to this day. I’m still looking for one because I keep getting turned off from different banks. And yes, merchant processors have loosened up a little bit, but they’re still very tight. I was one of the very first to be on the Square had a beta program. I was one of the very first to apply and I was approved and just recently they stopped taking my business. So there’s still always going to be challenges and I was able to find another. You just have to be really, really quick on your feet and I guess in any business you can say that, but it’s especially the world of CBD.

Gino:

Yes, it, it’s legal in all states, it’s just still very strange. There’s a lot of gray areas and a lot of loopholes and banking still needs to come up, loosen up a little bit, I can say.

Alex:

Gino, you mentioned 10,000 followers, or 10,000 members of your Facebook group relatively quickly. Can you give us some idea of where you’re at now and what the strategy is overall?

Gino:

Yeah. I mean, right now I’m approaching, I think it’s almost 20,000. It’s just very much me. Owning a small business, I don’t have the budget and I know you guys talk about a lot on your show is your margins. You’ve got to have the right margins in order to do a lot of the marketing. The beginning of my business, I really didn’t have my own brand. I just created a marketplace of multiple brands and so some of the pricing I was getting, wasn’t the greatest in the margins, so I definitely wasn’t able to have a large advertising budget, nor did I have it. So I really had to just grind, just put a lot of hard work in and I still do. Anyone that is an admin of a Facebook group, or has a large social media following, they know how much work actually goes into it. I mean, every new member that joins, I personally send them a message. That’s not something that you can automate. It’s something that I personally do.

Gino:

I always want to be of service to my members, followers. I don’t really think of making a sale. That’s just a setup to fail. Sales are just kind of a byproduct of everything. Education is always first, especially in the CBD world. You’re always here to educate if people have questions and to improve people’s quality of life. But then, there’s challenges there of things that you can say and things that you can’t, so it’s constantly changing and you have to stay up on it.

Alex:

There’s so much competition in the CBD space and there’s so many products out there, it’s pretty hard, I would say, without a lot of research and to have some kind of resource that can educate you to even know what’s good, what’s not good, what’s working, right? Do you agree?

Gino:

I agree 100%, 110%. Most people will go to a CBD website and they’ll just be lost. They won’t know where to start. There’s a lot of misinformation that makes it difficult, so I wanted to create a place in CBD 101, my company. My goal is to become the authority of CBD. If I say something is a good product and they really do the right thing and it’s a good company, I want people to really believe and trust that I have their best interests at heart. That’s the approach I take and it’s working so far.

Michael:

I think that that’s a problem in general a lot of people are facing in many industries, the amount of misinformation and as consumers get more tech savvy and older generations are easily able to decipher what’s legit, what’s not. Trying to filter through all the junk just makes it so much harder even just to be able to rank organically and get your presence out in front of people that using these alternative channels like Facebook groups or email lists really help people stand out. And I think that’s something that’s often overlooked when trying to grow a brand. People are so concerned about traffic or the amount of visitors that they have that they just lose track of it’s still a customer and it’s still the human interaction that, like you said, it can’t be duplicated by an automated sequence. You can do a lot with automation, and automation has… You can implement AI and really understand the right message to send to the right person, but that human touch still, it’s just something that’s not able to be duplicated.

Gino:

Facebook created their groups and I believe they created their groups for a sense of community to bring people together. Like minded people and if they share different interests and it’s about trust, and people want to feel like they’re a part of something. They don’t want to be sold anything. No one wants to be sold anything. They want to be educated, they want to be steered and led in that direction, but they do not want to be sold. We call it edutainment in my company. Try to educate, but we also try to entertain through different infographics and different things that we do. Different live feeds through Facebook, just be creative and try to keep it fun, but also educational.

Alex:

It’s my personal motto as well. Exactly what you said. It’s about providing a great product or service like in our business, right? Web development. I’m not looking at it, “Oh, let’s go make another sale of X amount.” It’s, “Let’s provide the best quality service that we can,” and as you said exactly, money and all of that, it’s a byproduct of quality work and caring about the client and being in touch. I think that’s my perspective.

Gino:

How can I be of service to my members and my followers? Sales will come, but unfortunately a lot of CBD companies out there, they don’t have that mindset. I believe in the end, the ones that will be left standing are the ones that share my point of view.

Alex:

Gino, would you agree that the barrier to entry for, let’s say a CBD startup, it’s quite low. Wouldn’t you agree? I mean, you can go white label a product, and have it shipped to your door, and call yourself an authority-

Gino:

I definitely agree. It’s a business that you can enter and relatively, compared to a lot of businesses, at a low cost. But then once you get into it, to really stand out from the rest, if you don’t have that marketing budget, especially if you’re not super tech savvy and you don’t know how to navigate your way through different things, it can be a challenge. What would you guys say you need for a startup to have decent exposure marketing for a startup like mine?

Michael:

I think it really just depends on the overall strategy of what you’re trying to accomplish. I mean, if you want brand presence, you just need to be able to have enough spend to be able to get your name out in front of people and that can be done very inexpensively through Google, or specifically Facebook, or influencer marketing. I think making sales, it’s a very different plan than just spending for branding with no measurement of ROI. I think one of the biggest variables are people who are getting into the CBD space, it’ll vary if they’re actually developing and making their own product and they have a brand, or if they’re throwing a label on someone else’s brand and trying to sell it off as their own, I think that they’ll have a much harder time because it’s not going to be unique, they don’t have a story that’s going to back it, and to get someone to buy that product versus another product and they can’t really figure out what products actually different or unique or actually going to help them.

Michael:

At the same time, it’s not just about the story or the brand. You still have a medical component that you need to be able to convince people that it’s actually going to help them. A lot of people who get in, maybe it’s their first business, maybe they like it because it’s cool. You can start a store for a couple grand and you’re in business and it’s really a matter of what’s the game plan? What does your end goal look like? For people that start up these websites, if the goal is just to get acquired, and there’s nothing wrong with that, at that point, it’s all about growth. It’s not about… They just need the volume of sales. Versus someone who’s trying to build something sustainable that could last them five, seven, 10 years or transition into something else which like you’re doing building a community, now you really have something.

Michael:

At the end of the day when you start evaluating e-commerce businesses, what is actually the value? Possibly a decent domain will carry a couple dollars worth of value. If you have inventory, potentially that could have value if someone’s going to keep it, but there’s not a lot, so it’s really your customer database and who’s in your network and your email because that’s the only thing that you’re going to be able to sell. It’s not a brick and mortar business where you have real estate and you have assets and other elements. The businesses are valued very differently. And again, you don’t have to start the business off knowing, “Okay, I want to get acquired in eight months,” but you should have a goal of what you want to do. And there’s different ways to start.

Michael:

And I think the biggest thing, and Alex and I talk with our clients all the time about in the initial onboarding phase of, “Okay fine, you want to move forward with ads, great. What is the end goal? At least right now, I mean, you can always shift it, but what do you want now? Is it purely just to get eyeballs? You just need influencers to push the product? No problem. It can happen.” But especially when people don’t know their numbers or they don’t have any clue of where the margins are, it can make it to be a very expensive journey. So, regardless of what it costs to get started, it’s how much can they afford to invest into the business with no clear direction? And I think that’s where the biggest disconnect usually falls.

Gino:

Yeah, like I said at the beginning, I go back to the triangle that I use. Who’s your audience and what’s your message? Forget about what your product is, you have to have that story and that’s something, what’s going to set you apart, like you said, so that’s why I couldn’t agree more with what you’re saying.

Alex:

From your perspective, what do you recommend to, let’s say, maybe not a startup at a bootstrap CBD company looking to make an impression, looking to do something? What’s your message to that particular person?

Gino:

Don’t try to be all things to all people. I think if CBD, it’s a lot of the same, and the way you market, you can market it specifically towards an ailment or towards a specific market, whether it be athletes or golf is seeing huge explosion of CBD right now with some of the golf pros. The PGA has done a lot for CBD recently, so are you marketing towards golfers rather than just creating a CBD for all? You can’t be all things to all people, so maybe just have a specific target market in mind and go after it. It’s an amazing industry with a lot of people that care a lot about other people. You just have to ask for help. Those of us in the industry are just, that’s what we’re here for to help other people.

Michael:

I think a lot of people when entering into this, because fine, there’s no actual barrier to entry except the idea that you want to get behind this CBD thing, but I think a lot of people might be detoured from asking from how not knowing where to start, thinking you have to have all the answers and oftentimes some of the best clients that we have worked with have come in looking for help. At the end of the day, I guess, if you have all your answers, what do you need us for?

Michael:

Starting off, I think being the all things to all people, even when you’re in such a niche vertical, you still have a target clientele and it’s not anything to everyone, because at that point, how do you really differentiate yourself? How do you niche down and have the perfect product for the perfect person? I mean, you only need a small percentage of whatever industry you’re in, and you can easily sustain a very good business from that. Spreading too far too fast, you’re just another retailer at that point. I think that’s a challenge people often see when trying to enter into it.

Gino:

I mean, start small. One of my favorite brands that I’ve come across, I come across quite a few brands being on social media, is a brand called Elevation Hemp. They started with two products, two tinctures, which are the oils that you put under your tongue, and they have one for daytime they call Awake, and one for nighttime that they call Calm, and just details that they put into the branding of the product. It reminds me if Apple created a CBD product, it’s just very sleek and very, it’s amazing, beautiful. It’s a beautiful product. And what’s inside the bottle is even better. It’s a fantastic CBD. They could have taken the startup money that they had and created three or four different strengths of tinctures. They could have done a topical, they could have done all these different things, but they decided to do two products really well and they are succeeding because of that.

Michael:

You said something very interesting about the doing things very well, especially on the e-commerce side of what we see. Sure, you have your initial cost to get the business up. You have your advertising costs. How much does it cost to acquire a customer. But then, people don’t always think about the actual product or they get so hung up on, “I’m getting all these negative reviews. How do we hide them?” And sure, there’s ways to work around negative reviews, but people are very good at understanding what is a good product and what is a bad product. And when they buy a bad product, sure you’ll get a handful of negative reviews, but that’s not the worst part about it. You’re not going to get someone to come back and buy from you a second time. Even when you have people to buy from you two, three times, you sell them one bad product, it could ruin the whole relationship.

Michael:

You put all the effort into getting the customer and getting the store to look nice, and then someone buys from you and it’s not a great experience. Sure, you made a couple of dollars, but how are you going to optimize that customer lifetime value where you actually make the money? Fine, you might not make money on the first one order or fine, best case scenario, you make a little money. But is it reasonable to break even on the first order? Absolutely.

Michael:

Especially if you’re a third party retailer and you have minimal margins, and your cost of acquisition is high and in competitive markets. Having a subpar product, it’s just not sustainable. And often when you look at the ones with the negative reviews, it’s not so much of how do you get rid of the negative reviews, but maybe it’s time to start reevaluating the actual products that they’re selling online because a customer is the market.

Gino:

What I found, a lot of times people may put their heart and their soul into it and maybe they were just a little uneducated at first. But it takes people that, like what you guys do, your company. Just be honest with customers and I’m sure that they appreciate it, that honesty a lot more than beating around the bush. Just tell them like it is basically.

Alex:

Gino, from my perspective, I’ve got to tell you, when I have a sales call with somebody new, for the most part of the conversation, I’m pretty much saying why I don’t think it’s a good fit and why I don’t think it’s a good idea. Not because I don’t believe in it, but I really want to be the devil’s advocate. I want to make a hundred percent sure that whomever is going to invest money into some kind of a new process, that we’re 100% certain that it’s with eyes wide open, so to speak.

Michael:

I’d actually love to get your insight on group moderation.

Gino:

Yeah, great question.

Michael:

We’ve had some guests on before in specific verticals that shed light on industry marketing, but understanding group moderation, I think people can get a lot of value from, and I just find it very interesting because I don’t have that experience.

Gino:

That’s a fantastic question that really no one has ever asked me. Yeah, I’d love to get into that. It’s challenging and it’s not something that everyone can do and I’ve learned that through adding moderators to my group. You need help. As the group grows, you need help from people. And with CBD 101, one of my biggest things I always just never wanted to control the narrative that much. If people disagree with each other, let them disagree. Don’t try to control what people can and can’t talk about. So that’s a little bit of the way I go about it. Becomes a certain point where you have to step in if they become disrespectful and everything. But I let other people sell, and in my group, if they want to talk about a product they love or they represent in the comments, go ahead.

Gino:

If you’re passionate about it, I would love if I created this platform, please, I want to be of service to you. Getting back to that, it’s many, many hours per day at no return. Especially at first when you’re first starting up. It’s not something you’re going to make money with. But it just adds value in the end. That’s how I think, and I love it. You have to love the group and have passion for it, but it’s definitely something that takes up a lot of hours of your day, you’re approving every single post. And CBD 101, we get probably, I would say 75 to a hundred posts a day. I do not approve ads in the post, so I have to go through difference between posts and comments, if those are two different things.

Gino:

There’s certain rules that you have to create. There’s a standard that you have to set within the group, and if people aren’t following those rules, it’s just a lot of different aspects to it. Obviously I created CBD 101 for my platform, because I have an e-commerce site, and I have products that I represent and I like to offer to people, and you’re going to hear people have negative remarks when you try to talk about a comment, and you just can’t let it get under your skin. There was a while there I would post something and I would turn off the commenting, because I didn’t want to hear the negative comments about it. Being that it’s my group and I can post the ad once in a while and I don’t allow other people’s. I’m the one that puts in all the hours, why can’t these people see that? You start to take it personal, but then I know I read something, I forgot who said it, you have to have that negative as well.

Gino:

So now I just welcome it. There’s a lot of times that people have said something negative, I’ve offered to help them show them the steps to build their own groups, to have their own platform. And some of those people that have said negative things, I’ve become close friends with. It’s not an easy task an admin to a group, but it’s definitely rewarding. It’s been one of the best things I’ve ever done. Put it that way.

Michael:

So if I wanted to get started with my group, where does someone begin?

Gino:

Where you began, first you want to, what’s your niche? What do you want to think about that? What is your group? Is it a fitness group? Anything. There’s Facebook groups about absolutely everything. An insider tip, if you want, that helped grow my group, is you create a Facebook page as the same name as your group. People would ask me, why would I do that? It doesn’t make any sense. Well you can run ads on Facebook pages and you can’t run ads on groups. Facebook is okay with running an ad about a CBD group. I was able to grow the group fairly quickly because of that. But there’s a lot more to it because I’ve told people that and they’ve tried it and it hasn’t worked for them. So it’s just one of those things. But that’s pretty huge. Just a lot of other little details or certain tags that you put on your group.

Gino:

So Facebook has their own SEO within Facebook and they just want engagement. So the more people are engaged in your group, the more they’re going to recommend it to others. That’s key. You want to stay on Facebook’s good graces because they will help you. If I run into somebody I have never met before and I just met them, and we’re not Facebook friends, I’ll ask to look up my group on their phones just to see where I land on the SEO, and there was many, many months I’d be number one in the SEO of Facebook when someone searches CBD within groups. So that helps a lot. The Facebook page, that’s a big nugget right there.

Michael:

What about for everyone that’s not on Facebook?

Gino:

First I would ask why, because like you said, it is king. I have Instagram as well. I’m not quite as involved in Instagram as other people in my company that work with me. I’ve just seen the most results from Facebook and maybe it’s just because of me and my passion for the group. I was in the hospitality industry for a long time. I’m sure that has something to do with it and why I’m so good at that position. Everyone has their different strengths and you just got to play on those strengths.

Alex:

Where are you going from here? What’s the plan, Gino? What’s the year down the line, two years down the line, five years down the line?

Gino:

Yeah. As you evolve in any industry, it’s like peeling back the layers of an onion. You get deeper into it. I said this when I started, I was just a marketplace for CBD where I was purchasing it wholesale and selling it retail. I didn’t know if I should be asking for much lower and lower prices below wholesale, and I’m able to use my group as leverage a lot and to get much better pricing on items now and I also really see why people create their own brands. Even a white label just because of the different pricing and the margins and that does give you the ability to have more of a marketing budget. But a lot of my business now is B2B.

Gino:

I’ve learned that’s a little bit of a sweet spot for me right now, just finding people. I do a lot of different white labeling for cosmetic products for a big manufacturer in California, so I’m doing that. I represent a lot of different products as an affiliate as well. I dabbled in that. My goal is just for CBD 101 to become the authority of CBD. When someone thinks of CBD, they’re going to go to my website first just for education, not even so much to purchase products, just for that education. And then those sales will follow after.

Alex:

Is there some kind of accreditation of CBD in general? Educate me here. Is there a testing facility that everyone goes to? Is there-

Gino:

There are, but they’re very much like, I don’t want to say pay to play, but they’re businesses as well. I don’t know how reputable they are. You can tell the people that know what they’re talking about and don’t. I don’t answer any medical questions on CBD. I really don’t. Yes I can, but I leave that for the medical professionals. I have medical professionals within my group that whenever a question comes up, medical, I’ll tag them and I’ll let them answer that. I think that’s a reason why my group has grown fairly quickly as well.

Alex:

Comes back to that point about not being everything to all people, right? If you can’t, actually don’t.

Gino:

No, one of my best qualities is I know I don’t know everything. So I try to leave that to the experts. That’s one of the problems with CBD. You have a person that’s maybe a hairdresser in the day, and they’re giving medical advice on Facebook about CBD. I’m not putting that down, I’m not saying they don’t know a lot about CBD, but there’s so much more to it and when you get into medical, when they’re taking other medications and does it contradict with CBD, and there is a lot of that. So you have to be very careful.

Alex:

My go to is an example of exactly what you’re talking about here is look what happened in 2008, 2009 in the mortgage industry. One day somebody is a “mortgage professional” the next day they’re not. The licensing was almost nonexistent. And look what happened, it became a meltdown. So I’m not equating that to CBD and saying that will happen. But I think that in a situation with very low barrier to entry and, as you said, maybe person that is unqualified in a particular area giving advice, I think it just opens it up to a situation of a potential issues. So I like the fact to be transparent, do what you do well, don’t try to be everything to all people, and I think that’s excellent. And look, from my conversations with you, I know that CBD101.io is going heavy in the direction of content. Can you tell us what’s going on with your podcast? I know you-

Gino:

Yeah, that’s a good question. You’ve been on me about that. Well, I’ve obviously purchased some of the equipment needed to do it, but I definitely need to start a podcast. My contacts within the CBD industry or I know so many people in the industry, that would be fantastic. Yes, that would have so much great information to share. Just that alone, for that reason, it’s something that I need to do and I will be doing very soon. I’m going to be doing, I partnered with Israeli company called Niamedic. Israel and was way ahead and many, many years ahead of us treating patients with cannabinoids over the U.S. Was partnering with them right before the pandemic with doing telemedicine through my group. They’re a very well respected company, not only in Israel but worldwide.

Gino:

They chose my CBD 101 to be the platform, kind of funnel patients into them, so that’s something that’s very exciting that I was doing. Among other things, I have different ideas as far as with CBD, who knows if there’s going to be any CBD conventions anymore with the social distancing, but that’s the thing with me. I start at one place and you have to evolve. That’s business and personally you have to evolve as a person and you have to evolve as a business to survive.

Alex:

I think you’re correct. You have to move with the times. You have to be able to foresee, “Hey, what is happening in the industry? Where is it moving to? And how can you position yourself, or leverage yourself or your business in a way that can move with the times and not just be stodgy.” Right?

Gino:

Multiple income streams too. That’s really important. That’s something I’ve been able to do. Yes, I have the e-commerce, but also I do the B2B stuff as well. Just multiple different things that I’m always involved in and it’s a lot of hard work. So I mean, owning any business is work, but it’s definitely… My whole life in the restaurant industry I always worked for someone else. I almost opened restaurants many times, but I just didn’t. Wasn’t never the right fit, or the right time. This came about, it’s been something that I’ve poured myself into and it’s been amazing. It’s been fantastic. A lot of hard work though, but it’s great to… I have three kids, twins that are five and a nine year old and to be able to show them there’s a different way rather than just trading your time for money.

Gino:

That’s one of the main parts for me as well. Showing my kids when they walk by my office every night and I’m working hard, there’s a different way to do things.

Alex:

Super insightful, Gino. We really appreciate you joining us. We’re asking all of our listeners to please check out CBD101.io, and you’re just a wealth of knowledge. We really hope that you will join us again in the not too distant future, and we really appreciate your time.

Gino:

You’ll be guests on my podcast, right?

Alex:

I’m waiting for an invitation, so is Michael.

Gino:

Okay, thank you. I appreciate you guys. Thank you so much.

Alex:

Okay, see you.