Retail Band

How Malcolm Fontier learned from a failed business to build a brand focused business – Malcolm Fontier Ep79


  • “Whatever business you’re going to pursue, make sure that the core business activity aligns you’re your strengths and interests.”– Malcolm [31:01]
  • “To do it well and do it for a long term, you really need to make sure that you have that work-life balance.”– Malcolm [15:25]
  • “If you have every option in the world in front of you, it takes more time to make those decisions or making your decisions harder.”– Malcolm [19:39]

Why You Should Build A Business Around Your Passions

Thinking of starting a business, how about starting one that aligns with your passion? The truth is that you’re more likely to succeed in what you enjoy doing than in something you don’t.

In this episode of the Page One Podcast, Luke Peters speaks with Malcolm Fontier, an industrial designer environmentalist and the founder of Pakt & SeaHive. Pakt creates thoughtfully designed and responsibly sourced travel accessories, while SeaHive helps prevent plastic waste from entering the oceans. Malcolm explains the lessons he learned from a failed business and then designed a business built around his passions.

Listen in to learn the importance of a work-life balance to ensure you remain efficient and productive in both areas. You will also learn why having fewer options in your business will make it easier for you to operate it successfully.

Key Takeaways:

  • The importance of developing a work-life balance to ensure efficiency and forward progress.
  • Understanding how having fewer options in your business make running things easier and efficient.
  • How to create a brand that is more human and is focused on creating great relations with its customers.
  • The power of optimizing and delegating to be productive, not just busy.

Episode Timeline:

  • [1:46] Malcolm explains the travel products his business produces, plus the direct-to-consumer business strategy they use.
  • [4:16] He describes his small team and the tech tools they utilize to run the business.
  • [6:10] How they give priority to profit margins, sales margins, and producing quality products as their three main KPIs.
  • [9:00] Malcolm narrates what led to the failure of his first business and how it contributed to him venturing into sustainable travel bag production.
  • [14:58] How Malcolm balances his work and life by giving his all to both.
  • [17:18] Why he doesn’t think of his business as a lifestyle business but as something they can build and hopefully sell in the future.
  • [19:37] Malcolm explains the few options that have made business operations easier for him.
  • [21:59] How to establish a community of customers around good and long-term relationships.
  • [26:18] He explains why they focus on being profitable on the first order and breaks down the conversion rate of their products.
  • [30:59] Why you should pursue a business that aligns with your passion, plus work smart to free up your time.

Speaker 1: Welcome to The Page One 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 One podcast. I’m your host, Luke Peters, CEO of Newair Appliances and Retail Band digital strategy agency. Business owners, do you wish you had an expert advisor to help you grow your brand online, direct to consumer, and also grow sales in Amazon, Wayfair, Home Depot and other online channels?

Luke Peters: That’s what I do. If you want to grow your digital sales, find me on LinkedIn or email me at Retail at In this episode, you’re going to learn from entrepreneur, Malcolm Fontier, on what he learned from a failed business and how he then designed a business built around his passions.

Luke Peters: Malcolm’s industrial designer, environmentalist, and hands-on entrepreneur as the founder of both Pakt & SeaHive, his work combines two of his passions, ultra light travel and tackling the problem of ocean plastic pollution. Malcolm, welcome to The Page One podcast.

Malcolm Fontier: Thanks for having me on your show.

Luke Peters: Awesome. Well, definitely excited to get into your story here. I think we just talked pre-show I surf, and I know oceans and pollution and plastics, it’s an important problem to solve, so that’s awesome that you’re involved there. But kicking it off, why don’t you just share a little bit about what Pakt does, that way the listeners have a good idea of what you’re working on?

Malcolm Fontier: Sure. We make travel products, travel accessories. What we’re most well known for carry on luggage. The way we describe it is obsessively designed travel essentials. And everything we do, we approach it just responsible, doing so as responsibly as possible from our business practices, to the materials and packaging that we choose to use. And that’s a big part of our brand.

Luke Peters: And for the luggage, what’s the average selling price? Where does it kind of fit into the category?

Malcolm Fontier: Depending on who you ask, I guess it’s kind of more mid to high-end, where most of our products or most of our bags are in the $250 to $300 range.

Luke Peters: Cool. I know you’re direct to consumer, are you on other channels like Amazon and eBay or any other sites, or what’s the percentage of sales that come from your website?

Malcolm Fontier: We are almost exclusively direct to consumer, or let’s say about 95%. Our own internal policy and statement is that we are direct to consumer, but we entertain any other unique opportunities on a case by case basis. And so we did experiment with Amazon, but we didn’t feel like it was working for us based on our brand and the ROI that we’re seeing, so we got out of that.

Malcolm Fontier: But for the most part, most of the time, our own website is the only place that you can find and purchase our products, although sometimes, like right now, doing a collaboration for the holidays with Goop, and so it’s a good way to reach some new audiences. Goop’s core audience is definitely a little different than ours, and so we saw it as a good way to reach those audiences.

Malcolm Fontier: But that will just be a limited time, and by the new year we’ll be back to exclusively direct to consumer until the next opportunity pops up.

Luke Peters: Yeah. Well, that’s great. And I know a lot of the listeners here, a lot of them have maybe product in store or they’re focused on in store and online channels, or they’re focused on online channels. Not very many or 100% direct consumer, because it’s harder and harder. So obviously you found that secret sauce and you’re doing a lot of things right. We might dive into that. We’ll still kind of focus on our theme of building a business around your passions, but definitely I find that interesting. Let’s kind of quickly go through a few more details about your business. Can you give us an idea of scale? Maybe how many employees you have direct and indirect?

Malcolm Fontier: Sure. We’re small, but of course we’re working to grow and growing anywhere we can, but we actually like being small, and maybe more accurate is efficient. We try to do as much as we can with a small team and grow when we need to. We’re a team of myself plus five full-time employees.

Malcolm Fontier: So there’s six of us all distributed all in the US, but everyone works from their own city, stretching from coast to coast. And then there’s probably about half dozen as needed contractors that we work with. We’re pretty small, but pretty young too. We just celebrated our third birthday this November, just a week ago. We’re still pretty young and we’re growing our product line and growing our team as we go.

Luke Peters: Awesome. What type of systems are you using? Are you guys on Shopify platform, and then what else do you guys use, say internally?

Malcolm Fontier: Yeah, we are on Shopify. We pair that with Klaviyo, for our email newsletter management, which we’re happy with both of those. Wouldn’t say Shopify is the only thing that would work for us, but just the size of their ecosystem and all the different add-ons and stuff that are available makes it really appealing.

Malcolm Fontier: So it works well for us. And then internally for our projects and things, we use Google’s little suite of products. And then we also use Slack for quicker communication, and Trello for longer term project management with different boards on there for each department and then cards for longer ongoing projects. That works well for us.

Luke Peters: Yep, Trello’s great. And then, again, a lot of companies here still, they wish or they want, especially after coronavirus and the disruption it’s caused, to have that D2C component, even if they are a much, much larger companies. What are the two to three KPIs that you track weekly to lead your company?

Malcolm Fontier: Well, being a direct to consumer business, one that we find very important is, especially at this point in our business where we’re trying to optimize a lot of things, is the profit margin. And not just your margin on looking at your factory costs, your landed cost compared to your retail cost, but what we find especially true in 2020, is what we look at is the margin of the actual average sale price.

Malcolm Fontier: Because it’s often so different from your retail price and it fluctuates every day and every week based on where your converting traffic is coming from. Because like most brands these days, we work with ambassadors and affiliates, there’s different discount codes. That’s what I mentioned in 2020, doing sales and offering different types of discounts is so important to keep sales momentum up. And all those things just eat into your feed in your margin.

Malcolm Fontier: So if we don’t watch that carefully, it’s easy for those margins to floor. So that’s one that we watch really closely. And then of course we’re always watching our average sales daily, weekly, monthly. And then another one for us, we’re so focused on creating amazing product, and that’s where that price kind of comes in. We’re not about pricing something just because you’re paid for the brand.

Malcolm Fontier: We price our products, because you’re getting a quality refined product, and we make it clear, we make it part of our brand, that it costs money to make a quality product and do so responsibly. So one thing we watch super closely is product defects and tracking those, anything that we’re hearing and making sure that we’re working on ways to design those defects out of the next production order.

Luke Peters: Yeah. That makes a lot of sense. And I mean, you have to factor in your advertising. You’re direct to consumers, I’m sure you’re spending a lot in advertising and finding different ways to drive traffic. But it sounds like you’ve found that recipe to be profitable. Trust me, it’s not easy. And it’s harder. You’ve been in the business before this, you’ve had another business. So you know how paid advertising ROIs have dropped over time.

Luke Peters: And so it’s really hard to meet those profitability goals that any D2C company’s going to have, especially selling a physical product, because your margins oftentimes can’t be as high as digital or SAS types companies. So, that’s cool to kind of hear what you’re looking at. Why don’t we dive in now to what you learned from the failed business and how you design a business around your passions?

Luke Peters: And like you said, you have a lean company and there could be a lot of listeners here that have really big companies. Some of them might wish they had a really lean company with some of the headaches that can come along with that. Why don’t we start, back up five years or so, you launched a travel business that failed. Why did that fail, and what did you learn, and how is Pakt different?

Malcolm Fontier: Yeah, absolutely. I have to go back a little more than five years, but my wife, we weren’t married at the time, but my now wife and I started a business way back in 2008. And already at that time, there was this theme of combine our interests. Our love for travel was something that originally brought us together. I had a lot of product development experience from 10 years of consulting at the time, and she had a marketing and PR background, and that’s her interest.

Malcolm Fontier: So we combined all those things and we launched a line of travel accessories. And we had some great products and we had modest momentum, but it was a very different time. eCommerce and online marketing was still in its infancy at the time. And so, because of it, or maybe we lacked a little foresight, but we did more of a traditional business model in that at the time we were doing trade shows and working with wholesalers and distributors, working with brick and mortar retail, and it was a tough business and also a big part of it is that we just didn’t really enjoy the day-to-day.

Malcolm Fontier: We felt like we spent way too much time traveling the country, going to trade shows. And so anytime you don’t enjoy something, you’re more likely to burn out on it. After a few years of feeling like we were always on an uphill grind and only modest success, we really burned out on it. So we decided to move on to other things and kind of wrapped up that business.

Malcolm Fontier: One product that we had designed near the end of that business, which was just under my name, just decided to keep it simple and I was a designer, so we called it Malcolm Fontier accessories line. One product from that line called The Getaway, it was a travel bag, a carryon duffle, and we only sold a few hundred of them in that last year right before wrapping up the business.

Malcolm Fontier: But coincidentally some guy that go by the name of The Minimalist, happened to be two of the customers of that bag. I changed gears and for a few years I was working on a tech startup and people would ask me, “Do you think you’ll ever go back to do another line of bags?” And at the time I said, “No, there’s too many other things I want to do. I already did that once, so why go back and do it again?”

Malcolm Fontier: But I ended up making a liar out of myself saying those things. But what happened was The Minimalist, they actually had a really great career trajectory and they put out a movie in 2016 that was picked up by Netflix, simply called Minimalism. And in it they use our bag, and the bag that I had designed five years earlier. And ironically, it generated a ton of interest in the bag. The movie is about minimalism and decreasing your possessions. And ironically, a lot of people that saw it wanted to buy this bag that they saw. Luke Peters: That is so funny.

Malcolm Fontier: There’s a lot of irony and serendipity around it. I definitely wasn’t planning to start another bag business. I was ready to start something new when this movie came out, I was actually laying the groundwork for what I wanted to do, was go from the tech startup world, which I realized I was kind of out of my own up there. I enjoy and I’m better at physical product design world.

Malcolm Fontier: And so I wanted to go back to that, but I didn’t want to just create more crap that’s easy to think that the world doesn’t need. And so I was looking at how I could use product designers or creative problem solvers. So I was like, “How can I use my product design background for an environmental venture?” And as a boater and a fisherman, I spend a lot of time on the ocean. This problem with ocean plastic was personal to me.

Malcolm Fontier: And so I was looking at how we can tackle the problem with ocean plastic through product design. So actually, there’s a lot here, we’re almost there. So when the movie came out, I actually was reluctant to do it because I was so set on tackling the problem of ocean plastics, but the demand and the inquiries for the bag that was a piece in the movie, just kept coming in.

Malcolm Fontier: So after a while it became too much to ignore. And so what really changed is when I realized that we might be able to relaunch this product and use that as a case study for my other venture, SeaHive, which would package products 100% plastic free and show people how you can produce a product, get it to a customer, all with environmentally safe packaging materials.

Malcolm Fontier: And so we talked to The Minimalist, and we decided to collaborate on launching the bag and it went really well. Here we are, three years later. It went well enough and we’re enjoying it, that I decided to turn it into a business, which is now called Pakt. Luke Peters: That’s a great story. That’s a great story. And just to quickly summarize, you started a business, you kind of lost passion, you and your wife weren’t really interested in the direction it was going. You were kind of selling wholesale, not direct to consumer, but then you found the right influencer and that gave you some momentum.

Luke Peters: And momentum is always that thing that just slips through most people’s hands. It’s so hard to get and even define, but you got that momentum, and then it kind of aligned with, like you said, there’s some serendipity and aligned with you wanting to get back into something, and that kind of nudged you that direction. And like you said, here you are. We did talk a little bit about how the business is a reflection of your interest.

Luke Peters: You’re a boater, you’re on the ocean, you’re fishing. You don’t like plastics in the water, nobody does, but talk more about that and even how you design your life around the business? And maybe it’s a way that you schedule your week, or it’s just how you think when you’re designing products. I don’t know, quickly, it would be kind of fun to hear how you think about business and life together.

Malcolm Fontier: Yeah, absolutely. I’m somebody that kind of a bit obsessive and if I get into something, I get really into it. I have a lot of hobbies being on the water is just one of them. I’m a mountain biker, I recently became a pilot, and the only way to do all these things, which as an entrepreneur, as you know Luke, it can be all consuming.

Malcolm Fontier: It requires you to be thinking on it seven days a week. But I really think that to do it well and do it for the longterm, you really need to make sure that you have that work-life balance. And so for me, I think the way my passions kind of play into it is that they actually force me to keep my work more contained, because my wife and I don’t have any kids, but probably a lot like parenthood, you have to make sure that you finish that work in time to get up and spend time with the family.

Malcolm Fontier: With myself, my wife is my family, but I make sure that I work as efficiently and keep focused on what’s important in the business in order to make sure that I leave time to do all the other things I want to do in life. And I think any business and any person, any team member can benefit from really trying to focus on efficiency and forward progress in the least amount of time.

Luke Peters: Yeah. And by the way, I’m a mountain biker too. So you have to let me know if you come down to So Cal. And I went to the dark side, I actually got an electric mountain bike. I got a Levo. I don’t know if you’ve checked that out. It’s actually pretty sweet.

Malcolm Fontier: They are fun. We rented one from my wife recently, and they are fun. I can see how you can go to the dark side. I haven’t done it yet.

Luke Peters: And it’s funny when you go there, don’t worry, you’re going to still want to ride your regular bike. Because if you just have time for like a short ride, you’re going to know that the electric one is not going to give you the workout you’re looking for, but it’s fun. You can go places you can’t go on the other bike.

Malcolm Fontier: Right.

Luke Peters: Sweet. Well, anyways, I mean when you think about business, do you think of your business like a lifestyle business where you focus on margin? And you kind of talked about it earlier, you guys are growing, but you’re not in a rush to overgrow and you want to fit it around your life. Do you think of it like that as a lifestyle business, or not really?

Malcolm Fontier: Well, I don’t think it’s that black and white. No, I definitely am thinking about growing this and next steps, hopefully I want to have more options down the road, whether it’s an exit or whatever it may be. And so we’re always thinking. The way I think about it is that in everything we do in life, it’s generally better to have more options.

Malcolm Fontier: And so the more value we build into the business, the more options we’re going to have, whether we decide it’s time to sell or anything else. And so in that way, I don’t think of it as a lifestyle business. We’re trying to achieve as much as we can in the shortest time possible, and grow this as big as we can in a way that feels natural to us. But I do always keep a focus on quality of life and encourage my team to do the same. Some people on the team that end up, I could tell, I see responses in the middle of the night, they’re checking emails in the night and stuff, and other times I’ll just remind people, “Don’t burn out. You’re an awesome team member and we want to keep you around. The last thing I want you to do is burn out. So make sure you keep your work in check and try to keep it contained.”

Malcolm Fontier: So I guess in that way, I’m very focused on, again, returning to that theme of kind of work-life balance and keeping things in check. So, I guess some people might define us as a lifestyle business.

Luke Peters: Cool. And there is a trend now, and I don’t know if the audience has totally seen this, but there’s a trend away from the endless aisle on a lot of marketplaces. I think Target, Home Depot, I think a lot of them are going there. I don’t know if Amazon… I don’t think they publicly stated it. Some of these other brands have, and it’s tough because there’s value to that endless aisle, but then it also can create confusion with a lot of options.

Luke Peters: And I think that a lot of the future of the internet and even a way to compete with Amazon, is that a lot of these larger brands are not going to go down that path. Like Costco for sure has not gone down that path, if you check out their website, and I think Bed Bath & Beyond as well. So, you mentioned that it’s beneficial to have fewer options. Go ahead and explain what you mean there, and maybe some takeaways that the listeners can get here?

Malcolm Fontier: Yeah. What I mean by that is if you have every option in the world in front of you, it takes more time to make those decisions, or making the decisions harder. Some examples with our own business that is basically once you set non-negotiables, if there are any non-negotiables that apply to your business, then put those in place and make sure everyone on your team is aware of these things.

Malcolm Fontier: And I think it makes your day to day and sometimes the bigger decisions easier. A couple that come to mind for our business is that we’re a fully distributed team. That happened because when I was at the tech startup, I was able to work remotely. We didn’t have any physical location. I enjoyed it. My wife and I are sort of snowbirds, we’ll go somewhere warm in the winter and work from there. So when we launched Pakt and it became time to start growing the team, the one non-negotiable is like, I really enjoy this remote work.

Malcolm Fontier: So anything that we’re going to do, let’s set it up in a way that we can do it remotely and do it well remotely. And so we actually do have a small office located at where one of my team lives, just because we needed a place to have marketing samples and things, but other than that, we’re a distributed team, and that makes everything easier. If we’re evaluating some kind of opportunity but it would require a physical office at this time, we’re basically move on and look at other options.

Malcolm Fontier: Another one is our SeaHive effort. The fact that we do not use any plastic in our packaging. Without that non-negotiable, when it came time to package a new product, we’d look at all these different options and say, “Wow, there’s 50 different ways to pack.” If right away you say, “We don’t use any plastic,” it narrows that list considerably and actually makes your options easier. And so those are a few of the ways that I think having fewer options in your business can actually make things easier.

Luke Peters: Those are great examples. And when you’re running a D2C, what a lot of people know, and maybe some don’t is if you’re paying for all this traffic, it’s really hard to turn a profit. So obviously companies got to focus on building email lists and getting organic traffic. You guys have done a good job of creating an engaged social community. Walk us through some maybe specific things you’ve done that have worked, maybe some story or an example that might create some takeaways for the listeners?

Malcolm Fontier: Yeah, I guess you could probably trace it all back to, we often say at our business that our community’s awesome. We describe our customers as our community. Our customer base, our community also feels pretty unique that they’re super vocal, really engaged. And I think a lot of that can be traced back to the way we launched.

Malcolm Fontier: The fact that we launched on crowdfunding. We originally chose crowdfunding, because it was a way to get an accurate sense of demand for the fact that we’re going to relaunch without placing a large production order first. The nice bonus that we realized that the crowdfunding audience tends to be super engaged. These are kind of early adopters. They help bring the product to life, and that product coming through was really… it was a pretty special crowdfunding campaign. We sold about 10,000 units, almost 10,000 customers just from the crowdfunding campaign.

Malcolm Fontier: And they created the foundation of our audience now. And so the fact that they’re so engaged, and the other part that we do is it really comes down to simply listening and having a conversation with the customers. When people comment on a social media post or something, rather than just giving it a like or a thanks or whatever, or one word answers, we’ve established some kind of guidelines for our customer service team and our community social media team to basically go above and beyond.

Malcolm Fontier: Take that extra 10 seconds to type a actual thoughtful response to people rather than just liking it, et cetera. And I think that really helps. People really feel like our brand is one that they can be friends with, they can contact our customer service and they know who they’re talking to by their first name. I think all of those things, just making a brand feel more human, go a long, long way toward kind of building that community and that conversation with your customer base.

Luke Peters: Now, that was a big crowdfunding raise. You know, 10,000 units is huge. Which channel did you guys run that on, and what was the secret for success there?

Malcolm Fontier: That was the relaunched bag that we worked with The Minimalist on, and we did that one exclusively on Indiegogo.

Luke Peters: Nice.

Malcolm Fontier: Kickstarter and Indiegogo are the two big players in the space. And a lot of people do Kickstarter first, and then will move over to Indiegogo. But after evaluating both platforms, we chose to go with the Indiegogo, and I have no regrets. Since then we’ve launched a crowdfunding campaign on Kickstarter as well, and they can both work, but there’s a few reasons that we ended up going with Indiegogo and it worked well for us.

Malcolm Fontier: I think one of the big ones is that you, especially with that product, that’s the one that was the relaunch of the bag that was used in the movie and we were collaborating with The Minimalist. We knew that we were going to be bringing a lot of our audience. We weren’t relying on the platform itself for most of our exposure, which I’d actually advise anyone to do, for anybody who’s looking for advice on what crowdfunding platform, is do everything you can to bring your own audience to the platform.

Malcolm Fontier: But when you do that and you caught someone’s attention, they’re clicking through a link or go into your campaign, it really doesn’t matter which platform it’s on. You already got their attention and they’re going to decide if they like it or not based on what they see on your page.

Luke Peters: That’s so true. By the way, I have heard that same advice, and we’ve had a past expert who did an awesome launch on Kickstarter. And it’s the same thing, it’s a lot of work. You got to drive all your own traffic, you got to build it all yourself. And before we wrap it up here, quickly on your website, so are you able to kind of break down… I don’t know if you can do this off the top of your head, but just breaking down where the percentage of sales come from?

Luke Peters: If I’m looking at channels on a website, I might say, you’ve got paid traffic. That’s going to be all your Facebook, Google, maybe other stuff you’re paying. Then you have your affiliates, you got your email, you got your organic. There might be another channel in there, but those four might probably sum up to the majority of your sales. Are you able to kind of break that down?

Luke Peters: And the reason I ask is, everybody wants to have a successful, direct to consumer brand like you where they’re not beholden to Amazon and everybody else, but they run into trouble because their paid component is too big. And oftentimes that one isn’t profitable on sale number one. It would be great to hear that breakdown, and then maybe if you can share your reorder rate, because that obviously higher reorder rate… Or if you’re profitable on order number one?

Malcolm Fontier: Yeah, we focus on being profitable on order number one. Every product, every business is different, but we have a little higher price point product for direct to consumer. Our retail to landed costs margins are often probably around somewhere in the 70s, around 75% as an average for our product.

Luke Peters: And that’s important right there.

Malcolm Fontier: Yeah. There’s a good amount of margin, and so we focus on being profitable on the first one. But also we’re a young business and we’re growing. Especially after coming off that successful initial product launch, we are trying to keep a good track record of only launching pretty successful product. So far, so good. We’re actually a very small product line, we have three products right now, three main products. We have a couple of accessories that go with each of those.

Malcolm Fontier: Each of those has gone really well and generated a significant revenue for each of those. So we don’t want to rush and just start cranking out products and slapping our brand on them. We want to do our homework and make sure we get it right each time. And so our product reorder number is actually pretty low.

Malcolm Fontier: I would share, but I don’t have any numbers on the top of my head that I could share with confidence that they’re fully accurate. But because of the fact that we only have a couple of products and each one is kind of different, we have a travel coffee making kit, and then there’s a couple of different travel bags, each one appeals to a different customer.

Malcolm Fontier: And so of course there are some people that order all of our products and stuff, but for the most part, one of them is going to resonate with a customer. And so the reorder potential is not necessarily there. But as far as product breakdown go, our first year we did almost no advertising, but we were very closely aligned with The Minimalist as our influencer partner, and we reached a lot of people that way with almost zero advertising.

Malcolm Fontier: Now our advertising traffic and conversions are probably varied somewhere between 30 and 45% of our conversions, but it’s something that we’re working to diversify. Affiliates work, but they’re not making up a very… at most any given month, they’re making 10 to 15% of our sales. So we’re working to grow that and offset some of the paid advertising. And then the others are organic, some media coverage, PR and stuff that we get. And then our own community, which always accounts for a good amount of our sales.

Luke Peters: That’s awesome. I love numbers, so thanks for giving us that breakdown. 30 to 45% paid, 10 to 15 affiliate, and then a significant portion of your own community. I’m assuming that means a lot of email sales right there.

Malcolm Fontier: Yeah. When I say community, we’re talking on email and social media.

Luke Peters: Yeah. But I’ll tell you what, the main thing, the biggest nugget there was 75% gross margins. And in sports like in basketball, they’ll say you can’t teach height. And I was joking around with my company earlier this year saying you can’t teach gross margins. Or another one is like in football or any sport, you’ll say, winning solves everything. Well, gross margin solve everything.

Luke Peters: So when you’re 75% gross margins, that’s an awesome place and a testament to the brand you built, because you don’t get there with a product that’s not working, and a brand that’s not resonating. So you’re doing a lot of things right to be able to command that. And obviously the design and product quality are intangibles that are going into that. So, you’re not making a commodity here.

Malcolm Fontier: Yeah. For the listeners out there, circle back to something you and I talked about early on in this conversation, and that’s about the KPIs, that product margin. So even though you have, especially this year, we just found that if you’re not running some kind of sale, it’s hard to compete during the COVID economy. And so if you’re offering 20% off and then an affiliate might make it 15% or something, that 75% margin can get eaten up really quickly.

Luke Peters: For sure. Well, you’re not ending with that. We all wish we were, right?

Malcolm Fontier: Definitely.

Luke Peters: That’s the starting number, unless you’re the entrepreneur or running the financials, a lot of people don’t actually understand walking that whole journey. Listen, that’s awesome. Why don’t we finish with, we’d love to get your advice for young entrepreneurs. You’ve been through this a couple of times, what are a couple of things that they should focus on maybe specifically their first year?

Malcolm Fontier: Yeah. I guess what I’d say is whatever business you’re going to pursue, make sure that the core business activity really aligns with your strength and your interest, because if you don’t like what you do, you’re not going to be that good at it and vice versa. And that’s so important, because you have to do this for a while. And then that’s one thing that came clear between my first bag business and this new one, when the core business was trade shows and stuff, I didn’t like it. We burned out on it.

Malcolm Fontier: This is different. I really enjoy the direct to consumer world and building a brand that way. So it makes a huge difference. Once you’ve found on day one or soon after, you need to start working on making sure you have product market fit. And as soon as you have that, I think it’s so important to start optimizing and building systems immediately.

Malcolm Fontier: For me know, I think I’m a big believer in that There’s a huge difference between busy and productive. We can all sit down for eight hours every day or however long and respond to messages, respond to emails. And at the end say, “All right, I worked all day.” That’s true, but did you actually move the ball forward and get closer to achieving whatever goals you’ve set out for the month, quarter and year?

Malcolm Fontier: And a lot of times if you’re just busy, you can’t… So I think optimizing and part of that includes just looking at what you can possibly outsource or what you’re going to hire for when you make your first hire. If you’re really a solo entrepreneur, of course you start thinking about that first hire, that’s all part of the optimization, but I think the goal in that should be to free up your own time so that you can start looking at the bigger picture, get ahead of things and start steering the ship, rather than just responding and being reactive, which is way too easy to do.

Luke Peters: Well, I love that quote right there. I love that, and you should put that on a shirt. There’s a big difference between being busy and productive, and it’s so true. This is why task lists can be good, but not if they’re full of things that aren’t important. And I think as an entrepreneur, you’ve been able to figure that out. And it’s, to me, one of the biggest things that separates the high-performers from those that don’t get there, is high-performers really know what to work on and what to say no to.

Luke Peters: And when they work on things, what to really, really focus on, and to get that excellent result. So I love that quote. Listen, really enjoyed having you on Page One podcast today. How can listeners find you, learn more about you?

Malcolm Fontier: Sure. I enjoyed the conversation too. Thanks for having me. Our business is at, P-A-K-T, bags. The same letters on all the socials, you’ll get to us @paktbags. And then personally I have my own site. I do some blogging there on business and business thinking and other things, and that’s just my full name, .com. It’s

Luke Peters: Awesome, and we’ll have that all in the show notes. Thanks again, Malcolm, and I hope all the listeners enjoyed the interview today. Truly appreciate your reviews on iTunes, and hope you all join us for the next interview. Take care.

Malcolm Fontier: Thanks Luke. Take care.

Speaker 1: Thanks for listening to The Page One podcast with Luke Peters. If you enjoyed this episode, please help us out by leaving us a rating on iTunes. Want to double your online sales? Check out And don’t forget to join us next week with our next amazing guest.

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