- “It’s not just putting a name on a product; it’s having a name go on a product that people can recognize that what the value and the utility is and what prestige that brand brings to that product.”– Bill [25:47]
- “If you try to answer everything in every business question and every different channel of distribution and every customer, I don’t think you’ll be successful.”– Bill [34:47]
- “We do have the capabilities of using eCommerce and direct to consumer sales today because that’s opening up a whole new area for us to dress new products development that may not be accepted readily because of the limited retail capabilities today.”– Bill [15:10]
How Select Brands License Products with Prestigious Brands and How The eCommerce Space Will Change After COVID-19
Do you want your product to be recognized and be competitive in the market after licensing? Then think of brands that will bring value and prestige to your product, not just any name.
In this episode of the Page One Podcast, Luke Peters speaks with Bill Endres, the owner of Select Brands. Bill decided to leave a career at the executive level after 22 years and now develops private label and licensed products selling to some of the largest mass retailers in the world. He also conducts business with his two sons each contributing differently within the company.
Listen in to learn how the pandemic has unleashed benefits for some industries in the areas of eCommerce and the direct-to-consumer market. You will also hear how companies like Select Brands are going about finding and utilizing manufacturers outside of China.
- How they utilize each employee’s capabilities from the US to China through collaborations.
- How the pandemic has positively impacted eCommerce in certain industries.
- The importance of collaborating with brands that bring value and prestige to your product and not just a name.
- The benefits of focusing on what you’re good at as a company and not trying to be everything to everyone.
- [1:55] Bill explains the products they develop- kitchen appliances and other products they do private labeling and licensed brands.
- [3:14] The unexpected demand they saw during the Coronavirus pandemic after eCommerce took off.
- [5:00] Bill explains the COVID-19 measures they still have in place to combat the virus.
- [7:05] He explains how they found manufacturers outside China and the time challenges they’ve had due to the production complexities of their products.
- [9:28] He explains the size of Select Brands as an international company and the unique operational strategies they use.
- [10:55] How they all collaborate to complete a project and the complex process of manufacturing that takes a year.
- [14:59] How eCommerce and direct to consumer model has created opportunities for Select Brands to offer new concepts to consumers.
- [17:47] Bill explains how and why they moved from the executive level and started developing their own products.
- [21:00] He narrates how he found funding to put Select Brands up and running.
- [25:09] Bill describes the licensing process and the lessons he learned in investing his product with valuable brands.
- [29:57] The lessons Bill learned from his father about business and the roles his two sons contribute to the company.
- [34:10] Learning not to be everything to everyone and rather concentrating on one product you’re good at as a company.
Announcer: Welcome to the Page 1 Podcast, a podcast featuring a variety of guests and thought leaders on topics ranging from digital marketing, sales channel strategies, influencer marketing, best in class product launches, and all the details about how to accelerate sales. Now, here’s your host, Luke Peters.
Luke Peters: Thanks for joining us on the Page 1 Podcast. I’m your host, Luke Peters, CEO of NewAir Appliances and Retail Band Digital Strategy Agency. In this studio episode you’re going to learn from Bill Endres on how after 22 years at the executive level he left and started his own business, Select Brands. He now has developed private label and licensed products selling to some of the largest mass retailers in the world. Along with that, has a family business with his two sons working with him.
Luke Peters: This episode is sponsored by Retail Band. Business owners, do you wish you had someone to create a custom strategic plan to grow your online sales? Do you need someone to run your strategy on digital, social, influencers, and content? Learn more at retailband.com.
Luke Peters: Back to Bill. Bill graduated from Southwest Missouri State with a marketing degree, went to work for Corning Glass. After five years, he’s moved over to Rival Manufacturing in Kansas City. He moved up to senior VP of sales and marketing and was on the board of directors when after 22 years he decided to start his own business, Select Brands, and he has continued that for 22 more years. Bill is currently on the IHA Board of Directors and will become chairman of the board in September. He’s blessed to also have both of his two sons in the business. Thanks, Bill, for joining us on the Page 1 Podcast.
Bill Endres: Thanks a lot. I appreciate it.
Luke Peters: Hey Bill, before we get going, can you give the audience a little bit of detail about the products? Maybe describe the types of products you sell. A couple of examples would be great.
Bill Endres: Yeah, we are in the small electrical appliance business. We sell virtually anything that you’d find in a kitchen that plugs in and is used as an appliance to prepare food and get ready and eat food and cook food. Some of our brands are, Toastmaster is one of our highest recognized brands, but we also make products that come under specialty baking, like in our Babycakes brand. We have true products, which are more of a upscale type of a product. Kitchen Selectives is our basic brand, it’s sold virtually everywhere. Then we do licensed brands and private label brands as well. Particularly in the licensed business, we do things like with Disney and Nickelodeon and Universal Studios, Warner Brothers. Yeah, that’s kind of the breadth of the brand. Mostly everything that’s in the kitchen, we usually have a source or we end up making products like that.
Luke Peters: Yeah, that’s great. For the audience, we’re going to dive into a few of those things. We’ll touch on licensing and how to think about that and what to think about in those licensing contracts. Bill obviously has a lot of experience there. We’ll talk about private labeling, verse licensing, even get into supply chain and some of the large customers as well that Bill and Select Brands are working with. Why don’t we, first, speaking to coronavirus or talking about coronavirus since it’s on everybody’s mind, how are you guys navigating that current challenge right now?
Bill Endres: It was definitely something that impacted sales and a few of the vast needs at the beginning. I thought it was going to be devastating to us as a importer and main manufacturer overseas and supply of product here in the US with the retail business really kind of shutting down. In the first two months I thought it was going to be a disaster. But shortly after that, we started to get our hands around it and figured out that, wow, the internet and the e-commerce business is really taking off here, and then those retailers who were still in operation started to see an increased demand. It’s definitely impacted us from sales wise, but now it looks like it’s going to make up the difference and we’re actually going to end up with a positive year.
Luke Peters: Yeah. For your category, and people are cooking more at home, and you guys probably are positioned pretty well when you think about it, or at least from my standpoint, it seems like you’d be positioned well for the current consumer trends.
Bill Endres: Yeah. Usually, it’s interesting in a small appliance business. Because we’re not a really high-end product and there’s utility value in what we sell, usually when there’s recessionary periods or times that are a little bit more difficult, our products are not impacted as deeply as some of the others and they also end up coming out of that recession period faster than others. I think, as long as we can keep the cost structure where it is, and we have totally value in their product, the consumers recognized that and they tend to use it. During coronavirus, people actually stayed home more, so they wanted products to help in food preparation and creating dinners at home.
Luke Peters: Yeah, it’s been a big trend. Nobody knows how long this is going to go on for, but I don’t know, do you have any personal opinions, or what do you feel might happen in the future with business given all the health changes and impacts that’s had to, say, in-store business and just change in consumer behavior?
Bill Endres: Yeah. I think, definitely, we made changes here in our business and how we operate, and those things still go on and they’ll probably continue to go on even after this starts to subside, but we’re a lot more conscious of our space and social distancing. Everyday, when people come in here, we still take temperatures and make sure people are safe. If they aren’t, they have to go home. And then they have to get an approval from a doctor to come back in. We take it serious here. For about six to eight weeks, we actually worked at home. We actually closed the office except for the warehouse, and the warehouse that we’re shipping products, especially for dot com, all those people wore masks daily, they had to clean their workstations daily, temperatures taking daily, and we were very cognizant of the virus itself and made sure that nobody was impact.
Bill Endres: Long-term, when I think about the changes here, yes, I think there’s health changes and I think those would be impacted, but like most things go, when coronavirus finally subsides, I think there’d be a loosening up of some of that, and I think history has proven that it’s happened with other major pandemics. I do think that it’s just pointed out though, the tenuous situation that we might face with having everything imported in the country of being China. I think that there’s a lot more pressure on China now, and we obviously have worked other places also for sourcing our products. I do think that’s given us a new direction to be able to be cognizant of so we don’t find ourselves in a tenuous position.
Luke Peters: I was going to ask that later on about your supply chain. Are you able to share where you found success outside of China? Any examples or even, if you’re able to say it, we moved this percentage? It would be really great, I think, for the audience to understand that. I know that’s been the trend with tariffs, everybody’s looking everywhere.
Bill Endres: Yes.
Luke Peters: But it is harder in your category. You guys got a plug. I understand the complexity of trying to move your products. There often isn’t the easy availability just to go to Vietnam or somewhere else. Maybe Taiwan of course, price is going to be higher. But I’m curious where you guys have found success and how that’s impacted your future planning.
Bill Endres: That’s a really good question. If you look at… It’s really difficult in small appliances because you’re not just making a product that is, I won’t say simple from the standpoint, I’m not in the cut and sew business, or you’re not in something that’s just only an injection molded product. We have multiple components that come from a lot of secondary supply. When you don’t have that supply chain in the country you’re looking at, it becomes much more difficult.
Bill Endres: Today, we’re having good luck, and Indonesia’s been the first place that we’ve been able to go. With Indonesia, we’ve been successful with two different manufacturers. We started off and one is currently producing product for us, and the other is coming online late this year. That’ll be a good resource for us in two different product categories. Both of those factories have ties back to China, so it does give you some components if necessary, and they also have a good understanding of operational procedures in both places. In addition to that, we’ve looked at Vietnam and also Thailand. Our product being a little bit unique and being electrical, it’s more difficult to find component buyers in those countries, so we had to be cognizant of that and it takes a little while to develop a good supplier in those countries.
Luke Peters: Yeah, that totally makes sense. Like you said, it’s difficult because the supply chain still is going to go back to China for the components. All of those countries that you mentioned, I think everybody’s looking at Thailand for sure, has some capabilities. India’s up and coming. Mexico of course has some capabilities. You mentioned Vietnam. But in Indonesia, is it still a contract manufacturing situation or are you having to really own a lot more of, say, the R and D and the tooling, or is that already part of your business model where you guys are owning more of that?
Bill Endres: That is part of our model. We own tools specific to our product, we do listings ourselves, we do design development. That’s one of the things that we decided early on, is that we needed to be able to do that to get the kind of product we wanted.
Luke Peters: Yeah. So you’re really differentiating yourself. I think the audience… Before we jump into more questions here, and I was actually going to start with how you even started this business, we’ll back up and get into that. I think we ran and jumped down this rabbit hole because I was going to go into this later in the podcast anyways. But why don’t we talk about your business? Are you able to share how many team members you have, how big your warehouse is, just to give the audience a scale of the size of the business?
Bill Endres: Sure. I’ll just say we do about 100 million US dollars in turnover. Some years more, some years a little less. We do that with we try to keep our head count down. We have 31 people here in the US. We have a warehouse here, but most of our business is direct import. We have a team of five direct employees living in China, in Mainland China. We have a office in Hong Kong and we have contracted our own inspection and logistics network over there as well to our office in Hong Kong. We do keep the numbers down for the volume that we do. As I said, we do a lot of direct import, so the percentage that goes through our warehouse here is only about 25% of our business. That’s one of the things that we do to make us a little bit different than other people.
Luke Peters: Yeah, that’s amazing. Listen, a lot of companies would be jealous to have three million in revenue per person here in the US, so you guys are above that. That’s a great metric to hit. I know it’s going to vary for industry to industry, but still, that’s an impressive number. Just to reiterate there because I know the audience is going to want to rewind that. About 100 million top line, 31 staff here, five staff in China, mostly DI business, 75% mostly DI, and you have a Hong Kong office. Obviously, you’re probably doing sales marketing, warehousing here, accounting, I’m guessing. Where are you guys doing R and D? Is that with the five China staff, or are they doing mostly sourcing for you?
Bill Endres: No, we have both. We have some engineering there and some development. But most of our product development and ideas generation and engineering starts here in the US. We have engineering capabilities, design capabilities, obviously we do a lot of marketing work and study ourselves, but we do a cooperative effort with our teams once we decide the project that we’re going to work on, then we bring in our China team, and we also utilize some of the engineering capabilities there with some of the factories we have. That’s one of the things that we do when we vet a factory, is to make sure they have capable engineering staff in the factory as well.
Luke Peters: Wow, that’s great. Have you guys been working on this move to Indonesia for a while, and now you’re finally live there? How long did it take to actually find… Listen, I know how difficult it is. You got a new country, a whole new factory, there’s QC that’s got to happen.
Bill Endres: That’s correct.
Luke Peters: Maybe tooling. There’s so much. What was start to finish timeline there?
Bill Endres: Really, because this factory existed and they were already producing some product that made it easier for us, but it still took about a year. We had to go through a lot of vetting to make sure they were making the products that we wanted, understand what the capabilities were, do a complete study on the content of product that was made in Indonesia versus product versus components that came from China to make sure we had a product that was actually could be said made it in Indonesia, which we do. The factory is actually standalone on themselves and Indonesian company, even though they have a partner in China. Actually, both of those factors wanted the same type of model. The other thing is that they have brought in and they’re making, doing particular sets of different types of manufacturing capabilities, and have extra landing capabilities to do more of that. As I talked about you need to have components and certain components in the electric, they actually have brought in partners that want to develop in Indonesia. On their property, they can actually come in and make a component there, and then they supply the factory, and if they want, they can apply others too. That’s a way to try to mitigate some of the issue having to go to other countries to get components.
Luke Peters: That makes sense. Bill, overall, we got a good scale on the company. How many total skews are you guys offering?
Bill Endres: About 200.
Luke Peters: Got it. Okay, that’s great to get a good feel for the company. How many skews do you launch per year on average maybe the last years.
Bill Endres: It really depends because we can take a particular type of product and then we can change the whole aspect if we make it a licensed product.
Luke Peters: Yeah, that’s true.
Bill Endres: I would say, on the average, we have something around 30 a year that is changes or new that comes out.
Luke Peters: Yeah. That’s still a lot though, because the reason I ask that is, well, I like to ask questions that I’m curious about the answers on, but I’m thinking of your marketing department’s got to launch 30 skews. Whether you outsource it or not, you got to shoot photos and maybe do videos and do content and you still got to bring 30 products to life whether you’re just making slight changes or it’s a new tool and a totally new design.
Bill Endres: Right. I think it’s really funny you mentioned that because internally we get into discussions and somebody says, “Well, it’s just another photo. It’s just a different photo. It’s just a different… ” No, but it’s totally a different new product, and that’s what people don’t recognize sometimes. You still have to go through the entire process. If you’re just changing the outlook or you’re changing the brand, it’s a new product. Whether or not it’s totally new or not, it’s still a new product.
Luke Peters: Yeah, and then sales has to get it listed, and if you’re putting it online, it’s not accepted at the same rate at all the retailers, some of them take forever. Yeah, it’s interesting. Even with SKU rationalization, when people say, “Well, we’re going to get rid of our poor sellers and bring in the new ones,” it’s a lot of work just to get these things listed and placed in the right areas online or in-store, and it’s hard to yank them when you’ve done all this work and then they’re just bringing a revenue at that point. I don’t know if you guys have to make the same decisions on your end.
Bill Endres: The thing that I think exasperates that whole situation is that retail in general is shrinking. The number of retailers that we have to sell is less. It’s a good thing we do have the capability of using the e-commerce and direct to consumer sales today because that’s opening up a whole new area for us to be able to address new product development that may not be accepted readily, but because of the limited retail capability today, it gives you a way to get to the consumer and to bring a new concept out that maybe retail isn’t interested in attaching themselves to to start with. It’s been a real opportunity to be able to try to look at the direct to consumer model, but not every product is made for that either.
Luke Peters: Yeah, exactly. There’s size and shipping considerations. Before we get you finally back to how you actually started this business, are you able to… We’re talking a lot about supply chain and your business. I’m just curious if you’re able to share what ERP or business system you’re on. I know it’s always another, just for our audience, an interesting one to think about.
Bill Endres: We use NetSuite. We went to that a little over a year ago. We’re happy with it so far. We’ve added a couple little modules to it. One of them is SourceDay, which is a module that we add that gives really logistic handling with each factory. We have so many factors we work with, it’s kind of the scheduling process that’s all online, so it’s a collaboration between them and us, and it manages that function of the business real well.
Luke Peters: Awesome. We use NetSuite, too, so that’s… And almost on your timeline. I think we’ve been on it about a year and a half, but pretty close to you guys. What WMS did you guys land on? We’ve used a couple.
Bill Endres: I’m sorry.
Luke Peters: The warehouse management system. Did you guys-
Bill Endres: Yeah, we actually are using what we have with… Can’t remember the name of it. I’m sorry.
Luke Peters: We’ll get it in the show notes for the audience. You can email me later and we can get it in there.
Bill Endres: Okay.
Luke Peters: It’s interesting, Bill. Just because your business and my business, they are similar in a sense, actually. Of course we’re doing different products, but you guys are more in-store, we’re more online, but we’re still probably using NetSuite in a lot of the same ways and our supply chains are probably similar and we still do a lot of e-commerce business and some DI. NetSuite, it’s a good solution, and it’s definitely an industry leader out there, and it’s all in the cloud so it definitely saved you during COVID, right?
Bill Endres: That is correct.
Luke Peters: I don’t know if you guys went from a server system to a cloud. I don’t know if you had a cloud-based system prior to NetSuite, but it’s nice.
Bill Endres: No, we did not, so it really helped.
Luke Peters: There we go. Yeah, timing. Well listen, let’s get into just really quickly back to your personal story here. You’re working for Rival for 22 years and had a high position there, you’re on a board of directors, and then decided to start your own company. Just take us through the process, your mindset, and then how you funded Select Brands.
Bill Endres: Right. It is an interesting story that, after 22 years with Rival. We had gone through seven different acquisitions with companies during that time, and we were a domestic based manufacturer at Rival. It was clear to us, as a management team, that we could see this is not going to work for us if we don’t look at least to the far east, because their cost of operation was so much lower than the cost of operating factories in the United States, and not just labor, but a lot of different areas. We started at Rival to look overseas to develop a relationship overseas. I was fortunate enough to be part of that team that went to China and started working with factories and learning that process back in 1986. My eyes were wide open and it was a new country, a new culture, different manufacturing processes and operations, and I just was enamored with it and I could see that I felt that the future, at least for the time being with our product category, was going to be in China. That’s really the emphasis that I took from that.
Bill Endres: I also learned at the same time that if you just went overseas and bought something off the shelf, it wasn’t really what the consumer was looking for over here. So I tried to take what I learned at Rival and understand a little bit more about the consumer, the marketplace, trends that were happening in our small appliance businesses, and then say, “Why doesn’t someone put together a team that does the work of identifying the product, identifying the spec, identifying the style, the design, and then go to China and have China work with them to develop a product that makes sense for our country and then own it so nobody else can buy it and get the listing yourself so you have control over it and then start to develop a brand that can drive that in the United States.” That was the thought process behind going overseas and developing this.
Bill Endres: My problem to start with is I didn’t have any grants, so I looked at licensing, and initially some of the first licenses I had were with Corning, and Corning, I was able to develop that brand into small appliances. I had Fiesta, which was the dinnerware that had an iconic look to it and color. And then, I had Campbell Soup Company that can openers fit, maybe a slow cooker fit, maybe a hotpot fit. But you tried to take those brands that you could license that had a relationship of a product that could be developed, that the consumer could say, “Oh yeah, I could see that in this brand.” And that’s the way we started. Walmart was our biggest customer to start with. I have a very strong relationship there and we had developed a private label product for them. It was during the time that George Farro was just taking off, and we did a private label for Walmart, and that’s what really started and made our business.
Luke Peters: That’s a heck of a customer to start with.
Bill Endres: Right.
Luke Peters: When you start. How about funding the business? Was that just all bootstrapped? Listen, these aren’t the cheapest companies to fund because you’ve got inventory, obviously, right? And terms. Walmart and other big retailers are going to… They’re not always going to have favorable payment terms. How’d you handle that?
Bill Endres: Two things were there. When I decided to do this, I got a call from several people that wanted to find out what I was doing and what I was going to do. I took every penny I had, savings, and I actually invested that as well. But I got a call from a guy named David [Friedson 00:21:17] who used to own Windmere, which eventually ended up buying Black & Decker and ended up being sold to Spectrum Brands over time. David knew me and knew the kind of person I was, and he said, “Whatever you’re going to do, I’d like to be a part of it.” And I said, “Well, what were you thinking?” He says, “Well, why don’t you put your notes together and think about that and come down and talk to me.” They were in Miami at the time. And I said, “All right, I will.” So we set up a time. I had a list of things that I wanted if I was going to have a partnership with someone that I needed, and one of them was distribution, that was probably the biggest one, and a back room, if he would, to give me some accounting processes and things like that, that I could use initially, because I was just starting up.
Bill Endres: When I went and talked to David, the first thing out of his mouth is, he didn’t ask me, he kind of told me what he had in mind. If I went down my list, he actually talked about everything on my list and we just checked them off together. At the end of the day, I said, “Well, how much of the business do you want?” And he says, “I want 51%.” And I said, “Nope. We’re doing half.”
Luke Peters: Yeah. That’s fine.
Bill Endres: We ended up starting off being 50/50 partners. I told him I would end up developing product for him and help him out in the Windmere side, too, and that’s the way we started out, was I had a back room, I had accounting function behind me, and then I did sales and marketing and product development all in Kansas City, and that’s the way it started. It didn’t last long. It lasted about two years, two and a half years, because David, he first of all asked me to become president of Windmere, and I said, “Well, what about what I’m starting?” He said, “Well,” he said, “You can continue to do that, I just need help here.”
Bill Endres: I was developing Select Brands, and at the same time operating Windmere, and then David ended up buying Black & Decker. As soon as Black & Decker was bought, everything changed. Eventually, I went back to David and said, “Hey, I don’t like the way this is going. Everything I’m trying to develop is being undermined by what we’re doing with Black & Decker.” He said, “What did you have in mind?” I said, “I’d just like to buy my 50% back.” I said, “Either I buy my 50% back or you buy my 50%, but I’m not going to stay here, I’m going to develop my own.” 24 hours later, he agreed and let me buy the 50%. I did, and that was Select Brands from there going forward, totally mine.
Luke Peters: Wow, what a story, and fortuitous and fortunate, you got the funding at the right time.
Bill Endres: Right.
Luke Peters: And honestly started the business in a great time. Like you’re talking about, that was just when China was still opening and not everybody was… Even if you just knew how to buy a product from China, you could make money back then.
Bill Endres: That’s correct. That’s correct.
Luke Peters: Totally different. How did you guys settle on a price? Was there some easy math to do where it was easy to figure out how to buy out that 50%?
Bill Endres: Yeah, it was pretty easy. The money that he had put in to the business from inventory, et cetera, that’s basically what the value ended up being. We split the profit that was made up to that point. We had grown the business pretty fast in those two years. Basically went from a startup that we did about the first year, did about $5 million to about 12 million within two years.
Luke Peters: Oh, wow. That’s a big one.
Bill Endres: It just generated big after that. That was basically because of the private label programs that we’re able to set up.
Luke Peters: Yeah, wow. Why don’t we talk about the licensing side of things? We’ve done a couple of deals, and I know, again, I always like to think of what’s going to be interesting for the business owners and in the audience here, and folks that have worked with licensing, it can be a huge multiplier, but it also can constrain you a lot with the way that the terms are written in the contracts. I guess the question here is, how do you successfully manage the whole licensing process? Where have you found the win/win, I’m guessing with great names, and then how have you negotiated those contracts in a favorable way that still is a win/win, and isn’t just puts you in a reporting rut where you have to report every single number and hit minimums that are unattainable and so on and so forth? I’d be curious to hear just maybe some words of wisdom on the licensing side.
Bill Endres: Luke, I can tell by just your comments there that you’ve experienced the contracts. I think you know that there can be some real pitfalls in those as well.
Luke Peters: Yep.
Bill Endres: I think the best thing that we did was by starting off right off the very first step, we ended up having three different companies that we did contract deals with. Each one of those contracts were different. Some of them were pretty arduous. As you can see today, we don’t have any one of those companies that are part of an ongoing licensing agreement, but we learned a lot during that time. One of them are the guarantees, the minimums that you have to make. I think the biggest thing is planning a brand that relates to what you are doing. It’s not just putting a name on a product, it’s having a name go on a product that people can recognize at both what the value and the utility value is and what enhancement or what prestige that brand brings to that product.
Bill Endres: Then, depending on the type of business you’re in, Luke, the royalty rates have a big play, and you can see we’d actually did early on some NFL properties. This was at Rival and I learned a little bit there. But their royalty rate was completely almost unobtainable to be able to put the limitations that they had and the royalty program that they had was really high for a small appliance that you’re not making that kind of margin structure on. So when you added their royalty cost, their guarantee cost, their marketing costs onto your normal margin, all of a sudden your product became not competitive in the marketplace. We learned a little bit from that and how we negotiated a contract to let people know, yes, we can pay a premium, but we can’t make it so high that people won’t buy it, or I can’t get your guaranteed amount.
Bill Endres: I also think that one of the things we learned in licensing was, if you started a business and it started to create some good volume, you wanted to make sure there was a stipulation that if you met certain hurdle rates, that you had a guarantee that those licenses would continue, and that’s one thing we tried to put into place as well. We have been very fortunate to have Disney. Disney’s been a huge, successful license for us. We have all the Disney brands, including Lucas and Pixar. We have all those. Funny that once you get one and you do well with it, other people in that business come to you all the time trying to talk you into working with them. That sometimes helps you negotiate favorable terms in the contract. I’m also very fortunate that Eric, my oldest son, is very detail-oriented and he handles that part of the business from a standpoint of contract negotiations, understanding the marketing and working with the marketing people on the development of the product, and the relationship managers with Disney in particular.
Luke Peters: Yeah, wow, that’s great. Taking us through the whole story in licensing, and again, it’s worth a rewind there for anybody interested in getting into the business or in a current contract. But I have seen, like what you talked about with that initial story with Rival and I think the NFL, and you didn’t mention numbers of course, but I have seen licensing percentage in royalty fees come down over the years. Now, often below 5%, but years ago, above 10% in a lot of cases with some brands.
Bill Endres: 12 to 15%.
Luke Peters: Yeah, there you go. You’re right. It can just price you out, and for a lot of hard goods, there isn’t enough margin there at the end after all the different allowances and everything else that comes in from the retail channels. Yeah. My two cents though, is just having a really great… I think you hit on the same thing, but having a great name that’s going to resonate with the product category you’re going into is an obvious one, but it’s the most important, and of course, Disney, there aren’t many names better than that. There’s a licensing show every year in Vegas, and they might have it elsewhere. It’s pretty interesting. You walk around, you just see all these incredible names, names you’d love to be affiliated with, but then you also see older brands trying to get their name into every category. In a lot of those cases, it didn’t resonate with me, and I think that’s what you’re talking about there.
Bill Endres: Absolutely. Absolutely.
Luke Peters: Yeah.
Bill Endres: Your product defines those areas that you can have a success with licensing.
Luke Peters: Yep, well said. Why don’t we move on to the family dynamic? I know that’s an interesting one. Growing up, I worked at my dad’s donut shop. I probably have told this story once or twice in the podcast, but I was like 10 years old making donuts in the middle of the night, graveyard, and that’s how I learned to work hard. But it was family business and we all had to work together. It’s a small business. At one time, he owned a couple donut shops, but mainly out of one donut shop. Still donut shop’s still around by the way. He sold it, so if anybody’s in Huntington Beach, check out the Donuttery on Beach and Slater. It’s literally kind of famous over there now.
Bill Endres: That’s great.
Luke Peters: That’s my family, the story on business. Talk about your dynamics. You have two sons working with you. When did they start and how long have they been with the business? We’d love to hear some stories on that.
Bill Endres: That’s great. Actually, I’ll tell you a little bit about my roots, too. My father was a salesman. He worked for Rival.
Luke Peters: Oh, wow.
Bill Endres: Before I went with Rival, he worked there for years. He introduced the Crock-Pot. That was a big thing. He was so proud of that because, unlike most product, Crock-Pot started in the midwest and resonated out to the coast. He actually had the biggest territory in all of Rival at the time because he really got behind the Crock-Pot and started that. Anyway, I learned from him. I learned a lot from him. I think that I’m fortunate that both of my sons decided to join Select Brands. Both sons have graduated from Baylor University. Eric, that’s my oldest son, he got [inaudible 00:30:45] first. He went to work for Libby Glass in Dallas for a little while. When I started Select Brands, I said, “I don’t know what your career path or what you want to do is.” I said, “But if you like the housewares business,” I said, “I’m starting this thing called Select Brands, and if you’d like to join me, I’d love to have you be a part of it.” He said, “Well, let me think about it.” And he decided to do it.
Bill Endres: I was so happy with that because, Eric, he studied marketing in school and he understood a little bit more about today’s business and today’s business cycles, I think, than maybe I did, even though I kept up with it. He brought a whole different perspective into the game. He’s very detail-oriented and has a good head for recognizing trends. Eric started off in the marketing area and working with product development and then into the licensing side of it. He’s now vice president of marketing here and works on product development, on the licensing programs, on the e-commerce side, relationships and things that go on there as well.
Bill Endres: Wes, my other son, I would say he’s a consummate salesman, but he also is very creative and artistic minded. He does all of our branding, all of our packaging, all of the photo work for our product, and also works in the sales area. He has a team of three people that work on developing the artwork and our branding. That in itself is a lot of work because of the number of products that we come out with all the time. There’s a good mix on both sides, and that’s been a blessing to us really.
Luke Peters: Yeah. How is it at the family gatherings? You guys talking business at Thanksgiving, trends where you guys want to go with things? Assume it’s got to come up in the family conversations.
Bill Endres: I will tell you, the things that I decided early on is I did not want to have the business be the only thing that our lives revolved around. When both sons started, one of the things we did, we sat down and we set up a rule, that when we have a family gathering, we don’t talk about business. I will tell you that every once in a while something will creep in there that might be important at the time, but we choose not to speak about what’s going on on our daily business. When we have family gatherings, we can concentrate on our family.
Luke Peters: That’s smart, because it can overtake everything. Right?
Bill Endres: Yes.
Luke Peters: You can spend the whole gathering just talking business up in the corner.
Bill Endres: Right. We have grandkids we need to focus and kids that we need to focus on. That’s the thing we try to do as a family.
Luke Peters: Eric, it sounds like he had a job before he joined Select. How about Wes? Did he join right away? What was his past to the company?
Bill Endres: Actually, he went for a little bit, went on a mission after he graduates from college. He went on a mission trip and was working at a church for a little while, and then I talked him into coming in to work at Select Brands. He’s been with us since graduation. Let’s see, Eric is 42, and Wes is 40, so they’ve been here a while.
Luke Peters: Oh, wow.
Bill Endres: Eric’s been here since the very beginning, and Wes, shortly after that.
Luke Peters: Oh, wow. Okay. So Eric has been there since… Wow, that’s cool. It can be a lot of pressure on the kids. It can be both ways. From the outside, I think people or other employees can look at it one way, but honestly, for the family, it’s double the pressure, because the kids really have to stand out and have to bring extra work ethic, so I bet, early on, there’s probably some challenges and some pressure, but it sounds like you guys have navigated that.
Bill Endres: Yeah, and probably the fact that they have been able to live up to what I think is a good company reputation and good work ethic, too.
Luke Peters: Yeah. Well, listen, Bill, I really enjoyed just diving into all these different areas and I know the audience is going to get a lot of interesting insights here. Why don’t we finish with just more about maybe a big takeaway from you? The question that I pose here is that you’ve been on various boards of directors, you’ve held leadership roles, you know own your own business and have been doing that for 22 years. What are the common mistakes you see other business owners making maybe from an area in improvement that others can look at?
Bill Endres: I think one of the things is just reflecting on what you are and not trying to be everything to everyone. If you try to answer everything and every business question and every different channel of distribution and every customer, I don’t think you’ll be successful. Focus on what you can do best, and then build on that. That’s been, I think, a strength that we have. We don’t sell every retailer. That’s by design, because we want to be important to those that we do sell. I tried a lot, and this was trial and error, but we tried other categories of goods and tried to expand into other categories, but we found we kept coming back to where our roots were, and that was the small appliance business, and that’s where we concentrate totally today because we found that’s what we do best and that’s where we can have the biggest impact bond with our customer base.
Luke Peters: Great advice. You can say a lot of different ways, but the key theme there is to focus. Great way to finish the conversation today. Bill, how can listeners connect with you or find more about you?
Bill Endres: Www.selectbrands.com is one way. We have a phone number if you want to call. We’ll talk to you. It’s 913-663-4500.
Luke Peters: Awesome. Great business story and family story. Just for the audience, we’ll have all this in the show notes. Hopefully you guys check out Select Brands and learn more about Bill’s story here. Thanks again for listening to this episode of the Page 1 Podcast sponsored by Retail Band. Hope you all enjoyed the interview today and truly appreciate your reviews on iTunes and hope you join us for the next interview.
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