The Game with Alex Hormozi - How To Never Pay For Rent or Food Ever Again... My $724,000 lesson. | Ep 169

Episode Date: December 3, 2019

"If you monetize it properly, it can allow you to get a lot of the things that you normally pay for free." Today, Alex (@AlexHormozi) discusses the concept of monetizing a business's distribution network to generate passive revenue. He uses the example of a gym's members purchasing supplements and food to demonstrate how businesses can capitalize on their clients' purchasing habits to make money without extra effort.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Timestamps:(3:23) - Distribution base monetization for free products and services.(6:49) - Supplements sold with food covering normal expenses.(8:51) - Take care of your people to take care of customers.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Happy Monday, everybody. Hope you guys have an awesome Thanksgiving. I hope you are rested and well fed and super anabolic and your glycogen stores are full. So I wanted to make a fun video about a $724,000 lesson that I learned. And frankly, the only passive, passive, quote, revenue stream that I've ever been able to create. And that $724,000 lesson resulted in House, a couple. and other cool stuff. And so what I want to do was actually cover the only kind of passive revenue that you can

kind of have in a business because I'm not really for passive revenue where I think that it's kind of a myth. But to the extent that it is a myth, I think this is the only viable way that you can actually have it, which is by looking at your business as a distribution network. So if you think about the drug game, right, the cartel or whatever, right? The reason that they're able to take a good cut of people who bring them drugs is because they own distribution. And so if you are a business owner, then it means that you have an element of distribution to your business, which means that you have clients in your business. And those clients also purchase other things, right?

They don't only buy stuff from you. So if you have members at your gym, what else would a gym member buy? right they 74% of all people in america buy dietary supplements right they buy 74% three out of four buy at least one dietary supplement and use it all right like you can just look at that up on satister or USDA like all those stats are free and readily available to the same degree each of those people also buy food right they buy groceries they go out to eat etc right they they buy fitness apps they buy heart remuner so fitness you know IQ data self-dict data stuff. They have Apple watches, they have Fitbits, all this kind of stuff, right? And so

what you have in front of you is the distribution base. And if you monetize it properly, it can allow you to get a lot of the things that you normally pay for for free, right? There are plenty of businesses there in your world who want to have access to your customers and are not competitive with you. And so capitalizing on that is a really great way of, making money without actually spending any effort, right? It's just making recommendations that you probably would already make anyways, right? And instead, just having it track back to you. And so what it does is it allows you to make money on all of the other variety of services that they purchase. Now, the closer the service or products that they purchase are to the

core thing that you offer, right? So you're selling weight loss, right? The next core things would be supplements and probably food, right? Maybe right next to that might be apparel or equipment, those are kind of adjacent things that someone who would start at a gym might then next buy, right? And so I'm really excited about this because this has been like the vision for me for three years and putting this together. And my goal, hopefully you guys are excited about this, is that no fitness professional will have to pay for their rent or their food ever again, which is super exciting for me. And hopefully just is exciting for you. And so in 13 days, December 13th or hopefully that's 13 days is it the okay it's second so 12 days um we are finally

going to be kicking off kind of the second huge piece um to our business which is uh ready meal delivery so it's actually fresh food uh that gets delivered uh next day air to your customers which is wild and awesome um and because of that uh based on the average numbers that we have uh so the average gym sells 14 people a month uh or the average of whether they work with this or not, so those 14 people a month into supplements, that same amount would cover you and four trainers and all your food for that whole time period. And so if you keep what you have in terms of what you're selling supplements for, and you add on the food that these people are already buying or want to buy,

and that's based on the assumption that people don't buy more food than they buy supplements, which is not true. But if you just kept the same assumptions alive, then you can now have all of the food that you're normally already spending money on covered. Your trainers can have all of their food that they're normally spending money on covered. And now you can truly, like, you can eat your own dog food. You can drink your own Kool-Aid. You can speak with conviction about the fact that you really want to walk and live a healthy lifestyle, not to mention the fact that people who are fitter tend to make more money.

That I can tell you, bar none, I've seen that across the board. which really just comes down to like do you believe what you're preaching right do you walk you walk and so i'm super excited about this because in 13 days um that will be a reality for everyone um like fitness professionals won't have to pay for food anymore and that's like really really cool for me and um we've been able to do that because we can negotiate and make i can buy chickens by chicken breast by the ton broccoli by the by the by the palate you know what i mean um to make this available for everyone, which is like so freaking cool. But anyways, now your trainers can benefit by being in your business, by being able to, like, think about what they can now tell

your friends. It's like, I might not make as much as I want to, but dude, they like, I don't buy food. You know what I mean? Like, they cover all my meals for me. And it just gives them this great benefit. And the thing is, if you take care of them, they take care of your customers. And that's always the way it is, especially in service. It's like, you have to exemplify taking care of your people so that they know what it feels like to be taken care of in order to take care of their, you know, your customers, right? Especially in service. And so I know of no better way to do that. And I try and practice this because like for example, the $724,000 lesson is like that's, that was the commissioners that we got from ClickFunnels just from the fact that like I don't build landing page

software, but I can recommend landing page software that works well. And so by doing that, we were able to capitalize on another aspect of what the customers that we had were buying, right? And so we've done this in a number of situations very transparently. Like, hey, you know, you don't pay anymore. It's just because we made a recommendation. And to the same degree here, your clients actually get a discount in order to do this. So you actually gain goodwill from your customers by saving them money on the thing that they're going to get anyways.

And instead of doing, you get your own food for free and your trainers get their food for free. Mosy Nation, real quick, if you are a business owner that has a big old business and wants to get to a much bigger business going to $50, $100 million plus, we would love to talk to you. And if you like that, we'd like to hear more about it, go to acquisition.com. You can apply anywhere on the page and talk to one of our team and see if we can help you get there. And so I think that I see a world, hopefully, in the near future, and 13 days away for 2020 and beyond where the revenue that comes in from supplements can cover your rent and the revenue

that comes in from meals can cover your food so that literally both of the, you know, of these things are taken care of for you simply because you are already making recommendations to the clients in your gym. They are already making these decisions to purchase these based on the decision that they've made to work with you to start a healthy lifestyle. And all we're doing is providing them with a convenient way of doing that at scale. And so anyways, I'm incredibly excited about it. We spent 18 months putting all this stuff together. And in 13 or 12 days, whatever it is, December 13th, that Friday, it will go live to the world. So, If you are interested in that, you should comment and like this because it will be available to everyone

past current gyms. Anyone who's ever worked with us, anyone who's not worked with us who's been afraid to work with us, whatever it is. Hopefully your clients want to have food. And it's probably the biggest pain point that we've all experienced with our customers is like they just ask you. They're like, can you just do this for me? And finally, you can be like, yes, we can do that for you. also allows you to market that as a unique differentiator in terms of like you being a one-stop shop of like we will even cook your food for you like dear god wow it allows you to close better on the front end because now you're decreasing the amount of pain and effort that it takes someone to change their you know change their lifestyle right if all susy has to think about is one meal that she has to get

right just her breakfast or just her dinner right and then the other two meals are taken care of or the other three whatever you know what i mean um it makes that lifestyle change for her so much more realistic, right? And she believes that she can actually accomplish it, which makes it her A, more likely to buy and B, more lengthy to stay. And then over time, if you want to, you can remove some of the meals so that she can learn it on her own or she can stick with it. And I mean, to be candid with you, Layla and I've been, you know, buying meals for two, three years, you know, despite the fact that Layla is a phenomenal cook. We choose to do it that way. That way don't have to think about it, right? It's already there. We peel it, we eat it, and we eat it. It's just very straightforward. And so now you can have that same benefit to your customers. so that they can have that same ease and they can live the same life that we do. Right? Is that like we prep our food? But like realistically, normal people take, this is just according to USDA, 5.9 hours a week prepping and cleaning food, right?

So that means, and that's not even, that's like normal people. That's not people trying to change their fitness lifestyle, right? Insane, right? Insane. But people who are trying to change the fitness lifestyle, I mean, I don't know if it's conservative to say that that would be one and a half times, like nine hours a week, that they'd be prepping and thinking about this stuff. And so if it's nine hours a week, like you're giving with someone a full day, full work day of their life back.

And over a month, it's a full week of work. Right. And so the value is already there and they're already spending the money on it anyways. Right. And so the beautiful thing is that sometimes you might feel like you have to sell a supplement, right? It's literally a supplement to, it's something on top of. Whereas food, 100% of humans eat food, right? 74% of humans, you know, of Americans buy at least one dietary supplement, but 100% of people eat food.

And if they don't eat food, they die. So it's got a little bit different of a feel to it. And the reality is that the reason that there's no salespeople at Chpola and at McDonald's and at every restaurant you've ever seen is because you don't need to sell it. People buy it. And so as long as you make it available to them, then they will make that purchase, especially if it comes with the Adelon benefit of being convenient, saving them time, and getting them to their goal faster, which we all know, real talk, 90% of it's

going to be food anyways. And so finally we can actually provide them that solution in a consistent manner where we actually benefit as fitness professional. So anyways, I'm super excited about it. I hope you're jacked up. Usually it's a little bit more matter of fact tone for me today just because I'm super busy with other stuff and I needed to make this video. So anyways, we're 12 days out. Tag you friends. Comment below if you're not in our world. Like if you're not like in Jim Lords and you are interested in this, comment below so that we know we can try and message you and let you know when it goes live

so that you two can have access to it. We'll have some sick prizes and sick bonuses because you know how I do to make it extra fun and exciting for everybody. And yeah, so help your clients, help your trainers, live better life, never have to pay for your rent or your food ever again because of the goodwill that you have with your customers

so that you can actually help them live better lives in the long haul the way we do it too. So anyways, I hope you guys have amazing, a meal-tastic Monday. We are 12 days out, the 12 days of Christmas, the 12 days of macros. And I hope you guys get as excited about this. I am, I'm trying to contain my excitement because so many people behind the scenes beyond me have been working to put this together so that we can crush the new year

as a community and help all these people who otherwise would struggle. They'd be like, I can't, I'm not going to be able to do this meal plan. but now they can't because we can make it easy for them right so anyways have an amazing day keep being awesome um keep grinding i can tell you i'm with you in that and i salute you for the hustle that you put in it because it never gets easier right we just get stronger so um have an awesome day guys and i'll catch you guys on the flip side 12 days left all right bye