“Our products were well packaged. Retail quality packaging. We had UPCs. We were able to walk in and say that we were EDI compliant.”
“We’re doing everything we can to control expenses internally and become more efficient.”- Matt [28:50]
“These challenging times force you to refine and become much more efficient.”- Matt [33:26]
How to Pitch Products to Major Retailers Plus Surviving the Impacts of the Pandemic
How did the pandemic transform your business’s operations and sales efforts? We have to admit that even with the many challenges we faced during the pandemic, many businesses have adapted through the adversity to become even better in their operations.
In this episode of Page One Podcast, Luke Peters speaks with Matt Damman about the positive and the negative impacts of the pandemic on the newly transformed Commando Lock. Matt is the CEO of Commando Lock company in Michigan, a growing manufacture of military-grade padlocks and security systems, and an entrepreneur.
Listen in to learn how the increase in the cost of raw materials and challenges with labor is affecting production processes. You will also learn the different ways you can pitch your product to major retailers.
- How to successfully pitch your products to different retailers
- The impact of the raw materials like brass and steel cost increase
- The uncertainty in sales performance for most businesses caused by the current world inflation
- How challenging times force you to refine your product and become more efficient in what you do
- [2:10] Matt describes what they do at Commando Lock, which is manufacturing military-grade locks.
- [3:57] He talks about the delays and sales growth they experienced during the pandemic.
- [6:40] The big companies they have been able to pitch to over the last several months.
- [9:14] He explains how to pitch products to major retailers through cold calling and presentation.
- [14:19] How their sales have been performing on different platforms plus how they were shut down on Google.
- [20:36] The raw materials cost increase and labor challenges that Commando Lock has experienced since the pandemic.
- [27:31] Why Commando Lock is highly contemplating cost increases to cover the production cost.
- [29:55] Matt explains their funding through credit and private investors to keep them afloat.
- [32:37] How they’ve been forced by the pandemic to become more efficient in manufacturing.
- [35:14] Matt explains their plans of getting into Home Depot and not taking out the competition.
Luke Peters: Thanks for joining us on the Page One Podcast. I’m your host Luke Peters, CEO of NewAir Appliances. In this episode, you’re going to hear from Matt Damon on how he’s growing his American made Commando Lock brand. We’re going to talk all about sales into military accounts, Tractor Supply and much more. How he’s thriving amidst the COVID pandemic, but also we’re going to talk about the supply chain, steel prices, other copper or whatever other materials he’s making to use his locks, and how that supply chain is impacting his business. It’s going to be really interesting, and a lot of the same things you guys are all dealing with in your companies.
Luke Peters: But first, before we get into that, I’ve got an important new announcement here. We are in need of vacation homeowners for a new cause that I’m working on. Check out vetcation.org, and you’re going to see how we’re supporting Veterans with dream vacations. Right now, we need caring vacation homeowners who are willing to donate a one week’s vacation. Literally, this is a vacation of a lifetime for these struggling families. Please if you can, if you know a vacation owner, if you have a vacation home, pause this podcast, check out vetcation.org to learn more. Please email me to get involved.
Luke Peters: So, a little bit about Matt. Matt is the CEO of Commando Lock Company in Troy, Michigan. He’s making military grade padlocks and security systems, and he’s invented all kinds of products, run small businesses, got a deal on Shark Tank, so he’s got a lot of fun stories. You can learn a lot about that in our first episode, so Matt was a previous guest of the Page One Podcast. This is going to be episode number two, and we’re really going to talk about COVID and post-COVID, and how Commando Lock is doing.
Luke Peters: Matt, welcome to the Page One Podcast.
Matt Damon: Hey Luke, thanks for having me back on. It’s great to be here, I’m excited to chat with you for the next few minutes.
Luke Peters: Awesome. Yeah, you’ve got a great story. Again, I encourage everybody to check out that first episode. But Matt, you want to just briefly describe the business, for those listening right now, so they can understand what you do?
Matt Damon: Sure, Luke. Yeah, Commando Lock Company, as you mentioned, we’re based in Troy, Michigan. We manufacture, as you mentioned, military grade padlock systems, so keyed padlocks. These are locks that can go on anything from the back of a truck to a cooler. Really, pretty standard padlocks like you’d think of from Master Lock. We just make a little bit better mousetrap, they’re high quality, high security. And again, most of the materials we use are all in the US, and the locks are fully stamped and assembled here in the US.
Matt Damon: So, been in business for a little over 12 years. I’ve been here, now, part of the business for about two and a half years. We take a page out of Yeti’s playbook, what they did to coolers, is you take a commodity product, make it a little better, and then put a lifestyle brand around out. Our Commando Locks are secure, and they’re also cool when you see the brand. People can feel good that they’ve got good security on whatever matters to them.
Matt Damon: That’s who we are, and I’m looking forward to you more about all the details here.
Luke Peters: Cool. And then, for those listening just check out commandolock.com. That’s the domain, Matt?
Matt Damon: Yeah that’s it, commandolock.com.
Luke Peters: Yeah, so you get a flavor for what they’re making. And then, we talked last year and you guys were doing great. How did you finish the year? You went from a company going back and back, and this might have been when you joined or even before you joined, you guys were losing money. Then, turned the business around, as I remember, and you guys were rapidly growing, got some big military accounts along with some other traditional retail accounts. How did you guys finish 2020, and how has the start of 2021 been?
Matt Damon: Yeah. When I got involved was the end of 2018, early ’19, it was a bit of a turnaround. The business had been distressed for a variety of reasons that were somewhat outside of the founder’s control. Came in, we did raise some capital, which we had talked about on the previous episode. We really hit our plan, through ’19 and ’20. You asked how 2020 turned out, we were on a path to break even. COVID interrupted some of that, and we can get into that more. But from a top line, in terms of sales have gone very well.
Matt Damon: We picked up two military contracts, which we actually go through a very large military supplier, great partners down in North Carolina. Interestingly enough, they use blind labor in their facility, so they’re under what they call the Ability One Act. A lot of these lock contracts that they have, they’re going to have forever and we are now a pretty tied in supplier to them. Longterm, I think there’s great growth for us with the military.
Matt Damon: Last year, our web sales really started picking up, Amazon picked up. We did a test with Tractor Supply, and it took a little while, COVID delayed a bunch of things. I’ll have to tell you, throughout the year getting things done was a challenge, but the folks at Tractor Supply have been awesome. We’re going to be shipping their top 400 stores, just in a couple weeks.
Luke Peters: Oh, congrats.
Matt Damon: So, the product will be out there.
Matt Damon: Anyway, the year came in really almost on our plan from day one. But, what it did is it pushed off I think some sales that probably could have happened sooner. Now, we started venturing into the supply chain stuff. Overall, I was happy with our execution. We also streamlined a lot internally, so within the facility as our volumes grew, we’ve gotten efficient on the operations side. But yeah, really pretty pleased with 2020. Now, it’s looking forward where we’re getting a little murky.
Luke Peters: Yeah. We’ll talk about that, we’ll talk about the supply chain and more of what you’re talking about, Matt. But before we do, let’s talk a little bit more about customers because I know the listeners, they always love to hear this. And Tractor’s huge, I think they just announced they bought Orscheln, and they are just massive. They’ve got so many stores, and it sounds like a perfect brand for you guys to link up with. Any other big customer news, or anything else that you’re able to talk about that you guys are working on? Or, even in-store placements that you have?
Matt Damon: Sure. Yeah, Tractor’s been great. Like I said, we did a 40 store test with them that went well, and they’re putting us in their top 400 volume stores to start. We’ll sit alongside Master Lock there. Like you mentioned, I think Tractor Supply, in terms of who their customer is, is a great fit for us.
Matt Damon: We are set up as a vendor at Home Depot and Lowe’s, both online. You can see all our SKUs there at homedepot.com or lowes.com. We also ship Home Depot Pro, which is their contracting business and that’s growing rapidly. That’s all gone pretty well. There’s a not-so-local Midwest chain sporting goods store called Dunham’s Sports, they’ve got about 270 stores. Great folks, their headquarters is actually right up the road from us. We’ll be in their stores here, just in a matter of weeks.
Matt Damon: Those are really the big ones. The exciting stuff on the brand is we do have some IP, and I think we talked about this on the previous episode.
Luke Peters: Yeah.
Matt Damon: We have an interchangeable lock system, where you can swap from a shackle lock to a cable lock, literally in seconds. It doesn’t really apply to the everyday consumer who just needs a lock for their storage shed in the backyard, but for utility use, a lot of B2B stuff, very active outdoor purposes, so we’ve pitched that to both Jeep and Ford, with the Ford Bronco, as doing co-branded or even private labeled kits.
Matt Damon: So you imagine, think of a Jeep, and Jeep people love accessories, and you’ve got your kayak and your cooler, and you’re going out for the day, whether it’s at the beach, or out into the mountains, and you need to lock stuff up. Now, you can have one or two locks that can become four to five locks, just with a twist of the key. For down the road, these could be pretty neat. It’s been tough pushing that, getting their … We’ve gotten to the right people, but now it’s a matter of driving those programs. But there could be some pretty neat stuff coming down the road, around that.
Luke Peters: That is really cool. Are you able to share any insights on how you got into that test? And maybe, what worked well when you pitched, or when you met Tractor? And then, the same with the military accounts? It’d be great for listeners, whatever you’re able to share, what worked in those meetings, and maybe any special prep or presentation, or anything you’re able to share that helped you get those accounts.
Matt Damon: Sure. Yeah, Tractor Supply’s pretty wide open. For years now, as long as I’ve known them, they do an Open Buyer Day, where they put out an invite. It’s usually in the spring, I believe, maybe early summer. And, you just register, you literally register. You go down, they’re in Franklin, Tennessee, and you show up. It was at a Marriott or a Holiday Inn, and you get a little pitch time with the buyer of your category. I did that. I just went down there two years ago, or a year and a half ago, and met with the buyer.
Matt Damon: Okay, so how do you prepare for that? Because I think they see the whole gamut of people walking in with homemade product, all the way up to a Master Lock. Really, it’s the basic stuff. Our products were well-packaged, retail quality packaging. We had UPCs. We were able walk in and say that we were EDI compliant. For listeners that don’t know what that is, it’s an electronic data interface that all the retailers use to pass invoices and purchase orders back and forth.
Matt Damon: Luke, I don’t have to tell you, but anybody who wants to go sell major retail, if you don’t know what that is you’ve got to figure that out before you walk in the door.
Luke Peters: Yeah. It’s a blessing and a curse.
Matt Damon: It is. You can get paper purchase orders to start and they’ll work with you, but you’ve got a leg up if you can at least come in and talk about that.
Matt Damon: We went in and I pitched them. What I did do, we have let’s call it 25 core SKUs, and then we do multi-packs and stuff off of that. I studied their planogram and I knew what they had from Master Lock, and we went in with a small ask. We certainly can’t displace Master Lock, I’m not looking to get 20 SKUs in there day one. I picked the four or five real targeted items that we have, that in their planogram were, I felt, missing, where it would give them an additional offering to their consumer, to their customer. They liked that.
Matt Damon: It got the foot in the door. Our pricing was competitive, we gave them good margin. Pretty quick, it was off to the races on the test. And then, it took some time from there. I don’t know if that answers the question, but it’s having all your ducks in a row, and being buttoned up on what does a retail buyer want to see. I think if you do that, you have a pretty good shot. And then, you’re at the whim of the buyer, you’re at the whim of the category, who your competitors are. But yeah, they’ve been great to work with.
Luke Peters: Actually, that’s great. Super insightful, and especially the part about look, you did the thinking and strategy for the buyer, you helped out the buyer, saved them time. And, you knew the category and went in there and just said these four, or however many you pitched, are going to add value and they’re different because of these reasons. Yeah, that’s actually great insight. That’s super interesting.
Matt Damon: Yeah. You’ve got to study the planogram, their set, and know the price points. And then, know where your product’s going to fit and tell the story. Why do you need this 24.99 brass lock? Well, [inaudible 00:12:35]. Yeah, that was it.
Matt Damon: I know you asked, then, the military.
Luke Peters: Yeah.
Matt Damon: That was a little different. That one was a cold call. We found that there was this company, they’re called LC Industries down in North Carolina, they had a couple large lock contracts. I literally Googled them, and right on their website they had their executive team bios and contact information. So I just blitzed them. I was emailing and calling their top four or five guys, and finally one of them called me back. It turned into a great conversation because he said, “Yeah, we supply these locks to the military, and we didn’t know you guys existed as a supplier.” Pretty quick it was, “Hey, send us some samples and some pricing.”
Matt Damon: That was a bit more price driven, and then service. They tested us out to see if we could deliver. But that one was just brute strength, in terms of persistence and cold calling, and then just getting to the right people.
Luke Peters: That’s cool, that is great. Yeah, it always takes a little bit of hustle and finding the right person.
Luke Peters: How are the dot com sales going? Obviously, likely they can’t compare to any of these in-store placements, you’re going to get huge volume there.
Matt Damon: Yeah.
Luke Peters: I think you’re selling on Amazon, and you have your own D-to-C site. Are you able to share percentage of overall sales, or how is that trending and what’s working there?
Matt Damon: Yeah. If I take Amazon and the web sales, it’s probably about 20, 25 percent of our revenue so it’s meaningful.
Luke Peters: Yeah, that is.
Matt Damon: The margins are pretty good. And of course, everyone gets excited at the gross margin, and then you start layering in … You’ve got all your Ad Words expense on Google, you’ve got Amazon fees and stuff. The margins are still good.
Matt Damon: What’s been interesting, and I have some data on this but a lot of it is just watching, our more expensive locks, our higher quality, the bolt cutter proof, the bad boy, tough locks, sell very well on our website. They do okay on Amazon. Amazon, our lower cost locks sell better. What I think it is, it’s the people who are doing research that really want to … If you’re going to spend 35, 40 bucks on a lock because you’ve got something, maybe you’re a tradesman or a plumber and you’ve got all your stuff in your truck and it’s been broken into, and you want a good lock, these people are doing some research and I think they’re finding our website and buying it there. Amazon’s a bit more of the commodity. If somebody’s putting in padlock and we happen to show up, our basic padlocks are selling there.
Matt Damon: But no, it’s been growing every month. Cable locks, our cable locks can be used as bike locks. We don’t overly market them that way, but they can be, those do pretty well.
Luke Peters: Yeah, I was thinking about that, actually. With all the electric bikes being sold and people worried about theft there, so you answered that question.
Matt Damon: Yeah. I will tell you, I guess we have a few minutes, we had a pretty interesting mystery situation with Google. When all the social unrest stuff was really peaked this summer, one night our merchant account was just shut down. No warning, no explanation, boom, shut down.
Luke Peters: Wow.
Matt Damon: Initially I’m like, “Oh, this has got to be a mistake.” Then, you start freaking out a little because it shut every … If you don’t know, the merchant account feeds Google Shopping, so all our shopping was shut down.
Matt Damon: Anyway, come to find out it happened to a couple other companies that we knew of. I never really got an explanation, but I spent about three months, through their customer service, trying to get it fixed. My personal belief, and a conspiracy theory here, but I think when all that stuff was happening because we use the terms military grade, and we did have some product reviews where people said that they put our locks on their gun cases, I think that may have triggered, maybe, some algorithm filter or something. Anyway, shut it all down.
Luke Peters: Wow. So you were shut down for months, on your credit card processing?
Matt Damon: Three months, our product would not show on Google Shopping.
Luke Peters: Wow.
Matt Damon: If you went to Google and you put in Commando Lock, or Commando Lock padlocks, our search would still show up, so the text responses on Google would show up. But, the little thumbnails for shopping if you want to buy it, all that was immediately turned off cold. Our sales, we lost five figure sales over the course of a couple months.
Matt Damon: I had given up. Literally, we shifted all our ad dollars to Amazon. Amazon started going great. And then, there was a customer service young lady from Google who reached out to me, not even knowing we had a problem. She was, “Hey, I’m your new account manager. I was curious what your experience has been like with Google.”
Luke Peters: You’re like, “Horrible.”
Matt Damon: I said, “Yeah, you really want to know?” To her credit, this young lady championed it, she ran it up the flagpole and within a few weeks, it was turned back on. But, we never got an explanation.
Matt Damon: It’s pretty crazy, it’s in the news, what these guys can do. If something gets tripped and you’re turned off, your business is just cold done. This woman came to me, but normally the Google Ad Word customer service is all over in India, so you’re sending emails.
Luke Peters: Yeah.
Matt Damon: But long story short, it all came back around, we’re doing great on Google again. It was really scary. It was like, “Wait a minute.” Overnight, this can just get flipped off.
Luke Peters: Yeah. Look, it’s a consolidated media world now, so it’s all running through less and less channels. That is a really interesting story.
Matt Damon: We really scrubbed our website, all our social media. Because we make a really cool black lock, it’s a black zinc-plated lock and we call it our Blackout. Military guys love it, and guys put it on their Pelican gun cases. It’s just a cool looking lock. And, I think the word gun showing up in reviews and stuff must have triggered something.
Luke Peters: Yeah.
Matt Damon: Lesson learned. Anyway, the sales have continued to increase, we continue to fund the Google Shopping and Amazon. Yeah, it’s going pretty well.
Luke Peters: Let’s transition now, because I know you guys have interesting things going on in the supply chain. Look, it’s a crazy world right now. We’re recording this in the beginning of March 2021. We’re paying for our containers, I’m paying three times what we paid last year, probably, at the same time. Plus, I get to tip the Port of Los Angeles with that extra demurrage fee, and detention.
Matt Damon: Oh, yeah.
Luke Peters: It’s a crazy world on the supply chain. Our lead times, for our products, for NewAir, they’ve extended but not as bad as you guys. You’ve got raw material costs. Take us through a few of the challenges you’re facing.
Matt Damon: Yeah. We’ve definitely been hit with it. In our locks, just at a high level, we make our locks out of either steel or brass. We buy hot rolled coils, these slit coils of brass. And then, the coils are fed into our press and we stamp out the lock bodies. We’ve got some cool videos for anybody who really wants to see how a lock is made, if you go to our YouTube channel or our website.
Matt Damon: But anyways, brass and steel. And then, we import all the little components. Ball bearings, and there’s an actuator, and little rivets we make. But then, we bring in our cylinders, so the little cylinder that the key goes into, those come in from overseas.
Matt Damon: Through last summer, we were seeing some delays but it wasn’t terrible. As we got into the fall and into the winter is when things really started stretching out. So just to give you an idea, I’ll tell you a number. On our steel, we were paying about 37 cents a pound for steel a year ago, and it’s up in the high 80s to 90 cents at this point. So almost same percentage increase, two and a half times, what you’re paying on your containers, right?
Luke Peters: Yeah.
Matt Damon: Brass is the same, it’s up probably 100%. Brass, the lead time is what’s crazy. We placed a purchase order for brass in January, this January, and the delivery date they gave us was August 1st. Now, we used to be able to get brass in two weeks. The stories we’re getting on this, on these materials, is everything from the big furnaces and the mills were shut down due to COVID and there’s giant backlogs, they’re having trouble getting the ore coming in through the St. Lawrence seaway was backed up. There are additives, like zinc, that goes into brass and there’s backups there.
Matt Damon: Anyway that, on the metal side, has been a real challenge and that’s extended out our lead times and costs. What do you do? In a perfect world, we would have loaded up on inventory ahead of this, but I don’t think we really knew what was coming. And, we didn’t have the working capital. We’re a little company, we couldn’t just go sit on a half a million dollars of steel. That was a challenge.
Matt Damon: The components, I’d say the production time in China hasn’t been the big issue, but it’s what you’re dealing with. These things are going in containers and getting on the ocean.
Luke Peters: Yeah, and they’re just sitting there.
Matt Damon: Yeah, it’s the same problem you’ve got. The freight’s double, triple, and used to get it in three and a half weeks, and now it’s taking seven, eight, nine, if you’re lucky.
Luke Peters: And Matt, are you able to source some of those locally, or in Mexico? Is that supply chain a little bit easier to find other suppliers?
Matt Damon: The cylinders are not. They’re really only made in China and Mexico, and the Mexican production is really owned by Master Lock. My partner is a true genius in this industry, and he has looked for years to try and make these cylinders here domestically. It can certainly be done, but the investment, the cost to do it, this is really tiny precision manufacturing. The little cylinder with these tiny little pins, it would be a well into the six-figure investment to get the machines all up and running, and we just don’t have the volume. We wouldn’t have the volume of the product to have it make sense.
Luke Peters: Yeah.
Matt Damon: Some day, if Commando Lock is rocking and rolling, and we’re up there with Master Lock, yeah you’d definitely want to make them here.
Matt Damon: All through last year, we were looking all over. Can we get them Taiwan, Vietnam? There are some factories that can make them, but the cost is more than double because it’s not their everyday stuff. We looked all over.
Matt Damon: And then, I guess Luke, the last piece that a lot of people are dealing with is labor. We were able to get folks coming in to do small part assembly for anywhere around 11, 12, $13 an hour. These were good flexible jobs for people. We would keep people employed, we’d offer very flexible schedules, pay them weekly, and have a path to a full-time W2 job if they performed over a certain amount of time. That completely went away, and now we’re paying closer to $20 an hour.
Luke Peters: Wow.
Matt Damon: So the labor’s up.
Luke Peters: Now, is that because … That’s amazing. Is that because of the government stimulus, you think? Is that your thinking on why the labor? Because the unemployment rate’s gone up, but I’ve heard the same thing, that jobs …
Matt Damon: It’s the enhanced unemployment. I’m not kidding. We’ve had a number of folks walk in the door and ask to be paid in cash, and blatantly say, “I don’t want to mess up my unemployment.”
Luke Peters: Yeah.
Matt Damon: We’re like, “I won’t do that.” For us to compete with what they’re getting in unemployment plus the extra 600 a month they were getting, we just couldn’t do it. That’s real, and anybody who says it’s not … I’m one guy, but it’s pretty real.
Matt Damon: We used to be able to put out an ad and have four or five people show up or call, within a day or two, and that just went away completely through all this. Our facility is very safe, we follow all the protocols. From day one, we had a letter from the military folks saying, what do you call it? We’re a manufacturer that had to keep working.
Luke Peters: Yeah.
Matt Damon: Critical supplier. Yeah, labor has been a real challenge. We finally, now, are fully staffed with about seven or eight folks, but they’ve all had to come through temp labor agencies because they’re able to find them. But, we pay a lot more for that.
Luke Peters: Okay. So your labor’s up, your supply chain cost, your raw materials are up, everything’s up 100%, unfortunately. That’s the number you guys are hitting. How are you able to handle that on the margin side? You guys are manufacturers, so how that works into your finished goods and cogs is a little different. It doesn’t just double the cost, but still it’s going to have a huge impact. How does that math look, and how are you guys able to handle it?
Matt Damon: Yeah. No, it’s pretty tough. You know, cost increases. We absorbed what we could for so long, and then you hit a pain point and you say, “Okay, we can’t run the business on this.” I’m in active talks with the folks who do all our Amazon selling for us. As far as Amazon and our website, and even Home Depot and lowes.com, we can take our costs up, it’s just going to push retail’s up. Now, this is inflation, this is what everybody’s talking about. Our locks are probably going to go up 15 to 20 percent in cost, and I don’t know what that’ll do to our sales. We just haven’t done this before, so I don’t know how sensitive the consumers are. If you’re going to buy a $35 lock and you really want that lock, will you pay 40 bucks for it? Maybe?
Matt Damon: And then, with the military we are just in active talks with them on how we take costs up. Unfortunately, there’s a contract we’re locked into in the first year of that new contract, so it’s a little dicey. But, we’re doing everything we can to control expenses internally, become more efficient. But then, it’s also everybody’s going to have to pitch in and have a little pain on this, and unfortunately it’s going to be cost increases.
Luke Peters: Yeah. Well, it’s one thing to grow top line, but if you’re not profitable the business can’t sustain itself. You’ve got to find that level, that margin where you need to live at. Matt Damon: Absolutely.
Luke Peters: A lot of companies are in that same boat. Everybody was in that with tariffs, and now even people who are not impacted by tariffs or have any kind of deal with it because of the supply chain, and the raw materials, and all of this inflation that won’t be in the CPI, by the way, so we probably won’t hear about it. But, a lot of products will be going up.
Luke Peters: How are you guys able to finance this, are you able to share? I think you did talk about an equity raise last time, and bank partnerships and stuff like that.
Matt Damon: Yeah.
Luke Peters: What’s getting you through this time?
Matt Damon: Yeah. The one thing I’d say, real quick before we jump into that, is the real positive on this, though, is the US manufacturing side, everybody we talk to who is making stuff here is super busy, it’s just the cost structure that now is the challenge. The exciting thing is that, we’re even getting it from a couple of our competitors who’ve asked us to do some OEM work for them.
Luke Peters: That is great to hear, by the way. That is awesome.
Matt Damon: Yeah. For all the challenges on the cost side, I think if we can survive it and get through it, the US manufacturing piece looks very bright. That’s a good thing. I don’t want this to all be doom and gloom.
Matt Damon: Anyway, to jump to your question, we did do an equity round out the gate, when I got involved, like I said, a little over two years ago. Great group of accredited investors came in, it was not institutional money, we’re much smaller than that. They’ve been very supportive, and we’ve lived off that and been able to survive for a couple years here. Now, we are looking at a line of credit, and unfortunately because we didn’t enough profitable quarters, the banks aren’t going to look at us yet. We have some good bank relationships teed up, just through our network, but we do have an investor whose offered a line of credit. It’ll be expensive money, but it will give us the working capital to hopefully weather this and come out the other side. Yeah, just doing it with private investors.
Matt Damon: The goal would be, then, hopefully next time I’m on the podcast, I’m talking about a bank loan and a line of credit with a traditional bank that would fund us, then, going forward.
Luke Peters: Yeah, and you’ll get there because you guys are going to have really high quality ARs from these customers.
Matt Damon: Right.
Luke Peters: You’ll be able to get some sort of ABL or something like that, where you’re going to be able to finance it. Yeah. Wow, that’s awesome.
Luke Peters: It sounds like you’ve got all the right plan in place. I can just tell you, firsthand experience with tariffs and all of these things, it is a shift, they’re still here. But now, everybody’s been able to shift, and pivot, and make adjustments like they needed to make, and then people are back and running. You guys will do the same, you just have to get through this period, but you’re making all the right moves. And then, six, nine months from now, you got great customers, that’s the most important part, and you got a great product, and you guys will figure out what to do as far as the costing and prices. I think you’re doing all the right things, from what I’m hearing.
Matt Damon: Yeah. No, I appreciate that. I don’t know if you’ve done this. I probably should know, but I ran a no-COVID P&L. I basically took our last six months and our next 12 months, and I just plugged in pre-COVID numbers, and it looked really good. I’m like oh my gosh.
Luke Peters: Yeah, that’s funny.
Matt Damon: We would be crushing it this year, our investors would be thrilled, and that’s if things were just normal. And you say okay, everybody’s dealing with COVID, it’s helped some people, it’s hurt a lot of people. It’s real, we’re all dealing with it. And that’s what I’ve stuck to, is hey if we can survive to normal times, we’ve really built a pretty cool company here, with a great product.
Matt Damon: These challenging times really force you to refine, and I think we’ve become much more efficient in our manufacturing. You know, coming out of this we’ll be a more efficient company. We’ve certainly dialed in all our costs. Yeah, I think it’s a matter of you survive, and then thrive later once things become a little more normal.
Luke Peters: Yeah, I think you said it there. You’re making all these changes, they’re all going to make you a better company, and it’s not going to last forever. But, it’s painful while it’s here.
Luke Peters: Let’s wrap it up, around the future of Commando. Given where your business has been and where you are now, what do you see as the biggest opportunity in the next, say, one to two years?
Matt Damon: Well, I think it’s the big obvious one is Home Depot. Getting in Home Depot, Lowe’s is certainly right there, they’re growing along with Depot. But, that’s the biggie.
Matt Damon: We’re friends with the Master Lock guys, they know who we are. We have no strategy that says we’re going to go after or take out Master Lock. They’ve been around for 100 years, they’re a $1 billion company. We want to sit alongside them, and give the customer an option at the high end of the market, the quality. That’s the biggie.
Matt Damon: There’s a new merchant in Home Depot, great guy. I think we plan to talk to them this summer. They’ve had their own supply chain issues, I can tell you about that, in terms of looking at new product. But, that’s it. The biggie would be when Commando can get into a home center like Home Depot, I think that takes us to another level. Certainly, all the other channels can continue to grow, like the military, and Amazon, but that’s it.
Luke Peters: Yeah. And what about any line extensions? Any other, given the door locks, or any other categories down the road that are interesting to the brand?
Matt Damon: Yeah. We’ve had a Bluetooth lock on the drawing board for a while that my partner’s worked on. We’re taking the idea of a keyless Bluetooth enabled lock, but applying our level of security to it. That can be big. It’ll take some investments, so that’s why it’s been percolating, but we’re not pushing it too hard. Certainly, bike locks. I think we’ve taken our current cable locks and we can call them bike locks, but there’s a few things we could do to make them a little more user friendly for bikes.
Matt Damon: You know we’ve always, from day one, maybe this is for another call, viewed Commando as a potential platform for acquisitions of other companies in the security space. So adding on, really, bolting on a theme of outdoor security, and going from there. Right now, it’s just survive so we’re focusing on that. Yeah, I think there’s a lot more to come.
Luke Peters: Well listen, thanks again for joining us, Matt. It’s really great to hear the update, and all of the details about the supply chain, and how you pitched Tractor. All of those things are so important and useful for people to hear, that are in the business. Thanks for being candid about that.
Luke Peters: How can listeners find you, learn more about Commando?
Matt Damon: Sure. No Luke, I really appreciate you having me on, it’s always fun to talk to you. Commandolock.com is the website, just CommandoLock.com, look us up there. And then if you go to YouTube and put in Commando Lock, there’s some pretty cool videos of the locks being made and our brand video. Those are also accessible through our website. But, you can learn a lot more there.
Luke Peters: Awesome, thanks again. And guys, made in the USA so support this brand, really cool product and they got some really cool finishes as well, so check it out.
Luke Peters: Before I let everybody go, I just want a reminder that listen, we need some vacation homeowners that want to help out our new cause at vetcation.org. You can see how we’re supporting Veterans with dream vacations. So right now, our bottleneck is we just need more homes. We’ve got plenty of Veteran families that are in need of, simply just a vacation with their family. So if you have a vacation home, if you can donate it for one week, we’re targeting Purple Heart Day in August, it’s a dream vacation for some of these families. I’ve been doing it with my own vacation house for about 10 years, and got my arm twisted to bring this nationwide. We’re pushing this out this year, really need some support. To get involved you can email, just find me on LinkedIn and hope to hear from you.
Luke Peters: And again, I want to thank everybody for joining us today on the Page One Podcast, truly appreciate all you guys, and hope you leave a review on iTunes. We’ll catch you next time. Thanks.
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Contact Matt Damman: LinkedIn