Archives: Podcast

Lowe’s – How to pitch products, get In-store, and drive sales – Merchandise Services Team & other improvements made over the last year – EP19

What you’ll learn:

Tim Gilmer has worked with Lowe’s for 25+ years as an expert in the hardware distribution industry. He gives valuable insight into sales, marketing, logistics, and merchandising strategies to get in store at Lowe’s—and stay there.

About our guest:

Tim works out of the Lamb, Britt, Gilmer & Associates corporate office in Gainesville, Georgia and is responsible for concentrating our sales efforts with home center chains and mass merchant accounts. Additionally, he is responsible for oversight of all aspects of category management for his departments and product lines at Lowe’s including: Sales, Marketing, Logistics, and Merchandising. He was recently added to the Lowe’s Advisory Council.

Key takeaways from this episode:

Highlight of Tim’s 30+ years in hardware distribution — 1:31
LBG’s unique business model — 5:58
Company stats (employee number, warehouse sizes, etc.) — 7:30
Services LBG brings to your company — 11:22
Tariff strategy: how to work with Big-box retailers — 14:35
Most important sales tactic to help pitch your products to Lowe’s — 18:34
Key aspects to track once you’re in store to maintain sales — 20:54
MST, Merchandise Services Team, and Lowe’s associate—what are the differences? — 24:20
Internal Lowe’s changes and next stage growth strategies — 26:00
Strategies for helping Lowe’s associates sell your products instore — 26:50
Product packaging improvement insights — 28:48
Best sales channels for the hardware and home center industries — 34:10
Best strategy to get in store at Lowe’s — 36:20

Podcast Transcription

Speaker 1: Welcome to the Page One Podcast, a weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies to tariffs, influencer marketing, best in class product launches, and all the details about how to accelerate your eCommerce sales with the big-box retailers or what we call our Commerce. Now here’s your host, Luke Peters.

Luke Peters: In this episode we focus on how to grow your Lowe’s business. You will learn from expert Lowe’s rep, firm owner, Tim Gilmer. Tim is partner and co founder of Lamb, Britt, Gilmer & Associates, we refer short as LBG. And you can … you’re going to learn how Tim got started, how he built his firm and how he’s was recently added to the Lowe’s Advisory Council. Thanks for joining Tim.

Tim Gilmer: Well, thank you very much Luke I appreciate it.

Luke Peters: Cool. And then before we get into questions, just a little bit about Tim. Tim as mentioned above, is a partner and co founder of the LBG firm, which specializes in Lowe’s rep business and maybe some other things that we can learn about today that you can talk about. Tim. Tim is responsible for sales and category management into Lowe’s and his firm’s focus is as mentioned all around Lowe’s and how to grow your business with them. Tim, why don’t we start the interview, kind of talking about your early years, maybe before you started this firm what were you doing and kind of how did you get into this line of business?

Tim Gilmer: So I was probably maybe destined to be in the hardware and home center world. I was entering the university of Georgia when a friend of mine when I was 18 years old asked me to come down interview for a job as a buyer at a little company called West Building Materials. They were a hardware home center lumber yard and 64 stores. And so I didn’t think much about it. I went down and interviewed and as it turns out, I guess they liked my interview. And before my first day in classes at the university of Georgia, they offered me a position at a buyer and I was floored because I was 18 years old and the position paid more than I thought I could probably make when I got out of college. So I thought, well, “Hey, I’ll give this a try for a year or two and see what happens.”

Tim Gilmer: And so I took the job and I ended up working there for little over seven years. And really enjoyed it, learned a lot. It was kind of a hard knock school. But I did learn a lot and through that process I saw a lot of the people that were calling on our company when I was a buyer. And I just thought, well, I see some good ones and I see a whole lot of folks that they maybe could do better. And so I needed, I felt I could do better and I wanted to work for myself.

Tim Gilmer: And so I found a couple of guys that were actually calling on me. Not calling on me heavily, but they were more concentrated in the distributor side of the business in hardware distribution and didn’t do much with direct homespun or business. And so it gave me an opportunity to talk with them and they pursued me and we put something together. And a couple of years later I became a partner with them. And we started what we now call LBG and it’s been a great almost 29 years now. That was December 1st, 1990 when I started in this business. So that was my second job that I really as an adult that I ever had and along my second job.

Luke Peters: Wow. It’s a great story. So you kind of cut your teeth, you put a lot of time in at the previous position, like you said, seven plus years and really learn the industry and then you went out and kind of co-founded your business with these other guys. Were you at the time, were you guys of like, from the very beginning, was it focused on Lowe’s?

Tim Gilmer: It really wasn’t exactly in the very beginning. Initially, it was Lowe’s, it was Home Depot. It was some small regional chains and they had already had business going with a lot of the distributors, some of which are out of business today, but the largest of which is still very much a customer of ours today. Oracle incorporated out of Memphis, Tennessee and Two-Step Hardware Distribution is really still a one shot of our business and the other side is primarily Lowe’s.

Tim Gilmer: And so they make up about half and half really of our company as far as revenue goes. And it’s a good balance because although we do different things at the Two-Step Hardware side of our business we do things we can learn about, to bring to the home center side of the business and vice versa. With the things that we do for Lowe’s and home centers, we were able to take into the other world and in both cases provide value to the customers. Both Lowe’s or an Oracle or whomever the customer might be, and to the factories that we represent.

Luke Peters: To clarify, what are you referring to when you say Two-Step Hardware? What does that actually mean?

Tim Gilmer: So Oracle is an independent hardware distributor, so that they have multiple distribution centers around the country and they would serve the independent hardware dealers as well as people that are multi-store chains, but smaller in nature and not a national home center by any means usually. But those customers are served through distribution and that’s a market that we serve home on the Two-Step Hardware side of our business.

Luke Peters: Got it. Makes a lot of sense. And so I was going to get more into that about, describe more of what you do for the audience. You covered of it. Is there anything else, to kind of say just to highlight what the firm does? Kind of before we go on into deeper questions about how people can improve their businesses?

Tim Gilmer: Well, I will just say about our firm, we have tried to build a business model that is unlike others in the industry. You said in the intro that we’re a rep agency. I mean technically we are, that’s the industry that we’re in. Although the things that we do are not typical of rep agencies. And we’ve grown to be to have a pretty robust set of capabilities both on the hardware side as well as the side that I run in the home center side.

Tim Gilmer: We work for a factory and handle their business at a company like Lowe’s, we have to have a reason for being and a value that we provide. And so if a factory is able to manufacture something and put it in a box and ship it, if they needed it, we could virtually everything else from package design to the graphics and the supply chain side of the business. And even to the point of after sale, customer of service report and parks shipments. So we try to be an extension and an outsourced extension of the factories we represent providing, incredible value to not only the factory but to Lowe’s. Because when Lowe’s, does business with a company they want to do business with somebody that knows how to speak their language. And that’s something that we’re specialists in.

Luke Peters: Perfect. And kind of give our listeners just a little bit better idea of the company. Can you kind of speak to how many scale of the company, how many employees building size, you guys are just your location. I know you guys are like right next to Lowe’s, so that’s one of your buildings is right next to Lowe’s.

Tim Gilmer: Right. We have 32 employees. Again, been in business since mid 80s. We have three offices, we have offices in Georgia, North Carolina and Alabama. And we position ourselves so that we’re …. and applies to take care of our customers when they need it. The Georgia part of our business, just where everybody was from, when the business started. And that’s where my hometown is. And I tell everyone I probably should have moved to North Carolina 28 years ago, but I didn’t. And so three hours away and I find myself making a trip at least once a week. Seems like about 40 something weeks a year. But it’s what we grew up on. A rock grew up on and I’m quite used to it.

Tim Gilmer: But we have an office there and a complete show room and we find it very helpful pillows, merchants, and the entire Lowe’s team to be able to have graphics folks come over or their brand development people and including their merchants and let their product development teams and we can leave things there and work with them for a long period of time and get them involved on the product roadmap earlier than they would with a lot of other factories. So it’s very beneficial to have that fulfill me, which we just moved into a new facility this year in Morrisville and tripled the space. And it’s given us a lot more flexibility with what we’re able to do with, with Lowe’s and as a company.

Tim Gilmer: We’ve just been blessed with tremendous growth. And that all comes from the fact that we’ve got great people working for our company. And that’s our most valuable asset as a company as the people that we have. And when we can depend on them and it’s very special to have a company that has two things going for it.

Tim Gilmer: One, a management, and ownership that trust and loves one another, which we do. And my business partner, Jim Lamb and I, we often say that, it’s just very rare in our industry. We’ve been partners now for 27 years. And I can’t remember a problem we couldn’t resolve where we’ve had a major argument about it. And that’s just very rare.

Tim Gilmer: And then the second valuable thing is that employees that we have, or just they’re the cream of the crop. I wouldn’t trade any of them for replacement. It’s a joy to have those people work for you and work alongside you and see their growth and development and buy-in into what we’re trying to provide to our customers. So, that’s what makes us successful.

Luke Peters: And you nailed it there with saying this, for how long have you guys have had this partnership? 29 years and still succeeding right now. That is definitely not commonplace. You see a lot of firms have issues with that. So you pick the right people to work with it sounds like.

Tim Gilmer: Yeah. We’re fortunate.

Luke Peters: Now specifically. So companies that are listening to this, they might go at it alone when they’re going into Home Depot or Lowe’s or any of the other big box retailers, or they might hire in help. And like you said, you guys might be in that category of rep firms, but you’re a little bit different. But just kind of in short, and you already kind of talked about a lot of the things you do, but even maybe more specific, what is the big value driver that you’re going to bring companies and why they would work with you rather than trying to go at it alone into one of these big-box retailers?

Tim Gilmer: Well, I mean, every company and every situation is different. And I’d be the first admit there are companies that would never need our services. There are a lot of companies that can greatly benefit from our services and those relationships are the most beneficial ones are where a company needs to bolster their focus on Lowe’s in particular. Maybe they’ve got a national sales manager or a sales manager that handles the account and that’s about it. And we bring, if they are our company to work alongside that individual and that’s the key.

Tim Gilmer: We never want to replace the national sales manager or the VP of sales or whoever it might be. That’s not our goal. Our goal is to come alongside and to make them stronger than they could ever be working alone. And immediately it’s like they’re working with a affirm that speaks the language and Lowe’s has its own language and tonally they have their own challenges and turnover and we’re uniquely in tune with that and it’s given us the ability to give them a comfort level, both from dealing with a new factory or an existing factory to make them better. And so that’s been a big key for success for us.

Luke Peters: And full disclosure to the audience, I work with Tim, I wanted to mention, I forgot to mention that earlier, but we are clients. We’re working with LBG and so to have a lot of insights about them and I thought that you’d be a great resource because I know a lot of companies are … and if they have someone who’s got 20 years with Home Depot, then that person understands the language.

Luke Peters: But often there’s a lot of companies that are in the middle, they might think they have the right team. But on the other end of the spectrum, there’s a lot of ways that you just kind of elaborated on that you guys can help these companies kind of get in deeper with their relationships.

Tim Gilmer: And look, it’s not just that we know people or that we know individuals or we can get doors open, that certainly I’m not going to discount that. But more importantly, what we know and how we know how to do it, is what is the most valuable and the speed with which we can make it happen before the factory and for Lowe’s in particular it has been the thing that has propelled us to continue the business model that we got started on really, we’d been redeveloping our company and reinvesting in our company and reinvesting in infrastructure and people and facilities and things that need to be done in order to continue to grow. So it’s a little bit unique in our industry.

Luke Peters: Yup. Kind of on that line and obviously you’re working with Chinese factories as well and you guys know a lot about supply chain. So kind of talking about supply chain and I’m sure you can help your clients with this as well, but what are say two to three things that you think you’ve learned or that you know would add extra value to the audience here, especially in light of the tariffs that we’re dealing with right now?

Tim Gilmer: Well, I don’t know if anybody is a total expert on the tariffs that are in place right now and that can change on a dime and we don’t really know what will happen tomorrow. Hopefully that that eases back and there’ll be a trade deal struck between the US and China, that will be fair to both sides and that some of the current pressure will go away. But one thing is for sure as long as it remains, how you deal with it, with the factory and with a customer like Lowe’s is very important to how you’re going to end up as profitable or not profitable company handling the business with Lowe’s. And so we try to be very aggressive with that to put something in place. Even before we’re asked by Lowe’s as the tariffs have increased and separate and additional layers have come on in different rounds.

Tim Gilmer: Having something in place and a strategy to deal with it in advance has been key to being able to navigate the waters and do it with the least amount of harm because it can get very contentious. And if not dealt with upfront and very forthrightly, then it can lead to loss of business or the decision by Lowe’s to perhaps go with another vendor that is in a different location or whether they just don’t have to deal with the tariffs. So having a plan in place to help mitigate and to work with Lowe’s and making sure that they know about it, that’s a key thing. And being able to work with it.

Luke Peters: Is there like an example there, Tim?

Tim Gilmer: Well, I mean, so for example, I mean, in our business, we know that we have, in most cases, there are multiple factories that can do … when I say multiple factories, one company, we wouldn’t represent multiple companies within an industry, but we represent a single company that may have multiple locations. Now they may not have a plan to do all of the items out of all of the locations, but the ones that are impacted the most severely by the tariffs. If we can help them facilitate moving some production or changing the way we do some of the business at Lowe’s in order to help them with that, then that’s what we tried to be very proactive in doing.

Tim Gilmer: And also to all fit tariff issues. There’s more ways to do that than just dropping cost. I mean, we’d get into looking at the tube of the item the way the packaging is, if they’re different packaging techniques that we can help the factory with to increase container quantities, all of the things that you can to help drive first cost down or landed cost down for Lowe’s can be something you get credit for, but you want to make sure that you’re bringing those points to Lowe’s as a customer and you’re getting credit for those. You wouldn’t want to increase container capacity of an item by 15%. And just do it without at least showing the example and showing the how to monetize that customer like Lowe’s so that they know that they’re going to see it in their minded cost.

Luke Peters: Yeah, that makes a lot of sense. And I mean, basically you’re just saying you’re partnering with these guys and you’re making sure that all the way through the supply chain, both sides are winning. When you’re pitching a product to Lowe’s, what are two to three specific things that are important to Lowe’s? Maybe these are, Lowe’s speak or terms that they look at or something that is important to them. That would be interesting to the audience.

Tim Gilmer: I think if we’re talking obviously with Lowe’s or Home Depot or Menards or whomever you would be talking to in this industry, they’re all going to demand that they buy it at the best possible price, that’s a given. So if you’re going there trying to sell it at something other than in the best possible price and you’re at a disadvantage already.

Tim Gilmer: But secondly, I would say that things that you can offer to them that allows them to be different, something you can offer to them that allows them to be exclusive or can have something that, where they don’t have to compete head-to-head with their largest competitor. That’s kind of a feather in your cap, so to speak. So if you can position certain things that way if you have the ability to do that or if you have the ability to work with them on development and look, your company is a good example.

Tim Gilmer: We were working on something for Lowe’s that, I won’t go over in detail on this, on this podcast, but I will say there’s something very unique and we’ve got buy-in from Lowe’s about it and now they’ve got ownership in it and then they’ve got skin in the game on wanting this item. And I think it’ll be very successful. So, that’s something that’s key. If you can … anybody can give somebody to same product and just quote a lower price. But if you can quote something that is unique or, and you can have something that offer something that’s not just a product in a box at a price and make the item a little bit special or something special about the assortment.

Tim Gilmer: And it doesn’t always even have to be about the item. It could be about the way you do the supply chain. Maybe you have a unique advantage and that you can do with lead time or the way you wrap the items. And we looked for the advantages throughout the category to see what we can do. That makes us unique and different.

Luke Peters: Makes a lot of sense. Given the best price, allow them to potentially get an exclusive or to be different. And that makes a lot of sense. So they went on the price side and the marketing side. Once you’re in store, then what are brands need to be aware of? I mean, I know there’s, you want to monitor, sell through, but kind of, what’s the language you guys are saying? What are the key things that have to be tracked so that you’re not in a problem situation of, not fast enough sell through. Or what else are you guys looking at or monitoring?

Tim Gilmer: Well, we certainly want to track how the thing ramps up over the first four to nine weeks. During that period we can get a pretty good snapshot of what our sales rate is going to be. And right out of the gate we want to make sure that it launches properly. We want to communicate well with their in store teams, which they call MST. We want to make sure that we’re getting a good product set, product launch, which is drastically improved at Lowe’s quite frankly over the last year and a half as they’ve launched their MST merchandise services team. They’ve learned about 16,000 to 17,000 people on that team nationwide. And it’s getting better and better as the months go by. Not only launching and doing reset, their own time completion has gotten much better than that. But also just in regular maintenance of the bays, making sure that the product is stocked properly.

Tim Gilmer: But beyond that, you got to really watch as new products especially, or guess what the run rate, the per store per week is going to be. And so it’s key that we keep a good eye on, what our in stock levels are going to be. And if it’s a product that lends its self to job lot quantities, that’s nothing you really have to pay special attention to. And have those job lot quantities get loaded are very important for Lowe’s. You got to be careful. You can’t just go out and increase job, lot quantities indiscriminately. Then you end up with inventory in the wrong places. And you’ve got out of stocks where you shouldn’t have them and you’d get overstocks where you shouldn’t have them.

Tim Gilmer: So no one had to do that. And out of work with Lowe’s is very important for that. And then, as it does get launched, you hopefully you’re launching it with the right package that tells a story so that not only the customer can see it on the package, but also the associate in the aisle, that’s the person that the customer’s asking for product knowledge about that product.

Tim Gilmer: And so they’re not going to be able to be an expert in every single product in that store or in that department, but if they can quickly reference the information either on the package or online that’s a great benefit to those associates. And we incumbent upon the factories and us to give them that data and that information and that knowledge in a way that they can access it quickly.

Luke Peters: Yeah. I’m glad you touched on that because I got a couple of questions kind of related to that. And I guess, so I was going to ask, how important is in store training of associates, but I guess at Lowe’s like you mentioned they’re called MSTs and you mentioned they have brought on 18,000 or so of these MSTs and I guess that’s part of the story right now. Right? There’s been a lot of changes at Lowe’s and hopefully now we’re kind of on the back end and going to see a lot of benefits from what the new leadership team has done over there.

Luke Peters: But the question here is how realistic is it to do training or is there a way to do training with the MST associates, the folks that are boots on the ground at each Lowe’s store. Are there any programs or what are the options there? Because there’s just too many stores to physically visit. Isn’t there or is there?

Tim Gilmer: I would now want to draw … there’s a difference in the MST and the Merchandise Services Team and the regular Lowe’s associate. The merchandise services team is focused on service. They’re focused on product service, reset, product launches, down stalking, in-stock condition, task oriented things. They haven’t been put in place to free up the regular associates to spend more time facing the customer, dealing with the customer, selling product and doing customer service.

Tim Gilmer: And so there’s two separate things, but Lowe’s have several things in place to help train both MST and regular associates. And they have video training that they do for their associates. They have electronic references for their associates. And as I said before, the online part of it and the technology piece that Lowe’s is putting in place is getting better and better.

Tim Gilmer: Lowe’s is focusing on that. I think they did a lot of field management and merchandising, structural changes and organizational changes first, that needed to happen once the management took over. And as those are settling down, they just announced another round of things that they’re going to be doing on the supply chain side, on the at IT side that are coming on quickly as the next round. It’s really begin to pay dividends now that they have the management structure and organizational structure in place. Now they’re adding in the next layers of things and they’re going to take them to the next level.

Tim Gilmer: That all of that is part of how they communicate with their associates. Communicate through regional field merchants and things of that nature that helped drive their assortments down to the local level and also drive the knowledge into the associate base so that they have the confidence to stand in front of a customer and help them with what their needs are.

Luke Peters: Yeah, I can see that being critical. If the associates know the product. So what is the … do you guys have a certain strategy on that or are there just multiple things you do to make sure the associates know about the product?

Tim Gilmer: Well, multiple things. I mean, some of them are very basic, where each department has a Cadence where they can send out information and to the customer service associates and we certainly want to be a part of that and making sure anytime we’ve got something to tell about our product that we’re trying to get that in that internal publication Lowe’s also offers weekly product showcases that their management does that become allowed for all of their stores internally. And you certainly want to try to get new and exciting things on there and always keep something about your company in front of them and keep just every bit of knowledge that you can pour into them is going to pay dividends.

Tim Gilmer: And so that in addition to the video training and product literature that we make available online also the product package, I mean, you’ve got a billboard in every department. Now granted some are smaller billboards than others if you’re selling nuts and bolts, but if you’re selling, let’s say an applies like you do, you’ve got a huge billboard sitting there in a package, Michelle that can talk to not just the customer, but it’s a benefit to the associates too. So let’s get the right things. And that’s one thing, new air does fantastic by the way, is tell the story of their product on the package. Very succinctly and would the key things jumping out at the customer or the associate that they need to know in the first couple of seconds as I began to look at the package

Luke Peters: And I was going to ask about that. And you make a big point about packaging and especially kind of for our products since they are larger, it’s a big billboard as you say. And what have you guys … have you guys had any experience on say, A/B testing, different product packaging or different call to actions on the packaging and then experienced improvements in sell through? Is there anything that you can talk to about that?

Tim Gilmer: I can. In today’s world, whether you’re selling just Spanish, English or trilingual packaging packages tend to get very wordy. So anything is an image or a logo or an icon does not have to be translated. And so the more of that, that we can use and the last words we can use on the package, that communicate the story, people quickly get an image, they quickly see what is happening and what is intended by it. But when you put something in there and you’ve got to have it translated in three languages, it begins to look like the decoration of independence, they kind of glaze over and you lose them.

Tim Gilmer: So the more we can do with less words and more action shots or more icons and images, the better.

Luke Peters: Yeah, there you go. Keep it simple. So, that’s wise feedback there. And thanks for going in depth there because I think, I mean, once in store, then it’s about optimization and making sure you stay in store and that the product is doing what it should be doing. It’s being communicated to the associates. So all of those details are … some of them are new to me, so it’s why I enjoy doing these podcasts.

Tim Gilmer: Sometimes things don’t stay in store and you’re not going to win every single time. And so you still have to be monitoring and planning and you’re much better off if you’re doing your job. You’re looking at that product and you’re making sure that if you know you have a problem, you’re addressing it early. You’re not letting inventory continue to bill for a problem down the road. So you can’t just be there in the good times. You’ve got to be prepared for dealing with issues that come up because it’s like no other. It’s like anything else in life, the message is going to be perfect all the time. There’s going to be issues and how you deal with those issues and that few are aggressively and proactively dealing with those issues. It’s going to be appreciated by everybody involved.

Luke Peters: That makes sense. And now, talking about the future goals of the business, are you able to share kind of what those are and where you guys see the company in say five years from now?

Tim Gilmer: Yeah. I mean, our company has been growing pretty fast paced over the last 10 years. And during that growth, we have really started to invest more in people, we’re still a small company, but we’re many times the size that we were when I started in 1990, for sure. But really over the last 10 years, we have hit our most aggressive growth and we now have put more things in place and infrastructure to allow us to do a better job. We’re not really trying to be something that … we’re not trying to go out into the sporting goods industry or go into the dollar stores. We’re focusing on what brought us to where we are, the customers that brought us to where we are and we’re trying to make sure that our objectives are aligned with theirs, both on the home center side and the two step hardware side and that we’re doing the things that are going to help them meet their objectives.

Tim Gilmer: So I know something that is super important to you and where you guys started with online business, at Lowe’s they’ll tell you they’ve got a long way to go there. They’re behind some of their competitors. They are not where they need to be with their online content, with their online systems, with their delivery systems that they’re ordering systems, all of that has some major challenges. It’s just beginning to start getting better. And there’s been a major commitment on Lowe’s by half to that.

Tim Gilmer: And so for that reason, everybody says that that online is still on a growth pattern. It’s got a big upside. It’s growing at all customers, but it really has the potential to grow by leaps and bounds at Lowe’s because they’re taking naps and barriers that they’ve had for years that once those are no longer in place, they’re going to have a much higher ceiling for growth, even then the general industry.

Luke Peters: Well, that’s good to hear. And I know for this audience, that’s probably like a valuable nugget there because Lowe’s has had a lot of changes in the last year and everybody’s wondering where to invest their time in. But I still like the house and home category online, especially for products that fit it. Because while Amazon’s always going to grow, it’s not the perfect spot for every product. And some of these Home Depot and Lowe’s in particular have a special segment of the market, I believe, and probably Wayfair also to where they can be really strong in some categories where Amazon is not the first place everybody thinks of. So yeah, it’ll be interesting to see.

Tim Gilmer: Well there’s a lot of products in this industry that people want to, they will research it online for sure. And that’s where vast majority probably of the decisions begin, but in the hardware and home center industry, they want to go in and see this product. They want to see how it’s going to be installed or how it’s going to fit with their home, how it’s going to work. It’s really much more hands on than say some of the typical products that you might buy online.

Tim Gilmer: And so that would the knowledge of the customers that they’re going after and the knowledge of the industry that we’ve developed. To go back to the point you asked earlier what we’re doing to grow over the next five years. We really are not only investing in infrastructure and technology on our side of the business internally, but also in people.

Tim Gilmer: And I don’t count myself with a super old guy. I’m 53 years old. So I think I’m really young, but we’re also investing in some younger people. We’re getting the next generation of sales people and supply chain people and graphics people and data people in our company because that’s where most people are going to be able to take us to the next level.

Tim Gilmer: So we have to recognize that we need to continue to invest in those people with the right skillset to help our customers. Whether it be a factory like yourself and our customers like Lowe’s get to where they need to be. So we’re going to continue to invest in the people and resources that will help us get to where folks need to be.

Luke Peters: Makes a lot of sense. In talking with, I mean, you kind of touched on a lot of these points. I kind of changed up this question I was going to ask you in the end. Because I really want the audience to kind of come away with something they can use in their business, which we’ve already talked about a lot of those things.

Luke Peters: So I’ll change this one up a little bit and I guess if somebody is not in Lowe’s, you’ve shared a lot about your business and successes and even a lot about what companies need to think about when they pitch and when they’re in store, but I guess, in this one, what’s the best place for them to start and how are they going to be most likely successful if they’re not in Lowe’s right now, but they want to get a strategy. They want to find a way to get in there?

Tim Gilmer: Well, I would say the first place to store it would be in the store. And I mean physically in the stores. If you’re not spending time in the stores and in there in a Lowe’s store and in their competitor stores, understanding how your product fits within that store or what you can serve that the other guy cannot or what they are missing and be able to demonstrate that, you’re going to have a difficult time once you get face to face with the merchant or a decision maker if you’re not knowledgeable about the retail environment and their stores in particular, and how you can make a difference in the store. You want to present not only just a strategy to, “Hey, here’s a great product,” but here’s a great product. Here’s how it fits within your store. Here’s how it wants to be processed through your distribution centers. The whole nine yards has to be a well thought out. It can’t be just, “Hey, I’ve got a great product.” It’s got to be, “Hey, I have a great product and here’s how we’re going to make it a great product for Lowe’s.”

Tim Gilmer: That’s the beginning places in the store and getting the feedback from the associates and hearing what they have that are challenges and how you can meet that need with your product to overcome those challenges.

Luke Peters: Yeah. It’s funny as sometimes or actually most of the time in business it’s sad, but most of the time in business it’s the obvious things just like that. I mean that was a great answer, which is … if you want to get in there, you’ve got to spend some time in there, really understand their business and then align with them. Because they’re your customer and then their customers are your customer. But that’s a great answer. And it comes at it from a more strategic way of thinking, I guess, than some quick tactical answers.

Luke Peters: So I like that one. And that’s great because we actually did that with the opportunity that we’re working with you on. We kind of, pulled in the whole lineup of who was in there and took them apart over here at the warehouse and looked at all their features and looked at where they are priced and all the different offerings. And that’s kind of what we built around. So I like that. That’s a good way to think.

Luke Peters: Listen, I want to thank you, Tim. I think we’ve gone through so many useful things here and hopefully the audience has gained a lot of value from this. But before I let you go, I want to kind of let you say, if there’s … how the audience can get ahold of you, is there a primary way of LinkedIn or Email or anything you wanted to mention there?

Tim Gilmer: Yeah, well, I have a LinkedIn profile under Tim Gilmer that they can find. But our office is located in Gainesville, Georgia. And the easiest way probably to get me is LinkedIn and send a message through there and if somebody needs some advice or wants to talk to us, we’re happy to talk to them. Honestly, we don’t super often take on a lot of new things and I know that sounds crazy. We’ve really been focused on growing the things that we do with Lowe’s and we don’t try to do too many things.

Tim Gilmer: So I mean more often than not, it seems that we even recommend advise the folks on how they can do something, but maybe we don’t even end up working with them. But I think that comes back to us if we’re just honest with people and that’s what we try to be. We just try to be very honest with people about what we think the opportunity is or how they could best go about achieving their opportunities. And that may not be with us.

Tim Gilmer: But we find that if we’re very honest and forthright with people the factories we represent and the customers that we call on it serves as well. And so I would say through LinkedIn they can get ahold of myself or even my business partner, Jim Lamb, and we’d be happy to talk to anybody or give them some advice.

Luke Peters: Wonderful. Well, listen, Tim, I just want to thank you for joining me on the Page One Podcast. It really enjoyed it and I hope you did as well.

Tim Gilmer: I really did. Thank you for the opportunity. I appreciate it.

Luke Peters: You got it.

Speaker 1: Thanks for listening to the Page One Podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about our commerce, check out www.retailband.com to get more great tips and tricks on how to accelerate your eCommerce sales with the big-box retailers.

Contact Tim Gilmer

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Company Website

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Find Page 1 Podcast

How ZLINE enforces MAP, manages channel and brand conflict and builds Customer Loyalty to Win Page 1 of Search Results — Galen Bradford, CMO ZLINE Kitchen and Bath – EP18

What you’ll learn:

ZLINE Kitchen and Bath is an industry leader competing against other high-end, luxury brands. Team members Galen, Mason, and Drew talk about how ZLINE competes on its own terms, especially when it comes to controlling MAP violations, passing tariff price increases on consumers, and owning page 1 of search results.

About our guest:

In 2009, Galen Bradford co-founded a mobile software company, Tiger Stripes LLC. Under his leadership, Tiger Stripes sold over 3 million apps to a worldwide audience across multiple platforms. After Tiger Stripes, Galen consulted a number of startups and established himself as a dynamic project manager. He had extensive experience in many fields including product design, sales, marketing, branding, SEO, web development, strategic operations, social media strategies and graphic design. Currently, as the CMO for ZLINE Kitchen and Bath, Galen drives ZLINE’s vision to become a household name in kitchen appliances and bath fixtures. ZLINE Kitchen is the industry leader in designer kitchen appliances – with a passion for innovative styles and high performance, more homeowners can experience luxury in the spaces that mean the most.

Key takeaways from this episode:

Company stats (product fulfillment, warehouse sizes, etc.) and ZLINE backstory — 3:53
ZLINE Bender: how to transition from ecomm only sales to in-store retailer channels — 3:25
Driving D2C online sales by 40% — 7:24
How ZLINE maintains MAP across retailers — 8:07
Using Dropship to own your product — 11:01
Professional Consumers, Builders, & Contractors as solid growth channels and partners — 13:56
Innovative new product lines, style & color customization, and comprehensive kitchen remodels — 15:48
Brand marketing strategies and tactics that make ZLINE standout — 20:16
Engaging with customers on social media & driving traffic to retailer product listings — 23:40
Win page 1 and make your product stand out on retailer search results — 26:43
Taking advantage of New Product Placements when you launch a product — 29:54
MAP strategies across multiple retailers — 33:24
Perceived value and passing tariff price increases to consumers — 36:44
Biggest ZLINE win in 2019 — 42:50

Podcast Transcription

Narrator: Welcome to the Page One Podcast, a twice-weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies, to tariffs, influence or marketing, best in class product launches, and all the details about how to accelerate your e-commerce sales with the big-box retailers. Or what we call, R-commerce. Now here’s your host, Luke Peters.

Luke Peters: Thanks for joining me on the Page One Podcast. I am your host, Luke Peters. This is the podcast where I bring you the best and brightest leaders to share consumer, products, sales, and marketing strategies that will help you grow your business. I’m the CEO and founder of NewAir Appliances where I cut my teeth selling products online and have now started Retail Band to help other brands succeed with product launches and influencer marketing and B to B online sales strategy. And before we get into the podcast, I just wanted to quickly offer a free evaluation of your online sales strategy.

Luke Peters: So, if you are looking to improve your sales on Home Depot or Walmart.com or Lowes.com, Wayfair.com, these are areas that we can help you. And if you’re interested, find me on LinkedIn or email me at Luke@retailband.com. And in this episode, you’re going to learn from Galen Bradford along with a few other folks on his marketing team, and Galen is the CMO of ZLINE Kitchen and Bath. They have a really innovative brand. They built out a luxury appliance brand and really excited to dive in and see how they position themselves in a way that they compete on their own terms. Welcome to the show, guys.

Galen Bradford: Hey, thanks a lot, Luke. Yeah, we’re excited to be a part of this.

Luke Peters: Okay, great. And so quick bio on Galen. Graduated UC Davis. Student athlete, and he’s been a current CMO, he’s been a business owner. In 2009 Galen co-founded a mobile software company, Tiger Stripes LLC, and under his leadership, Tiger Stripes sold over three million apps to a world-wide audience across multiple platforms. And Galen has deep experience in branding, SCO, product design, social media strategies, and some of the questions I have tailored to those. So I hope to dive into those and see how Galen and the team have used those in a consumer products appliance brand. Currently the CMO for ZLINE Kitchen and Bath, and ZLINE’s vision is to become a household name in kitchen appliances and bath fixtures. So, welcome again, and Galen, before we get started, what… As an athlete, what sport were you playing?

Galen Bradford: I was a baseball player. Yeah, it seems like an age ago, but yeah I was a pitcher. I was a baseball player.

Luke Peters: Oh, that’s awesome. So we have a softball team here, and the joke was always… Well, when we interviewed, the joke was always that we had to find out what sport… Because we do basketball, here, too, so it’s like okay.

Galen Bradford: Yeah, yeah. Killer. Yeah. Yeah, we’re actually competitive ping-pong players. Mason, he’s also in the room, he actually just took the crown from me. So that’s a big moment at ZLINE sports.

Luke Peters: That’s awesome, yeah. Stuff like that, we have ping-pong here, too. That’s a ton of fun. Cool, great to have you guys here. The funny thing about… Not to labor the point, but the funny thing about company softballs teams is if somebody literally even played at the high school level, then they’re going to be really good, you know? Because most of us are just weekend warriors and never went that far.

Galen Bradford: Oh, yeah. And then there’s the co-ed situation where if your girls haven’t played softball, forget it. You’re not competitive.

Luke Peters: Yeah. And the fortunate thing on our team is we actually have girls on the guys’ team.

Galen Bradford: That’s awesome.

Luke Peters: Because we have one here, you know, she played in college, so she’s scooping the ball up and getting it out of the glove a lot quicker than we are.

Galen Bradford: No, that’s the dream. That’s awesome.

Luke Peters: Yeah, it’s cool. Okay, great, so let’s dive in to ZLINE. A little bit about the company, so the audience has kind of a good feeling for the company.

Galen Bradford: Yeah.

Luke Peters: So why don’t we start with total number of employees, warehouse size, do you guys do your own fulfillment? How about a little bit around that?

Galen Bradford: Yeah, sure. So we do everything end-to-end. We do everything from the product development, marketing, to the design of the product, every single part of the business. We do direct fulfillment, we do direct consumer, we do B-to-B, we really do everything. What makes ZLINE special is our tag line is attainable luxury. We’re really trying to create a feeling. We’re trying to create a feeling where someone could feel like a king in their own house. It’s affordable and it’s accessible, you know. And this is one of the big dents we’ve made on the marketplace and we’re really excited about the story we’re telling.

Luke Peters: Great, and how about just a scale? Is there a number of team members, or how big is the building you guys are in?

Galen Bradford: Yeah, so, we have four locations across the country. We’re here in Reno. Our headquarters is in Reno now, and we have a small distribution center here. About 55,000 square feet. And then in Tennessee is our main distribution center. We have an amazing customer service team there. That’s about 200,000 square feet. And then we have two locations in Ohio, combined about 140,000 square feet. Team-wide, we’re about 80 members, and then we have two, 3000 people manufacturing for us overseas. I want to include them because they’re definitely a part of the ZLINE brand.

Luke Peters: Wow. So you guys got a big footprint. You’ve got about 400 square feet of warehousing?

Galen Bradford: Yep, that’s correct.

Luke Peters: But you’re pretty lean with 80 people to cover that 400 square feet.

Galen Bradford: Yeah, we’re lean and mean. Yeah, that’s how we roll. That’s how we do everything.

Luke Peters: Great, and a sales mix. So, are you guys in-store, and what’s the percent of in-store and in-line, or online? And then maybe talk about some of the key clients.

Galen Bradford: So historically, we’ve cut our teeth with e-com. This is what I really know, this is what our team really knows. Andy Zuro, the founder and owner of the company, this is how he got started. He got started originally with eBay. And then we were really selling on a couple of direct consumer channels online that have done really well. And he brought me on board, and this has been my main mission is to really build the brand and to expand that. So now four years later, where we’re at is we’re making a transition from selling strictly e-commerce, to moving in the store. So now we have conversations going on with the big boxes. You know, we have conversations going on with Home Depot and Lowe’s.

Galen Bradford: There’s some things I can’t speak about yet until the papers have been signed, but we have an opportunity to be in 1000s of big box stores, hopefully by the end of next year. We have things working on there with Lowe’s and Home Depot and Best Buy are three biggest partners, and we’re really excited about the potential there. So we’re making a transition to getting in-store. So on the other side, we have a team that we’re building out extremely quickly. It’s called ZLINE Bender. So this is our Bender team. We’re really excited about this, and what we’re doing here is working with BrandSource, Nationwide, I don’t know if you’re familiar with those two companies, but they’re essentially distribution platforms. And we’ll have access to over 4000 independent appliance store owners and work with them. So we’re really excited about the opportunity there in the next year.

Luke Peters: And, actually, I think we do have some experience with them, not recently. So it was BrandSource and who was the other one?

Galen Bradford: And Nationwide. Yeah, they’re our two competitors, but we’re trying to be everywhere.

Luke Peters: Yep, yep. So, awesome. And I actually remember that. Yeah, because I think they have a trade show. I can’t remember if there’s a trade show in Florida, and it’s smaller business, like pallet business, but to all of these independents, I think is the idea there.

Galen Bradford: Exactly, yeah. Yeah, I think that’s going to be huge for us.

Luke Peters: That’s great. So back to the channels, how much of your business is direct to consumer? We’re not talking HD.com, we’re talking website direct to consumer.com. Is that a smaller portion or is that a pretty big portion of the company?

Galen Bradford: Well it used to be an extremely large portion of the company, and that’s now spread out to… It’s now one of many channels. So this is actually the channel that Mason runs, and that’s driven mainly by online marketing. And we have several platforms that we drive topics at, and a couple point of sale pikes there that have done well, historically, and are continuing to grow about 40 to 50% year over year in that channel.

Luke Peters: That’s amazing. And so, historically, that was the majority of it but now I’m guessing have accounts like Amazon.com, HD.com, Wayfair, and Lowe’s. So those kind of eclipsed your direct to consumer?

Galen Bradford: Yeah, I would say so. Amazon’s really interesting for us. There’s been some challenges there working with Amazon as I’m sure you and your listeners know. There’s really two tenants to Amazon. There’s Amazon Seller and there’s Amazon Vendor. We’re making a transition in terms of how we approach that. Mainly because of MAP pricing violations. And I’m sure your listeners know, I mean if you can’t maintain MAP, you can’t maintain a brand online. And so that’s one of our biggest challenges. And Amazon can be challenging to work with in that regard. But Amazon Seller, we run entirely, and it’s actually one of our most profitable channels. And then we control the pricing and we can make sure that we adhere to MAP.

Luke Peters: Wow, so good for you. So you guys are able to actually control your MAP online, because that’s… Man, that’s a challenge. Because, well, look who you’re selling… You’re selling to a lot of people, that’s not easy.

Galen Bradford: Our business is founded on that, and so we’re… I’m sure a couple more managers would look at me if I said that yeah, we’re 100% there, but we do think we’re 95% there and we’re striving to be 100. And I think we do the best job in the industry of that.

Luke Peters: Oh, no, that’s, yeah. Even if you’re close, that’s really impressive. I mean we’re not there. None of our competitors, our direct competitors are there because it’s such a challenge. Is there a tool? Obviously you guys have to work with buyers and make sure they hold MAP.

Galen Bradford: Yep.

Luke Peters: Can you call out any special tool that you’re using to make sure you’re keeping people in line?

Galen Bradford: So there actually are a few scrubbers. Do you guys remember what those scrubbers are that we were looking into that we haven’t purchased yet? So there’s some scrubbers that basically scrub online, but Home Depot and Lowe’s and Wayfair are actually really great partners of ours. We’ve got tremendous relationships with them. So they’ll actually send us reports. We made the agreement with them that we wouldn’t allow any of our prices to violate MAP. And so they’ll send us a report every week of when there’s a violation, and hopefully they never have to send it. But they do send it when we violate, and we often decide to do us and do make adjustments that are needed.

Galen Bradford: And it comes down to taking product off channels that break MAP. And we’ve run into a lot of issues over the years, and know the reason why we’re able, you asked how we’re able to do that. Well it just comes from having brass balls. I mean you have to be able to look them in the face and say hey, we’re going to stop doing business with you and we’re going to lose $500,000 a month or whatever it is on that channel because it’s that important for us to maintain brand recognition and adhere to MAP.

Luke Peters: There you go. Home and housewares brands, got to have brass balls. I think that’s what we’re going to have to title this episode. That’s a first on the Page One Podcast, I like it.

Galen Bradford: And that’s really a testament to our founder and owner and chief designer of products and that’s Andy Zuro. This just comes directly from him, and he definitely puts his money where his mouth is.

Luke Peters: Okay, I’m going to go deeper on that because man, I’m interested. I’m learning, so I know if I’m learning stuff here then the audience is, for sure. So you’ve got to pull product, but I know a lot of these customers you’re talking with, they have their own DCs or DFCs and they’re taking inventory.

Galen Bradford: Oh yes, yes.

Luke Peters: So then you’ve got a big problem if they’ve got inventory and you’re violating MAP.

Galen Bradford: Exactly.

Luke Peters: So how do you guys handle that?

Galen Bradford: Yes. So this is where we’re really unique, and this is a thing that ZLINE does that’s really unique in the industry is we stock all of our products ourselves and then we drop-ship. And so everything actually is getting shipped on our own account. So when we ran into issues, we ran into issues with Amazon Vendor, and that is because they owned our product and so they effectively can sell it for whatever they want.

Galen Bradford: So when we own our product and we ship directly to consumer next business day, and we were born on the Amazon model, and the good part about the Amazon model and what we’re grateful for is every single product that ZLINE sells, I mean over 3000 skus when we were selling large ranges, we’re selling ranges, we’re selling all kitchen suite except refrigeration, which we’ll have next year, hopefully. And every single product that we have we stock it and we ship next business day. And actually any orders that come in before noon, we’re actually shipping the current day. So our customers are getting product within three days and that’s insane when you’re talking about a 48 inch range.

Luke Peters: Yeah, that is. So 3000 skus?

Galen Bradford: Yeah, yeah. We have an incredible market and design, you know. So obviously we have models that sell much quicker than other models, but we stock everything.

Luke Peters: And you don’t let others stock it, it sounds like. Like if one of your clients wanted to put it into their DCs you’re saying no? You’re saying hey, we’re going to ship that for you?

Galen Bradford: Well it really depends. And this is where the meat of your question is, is it comes down to trust and adherence to MAP. So if someone wants to stock our product, it’s something that we’ll absolutely consider, but we’re not going to consider that if the terms rely on them needing to move that product by discounting.

Luke Peters: Got you. But you do still have a promo schedule, you just kind of align it with everybody?

Galen Bradford: We do, exactly right. And that’s something that we’ve run into some issues with in the past couple of weeks, which is new for us because we always do November sales, these November Black Friday specials. November’s our biggest month of the year. And so we have about 100 skus on sale, and it’s different for in-store… our vendor partners, you know, and we realize that we’ve kind of made some mistakes by allowing online sales, where normally we give it to Wayfair, we give it to Depot, we give it to Best Buy, we give it to Lowe’s. Everyone’s usually on the same exact playing field, and that’s really what our theory is. As long as everyone’s on the same playing field, everyone has the same opportunities and may the best win. And we just don’t want anyone to have kind of a unique advantage. But our vendors have had issues with that, and we’ve made some adjustments there and we’ll definitely have to, as we grow as a brand and have more in-store presence, we’re going to have to make some adjustments and probably limit our sales.

Luke Peters: Yeah, I mean these are really super interesting insights, Galen, so thanks for this. And kind of on this same line, so we talked about how you guys are handling MAP. That whole section is worth a play-back right there. What is your best growth channel right now? You mentioned D-to-C is growing 40% plus a year. How are the rest of the channels? What do you guys see as the future and the growth?

Galen Bradford: Well, I think that our biggest opportunity and my favorite opportunity is with builders and what I like about that business model is being able to do bulkage and sweeps. So we’re here in Reno and there’s a lot of building going on in Reno, and so now we’re part of the local building community which we’re really appreciate of. And, for instance, let’s say we have one builder that does 25 homes a month. Well, we can get those 25 homes a month to do the full kitchen suite, and then we can do that in 100 different markets. This turns into a subscription-based model where we have 100+ day lead times that makes it really easy on our GTs and it’s almost guaranteed income ahead of time. So we’re pre-selling a product. We’ve never done that before until the past couple of years, and it is sweet. We are working with Ryan Homes, who is owned by NDR and we do some of their high-end homes for our range hood and it’s been just a really great partnership for us and we’re thinking there’s a huge opportunity with builders.

Luke Peters: Wow, that’s great. That’s unique. That’s something that I didn’t expect to hear, and so I love getting answers like that. Working with the builders, it makes a lot of sense. You’re going to have your ups and downs with the economy, but so will the business itself, anyways, you know, as the housing build-outs go up and down. But like you said, it’s like a subscription business and that resonates. And that’s hard to get in this type of an industry, so it is a different business model. I like it. It’s cool.

Galen Bradford: Yeah, and it’s better because you don’t have return issues, either, because we find the majority of our returns are from damages in shipping because we’re drop-shipping everywhere across the country. We can palletize our product and ship it bulk and our returns are zero, or less than 1%.

Luke Peters: Now, but a lot of your products are large. So just how about, just for the audience really quick, so we’re talking about ZLINE Kitchen and Bath but you guys are doing full ranges. Do you want to kind of, I mean those got to go on pallets, I’m assuming, right?

Galen Bradford: For sure, for sure.

Luke Peters: Yeah. So why don’t you give the audience a quick run-down of, say, your top five product categories?

Galen Bradford: Yeah, so we got started with range hoods. So Andy got involved with range hoods. We’re probably, by far, the largest range hood seller online, really probably ever, you know? In terms of design, we definitely lead the industry there. Even invented some things like crown molding for a range hood. And what that allows us to do, is it allows you to gut the chimney at any point without having a telescoping chimney. So it’s like this beautiful thing and it really finishes that cut at the top of the ceiling, it looks beautiful. We’ve developed some different finishes. So we do copper finishes, we do a stainless finish, non-directional snow finish, a fingerprint-resistant. Wooden range hoods, we’re the first manufacturer of wooden range hoods that the motor is included, and we offer a lifetime warranty on the motor, which no other range manufacturer offers and so this is a lot of really creative story online where we have professional quality products and 1000s of variations and sizes that looks like a designer product that someone would purchase for four, $5000 in a high-end home.

Galen Bradford: It is now available and can be shipped to your door for $500. And that changes the game and so that’s why we’ve been really successful with range hoods. With that success, we’ve gotten into other categories like ranges. We’re really excited about our ranges. Our ranges have been killing it, and it’s been really fun there. So we do a 30 inch range, a 36 inch range, a 40 inch range. We do duel fuel, gas on gas. And what am I forgetting here, guys? There’s a whole bunch of other products that we kick ass on.

Mason: Yeah, this is Mason here. We also specialize in our newest line, which is black stainless. So we offer a black stainless variation of all those sizes, as well as colored doors and panel doors. So really just speaking more to the customization and really complimenting the customer’s experience, really, to enhance their kitchen design, all in all.

Drew: Yeah, and this is Drew here, and the one thing I’ll add, too, as Galen kind of mentioned before this idea of the complete kitchen suite is really expanding from the range hoods and the range into a really exciting microwave drawer and our two-sided dishwasher. Which, from there we even innovate the finishes that Mason mentioned. The black stainless, and a lot of the different finishes you’ll see in our range hoods so we can really bring pretty comprehensive aesthetics to the kitchen across the whole suite of appliances.

Galen Bradford: Yeah, we want to be a one-stop-shop for kitchen remodel and that’s where ZLINE Kitchen and Bath… We’re also moving the bath feature, as well, but that’s kind of the quick and dirty.

Luke Peters: Yeah, and I saw a bunch of faucets, as well on your-

Galen Bradford: Yes, yes.

Luke Peters: So is that a newer category?

Galen Bradford: It is a new category. Yeah, it is a new category. We actually manufacture our faucets from the same manufacturer as Rohls. We’re super high-quality, so we have… It’s all a brass construction in our faucets. We have a couple of patented spray systems that are anti-splash, which we’re excited to introduce. And what we’re really, really excited and passionate about is this new stainless steel. It’s called dura-snow stainless steel and Andy’s invented this and it’s a non-directional stainless steel. And we’re doing this in the whole family, so it’ll be in the sink, it’ll be in a dishwasher, it’ll be in a range hood, it’ll be in a range. What’s really innovative about it is if you scratch it, and it’s just huge for sinks, if you scratch it… You know, those stainless steel sinks, they get terrible looking after a few knives have been in them over months.

Luke Peters: Yep.

Galen Bradford: Yep, and you can actually take those scratches out and buff them out, and we have a tool for that and it’s designed to make your sink look brand new after it’s three years old. And that’s going to apply to every appliance. That kind of thing fires us up, and that’s what we’re here to do is we’re here to innovate in the industry and do something that no one’s done before.

Luke Peters: Great, and just from you guys talking, I’m guessing it sounds like the company started with range hoods and that’s probably 50% plus of the business sales. It seems like that’s where the company started and where the innovation started.

Galen Bradford: Yep, that’s fair. It’s starting to change as we’re getting to these new products. We’re finding that our ranges are becoming our new marque product. The range hoods, we’re seeing huge growth there but the ranges are… We’re becoming more and more excited about the opportunities in cooking.

Luke Peters: And you guys are really innovative. The marketing is great, the website’s amazing, I can tell. We’re going to get into some marketing questions here. But kind of before we do, what do you guys feel is, or maybe one to two things that consumer brands should be doing that you guys are really good at and you notice that a lot of… You got to give away some of your secrets, here, but a lot of the competitors are missing out on? Is it something special you’re doing with the product launches, or the D-to-C side, or what do you feel kind of makes the magic of ZLINE online?

Galen Bradford: Well, there’s a lot. That’s a great question, Luke. There’s a lot and I can let the guys answer this a little bit more in-depth, but what I think in terms of marketing in general, is it’s kind of a broad suggestion, but it’s like the key suggestion if you really understand what it is. And that’s the brand, right? So what does the brand mean, you know? It comes down to a feeling. And what kind of feeling are you getting from your customer? And then is that part of your brand’s DNA in everything that you do? And if you can really get that dialed in, then you have something really special.

Galen Bradford: So, for instance, for ZLINE, our tag line is attainable luxury. We want something where someone can feel like they can have this beautiful space in their home and what that feels like. And so that relates to everything that we do. So if it’s marketing online, what does our content look like? If it’s writing, what does that feel like? And that’s kind of like a broad brush stroke, and that’s what all my managers are focusing on. And also how to innovate in our industry. There’s a great book… I’m sure your readers have read it or have heard of it. It’s called Blue Ocean Marketing Strategy.

Luke Peters: Yep.

Galen Bradford: And this is, yeah, so this is fundamentally how we roll on every single part of our business. We’re not really competing against people, we’re doing things completely differently and, you know, this starts to pop with Andy’s vision in development and in product creation, and it goes into every part of our business in terms of operations, in terms of marketing, and how we think about things. How else would you guys describe the more concrete marketing tactics?

Mason: Yeah, Mason here. I would, to compliment what Galen’s saying, I think it all starts with what kind of story do we want to convey to our audience? And utilizing every single avenue to make that happen and to really integrate that into not only the service we provide, but what we’re thinking of in terms of the end user experience. And really tying in that feeling and making our team buy into that allows it to resonate with everything we do, I think is the essence.

Drew: Yeah, this is Drew, and to piggyback on what Galen and Mason are saying, we have a vision of how can we have the perspective of what our customer is going to experience from shopping all the way to bringing the product in their home? And that vision, too, is, you know, you’re buying kitchen appliances but we’re really helping someone purchase the lifestyle they want to have and enjoy that. And we can fulfill that role with our marketing, our shopping experience, our customer service. That’s where we’re innovating and we’re continuing to deliver a premium experience to our customers from every interaction with us. And that’s really what we’re bringing to the market.

Luke Peters: Now, guys, I like all of that, but I’ll challenge you a little bit because-

Galen Bradford: Perfect.

Luke Peters: We want to get something really tangible, so I…

Galen Bradford: Yep.

Luke Peters: Everything you’re saying is textbook 101 branding, and you guys are obviously doing a good job, so you know what you’re doing.

Galen Bradford: Yeah, great.

Luke Peters: But, you know, when HD’s got your product online, HD.com. Now, again, these are high consideration products so maybe the consumer’s kind of looking around a few different times. Could be a couple weeks before they buy it. But I guess what I would say is do you guys have maybe… Because this one, I didn’t have a chance to look at. Do you have like a huge social following?

Galen Bradford: We do.

Luke Peters: In other words, is there a special way that you’re engaging with your customers? Because HD’s not going to do it for you.

Galen Bradford: Yes, yeah. So we can go pretty deep on this. So I guess at a social media marketing level, we do a phenomenal job in terms of telling our story directly. But Home Depot, specifically… We take each channel, kind of hold it sickly. So Home Depot, you ask yourself well what really drives traffic on Home Depot? Now, if I’m going to get into the nitty-gritty of what we do that’s unique is we focus on two different things here. So you’ve got to start with content, right? If you don’t have good content, then you’re not going to sell anything. So we start with having the best content, all right? So we’ve got content, we have the best videos, and then we also have the best background.

Galen Bradford: So what is the customer’s flow going to look like? They’re going to go to Home Depot, they’re going to find something that they like. They’re not probably going to purchase the first time they look at it, especially a few thousand to a $5000 product. So what are they going to do? They’re going to look for reviews online. You know, outside Home Depot, what else have they found? They’re going to look for problems on ZLINE. They’re going to look for when customers had issues. And so I challenge you to actually look into that and find what we look like online saying hey, type in… Try to find issues on ZLINE products and see how we’ve handled it.

Galen Bradford: When we find that when you have customers that have had a bad experience with us, we go above and beyond to make sure that they have an incredible experience with us. So, you know, customers that have had something fail, we make sure that they’re still well taken care of. They become a raving fan. So when you have a raving fan, now they’re going to be leaving a raving review and they’re going to speak about their problem and how ZLINE handled it and how that’s crazy what they did for them. And that comes down to our psychological… Or just making sure that our customer’s taken care of. Attainable luxury, but you’re going to be treated like a king when you have a problem. So this is something that really separates us because we have raving reviews and raving fans.

Galen Bradford: One of my favorite books is Tribe by Seth Godin and he talks about if you have raving fans, then everything else is taken care of. And we found that online, that’s particularly the case. So we focus on content, we focus on reviews. So we have great reviews, we have great content. And that’s starting to create legitimacy for the customer on channel at Home Depot. So what else can we do? Now we can drive traffic, and we have a couple of things that we do to drive traffic. The Depot, particularly, and that’s we have JavaScript into our website and around every product listing, we have a link that goes directly to Home Depot so that our partners are succeeding with the job that we’re driving. And those are just a couple of things, I could go on and on about that. But is that more helpful?

Luke Peters: That’s awesome, that’s a great answer and I love that specific one of actually driving traffic from your website to one of your retail partners. Super unique, but you know I’ve talked to guests in the past, and they’re… For example, on Amazon instead of using Amazon AMS advertising, they’re using Facebook advertising because they’re getting a better bang for the buck right to their seller or vendor listening. So you’re kind of doing the same thing. You’re saying hey, you want to sell it on your website but you know what? HD or Amazon or Lowe’s or Wayfair are probably going to convert higher than your website. Probably, you know, if someone’s like already registered and has their information on those sites. So, yeah, that’s a great specific item right there. Super interesting.

Galen Bradford: Yeah, another thing to add that is kind of unique that I’m not sure people think about a whole lot, and I haven’t even talked with this about the guys. So my history, I used to do apps and make apps. I was in the app business for nine years and we used a lot of apps, and some of the apps really sold a lot. And what really was interesting is how the app store worked, right? And so the app store, their algorithm’s based on searchability and ranking, and where your product comes up in these rankings. And so if you… I mean, I don’t want to go into too much detail of our secret sauce and also the ways to make your product stand out, but there are ways. And so if you are able to look at that, for instance in the app store, what really drove apps?

Galen Bradford: And so there was a long period of time where you could, you know, essentially, not necessarily game in the system but you can make sure that your apps are extremely discoverable and if you’re on the front page, everyone knows this with any FDL. So on the front page, then it’s a multitude of clicks. It’s not just like hey, it’s not just two or three clicks more than the next page. It’s like 100s more. And it was the same thing for the app store. And it’s the same thing featuring your product on any channel that has search algorithms, including Home Depot or any store. So I thought I’d touch on that a little bit.

Luke Peters: I mean so, I’m going to try to pull it out of you. Are you saying using, say, PPC traffic, driving it to listings, that type of an idea?

Galen Bradford: Well there’s obviously a lot to look into in that sense, but I’m talking more… So what makes something popular in algorithm, and that’s having good reviews, having good content, and having conversion on the clicks, right? So if people are going to our product on Home Depot, let’s say it’s an RA30, which is a best selling product for us. It’s a 30 inch range, full fuel. It competes with Viking, so a Viking or a Wolf. It could be any brand, you know, that does a good job that is a household name. We’re competing with those brands. You go to that product page, and how many thousand people have clicked on that product versus converted? So that’s going to be something that any algorithm is going to take into mind.

Galen Bradford: They’re going to look at the reviews, they’re going to look at that, and then also how long it’s been on site and how many sales it’s had. So it’s just like anything, whether you’re PPCing on AdWords, whether you’re selling something on Amazon, each one of these sites has their own algorithm and it’s important to make sure that you set your product in the best possible way.

Luke Peters: I got you. I got you. So you’re really kind of backing up to what you were talking about before, making sure you have really good reviews and the best content so that you’re going to have the best conversion rates and maximizing those types of things.

Galen Bradford: And then it’s a self-fulfilling prophecy. So then the next step there is… Once you’re on the page one, you stay there.

Luke Peters: Yep, I totally get it. Well love it, I love it. I love where this is going. So this is so interesting to me. So why don’t we just keep going on this, kind of down this road and talk about how you guys launch products? The reason I ask for you guys, so you have kind of back to the beginning, 100,000 square feet, 300,000 skus. That’s a lot of products you’re bringing into the market. We’re launching new products all the time, I’m sure a lot of people are, especially in this world of tariffs. But it’s tough when you launch a brand new sku. Kind of what we… Because this goes against what we just talked about. So we just talked about winning page one, and that’s a self-fulfilling prophecy, now those skus are going to kind of hopefully locked in on page one, but now you’ve got a new sku that’s nowhere to be found and you’ve got to launch that sku and kind of get some traction and volume. Are you able to walk us through kind of your thought process there?

Galen Bradford: Yeah, so, I mean, similar to apps, I think about in terms of that of what would happen with an app release, right? When you first release the product, you have an opportunity, and it’s really just big box but they’re pretty much everywhere, but you have an opportunity where it’s a new product so you have preferential ranking as new. Some channels, it’ll actually put you in the very back which stinks. But if you can make sure that you have high conversions at the beginning, then you’ll stay there. So when we do product launches, we want to make sure that we’re blasting it on our social media channels. We’re telling stories about it, we do product launches, right? And we do announcements. We try to drive as much traffic as we can to those skus when they launch so that they’ll stay highly ranked.

Luke Peters: Got it. And how does that look, specifically? Is that social media from Instagram channels or is that paid or is it organic or how are you guys driving it to those listings?

Galen Bradford: Sure. Yeah, there’s a lot. I don’t want to totally give away our secret sauce because it’s working really well for us.

Luke Peters: I’ll call you after the podcast. I’m just kidding.

Galen Bradford: Yeah, yeah, yeah. But in short, we do a lot of branding and traffic driving.

Luke Peters: That’s good, I get it.

Galen Bradford: And we do the research beforehand, too. I think this is really critical for your listeners, is there’s a lot of things that you can do before you launch a product and I’ve learned this from not only at ZLINE, where we’ve had extremely successful product launches and some… We’ve actually, every product we release actually sells pretty well. But some products not as much as we were expecting. For instance, an example would be we have these amazing butcher block wooden range hoods, and these are the most beautiful product. They’re still my favorite ZLINE product. And for some reason, maybe it’s we’re not doing good enough telling the story or it’s so radical for the consumer in our space, they don’t sell as well as we thought they would compared to other products that we’ve released. And so the staff points me at price points they’re at and then the looks they have. The people just aren’t… they’ve never seen anything like it before. Andy’s developed this product that is just game-changing and an amazing price point. And if they don’t see it, they can’t buy it whether…

Galen Bradford: So what I mean by that is people aren’t searching for wooden butcher block range hoods. So how do we market for something where people aren’t searching for it? Because what we’re really good at is we’re really good at marketing things where there’s high traffic for, right? So if someone’s range hood… And, you know, type in range hood online. Just search range hood. You’re going to see ZLINE all over the place. That’s testament to what Mason does and what Drew does. And so we’re really good at that. But people aren’t searching for butcher block range hood. So this is more of a long tale sell of our wood hoods and the story behind those where people need to really see them to believe how amazing it looks in person. And so I think that having displays in stores is going to change the game for those. But that’s a challenge, so I don’t really know how it’s going with that.

Luke Peters: No, it’s a great example. We run into that, too, with product launches where… I mean it’s the same product, but it’s a different version or a raft product or something new that we’re developing. And so in your case, you got to educate the customer or you got to, you know, maybe you could tie it to another sku so you’re getting eyeballs on it. And then maybe it’ll pick up volume, or maybe it won’t.

Galen Bradford: Yeah, yeah.

Luke Peters: That’s interesting. What are… So now, thanks a lot for all the product details, by the way. Find that stuff fascinating.

Galen Bradford: For sure.

Luke Peters: And you talked in really detail about some specific wins and I think there’s some good stuff there for the listeners to dive deeper and win with their own brands. Kind of talking about… So talking about offering products on competing channels, and we’ve talked about this at the beginning but I figured we’d go one more round because I want to make sure we understand it all because you guys are successfully implementing MAP. Is there anything else to your channel strategy? Did we kind of already cover it or is there any other nuance? Because it looks like you guys are selling to most of all the big box retailers online, and that’s hard. And so you guys just have MAP agreements with everybody, or is there more to it on your channel strategy? Does everybody get every sku pretty much, or do you guys kind of have to have silos and segment that out?

Drew: Hey, this is Drew. I’ll kind of jump in here. You know, it’s kind of unique. We kind of… A big thing, like, we’re saying with the product launches to working with the channels is very much listening. How do we create an opportunity to really win with them, win on their platforms, especially on a bigger channel? They have the platform there. What is there audience looking for? So one thing that’s unique there, too, is really bringing the products to their audience that they want to find. And then that idea, too, is that once you’re satisfying what I need, the competitor’s audience needs to be satisfied, as well. And so that’s part of what works well for us. And the other thing, too, is really we are able to iterate very quickly. We’re able to see what’s working, what’s not. Take that information back and arrange ourselves so that we can really bring a comprehensive, very palatable thing to different audiences successfully. And that’s what’s really unique in our ability to have the direct to consumer option but also work with our channels.

Drew: MAP is unique in that it does take a lot of work, but again that kind of goes back to our feedback element, as well. We’re willing to have our partners let us know when they see hey, someone else is trying to break MAP. Our job is to take that information and act on it as quickly as we can, and that also reinforces that relationship that we have with those partners. So from there, I mean, it really is unique per platform, but we’re always trying to present ourself in the best way possible to any platform’s audience to have them say oh, ZLINE’s fantastic, that’s what I want, that’s what I’m looking for.

Galen Bradford: I think, just adding to what Drew’s saying, it’s really interesting in the appliance industry. The state of content on channels. And there’s just so much opportunity. There’s so much opportunity within our own brand that we’re just so excited to improve upon, and there’s just so much opportunity there. Mason, is there anything that you’d add to this?

Mason: No, absolutely. I think that, you know, just maintain the harmony with each channel is essential in building that brand and leveraging it, and also just maintaining and fostering those relationships with all the retailers and trying to keep that as aligned as possible.

Galen Bradford: The relationship with our partners has been huge, and without a solid relationship then we can’t adhere to MAP. And sometimes that I mentioned earlier, you have to call people out. You have to call people out on their shit.

Luke Peters: Yeah, yep.

Galen Bradford: Yeah, we’ve been in a couple situations where we were forced for more margin and, you know, you need to just really stand up. And so this is where the big brass balls comes into play. You have to really stand up for your brand because if you start to move, even with a ton of pressure, with those threats, you start to move with those threats then you lose what it is that made you great.

Luke Peters: Wow, I love it. I think all of us can learn from that. Well said, let’s move on to another favorite subject, tariffs. I’m assuming-

Galen Bradford: Oh, gosh. Yeah.

Luke Peters: Yeah. I could tell, specifically, I mean you guys are bringing some stuff in from Europe, but is it correct to assume that most of your stuff is coming from China?

Galen Bradford: That’s correct, yeah. I mean we do have a lot of Italian manufacturers. We have some work we’re doing in Germany. But it is… We are predominately shipping from east Asia and China.

Luke Peters: And how has that worked? Have you guys been able to pass those price increases on? With MAP, you have more margin in there, I’m assuming, on both sides, so that probably helped you.

Galen Bradford: Yeah. So we have some decent margins on our products, but again, the tariffs are a nightmare. There’s no way to talk about it and stress how much of a nightmare it is, particularly for a US-based company. And a lot of our competitors are actually China-based companies. So we consider ourselves the industry leader in kitchen design. And I know that that’s like a huge freaking claim, but there is a lot of things that we can do to back that up in innovations that we’ve made in the range hood business, and also the innovations that we’ve made in the range business. And I can get into product details, but for the scope of the tariff question, it’s a really big challenge for us because we’re getting copied constantly by all these Chinese brands and brands even in Europe that are literally just copying us, much like how Apple invented iOS and everything you look at’s iOS, even everything… Android is 100% an iOS rip off. And every phone you see has the same cameras that Apple came up with and even like the notch.

Galen Bradford: Huge Apple fan boy, of course, but I wasn’t a big fan of the notch and face ID. And before you know it, you know, six months later every single phone has face ID and the notch. And so they’re just getting copied, and that’s kind of happening with ZLINE. And so where it’s frustrating is we’re getting tariff, whereas we would love to be manufacturing in the United States. We would love to be hiring more people, and the money that we’re getting tariffed is actually preventing us from competing at a level that we want to compete at in the reinvestment that we’d be putting back into our business. So we’re literally now putting 20% of our profit into someone else who gets to decide how to spend it and I guarantee they’re not building the jobs that we would build, right? So unless they’re government jobs, but we can’t afford that anyway. So I have a lot of feelings about this.

Luke Peters: Yeah, well, listen, we’re in the same boat. So it’s a total nightmare, but I guess the question is have you guys been able to at least recoup some of that from… Not from your suppliers, I’m saying literally from the customers because that’s a tough conversation. We haven’t been successful with every one, so that’s why I’ve asked it.

Galen Bradford: Good question. So what we’ve done, and we did this about two months ago is we raised prices. We raised prices and so the consumer is now paying for it. And what’s really interesting with this, Luke, is we’ve raised our prices, depending on the product, but we’ve raised our prices from 5% to 20%, depending on the sku. And across the board, pretty much. And what’s really interesting is our sales have actually increased. And so we find that fascinating. We’ve done a good job telling our story and our brand online, so I think that’s been a part of it.

Luke Peters: That’s awesome.

Galen Bradford: But I also think that the customer actually… We’ve pricing ourselves a little bit too low for the quality of our product. I ran into this in apps, and this is actually some food for thought for anyone in this industry. When you’re selling something that’s inexpensive, but has amazing quality. It’s very rare to find, but when you have it, it’s interesting. So I used to sell apps for 99 cents, and I’d sell a certain amount. And then we said hey we’ll raise our apps to $1.99, 2.99, and the sales actually doubled.

Luke Peters: Wow, yeah.

Galen Bradford: It was perceived value that is interesting. It’s hard to understand. We kind of think about selling things in terms of well how cheap can we go and still making our margin? That’s kind of in our psychology. But actually there’s another thing that you’re doing there if you have a really good brand, and you have really good materials, that if you actually raise your prices you end up selling more, too.

Luke Peters: Good for you guys. That’s a rare story. You guys are just… You’re winning on all fronts. So you’ve got your price increase in. Now I’m assuming you got it in because you’re running a MAP policy and there’s enough margin on both ends, and so it sounds like all of your customers just took it, right? I mean that’s great.

Galen Bradford: Yep. It’s pretty nightmarish on how we were able… It had to be coordinated, right? So implementing this, and we have our director of our channels and accounts, her name’s Brit Johnson, and she did just a hell of a job corralling all of our partners to change our pricing at once, because it was a date. We set a firm date. And we actually had to keep pushing that date back and send it to our great partnerships that we have with Home Depot and our partnerships with Lowe’s and these big box stores that not only, they not only changed the pricing for us, they kept their pricing higher for us when a couple of our smaller partners didn’t change.

Luke Peters: Yeah, that’s awesome.

Galen Bradford: And that’s because of great relationships that we had with our buyers. And they believed in our brand and so without them holding MAP for us, we wouldn’t have been able to do it. The relationship factor is huge and so we really appreciate that. And that’s going to go a long way in future negotiations with them.

Luke Peters: Congratulations. I mean that’s something a lot of listeners can learn from. So you’ve got… You had to coordinate it. It’s sounds like, you know, you actually had to push it back a couple times, I guess.

Galen Bradford: We did.

Luke Peters: Maybe it wasn’t ready to go live, but then it went live and not everybody was there. But your big guys held until everybody got up, and you successfully pushed it out. That’s good for you guys.

Galen Bradford: Yeah, we got away with one there.

Luke Peters: Yeah. Well, I mean that’s… I mean, listen, that’s how we’ve seen it in all of those cases where you’re pushing something through and you’ve got to rely on that partnership.

Galen Bradford: Exactly, exactly.

Luke Peters: Wow, this has been really a fascinating interview. I want to thank, Galen, you, and Drew, and Mason, and I guess this last question, or one of the last questions here is that you guys have shared a lot about the business. What’s your biggest win in this past year? I guess I can’t… You’ve got to pull the price increase out of there, because we already talked about that. That’s probably your biggest win if you look at profit dollars. So excluding the price increase, what would you guys say is your biggest win in the past year?

Mason: Yeah, Mason here. You know, just kind of tying back to what we’ve focused on moving from e-commerce now to working with builders and growing our vendors side of the business. One of the things that we’ve taken advantage of is making partnerships with brand stores and attending their trade show. That’s been a huge win for us and that’s allowed us to make some awesome connections that we’re really excited to pursue moving forward and continuing to expand that by some things.

Luke Peters: Great, so working with the builders. Cool.

Drew: Yeah, and this is Drew. I’d say the biggest win is seeing what we were able to accomplish and knowing where we’re going. Just as far as the initiatives we’re claiming and the ability to say we can look the industry differently. We can target things and do them differently and succeed, and that’s on a small level, but on a really big level that’s really the vision that’s guiding what we’re doing going forward. And so to me, the big win is just knowing we can do it. We can take these chances and win and it’s awesome. Everything from building new relationships to completely changing how we represent ourselves and interact is so awesome. It just fuels me up every day.

Galen Bradford: Yeah, we’ve had a really great year and a lot of wins. I think, for me, the biggest win that we’ve had is the team that we’ve been building, and the leaders that we’ve been developing. And, you know, you really can only grow as fast as your people grow, and scale as fast as your people can scale. So that’s been the biggest part. We have this team in Tennessee that has been built in the past year, and we didn’t have this team a year ago. And it’s a 200,000 square foot facility. We have over 30 people there, we’re trying to find people there now. And we’re hiring as fast as we can there so we have this just lights-out warehouse team that are just moving mountains for us.

Galen Bradford: We ship now 40% of ZLINE product out of this facility, and then we also have our customer service team there. There’s 15 customer service reps there that are just killing it for us. I mean these are some of the best people you’ve ever met in your life. Just like real Americans that really care about appliances and doing the right thing. And also we have this amazing management team here in Reno that have been such a tremendous job in pushing the envelope and challenging themselves. And that’s what I’m the most proud of, and we don’t do what we do without them.

Luke Peters: And I can hear the passion in your voice, so congratulations. Galen, you’ve built a great team, obviously, with Drew and Mason. And I can tell that you guys are knowledgeable and understand your domain. So really thought-provoking interview and the details you guys put out there. And I’m taking notes and I’m going to go re-engage with BrandSource and see where we can go with those guys.

Galen Bradford: Yeah, they’re great guys.

Luke Peters: Yeah, for whatever reason we missed the mark a couple years ago but, you know, things are a lot different at my company now. So I’m taking notes.

Galen Bradford: You guys are killing it.

Luke Peters: And looking at that, so I’ve got a bunch of other stuff highlighted, too. So listen, I just want to thank you guys for being so open. It’s really been a learning experience on the marketing side and then even through the tariffs and the MAP side. How can listeners find you guys, connect with you, and/or learn more about you or the business?

Mason: Yeah, absolutely, this is Mason. You know, I would just say come check us out on our website www.zlinekitchen.com and then from there, we have a number of awesome pages. A lot of the content that we’ve referenced earlier you’ll see there. I mean we have everything from product launch videos to, you know, utilizing our ranges and cooking. And actually, we’ve created a lot of captivating content with the local chefs most recently. So if you’re big into food, definitely check that out. There’s a lot of instructional videos. And then we also have a really great Instagram page. Pinterest, as well. A lot of pin boards up there. So there’s a number of great avenues to explore via zlinekitchen.com.

Luke Peters: Great, and the rest of you guys? People can find you on LinkedIn, maybe, or is there a preferred way to contact you?

Drew: Yeah, this is Drew, but you know, take a look at us on LinkedIn. You’re going to find us on YouTube. You’re going to find us on Twitter, Instagram, Pinterest, like Mason mentioned. Pretty much if you’ve got a favorite online retailer that’s in the appliance industry, you’ll find us there, too. So we’ve got great content out all over the place and just building new partnerships every day. So ZLINE’s going to be a brand you just start seeing more and more of when you’re online looking at content in that space.

Galen Bradford: ZLINE, your favorite appliance retailer.

Luke Peters: You’ve got to get your own podcast going. I like that.

Galen Bradford: Yeah, yeah.

Luke Peters: Hey, guys, how is that Pinterest channel for you? I know we’ve had some success. It’s hard to kind of… We haven’t been able to actually evaluate traffic conversion on it yet, but it seems like there’s a lot of engagement. Are you guys finding Pinterest to be a good channel for you?

Mason: Yeah, most definitely. You know, it’s like the top of the funnel, really, when it comes to marketing. And if you think about, it’s like if you know what you want then you’ll usually Google it, but if you need the inspiration for it then that’s when you turn to Pinterest and you look for ideas and inspiration in all sorts of corners in that platform. And so what we’ve really done is kind of focus on the niches of this world, catered to people’s taste and how do we tell the story to cater to that desire or the feeling that they want to get out of their kitchen? And the inspiration that we can provide via our content. So, yeah, we utilize Pinterest heavily and we’ve seen a lot of great traffic conversions from that. And, you know, making sure that that strategy is also integrated with YouTube and Instagram, but yeah. I would say in short Pinterest has been nothing but beneficial for us.

Galen Bradford: Yeah, that’s a huge opportunity for marketing, for sure.

Luke Peters: Awesome, guys. Okay, listen, I want to thank you guys. Thank you Drew, Mason, and Galen for an awesome episode. And I want to thank all the listeners for listening to this episode of the Page One Podcast, sponsored by Retail Band and quick reminder that I’m offering a free evaluation of your online sales strategy in a lot of the channels we’ve talked about in this episode today. We can review your Amazon, Home Depot, Wayfair strategy. Take a look at your products using our selling tools. I can present the findings directly to you, and if you’re interested for this free evaluation just contact me on LinkedIn or Luke@retailband.com. Thanks again for joining us on the Page One Podcast sponsored by Retail Band. Leave us a review if you enjoyed the content. Take care, and we’ll see you next time.

Galen Bradford: Yeah, hey, thanks, Luke.

Mason: Yeah, thanks for having us.

Drew: Yeah, thank you.

Narrator: Thanks for listening to the Page One Podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about r-commerce? Check out www.retailband.com to get more great tips and tricks on how to accelerate your e-commerce sales with the big box retailers.

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Inspired Home Show and IHA Rebrand – What makes a vendor successful at the International Home + Housewares Show? – Best Practices, Events & Booth Location – EP17

What you’ll learn:

IHA, the International Housewares Association, just went through a major rebrand and is now called the Inspired Home Show. We talk about all the new programs, features, and resources vendors can take advantage of to stay at the forefront of their industries and get the most out of their show experience.

About our guest:

Leana Salamah is the Vice President of Marketing for the Inspired Home Show (previously, the International Housewares Association Show). She has a bachelor’s degree from University of Illinois and a Master’s in integrated marketing and Communications from Roosevelt University.

Key takeaways from this episode:

Why IHA rebrand to Inspired Home Show and the realities of the marketplace — 3:17
How does a Housewares consumer make a purchasing decision? — 4:10
Inspired Home Influencer Conference: what is this NEW networking and educational event for vendors and how does it work? — 7:53
Top 3 events for vendors to checkout at IHS — 11:31
Is there a perfect place to be on the show floor and data on attendee show traffic — 20:24
The IHS Marketing Kit and support options for vendors — 23:24
What makes a vendor successful at IHS and why understanding the IHS attendees is crucial — 27:49
Mark Atkisnson: sourcing missions to Vietnam for vendors and your resource to freight and shipping discounts —31:46
CORE meetings: user group for best business practices and lessons — 33:04
com – influencer developed products and crafted lifestyle content for vendors—34:08
Inspired Homes Editorial Calendar – more lead time to submit product story ideas — 36:04
Main takeaway: what to expect from IHS this year — 38:22

Podcast Transcription

Speaker 1: Welcome to the Page One Podcast, a twice weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies to tariffs, influencer marketing, best in class product launches and all the details about how to accelerate your eCommerce sales with the big box retailers or what we call our rCommerce. Now here’s your host, Luke Peters.

Luke Peters: Thanks for joining us on the Page One Podcast. I’m your host, Luke Peters, and this is the podcast where we bring you the best and brightest leaders to share consumer products sales and marketing strategies that will help you grow your business. I’m the CEO and founder of NewAir Appliances, where for the last 17 years I’ve been selling direct to consumer and also B2B through online channels like Home Depot, Wayfair and Amazon and recently have been using influencer marketing along with the B2B sales channels to grow our sales over here.

Luke Peters: What I’ve done in the last year, started a new company called Retail Band and I know a lot of you listeners have heard about that. I talk about at the end of the podcast, but I just wanted to put it in here at the front that if you need help on your sales and marketing on those online channels, maybe you’re strong on Amazon or maybe you’re strong in store but you’re not that strong in Home Depot or Wayfair, we can help you. I am offering a free evaluation of your online sales strategy.

Luke Peters: So please contact me, find me on LinkedIn or you can email me at luke@newair.com and I’ll get back to you and create a really cool personalized deck. In this episode, I’m excited to have Leana Salamah from the IHA Show. She is the vice president of marketing and the show has changed so much even with the new name. So we’re going to learn all about the show changes. I know the AHA Show is so important for so many of you guys. For us it’s the most important show of the year and I think it has something like 70,000 attendees. So I’m really excited to have Leana on the show. Welcome to the show.

Leana Salamah: Thanks so much Luke. Thanks for having me.

Luke Peters: Cool. So a little bit about Leana before we get into some questions. She has a bachelor’s degree from University of Illinois and a Masters in Integrated Marketing and Communications from Roosevelt University. I guess with that, Leana, you should have the podcast with the communication masters. That would actually be kind of fun to have for IHA. I think you guys should actually think about that.

Leana Salamah: Yeah. I think content is increasingly important to us. I wonder if podcasts might be in our future.

Luke Peters: I think it’d be a like a natural fit honestly. A little bit more about Leana. So after 12 years working in various Chicago advertising agencies, she’s now found her calling in event marketing and has spent six years heading up marketing for the National Restaurant Association annual event, and now for IHA. Obviously, or hopefully you guys have heard this, that IHA has a new name, the Inspired Home show. So with that, Leana, why don’t we get right into that first question, which is why the name change for the show?

Leana Salamah: Yeah, absolutely. We’re really excited about the rebrand from the International Home and Housewares Show to the Inspired Home Show. The onus behind it was really about trying to do a better job of reflecting the realities in today’s marketplace. When we think about back in the early 2000, price was really the determining factor in what housewares were going to be successful and what weren’t. Then we kind of evolved from there, where functionality with better design or aesthetic, became increasingly important.

Leana Salamah: Now kind of moving beyond design aesthetic functionality, we’re seeing lifestyle as being the next step in kind of the evolution of how consumers are shopping for their home. We’re looking to be out in front of it, and to bring the rest of the industry out in front of it with us. At the end of the day, the best design product at the absolute best price, if it doesn’t fit into the lifestyle of the consumer, a sale just won’t be made. These consumers are looking to build a personal brand, a lifestyle, and these home and housewares products have to fit into that lifestyle.

Leana Salamah: This is where influencers come in and I know we’re going to talk a little about them, but they take their cues from these influencers. Influencers can be online personalities or they can even be retail specific. So these folks are showing consumers how to build a lifestyle using home and housewares products and the re-imagined show, the Inspired Home Show is really about helping retailers understand how that design and function fit into those lifestyles and find ways really to inspire lifestyles as they’re selling products to consumers.

Luke Peters: Great. But I guess one of my other questions was how long, I’ve been attending the show for 10 years, how long has the show actually been around? How did it actually start?

Leana Salamah: It’s been around for more than 80 years. The first show was actually in 1938 and for a long time actually until 1992, it actually took place twice a year. A couple of different cycles. There was a January and July pattern. There was an April and November pattern. It wasn’t until 2004 that the show actually went to once a year in March rather than in January. For a long time it was in January even when it went down to one a year.

Luke Peters: That’s funny. That’s probably right when I started attending, it was literally right around 2004. Has it always been IHA and are you worried? I mean, you guys have done a great job rebranding it by the way, like a really, really good job. Because that’s something that we pay attention to obviously with product branding and I’m pretty close to the pulse I think because I know a few people on the board and go to the CORE meetings, which we can talk about. But was there a concern that you’ve had this name that’s resonated with the show, everybody just calls it IHA and now you’re going to a totally different name for the show?

Leana Salamah: I mean certainly there’s a challenge there in marketing communications and we’ve spent a lot of time in the last six months when maybe we would have normally been a little quieter, to try and make as much noise and get as much awareness out as we can about the change. I think the good news for us is that, historically this isn’t the first time the show has changed its name. The association itself actually came about through different mergers and acquisitions of various associations over the years. Really only became the International Housewares Association just in the past 20 or so years.

Leana Salamah: The most recent name of the show, the International Home and Housewares Show, was actually the International Housewares Show until about 10 years ago. So we’ve gone through several iterations. This one is probably a little more drastic, but we’re doing everything we can to get the message out and to make sure that it resonates and to make sure that we’re creating that link between where we’ve been and where we’re headed.

Luke Peters: Okay, cool. Thanks for that. On this podcast, like specifically Leana, what we want to get into is, how attendees and exhibitors can get the most value. I know even I’m curious to learn some of these things from you because I’ve attended it for so long. Last year, I found out that we could work with IHA on quotes and that there’s different partnerships. In fact, even on the trade dispute, there is a gentleman who’s helped us kind of on consulting and thinking about our different product class codes. I know there’s a lot of resources in IHA and that’s what I hope to pull out and making this a really valuable podcast.

Luke Peters: I guess the place to start is that you guys are having a new, like I guess a day before the show, whatever you want to call that pre-day with influencers. Can you kind of talk about that and what’s the opportunity for those attending the show there?

Leana Salamah: Yeah, I would love to talk about that. That’s kind of us kind of been my baby for the past year and a half or so. This is the second year that we will be holding the Inspired Home Influencer Conference. Like you said, it will take place the Friday before the show at McCormick Place. It is a one day networking and educational event. Last year we got about 145 influencers. This year we’re expecting about 300. During that day we actually invite a 100 of our member brands, our exhibiting brands to come down to the conference for a two hour kind of tabletop expo and speed dating session with these influencers.

Leana Salamah: That gives everybody a kind of a chance to get a head start on some conversations, but certainly it’s not enough time to really dive in and develop partnerships and figure out where to go from here. So those influencers that we bring to the conference, the charge to attend the conference includes a media badge for the show. So they are allowed and encouraged to stay the entire duration of the show so that they can walk the show floor, see what’s new, create content, even post content directly from the show floor and meet and interact with different brands and retailers while they’re in Chicago.

Luke Peters: Awesome. So, it sounds like networking. Is there a schedule or can people get a feel for like if they show up, is there like an application process for exhibitors or does the typical badge get you in on that first day? Kind of how does it work for attendees and what does it look for that day as far as the networking goes?

Leana Salamah: For the influencers themselves, there’s an event page set up that they can go to in order to register. They can also get there through our website, which is the inspiredhomeshow.com. For our exhibiting members because we have a limited number of spots, we haven’t opened it up just yet, but any of our exhibiting members who want to reach out to their sales manager here at IHA, can get some more details and get put on the list of folks to be contacted once we open that up.

Luke Peters: Oh, got it. I got you. So it’s a limited amount of brands, but at the same time you kind of creating the pull to get more influencers interested in the show. Then hopefully on day one, two and three of the actual show, they’re going to be walking about and kind of promoting. Is that kind of the strategy that you’re setting up?

Leana Salamah: Exactly. What’s nice is, is that we’re including the influencers in the mix as media participants, which means that the media list, which we make available to all of our exhibitors is available pre-show. So upwards, gets updated on an ongoing basis as media registrations come in and that includes these influencers. So really at any time before the show, our member brands can go in and they can download this list and they can reach out to these folks and invite them to the booth, give them an idea of what they’re about. So they can do some pre-show marketing to make sure that they’re included in these influencers schedule.

Luke Peters: Okay, awesome. That’s helpful and gives me a good picture of what’s happening and that predate. I’m often there and I know a lot of people are there early, so it sounds like if folks are interested in learning more or possibly attending, they can reach out to you or to IHA and then take it from there.

Leana Salamah: Absolutely.

Luke Peters: Thanks Leana. Now the next question is kind of more about what are other things that attendees and exhibitors should be thinking about and in the sense that, been going there a long time, I know where everything is. We’re usually in the Lakeside hall, but I’ll still make my way over to the other hall just see a few companies that I know. But I know there’s more going on at the show and there’s the morning newspaper that pretty much hits everybody’s hotel room. There’s stuff going outside, I’m not sure what you call it, but kind of in the main area where certain products are being featured in the food court area. So there’s so much else going on. The question here is, what are the top three other things that attendees should know about and try to attend when they’re at the show?

Leana Salamah: I think some of the most critical ones especially as we think about, and we hear from attendees, and even exhibitors on why they come to the show. What’s new in the marketplace is so important to everybody and it can be so difficult to walk around 800,000 square feet and identify all of the things that are new to market. So what we do is we set up a number of different display areas. One is in the large Grand Concourse area in the lobby when you first get into the North building. Then there are some set up also in our buyer’s clubs where we actually curate, we speak with our exhibitors, we curate the new products that are out there. The criteria is that in order to be included in these displays, the products must have never been shown at our show before.

Leana Salamah: So they legitimately are brand new and we bring all of those together into display so that people can very quickly identify and digest some of what’s going on out there on the floor. Then certainly those products are identified in a way that allow them to go and explore further. So I feel like those are really kind of the heart of this show, are these places where you can just quickly find out what’s new.

Leana Salamah: The second thing that I would mention is, we have actually three different, what I like to call our incubator areas. This is really about in addition to creating promotion and buyer-seller connections between established brands is how do we develop and nurture kind of a next generation of product developers and designers who are out there? We do this through our incubators and probably the most prominent and exciting one is our inventors corner. Inventors corner used to be located in North Hall. It is now going to be in the Lakeside center lobby so in the East building.

Leana Salamah: What it is, is it’s about 60 inventors who have small stands set up where they’re demonstrating their products. These are products that have not been brought to market yet that they are still kind of, shopping around, whether for feedback, whether for investment. As part of this display, there are ongoing sessions that we call inventors review, which is a little bit like a Shark Tank style presentation series. There’s not necessarily an investment award at the end of it, but these inventors are given the opportunity to stand up in front of retail and manufacturer professionals and get feedback on their product. What works about it, what might they want to rethink, what do they have to improve upon in order to bring it to market.

Leana Salamah: It’s really a great way for these inventors to get feedback that then can bring their product to the next level, and then maybe we see them in a full fledged exhibit the next year or maybe they’re working with a manufacturer at that point. So I feel like that’s really a don’t miss because there’s really some cool things that come out of that.

Luke Peters: Yeah. Sounds great.

Leana Salamah: Then, I think you asked for three so I’ll give the third one. This is something I’m excited about as well. It is our, I suppose you could call it our state of the industry keynote. This is new this year. We’re re-imagining what IHA had traditionally put out as our annual industry report. Rather than focusing on kind of the past year’s datasets and how things are performed, we’re really transforming this report into something that is very consumer trend oriented and forward-looking.

Leana Salamah: So the idea being, what are the major macro consumer trends that are out there, and then what are the implications for each individual product of home and housewares categories, right? So how does a given trend impact kitchen electrics versus gadgets versus storage and organization? We’re putting this report together. We will actually release it at the show as part of our keynote on Sunday morning at 7:30 AM. That’s before the show open, so I would love to see as many manufacturers and retailers as possible join us for an event where we really get to kind of unveil what we at IHA see as being the big consumer trends and implications on home and housewares categories in the next year.

Luke Peters: Where is that keynote going to take place?

Leana Salamah: It’ll take place in the Grand Ballroom, which is room S100 at McCormick Place.

Luke Peters: Great. I know where the halls are, North, South Lake side, where’s the Grand Ballroom kind of in relation to the halls?

Leana Salamah: So it is downstairs. If you come in through gate four, which is where the taxis drop-off or even where the buses drop off, you have to walk past it. Before you start to go up the stairs and up the escalators into kind of the Grand Concourse, it would be over on the right and we’ll have signage and directionals that’ll help get there.

Luke Peters: Oh great. Who’s giving the keynote and how long does it last?

Leana Salamah: So it’s going to be a panel and we haven’t completely flashed it out yet, but certainly we have a commitment from MTD to engage with us in it, and from springboard, which is a consulting group that has recently been formed by Tom Rob Lee and a few people in the industry. It’ll be about an hour long is what we’re expecting. Everyone who comes to the event, will then leave with a copy of the actual report itself.

Luke Peters: That’s great. So to summarize, we’ve got what’s new in the market, the new products, must’ve never been shown. That was kind of your first value add there. That one, I’ve already got a couple of products in my mind by the way. Who do we contact to get products into that showcase?

Leana Salamah: That is Connie Chantos. Her last name is C-H-A-N-T-O-S and I am going to give you a link to our marketing kit, which is actually where you would submit those products. That is the inspiredhomeshow.com/marketing-kit. If you go through there through the new product showcase area, it’ll walk you through how to submit those products.

Luke Peters: Okay, great. For the audience, I’ll put that in the show notes because I think this is super valuable. Leana, where is that going to be? I know that the inventors one you mentioned is in Lakeside, I think. What’s new in the market, where are those products going to be showcased?

Leana Salamah: So the individual product showcases will be in the buyer’s club. So there’s one in each hall that is specific to the category or the expo that’s taking place in that hall. So for example, in the North Hall, the new product showcase focuses on the cleaning contain and discover design expos. So you see a lot of high design items and you see a lot of storage and organization, pet care, those types of things. In Lakeside because that’s our wired and well expo, you’d see a lot of kitchen electrics, personal care, home environment types of things. Then in the South Hall buyer’s club, which is in our dine and decor expo, you’ll see everything from tabletop to cook and bakeware to home decor item.

Luke Peters: It’s a great tip. So hopefully everybody listening takes advantage of this one. Then the second item you brought up is great. The inventors corner, I’ll definitely walk that. That’s going to be in Lakeside I think you mentioned, and I think you said about 60 inventors. So it seems like it’s easily walkable and maybe we can get some great ideas from that.

Leana Salamah: Absolutely.

Luke Peters: We already talked about number three, which is the keynote. So thanks for that. Those are three new items that I hadn’t previously known about. So I think that’s great. Moving on to data, everybody, I love numbers and I know every time I get picked up and the taxi driver’s asking me how big the show is going to be, and I think it’s about 70,000 attendees, at least that seems to be the number I remember. It probably fluctuates every year. What are different numbers?

Leana Salamah: It’s about 52,000 right now.

Luke Peters: About 52K. What’s some data you can tell us because I know we’re getting scanned everywhere we go? Is there something that you can let exhibitors know about like, how traffic happens at the show because maybe they could get insights on where they really want to get their booths moved to or what are you able to kind of talk regards to data?

Leana Salamah: In general terms, I think what I would say is that there’s really no perfect place to be on the show floor. Throughout my career in event marketing, a lot of brands, they feel that they need to be in the front of the hall. The front of the hall is great and very high visibility and everything else. But it’s really amazing to me how much time attendees really do spend throughout the entire hall and especially browsing through some of the smaller exhibits that are there.

Leana Salamah: There seems to be kind of inherent knowledge that emerging companies and things you’ve never seen before are likely to have, the 10 by 10 space or the smaller areas. So attendees make a point of getting there. They cover off on the large brands and they make sure to go into the large, interesting boots in the front, but they don’t skimp on the time that they spend in the middle and back of the hall exploring some of those smaller and emerging companies. So I think that’s really important for the marketplace to understand.

Leana Salamah: The other thing I would say is, as we talk to people who are most enthusiastic about the show, and then we look at how they spend their time at the show, what you see is, is you see people who are really consuming all three halls. They’re not saying, “Okay, you know what, I’m only responsible for purchasing tabletop. So I’m going to spend all my time in the South hall and then I’m going to be done with the show. They take the time to go into the other expo, to go into clean and contain, to go into wired and well. Even though it’s not their primary purchasing responsibility, they go in there and they find themselves inspired and intrigued by what’s in there as well.

Leana Salamah: The last thing that I would say is, we do get a number of people who attend the educational sessions. What I’ve noticed is, it’s a lot of our independent retailers who are attending our educational sessions, which makes a lot of sense if you think about the broad need that those independent retailers have. They own a business, they’re trying to market the business, they’re trying to buy for the business. So we get a lot of those folks in our education sessions learning about all the different ways to come to market and be successful.

Luke Peters: Cool. Thanks for that advice and tips and kind of the idea about the flow. I’ve seen that too because like, I mean we’re in a good spot but like a little bit more to the back and a lot of it is just, it’s like pre-show prep.

Leana Salamah: Absolutely.

Luke Peters: Are you talking to the buyers, are you scheduling appointments? In our case, it’s 20 or less key companies that we’re working with and key partners. Of course we want to talk to everybody, but the list is set up like that. I guess it leads into the next question, which is a marketing support. So could you kind of speak to what support is offered at the show? I mean we get an email list I think, that’s what our marketing team is getting a hold of so we can contact the buyers. Can you talk a little bit more about what’s available and what’s being given out and how it’s getting to people?

Leana Salamah: Yeah, absolutely. So we do provide an attendee list to all of our exhibitors. In the last couple of years, we’ve had to forego actually including email in there because of GDPR and some of the other regulations that are coming out. But we still provide the list so that you guys know who’s going to be in attendance. A lot of cases, they may be people you have in your database who you can reach out to and make sure that they come and see you. We also give exhibitors a number of different vehicles by which to invite their own customers. So that they can actually take advantage of the materials that we produce in order to co-brand and send to their list and to convince their customers to come to the show and see them while they’re at the show.

Leana Salamah: Because of course, I mean, part of the show exhibit experience, part of it is about finding new buyers. But part of it, it’s strengthening relationships with existing buyers. So some of it is you want to have that FaceTime with people while they’re onsite. It’s not only looking for those new buyers. So of course those are critical. We have an entire exhibitor marketing kit. I’m delighted to say actually is going in the mail this week, out to all of our exhibiting members, but is currently online and that is @theinspiredhomeshow.com/marketing-kit.

Leana Salamah: That’s how to do just about everything. Some of the things that are included in there, the attendee lists, certainly is an option. There’s a media list which I mentioned and that does include email addresses. We get explicit permission to share those. There’s a number of sponsorship opportunities, ways to kind of get your name out into the environment beyond just in your booth space. There’s some of those new product promotional opportunities. Like we talked about the new product showcase. We have our gia awards program. We have a couple of pre-show previews.

Leana Salamah: One is our new exhibitor preview, which is all of the folks who have never exhibited before come together and do a hour and a half preview before the opening up the first day. As well as a trending today preview where we pick a major trend and we do a little mini expo on it before the show opens. This year that trend is sustainability. So products that are designed with kind of an eye towards economic or I’m sorry, environmental friendliness. Whether it’s in the intent of the product usage, saves waste, replaces something that winds up in a landfill, whether it’s the principles by which the product is developed, environmentally friendly standards or the materials that are used for the product.

Leana Salamah: So all things sustainable will be focused on during this show preview. Then there’s some things including online and digital directory listings. We have our printed online directory and then we have our year round digital directory, which is Housewares Connect 365. The marketing kit walks you through how to make sure that you have your company listing in there, how to make sure you have your booth listing in there and then any product information that you want to provide as these attendees are planning their show.

Luke Peters: Awesome. So I’ll keep an eye out for that. I know I’ve received it in the past. It’s just in the overload of physical mail that comes in. But I think you guys, you do put together like a beautiful exhibitor marketing kit, so that’s cool. Usually I’m handing it off, but now I’ve got a list of all the things in there. You said media, the attendee lists, the sponsorship, and the media lists with contacts, looks like that could be an interesting one. So yeah, definitely, I’ll take a look at that. Cool. Thanks for kind of pointing that out.

Luke Peters: This is another question about case studies. I wonder if you guys have ever tracked companies or have done a case study to find out how they were successful. I know like when we first started exhibiting, I bought some custom chocolates, which I thought was the best idea ever. I mean, it was an all right idea, but at the end of the day you realize that you always want to meet new buyers, but a lot of it is building relationships of just your existing buyers. We’re able to see everybody in Chicago and you kind of learn that quickly and it’s not the type of show where you’re kind of out there and shining bright lights and trying to attract random people into the booth.

Luke Peters: Like you find out quickly that’s not a professional way to run the booth. But I’m just curious if you guys have done case studies on best practices and what successful exhibitors are doing to kind of win at the show?

Leana Salamah: I wouldn’t say that anything is kind of specific as giving away chotskies or offering some kind of discount. Those things happen. I think they certainly attract a degree of traffic. But one of the things we’ve been talking about a lot internally here and with our attendees and with our exhibitors is about really understanding the different types of attendees that we have and making sure that you’re prepared for kind of whoever walks in your booth. I think a lot of exhibitors come to the show expecting the large buyers from Walmart and Target. You’re absolutely going to see those folks, but we also have a huge contingent of independent retailers.

Leana Salamah: Sometimes the person in a booth who’s prepared to talk to a Target or a Walmart isn’t prepared to have a conversation with an independent retailer who’s potentially a smaller volume buy. So we really encourage our exhibitors to understand that if in fact they are available for those types of orders, that they need to have someone on hand in the booth and know who that person is, who’s prepared to meet with and have conversations with those independent buyers. We see the same thing on the international side. So somebody will come in from Germany and they go to the booth and the person in there really isn’t prepared to have a conversation about selling to international purchaser.

Leana Salamah: One company that we did anecdotally receive feedback on was OXO, who did a really nice job of even if the international person wasn’t in their booth, they had a ready-made, they kind of had a file drawer of information by company that could be given out to those people when they came in the booth. So at least they didn’t come in and get kind of stone-walled, have no one to talk to. They at least walked away with some information that they could follow up on when that person was back. I think the last segment to be cognizant of is the media segment. Because again, I can’t tell you how many reporters, editors I speak to who walk into a booth and nobody there really knows who’s allowed to talk to the media, who’s supposed to talk to the media, what the parameters are.

Leana Salamah: That that reporter, that editor probably they walk away and they’re probably not going to come back. So I think one of the best things all of our exhibitors can do is really understand that there are these large segments of attendees and that they need to be prepared to either have conversations with or to redirect to the appropriate person. All of these different groups

Luke Peters: Wow. You kind of made an excellent point there and something I haven’t thought about like in the way that you kind of explained it. So, be prepared to talk to the independent companies, be prepared to talk to international and especially be prepared to talk to media. So, great points is going to make me rethink those three elements, especially media because it’s just a different conversation. I mean independence-

Leana Salamah: It is. It’s a very different conversation.

Luke Peters: Yeah, totally and I can see a lot of companies not being ready for that, especially smaller and mid size companies. So that’s great. I kind of circled that and I’ll make sure we’re ready to go on that. Thanks for sharing and bringing that idea up. Besides the show or after the show, what other services does IHA offer? Kind of talked about a few things earlier. You guys have some really cool offerings like I think that the guy’s name is Mike. I kind of wish I knew his last name, but he helped me a lot kind of thinking over the tariffs and how to strategize around that. Then I know you guys have kind of like a freight option for ocean freight. I personally attend-

Leana Salamah: We sure do.

Luke Peters: I attend the CORE meetings. For any of you guys listening who don’t know what those are, check it out on the website and it’s a great way to meet fellow business owners locally. Anything else you want to speak to?

Leana Salamah: Yeah, absolutely. Just to reiterate kind of what you said, Mark Atkinson is our Vice President International and he is just a wealth of information on all things going on with tariffs, with international trade. He actually is our liaison to the International Housewares Shippers Association, which is that volume discount. As half full containers are going back and forth across the ocean, there’s opportunity to get in on that. He is actually putting together… so one of the things he does as well from an international standpoint and he puts together trade mission.

Leana Salamah: We’ve had had less interest in peer sales trade missions recently. So what he’s done and we’ve kind of flipped the script a little bit on that and he is putting together a sourcing mission to Vietnam. So for those companies who might be interested in exploring some alternative sourcing options, given everything that’s going on with tariffs, there’ll be a couple of groups that he’ll take over to Vietnam and visit with some pre-vetted factories and have conversations about capabilities and parameters and those types of things. So there’s a lot of international resources, whether it’s selling internationally or whether it’s sourcing internationally.

Luke Peters: Wow.

Leana Salamah: You mentioned CORE. That is a great resource and as a followup, so CORE takes place quarterly. It’s a quarterly kind of user group. We told them on a regional basis and folks come together in small groups to talk about industry issues, talk about challenges they’re facing, things that they’ve tried. It’s great to see everybody and really kind of an open, honest environment sharing best practices and sharing wins and losses that they’ve seen. Then once a year, we bring all of those groups together along with really any other member companies that want to engage for our chess event, which takes place in October and is our Chief Housewares Executive Super Session.the day and a half of content and networking, we bring in the folks with some of the big data information. We bring in major retail speakers. We bring in some thought leaders to talk to members about kind of the most important issues of the day.

Leana Salamah: So that’s always really successful and is held here in Rosemont, which is convenient because it’s right near O’Hare Airport so people can get in and out very quickly for that. Then the last member service I’d love to talk about is actually the inspiredhome.com, which is how the inspired home show got its name. But the inspiredhome.com is our consumer facing platform. What we do with that, it is a website the inspiredhome.com, that features influencer developed product forward lifestyle content. What does that mean? That means that we have a network of influencers who we work with. We provide them with member products, we source products directly from our members, provide the products to these influencers and they develop content around them.

Leana Salamah: Whether that’s recipes, whether that’s entertaining tips, whether that’s cleaning and organization articles. They develop these stories for us. Then we post them on our website and everything is completely shopable. So any product that is featured in one of these articles, there is a call out of the product along with the link of where to buy. That link is dictated by the member company that has provided the product. The site actually enjoys about 500,000 sessions a month. So we had a really fantastic audience of people who are consuming this content and being exposed to all of our member products.

Luke Peters: Wow, that’s surprising. I think we’ve looked into that. I think maybe it was something different where you guys are making a physical magazine that was going out I think on the new stands. Was that a different project and there was an opportunity for some brands to work with influencers to get inside that magazine?

Leana Salamah: Yeah, it was an offshoot. We did three issues at the inspired home journal and it was just an absolutely beautiful publication and really well loved by everybody who consumed it. But ultimately what we found was that we were getting more bang for our buck on the online platform than we were in a print platform. So we sunsetted the magazine in favor of refocusing our efforts online. What’s really great is that one of the things that’s allowed the team to do is be much more forward looking in our editorial calendar development.

Leana Salamah: So whereas before we might have a sense of stories we were going to write in the next month or two. Now our editorial calendar has topics on there that we’re planning to write about in Q1 of next year, which means that for our member companies, there’s much more lead time to submit products for consideration for those stories. So if you go to housewares.org/consumers, you can locate the Inspired Homes editorial calendar and right there through an online form can submit product ideas that might be included in those story ideas that’ll be coming up.

Luke Peters: Great. So submit those through housewares.org. The other thing is just listen, Mark is like, he’s such a helpful guy. So to know that he’s doing a sourcing mission actually sounds kind of fun to Vietnam, definitely going to look into that. We’ve already looked there. It’s tough. Anything that isn’t electronics related is always just tougher to work with the supply chain.

Leana Salamah: Of course.

Luke Peters: But I know everybody’s like all over the world looking for options. So this is pretty cool that that’s an opportunity. Then just as Leana mentioned, there’s CHESS, there’s CORE, so just kind of rewind that section, everybody listening, make sure you guys at least know all of these opportunities and all the things that you could take advantage of, we found a lot of value in. Especially in CORE, just because you get to meet people local. In my area, we’re in Orange County, we’re like 30 miles South of LA, so you get to meet businesses all the way from kind of like the whole LA metropolitan area up into the Valley.

Luke Peters: Since everybody’s close enough, you can get together after the meetings. So it’s a great networking and a great learning opportunity. Cool. Thanks for that. I think I got a page and a half of my own notes here by the way. So some cool things that are actionable that I can get the team working on and we can kind of prepare for the show. So, thanks for all the tips. Is there anything kind of just before I let folks, if you wanted to give a a way to contact you, but before we do that, is there anything else you wanted to kind of share about the show or any actionable tip that you want to leave listeners with?

Leana Salamah: I mean, I think that probably above all, I just want to make sure that it’s crystal clear to everybody that every year there’s brand new things to see at the show. A lot of times you walk into a show and a lot of booths seem like they’re in the same place and you see some of the same things. But every year we make a concerted effort to make sure that there is brand new and that we’re highlighting it, and that we’re creating opportunities for everybody to advance their business. So looking forward to seeing everybody this year and by all means I am more than happy to take inquiries.

Leana Salamah: My email address is lsalamah, so it’s S-A-L-A-M-A-H @housewares.org. I will take any email that comes in and I will either respond to it if I can or I will get it to somebody who can do a better job than me.

Luke Peters: Awesome. Well, thanks for that and we’ll have your email in the show notes and just want to thank you Leana for being a guest and sharing all these insights. I really enjoyed speaking with you about these things.

Leana Salamah: Likewise, I really appreciate the time and the opportunity Luke.

Luke Peters: Awesome. I just want to thank everybody for listening to the Page One Podcast. Again, if you guys have a business where maybe you’re really strong in Amazon, or you’re strong in store, but you need help selling through say Wayfair or homedepot.com or lowes.com, walmart.com or you need help with influencer marketing, go ahead and contact me. Like I said at the beginning of the podcast, you can find me at luke@newair.com. I can provide a free evaluation of your business and you can make the choice if there’s an opportunity for you to grow your business in these other channels. Thanks everybody for listening to the podcast and we will see you next time.

Speaker 1: Thanks for listening to the Page One Podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about rCommerce, check out www.retailband.com to get more great tips and tricks on how to accelerate your eCommerce sales with the big box retailers.

References Mentioned in this Episode

Get the IHS Marketing Kit

Get the Inspired Homes Editorial Calendar

Contact Leana Salameh

Her email salamah@housewares.org

Her LinkedIn

Contact Luke Peters

Company Website

His LinkedIn

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Promotional Products Industry Insights –Importance of Design Patents, Investor Partnerships, and made in the USA products – Mike Watts, CEO of LoveHandle – EP16

What you’ll learn:

A 6-time serial entrepreneur, Mike Watts, joins us on the show to take us through the process of creating a promotional product. He also shares the secrets to competing against an industry-leader, to building successful teams (6 times running), and to developing strong inventor partnerships.

About our guest:

Mike is the founder and CEO of LoveHandle, an American Manufacturer of patented smartphone grips with over 30 full-time employees. Mike has three consecutive multi-million dollar startup companies totaling over $50 million in retail sales.

Key takeaways from this episode:

What makes Love Handle unique and innovative — 1:19
The value of taking risks and jumping into the unknown as a successful entrepreneur — 5:11
Breakdown of LoveHandle’s sales channels — 10:14
How to get into promotional products and develop that side of the business — 14:12
Understanding the consumer behind a promotional product — 17:31
How Mike scaled and grew 6 successful businesses: have and build a great team — 19:52
More than just a consumer product company: graphic design, product invention, and marketing — 23:20
Partnering with inventors to develop new products — 30:36
Designer Patents, being first to market, and starting the journey — 36:00
Takeaway Advice: selling and standing out at tradeshows — 39:21

Podcast Transcription

Speaker 1: Welcome to the Page 1 Podcast, a weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies to tariffs, influencer marketing, best in class product launching and all the details about how to accelerate your eCommerce sales with the big box retailers for what we call rCommerce. Now here’s your host, Luke Peters.

Luke Peters: Thanks for joining us on the Page 1 Podcast. This is the podcast that deals with consumer products in relation to product launches and selling it to big box online platforms. I am your host, Luke Peters. I have 17 years of experience in this category. Today, I’m excited to have Mike Watts joining us from lovehandle.com.

Luke Peters: A little bit about Mike, Mike is the founder of six companies totaling over $150 million in sales and now teaches entrepreneurs to reach their financial and personal and spiritual goals. Currently serving as CE, Texas based manufacturer of 100% American-made patented, printed smartphone accessories. We’ll get into exactly what that’s all about. Mike’s products have been featured in Good Morning America, QVC, HSN, and the Today Show. They’re all sold on Walmart, CVS, Home Depot, Lowe’s, Rite Aid, Office Depot and more. Thanks for joining us, Mike. Welcome to the show.

Mike Watts: Thank you so much for having me on, Luke.

Luke Peters: Okay, great. Mike, I want to get into actually talk a lot about your sales channels. Before we do that, just a couple of quick questions. Why don’t you tell us quickly, what is LoveHandle do; just a little bit more about the product so the audience can understand what you have created here?

Mike Watts: Great, yeah. The LoveHandle is a low-profile, comfortable pocket-friendly smartphone grip that was patented and developed here in the States. We partnered actually with the inventor, which has been my game as to license patents for products that I think we’re going to be consumer facing and solve a real problem for the large number of people. We manufacturer our super-thin smartphone grip right here in suburban Houston, Texas and built all the automation equipment to be able to make up to 50,000 units a day, completely custom printed. We have some of our business in the promotional product space, a lot of it online. We’re just now breaking in a big way into retail.

Luke Peters: That’s really interesting that one part you mentioned about how you partner with the inventor. We’ll get into that a little bit later. Before we dive deeper into the business, you started it looks like six companies here reading your bio, which is really amazing. You’re speaking. You’ve worked with Daymond John from Shark Tank and your products are featured all over the place. Obviously, you’ve done well for yourself. Talk about your childhood. Was there a specific inspiration or somebody or something that nudged you down this road and got you so interested in entrepreneurship?

Mike Watts: Luke, I think I’ve always had an entrepreneurial spirit or maybe a blood line, as it were. My parents actually started the first company that was right in front of my face. Growing up as a kid, I always just like having extra money. My parents didn’t really have the resources to just hand it to me. Early on, I was selling Blow Pops in Now and Laters in the middle school lunchroom. I was cutting the neighbor’s yard and eventually built a little business around cutting quite a few lawns in the summertime.

Mike Watts: As I got older, in high school I started creating … and only seniors got to leave campus for off-campus lunch, which as a junior I was pretty jealous about. I figured out all it was was a little yellow piece of identification that I needed. I built a business around that for a short while until I got caught.

Luke Peters: Those are always the most fun.

Mike Watts: I learned my lesson about just because it’s entrepreneurial doesn’t mean that it’s the right thing to do. Each step along the way I’ve always been just willing to take risks and willing to put myself out there and learn as I go. I think that’s really the common factor for success is just being willing to just shoot forward without knowing the exact outcome, but be willing to learn as mistakes come and failures come along the way and course correct and then keep pushing.

Luke Peters: Did you grow up in the Houston area?

Mike Watts: I did. I’m actually a seventh generation Texan. I actually have family that fought in the Alamo way back in the day.

Luke Peters: That’s amazing.

Mike Watts: People were in Texas when it was still Mexico. We go way back.

Luke Peters: That’s cool. I visited the Alamo actually, so that’s pretty cool. Getting into your entrepreneurial career, you graduated from Texas A&M with an agri business degree. Then you went and worked for corporate for eight years, which is interesting because I actually, after school, went and worked as a haz waste scientist for the government for a couple years, not quite eight. You’re entrepreneurial when you’re young. You got your degree. You went and worked and then somehow you decided to jump back into business. How did that happen?

Mike Watts: I think it’s probably like a lot of people that have been able to make that leap. Again, I’m not saying anything specifically against having a corporate traditional career, but for me, the frustration out of school … out of school, I was doing what I was supposed to do; go to school, get a good job. Get the job, get the security. I was working for the electric company. There’s nothing more secure really than that. It’s a monopoly. People just don’t get fired from there. It’s very much like working for the government. My grandmother was super happy. She said, “You’ve got the best job ever. You can never be fired and you’ve got security for your family.”

Mike Watts: The problem is that every year would come along. I can’t not give 110%. I’m just wired that way. I would give 110% and expect to be compensated relative to the people around me. That just didn’t happen that way. I would get my 3% cost of living adjustment because that was just what was standard. It was just this normalization of everyone back to the mean or even below the mean that really frustrated me.

Mike Watts: In the year 2000, my first son was born. He’s actually back at Texas A&M now, so it’s all come full circle. My wife bought me a copy of Rich Dad, Poor Dad and gave it to me. She had seen it on Oprah, gave it to me. I was reading that book together and understanding the principles and learning more about how money worked. We said you know what, let’s find a way to get an alternate stream of income somehow so that we can meet our personal family goal of being able to have her stay home and invest her time and effort during the days into our growing family. Then I would just find a way to make some money.

Mike Watts: That’s what started us on our journey. I started doing home and garden shows on the side. That’s one of the very first of those six businesses was this product called Rain Sorb that we sold at craft fairs. I’d buy it wholesale and package it up and created my first brand and grew it. There’s still a product out there today sold at Home Depot and Lowe’s that was my competitor at the time.

Mike Watts: From there, we just kept adding more products and started more little small companies based upon new product line yard decorations and wooden airplanes out of Vietnam that we sold in the malls at Christmastime in kiosks. We just kept trying new things. That eventually led me to believe that I needed a product I could protect because all of the products I was selling were commodities. Every time I would show up and do good at a show or at an event or at a mall, the next week somebody else would show up selling the exact same product. I just went to my source. That’s where I learned that I needed to be able to control my market. That’s when I started working in patented products or patent pending products at least.

Luke Peters: Yeah, and I definitely want to dive into that. I actually just had a patent attorney on my podcast, Tina Loza.

Mike Watts: Really?

Luke Peters: Yeah, she’s our IP attorney and has grown one of the largest female women-owned and minority-owned IP firms in the country. It’s pretty cool because we were just talking about how a brand should be protecting their business and how IP is that important asset. We’ll dive into that. Before we do, let’s talk … by the way, Rich Dad, Poor Dad, that’s a cool reference that you pointed out that you read that book and that was one of the things that got you on this journey. I’ve read a bunch of his books. They have a kid’s version. I got that for my kids too. It’s pretty cool. I don’t know if you knew that.

Mike Watts: We have a board game. We play the Cash Flow board game. It’s my kid’s favorite game. They can figure out how they can get out of the rat race and get out there on the fast track and get ahead.

Luke Peters: Yeah, it’s awesome. Let’s get, for the audience, a little bit of scale of the company. I think you have some of this. Your company right now with LoveHandle, you have 30 full-time staff?

Mike Watts: Yes sir. Yeah, we’re just over 30. Actually, right outside of the door in the studio right now, hopefully you can’t hear them, but I can vaguely hear them packaging up a large order we have going out for Academy Sports and Outdoors that’s adding the product line for the Christmas season. Right up behind that, we’re packing up for Albertsons. It’s neat because we’ve invested over the last few years into being able to manufacturer every piece, from A to Z, in one building.

Mike Watts: When they order, for example, Academy orders, and they wanted some cool phone grip designs that were specialized for Texas consumers for their Texas stores, so we made some that said this ain’t my first rodeo and made in Texas and Texas proud. We were able to make that and then also package it in-house and then put it into clip strips and then send it to the store with clip strips program where they can place it in there real easily. It just makes it really easy for the buyer to pick it up because it’s personal for them. It’s relevant for their consumer, and so we can take that same model and apply it across all different types of retailers and price point.

Luke Peters: What is the channel … if you could give me whatever you’re comfortable talking about but the breakdown in channel sales? It looks like you guys, you’re doing some direct to consumer commercials it looks like and also some direct to consumer marketing. Are you able to talk to maybe the percentage of sales that are in-store, the percentage of sales that are, say, Amazon, and then the percentage of sales that are just everything else on the web, maybe your own website? How does that look?

Mike Watts: Yeah. I’m pretty much an open book. Right now, actually, and to date, one of our niches that we’ve been very, very strong in is in promotional products. Right now, I would say that around 50 to 55% of our business is strictly promotional where we’re putting brand names from companies big and small onto the product. We’ve even developed a way to be able to customize the packaging. We actually print custom marketing literature here and then attach our phone grips to it. Marketers love that because they can put all their marketing material on the card, their extended messaging, links to their website, QR codes. It’s got a cool gift that will then be seen hundreds if not thousands of times a day or total through its lifetime on the back of a smartphone. From a marketing perspective, it’s fantastic.

Mike Watts: That’s not what I thought the product would be when I licensed it. I really didn’t give much credence to the promotional products industry at all but it’s much bigger than I ever thought it was. You look at a pen. It’s 50 cents for a pen or whatever. You’re like, oh, there’s not much money in it. When they bought 10,000 or 50,000 at a time, that is a lot of money. It’s been a really strong part of our business. We’ve dedicated a lot of our effort into that space.

Mike Watts: One of the good things about the promotional space is there’s really only two closed net search engines out there. When it comes down to protecting your product and your brand, particularly with a patent or a brand name, having two closed loop systems makes it much more attainable. We’ve been able to grow that business well.

Mike Watts: The rest of the half of the business, 40 to 45% of the business is to the consumer, and that is either they’re brick and mortar retail, which is really right now only about 10 to 15% but growing quickly. Amazon, the dot com space is huge for us. We spend a lot of time and effort doing a good job on Amazon, being a great seller on there, optimizing our ads, making sure our listings look good, and then making sure that we add great customer service so that our ratings are higher than our competitor.

Mike Watts: We’ve got one big competitor that set historic records over the last few years. They were number two on the Fortune 5000 and started the same month that we did in their inception. I’m a pretty competitive guy. It’s been hard for me sometimes to just be second place for so long and wanting to win in a category. At least in the Amazon space, we are winning there. I think at retail, we’re due to win pretty quickly.

Luke Peters: Awesome. Thanks for that breakdown. Just to reiterate, it’s about 50% or so promotional and then about 10 to 15 in-store, so the rest about 35% or so is going to be the dot com and Amazon?

Mike Watts: Dot com and Amazon, mm-hmm (affirmative). We have lovehandle.com and then Amazon. I’d say from that breakdown, probably 10% is our own website and then the balance would be Amazon.

Luke Peters: Back to promotional, because that is surprising. I think the audience would find it really interesting too. I totally agree, it’s a great product. I’ll probably end up being a customer of yours for one of the trade shows because I can see this is an ideal thing that tons of people could use on their phones. How do you actually get into the promotional side? It sounds like you said there’s just two search engines or websites that you literally have to list your product in and then you’re working with them. How does the promotional business work in a nutshell?

Mike Watts: That’s a great question. This is good knowledge for people to have. I had to learn it all going in. In fact, when I started out, they had this coding in their industry that masks the actual pricing. Everybody in there is a middle man. The guy selling to the brand, let’s say Coca Cola, he’s a distributor but he sells them everything and flyers and shirts and caps and phone grips. He’ll make anywhere between 25 to 40% margin on everything he sells them. He wants to be able to list the pricing out there, so there’s codes based on whether it’s a 40% item or a 50% item or a 10% item and how much margin he’s going to make. I didn’t even know what those codes were the first show I went to.

Mike Watts: There’s two industries. There’s ASI, which is Advertising Specialties Institute. You can Google it and find them. They’re a great organization out of New Jersey. They produce shows coast-to-coast. There’s a total of five shows a year that they do. These are closed shows that only their official distributors come to. They have the search engine that they call ESP. I’m not even sure what that stands for. It’s a search engine for promotional products. Again, it’s closed. I can’t even search as a supplier. I can’t search as a distributor would against my competitors. I can only see my own listing on there. It has all the coded pricing, all the sales literature and everything that they’ll need to then turn around and market it to the brand as a potential product for them.

Mike Watts: The other industry organization is PPAI. They use a search engine called Sage, S-A-G-E. Sage is based out of Dallas, Texas. They have a great search engine too. It’s just like a Google/Yahoo thing, one or the other. A lot of people will use both. There’s membership fees associated with both, not as much for the distributor there. Some for them but for the supplier, and it’s based on your revenue. Starting out, I think with a start-up, it’s around $500 a month that it costs you to be an official supplier and to have a listing in there. Really, if you want to do it, I think there’s 1.4 million products in there, so you can’t just show up and put your product in there and expect it’s going to be found. You either have to be at shows promoting it and getting people to look for it and build your brand, or you need to be doing some sort of marketing and advertising to show up in the searches, product features.

Mike Watts: Like anything else, there’s pay-for-placement across the board there. Those two search engines are really where most of the business happens. There’s another one called Distributor Central out there. Sage and ESP are the two Yahoo and Google of the promotional products industry.

Luke Peters: Wow. Thanks for that breakdown. I’m definitely going to dive in. Our products are, we’re selling compact appliances and generally wouldn’t fit into this category but there is related accessories that would. I just find it really interesting that 50% of your business comes from this industry. I get it. Your product is perfect for this category. Even you said, you weren’t even sure that that’s where things were going to go. That’s something that you’re doing right now and succeeding at it, so it’s super interesting.

Mike Watts: For us, it was understanding … and this is true for no matter how you’re going to go to market, just to understand your consumer, and then in this case, the consumer’s a marketer. If you put your marketing hat on, you say, “I’m going to go to this trade show. How am I going to get people’s attention?” People are like, “I’m going to give them something with my logo. I’m going to give someone a gift at their essence but then I also have my brochure sitting here beside it.”

Mike Watts: By us, nobody picks up the brochure. They just take the squeegee ball or the coozi or whatever. We said why not be a super relevant product that we can price affordably. Again, the margins in that space are much tighter than they are at retail but the volumes are higher. Let’s make it even better and let’s put it on a customer card so that they get that brochure attached to the product. Then let’s do it, and like everybody else in the industry, they charge for color. We don’t charge for color. Everyone else in the industry charges rush fees. We don’t charge those. We produce it in three and up to 50,000 units. No one else can do that because most of these guys are just sourcing the stuff in China.

Mike Watts: By us investing in our capacity that produce high-quality product really, really fast and then have that extra layer of that extended marketing on the card, it really positioned us at … It’s like the … if you’ve ever read the Blue Ocean Strategy …

Luke Peters: Yeah, great book.

Mike Watts: … a perfect example … Yeah, it’s a perfect example of that. We don’t really have any competition per se. We have such a unique proposition for these marketers that they can’t help … our reorder rate is over 70%. That’s ultimately the best indicator any business can have is your reorder rate. We were very pleased with the results there. We’re now number eight. Out of the 1.4 million products I mentioned, we’re the number eight searched for product in the whole search engine.

Luke Peters: Wow. That’s got to be a good place to be, so congrats. That’s awesome. You’ve started a lot of companies. You’ve obviously grown them. It looks like six total and then I think three multi-million and over 50 million in sales. A question here: You have about 30 staff right now. I’m listening to your sales process. I’m going to ask some questions about how you set up your sales team because you guys are really diverse on who you’re selling into and all of the accounts you have.

Luke Peters: What was maybe the major learning you had going from, say, a smaller company, say, under 10 employees to now 30. Curious, was there a key hires you had to make that you have now that you couldn’t have or didn’t have back then? Just curious on the transition as the company has grown.

Mike Watts: Yeah. I would say that you need A-plus caliber people. You just can’t compromise on that. I’ve learned that lesson the hard way. The thing is, an A-plus person, they’re going to stand out. The gentleman that runs my promotional product sales department, he started in my production team. He started as an intern, moved into production and just continued to show himself as somebody that shows up, has a great attitude, is humble, hard-working, and plenty smart. Didn’t have any sales experience. Never really knew how to build a quote or send a PO, none of that stuff. I saw in him the right kind of attitude and the drive and the passion and the humility, above all things, that I’ve continued to promote him, and he has risen to the occasion every time. He’s a rock star.

Mike Watts: I’ve also hired in people that had the pedigree to the moon that were complete flops because they thought they were the best thing since sliced bread. That comes through when you talk to customers and you think you’re better than them or you’re just not willing to do whatever it takes to make a customer happy, and that’s what he does.

Mike Watts: I think that trying to find someone that fits your culture, because that’s very much the culture that I … Every one of my companies have been successful because of our unwavering passion for the customer and willingness to do anything for the customer to make them happy. If you’re not willing to do that, you’re probably not going to be successful, in my opinion, especially, the field’s been leveled now with Amazon and their reviews. If you’re only providing a really great product and a really great service and standing behind it, then you’re going to pay for it. As far as personnel goes and then treating people right, for me, I know our team would go to the moon.

Mike Watts: In fact, I was at a show last week in Tennessee. We had these rush orders come in for Albertsons and Kroger and Academy. Our guys had to run 24-hours a day for six days straight in order to get all these orders out. Not one person said I can’t come in. They all showed up, smiles on their faces, and they rotated shifts and things like that, but they made it happen. It’s just because we have the right people, people feel valued, they feel appreciated. That starts at the top. I always try to say that I want to be a servant leader, and I’ve been all the way to the bottom. I’ve been to the bottom. I’ve got some terrible jobs in my back pocket and had some terrible bosses in my back pocket through the years. As you learn those things and you understand about how to be a leader, then you hopefully can transfer those values onto your team. When you do need to lean on them, everybody’s paddling hard in the right direction because they do feel valued and a part of something bigger.

Luke Peters: Great answer. Have a great team but also build a great team with culture. It sounds like you’ve done that. That’s a cool story about the team going 24/7 for six days. When you run businesses, time flies. You’ve got to be able to put that thing down on paper, somehow remember those stories, I guess. Christmas parties are coming up, so that’s where those things come out. Those are always fun to have at every company.

Mike Watts: Yeah.

Luke Peters: With your team of 30, again, let’s get into the sales, if you don’t mind telling me quickly about the, say, the org structure, how you have it set up. The only reason I bring it up is because selling into Walmart is going to take a different discipline than selling promotional goods, then maybe even selling into Kroger because it’s a little bit different, and then also totally different than selling into Amazon. How are you able to do it? How many people is it taking? What are the basic breakdown of responsibilities?

Mike Watts: Yeah, that’s a great question. This business is unique because we’re not only a sales and marketing department but we’re graphics. We do a lot of interaction with customers back and forth on design for their logo and layouts and things like that. We have a large graphic team and then the actual manufacturing team.

Mike Watts: Out of the 30, it splits out a bit like this. We’ve got about 50% of them that are, it’s a two-story building, so the upstairs is production. Fifteen or so are in production. About 60% of those are in the actual assembly of the product and then 40% are in the printing section. They’re actually printing onto the elastic that we use for the bands. They’re cutting the elastic. They’re quality controlling it. They’re printing the cards and printing the cards.

Mike Watts: The other side is actually assembling the product, putting it on the cards, boxing it, packaging it, retail packaging it and clip strip and all that stuff to get it out. The other 15 people are going to be sales, marketing, admin, customer service and graphics. Graphics team is a team of five now. That takes up 30% of our workforce downstairs. Then we’ve got one general manager. She’s been with me since three start-up back and through a big exit and everything. She’s the right-hand person. It’s very much like I’m the big picture guy. I’m the visionary, if you follow any of that type of a visionary, and then the integrator. She’s my integrator. She makes sure that things happen. If something has to happen, she’ll make sure it happens. She’s a great leader. Nobody can outwork her.

Mike Watts: Then I have an accountant that keeps our books straight, makes sure we get paid on time and that invoices are right, and the work we do, we do get paid for. He’s amazing. We have a shipping and customer service and internet fulfillment manager. She makes sure all the shipments go out on time, the customers receive communication about their orders and all our website orders and any seller-fulfilled Amazon orders are fulfilled on time every time. She’s a very detail oriented person and really good at it. She’s also our party planner, which is great to have someone there that loves party planning. She loves it and she does a great job.

Luke Peters: Always got to have one of those.

Mike Watts: Got to have that, right, party planning committee. The sales and marketing, right, that really centers around me. That’s my strength. I head up both in a way, but then as far as the action and then I have an executive assistant, which ironically, she keeps us all straight. She’s that super organized person. We use some tools, two particular pieces of software that really help us. We use Slack to communicate in each work group. If you’re in the promotional products sales team, there’s a communication group for that. If you’re in the retail team, there’s a different group for that. She keeps us all communicated on there.

Mike Watts: We use monday.com. It’s a rolling to-do list that she monitors and make sure that we … She goes through my email and makes sure … I think I have 175 thousand emails right now in there. I don’t know how many come in a day. She’s go through and she’ll make sure that the important ones go onto monday.com and I get those taken care of. She’ll remind me because I’m a little bit scatterbrained in that way. She’ll make sure that that happens.

Mike Watts: This is me shoring up … I think as an entrepreneur, we all have to understand our weaknesses, maybe more so than we need to understand our strength. You need to fill those weaknesses in with people that that’s their strength. Then you’ll have something robust.

Mike Watts: We have one person that runs our promotional product sales, one person that runs our retail sales, and then I have a floater who’s been my right-hand marketing manager. He’s also an excellent graphic artist. He does all our design work for packaging, all of our design work for displays, and our logos and any high-end collabs we do with celebrities, he does all of that premiere work. He’s in the office with me.

Mike Watts: That rounds everybody out. Really, our sales and marketing team is only five people total including my executive assistant. We each have our silo. Now, I do have one other person. You mentioned Amazon. I have an Amazon manager in-house, but all he does is do fulfillment to the FBA centers. We’ll do maybe three million this year on Amazon with just our one product line. We do a lot of business over there. You’ve got to keep the shelves full over there if you want them to keep populating you to the top of the listings. He does a great job there.

Mike Watts: Then I have an independent contractor out of California that manages the nuts and bolts, the back end side of it and makes sure that all of our listings are populating well. He opens up case logs with Amazon to make sure that any … There’s all kinds of weird issues that happen. If any of you guys out there listening fill to Amazon, or you know that there’s some weird nuances that happen. The resale team will jump in and change your listing title or they’ll change the way your brand is listed in the brand registry and things like that. They do that. They do that for a small percentage of our sales, but it’s well worth it because we have a perfect filler rating. We have a perfect customer service rating. That’s the whole team from front to back.

Luke Peters: Yeah, really interesting. I was taking notes there. I just find this part of it really fascinating in how businesses grow and how you have to decide how to allocate all these people. You’ve got half in production and five out of the 30 in graphics, which is huge. Gosh, you and I probably read the same book because you used the terminology your GM is an integrator. Oh, man, I’ll come back to you on that book.

Mike Watts: Oh, yeah, yeah. There’s a couple of books. Yeah. I can’t remember it either. You know what I’m talking about.

Luke Peters: Yeah, yeah. We’re talking about the same book but we don’t know. I’ll put it in the show notes and I’ll tell you guys. I’ll tell you afterwards, Mike. Anyways, yeah, it sounds like you run a lean team. I took those notes for monday.com. I’m going to take a look at that. Obviously, I’ve heard of Slack. Haven’t heard of monday.com. It looks like that’s your tool that you use to make sure the key tasks, everybody understands the key elements, or you at least understand your own key tasks that you’ve got to get done and then utilize an assistant, which is pretty cool too. Good overall feel. I think the audience will get a good feel for how your company is set up. Now we know how you’re driving revenue.

Luke Peters: Quickly, because it seems like it’s one of the parts of your success is back to the beginning, you talked about how you partner with inventors. Do you want to go into that? How do the ideas actually come to you? How do the inventors know to come to you? How do you partner with them? How do they win in the relationship? It’d be great to hear how that works.

Mike Watts: Yeah. Every single bit of this, even the org chart, all that’s happened organically by the need arising for something. Back to the story when I was working my corporate job and I was doing home and garden shows and mall kiosks on the side and then found the need to have something I could control, that’s when I met my very first inventor at a home and garden show. He had developed this aftermarket weed eater head that later became the PivotTrim and the number one selling weed eater head in the world once we got our hands on it and then eventually, sold that company.

Mike Watts: Partnering with him, he was a unique character too. I just feel like everybody has their own strength and God-given talent. A lot of these inventors that I run into and meet and I now speak at entrepreneur conferences, I speak at inventor clubs in Houston and around. They’re very much similar types of personalities on par. You can’t paint too broad of a brush, but generally speaking, they like to be in the details. They like to be coming up with innovative solutions and prototypes and trying to fix problems that may or may not be right for the marketplace. There’s a big difference in a product or an idea that you should just make one of and just use around the house because it’s a good little gadget for you and something you should cash your 401(k) in and go all in and make it a new company.

Mike Watts: I think my strength has been to able to see the vision for, hey, this product fits these criteria. I have a very specific list of criteria. It can be demonstrated. It’s relevant. It solves a real problem that people can know of already, that you don’t have to convince them they have. It’s in an industry. There’s not some huge barriers from enormous competitors or domineering safety compliance or something like that that can derail you. It’s not too big of a huge barrier of entry. If all those criteria are met, then I will partner with an inventor through a license arrangement. I license the patents from them.

Mike Watts: In every case, ironically, I’ve licensed pending patents. That means that they’ve just filed for their patents. We don’t know whether they’re going to issue or not issue in which case I’m taking on some risk because if they don’t issue, well then all this effort that I’ve put into this so far, I’m not going to be able to protect it, at least not from a patent standpoint.

Mike Watts: We partner up, and the good thing about it is that I can do what I do best which is creating a great brand, marketing, I’m starting to attend trade shows and building a network, leaning on my network of distribution or whatever sales channels are emerging, which is where I’ve been able to make my way just trying to stay ahead of the curve in marketing in emerging ways, social media being one example.

Mike Watts: The best thing is that the inventor can then go back to the workshop where they’re most happy, where they produce their best work and develop the next version or the next machine, in this case. All the machines that we use to manufacturer the LoveHandle here, were invented and developed and built by the inventor of the LoveHandle. In his basement, he took 80/20, which is a type of rail system. It looks very much like large Tinker Toys with Arduino circuits and actuaries and circuit boards and pneumatics. He just started with the idea that, hey, I want to make something that will build this part at scale. It took him six months and then he built it, loaded it in a U-haul truck, he’s from Minnesota, drove it down here to Texas, set it up in our little shop, and that thing started spitting parts out.

Mike Watts: Now we’ve got three of those machines up there and can produce 50,000 units a day off of these machines. He can build other machines for us that stick the parts on the cards. He’s just built one he’s bringing down in two weeks that will actually completely package our product and print the barcode on the packaging for each style that we were making. He is amazing at that.

Mike Watts: If he was tied up doing customer services calls or package design or attending trade shows or whatever, then he wouldn’t be able to be in his sweet spot. This partnership, it’s a great example like a marriage where the whole is greater than the sum of the parts. He’s contributing in ways that only he can do, and I’m contributing in ways in only that I can do. In the end, we both get to be millionaires, hopefully, one day.

Luke Peters: Wow. It sounds like you hit a home run with this guy, Mike. I can tell you, not only he’s got the idea, the product, but then also the ability to make the product. Wow, that’s a cool story. I guess a key thing I took out of this, and again, is it’s not about the idea. You’re dealing mostly with patented product ideas, right? Would that be fair to say? Even before the consideration point, you’re waiting for something that’s already … it’s not patent pending. You mentioned you might work with those but generally it’s patented. At the idea stage, it wouldn’t even garner interest until maybe it had a patent? Is that how you look at it?

Mike Watts: Yeah. Patents are a funny thing. Yeah, it just happens to work out that way, that they’ve been pending patents. I like that runway because when it’s pending, you can claim the moon. You can say I invented the wheel.

Luke Peters: Yeah, totally.

Mike Watts: Until the examiner gets in there and says no, actually it’s been done or whatever, you get to claim the moon. That’s a cool time to be launching a brand. Beyond that, if it issues, doesn’t issue, it’s all perception to a point, especially utility patents are. Again, I’m not a patent attorney but from a marketing perspective, I have seen over this time of being an entrepreneur, a growth in the importance of design patents and trademarks because of the digital age that we live in.

Mike Watts: The best example is Amazon. I can show Amazon a design patent which is a visual representation of my product and I can show them a trademark, which is a group of letters together or a logo. They can very quickly say yes or no. That is protected or not protected. You give them a utility patent, well now they have to decipher whether this language inside the utility patent that describes this mechanical invention or whatever it is that you’ve invented, makes some judgment call as to whether this other product infringes on your product or not, and they’re not going to do that and they’re not qualified to do that.

Mike Watts: It’s been pretty interesting. Early on, I was like, it’s all about the utility patent. Anymore, it’s more about the design patent and the trademark that become important. Ultimately, the most important thing is that you get to the market first, and you show up with the best solution first.

Mike Watts: I was listening to a podcast the other day with Seth Godin. A big fan of Seth Godin. He was talking about this website called The Wayback Machine. You ever heard of that?

Luke Peters: Yeah, yup. For sure. I still use it, I think.

Mike Watts: Yeah. You can go back and see what Amazon looked like back in 2000 or 2004 or whatever and see how imperfect their product was. But you know what? They were first, and they kept getting better and kept getting better. That’s a whole lot of it is starting a journey and just pushing your imperfect idea out there into the marketplace and then course correct as you go.

Luke Peters: Yeah, and that’s great advice. Amazon’s never had actually the best shopping experience in my opinion. They do everything else right. They never really cared about how the page looked. Everybody else is always focused on having the better customer experience on the page, but Amazon’s just like, well, we’re going to get it to you in a day or two. That’s what customers value more than having the fonts look a different style or the page, the layout a little bit better like some others have tried. Yeah, it’s interesting.

Luke Peters: Man, we could talk for hours probably on the marketing side, and we haven’t even talked about that. We’ve covered a lot about your company and how you think and how you sell and where you sell to and all about promotional goods. Now we just talked about partnering with inventors. All of it is so fascinating. Just wrapping things up here, what do you think is … You said you speak a lot. I’m sure you talk about some of these subjects, but what is maybe your best advice that you could pass on to brand owners? These wouldn’t be start-ups. These would be this audience which might be comprised of hardware show, house ware show, brands.

Luke Peters: At the same time, a lot of them are old school. They’re thinking traditional in-store only options and not always up-to-date on the digital age. If you had to speak to that audience, what would the theme be?

Mike Watts: That’s a great question. It’s hard to paint a broad brush across it. I would say that if your business, let’s say for example that you attend a lot of trade shows, which a lot of us do and house ware show, the hardware show, on and on. We attend the Consumer Electronic Show and promotional products shows and on and on. I can’t tell you the number of shows that I’ve done. It’s got to be up in the hundreds, probably in the thousands at this point.

Mike Watts: The key is to be better than everyone around you. Whether that’s that your backdrop is bright and clean and your stuff is lit and it really stands out and that you have a very good location in that show such that natural traffic will find you, those are some small tangible things. Work with show management. Don’t accept a terrible booth spot. Keep pushing. Keep asking. Email them every day, did something open up? Did you get a better spot?

Mike Watts: What happens, you can look at a floor plan. I learned this from doing the home and garden shows, the retail shows when I was cash and carry. People walk in the front, they turn right and they start going up and down the aisles, most of them. If you got them too early, well, they weren’t ready to buy yet. If you got them too late, they were out of money. It’s the same thing. You’re third or fourth aisle, a cross aisle, and people walk on the right side of the aisle just like they drive on the right side of the road. You want to be able to stop them. You want a facing corner on the right side, third or fourth, fifth aisle, somewhere in there where it’s going to be a natural stop for people. You want to make sure that it’s a visual difference from the people around you.

Mike Watts: Don’t sit on your laurels. You didn’t spend all that money to go to the show to sit in a chair. You shouldn’t have a chair in your booth. You can go sit some other time. Don’t sit while you’re at the show. You need to be stopping every single person and starting a conversation. If it’s a busy show, then yeah, be more selective about who you talk to. Use your time wisely.

Mike Watts: We go even a step further and we start to network with other people in the industry, competitors. You have a competitor there? Don’t be standoffish with your competitor. Go make friends with them. Take them to dinner. Get to know them. I did that with my first company, my first big company, PivotTrim. We started talking to our competitor over there. Went to dinner with him, built a great relationship. They became our largest distributor and eventually purchased our company for over $6 million, all because I was able to set my ego to the side and say, you know what, how can I create a win-win with these guys?

Mike Watts: I think that that approach to trade shows and being more creative, taking some time to plan it out, and it looks visually great and that you’re ready and prepared for it instead of just showing up, putting your stuff up and sitting down and waiting for people to stop at your booth, because that’s not the way to get the best return on your investment.

Luke Peters: That’s funny that you brought up the … In summary, obviously have a beautiful booth and spend some time and obviously some money on that. Stand out more than everybody is around you was your key point. Meet the competition. A hundred percent, I agree. Hey, business, it’s usually a huge market. Sometimes everybody gets caught up and thinking that it’s just them and the competition, but there’s so many other people probably involved in most markets. The pie is usually huge. There’s so much to learn from the competition. Obviously get that great location.

Luke Peters: The other one I was laughing a little bit when you talked about stand up, don’t have a chair. Get in there and meet with people. I always find it so funny when people are having lunch in their booth. If there is not a bigger turnoff for a perspective buyer and they’re walking down the aisle and someone eating food in their booth, that’s what the lunch hall’s for. I still it. Those are things to avoid at a trade show. Wow, you’ve been to a lot of them. A heck of a lot more than I have. You’ve put your time in.

Mike Watts: Yeah. There’s more coming. Just to jump in real quick just based on your previous question, the other piece of it outside of the trade show, in the age that we live in, as uncomfortable as it might be, you have to get good at video. Video is king for any brand today. If you’re not creating good video around your product and showing the world why they want it or your service and why they want it, then you are really missing the boat because that’s what works. That’s the end game is creating great video content. If you think you’re creating enough today, then double it. You just need to create as much as you can around your brand.

Luke Peters: Yeah, well said. YouTube is like the modern day blog. Everybody’s getting their information off YouTube. Creating that, it’s just a template that, the medium that everybody is using, and interestingly. I started another company where we’re doing agency consultancy style work. One of the most interesting offerings that we have is doing influencer marketing for people where we’re getting influencers to create videos of their product, third-party talking about their product. Anyways, yeah, you’re 100% right on video. It’s a huge deal. It’s perfect for this audience because it’s not taking advantage of enough.

Luke Peters: People I think are just now catching up to having great photo collateral. That’s still a work in progress, right, and then video’s the next level. People still have to up their game to get to that point.

Mike Watts: Yeah. Don’t think it has to be perfect. It’s okay to be a little bit imperfect with it as long as you put it out there.

Luke Peters: Yeah. Engaging is always going to take precedence over having everything perfect. Yeah, you’re probably the same way as me. I’d rather get it out the door with a great message than have all the lighting and the backgrounds and everything perfect. I think at the end of the day, usually the artist or the videographer cares more about that than the actual audience might.

Mike Watts: Right, yup.

Luke Peters: Cool. Listen, Mike, this has been really interesting. I learned a lot right here. I’m taking notes on the promotional engine. I’m going to look it up myself although I may not totally qualify in my type of business. I learned so much, and I know the audience has. Where can the audience get ahold of you and learn more from you?

Mike Watts: I’m active on two main platforms. On Instagram, I’m @MikeWatts. I was able to get my name. I had to buy it from a Brit, but I think it was worth it. Reach out to me there. I answer DMs. If you have a question about anything you heard on here, I do answer them. Sometimes it’ll be a video response or an audio response because that’s an efficient way to do it, or send me a video or audio message. I read them all, and I respond to them all.

Mike Watts: I am launching a live show on LinkedIn. That’s going to launch in the spring of next year. That’s going to be around just launching businesses and taking things to the next level. We’re going to be bringing on some great guests, I think, that we have lined up for that in digital marketing. We’re excited. Definitely connect with me on LinkedIn as well.

Luke Peters: Thanks a lot, Mike. It’s great getting to know you here. Maybe down the road I’ll have you on again and we can talk more about marketing product launches because it sounds like you have a lot of expertise there. Yeah, I just want to thank you for being a part of the Page 1 Podcast. Thank you, audience, as well for joining us today. If you need help launching products yourselves or you’re looking for help with influencer marketing or selling on homedepot.com or wayfair.com or any of the other large big box online channels, check us out at retailband.com. You can also find more information about how we actually can help you in those specific areas with case studies. You can reach out to me directly at luke@retailband or find me on LinkedIn. Also, if you enjoyed the podcast today, would truly appreciate a review on iTunes. Thanks again, everybody. Hope you all have a wonderful day.

Speaker 1: Thanks for listening to the Page 1 Podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about rCommerce? Check out www.retailband.com to get more great tips and tricks on how to accelerate your eCommerce sales with the big box retailers.

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Find Page 1 Podcast

How Tim Case founded BakerStone and scaled the business internationally, but then lost ownership control and what he learned – EP15

What you’ll learn:

Today we hear an inspiring, yet cautionary, tale from a startup founder who lost his company from equity dilution. Tim Case shares his story and gives early-stage entrepreneurs invaluable advice on how to create an innovative product and scale a business with little starting capital.

About our guest:

Tim Case is a serial entrepreneur who has been cooking and inventing since he was twelve years old. Through the combination of his inquisitive nature, engineering mindset and passion for gourmet experiences, he was able to develop, patent and launch—via Kickstarter—the award-winning Pizza Oven Box under the company BakerStone (all while working as a business banker).

Key takeaways from this episode:

The BakerStone Background Story — 3:38
Conceptualization and innovation behind Pizza Oven Box —6:16
Using Kickstarter for proof of concept and lead for industry contacts — 7:38
Product to market timeline — 8:45
Growth of founders and equity stake investors — 11:32
Founder relationships and what each person brought to the table — 12:54
Peak growth point and sales percentages as an early stage startup — 16:23
Key marketing angle when launching a product — 20:30
Diluted equity stake and change in partnership — 21:28
Founder Advice: What would Tim do differently in hindsight — 22:31
Determining startup profitability — 26:06
Selling in-store: challenges and lessons — 28:17
Arbitration and a change in ownership and upper management — 30:33
Invaluable advice from a serial entrepreneur — 31:53

Podcast Transcription

Speaker 1: Welcome to The Page 1 Podcast, a weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies to tariffs, influencer marketing, best in class product launches, and all the details about how to accelerate your e-commerce sales with the big box retailers or what we call our rCommerce. Now here’s your host, Luke Peters.

Luke Peters: Thanks for joining us on The Page 1 Podcast. I’m your host, Luke Peters. This is the podcast where I bring you the best and brightest leaders to share consumer product sales and marketing strategies that will help you grow your business. I’m the CEO and founder of NewAir Appliances. Where for the last 17 years have been selling both direct to consumer and B2B sales and using influencer marketing along the way and other marketing strategies that we’re now offering with a new company called Retail Band, which we’ll talk more about that at the end. And today, thrilled to have Tim Case with me in studio actually, and today you’re going to learn a cautionary tale about entrepreneur Tim Case and his former company, BakerStone, how Tim grew BakerStone and scaled to 15 countries in in-store business in America and how he then lost the company after giving away a little too much equity during a growth phase of the company. And Tim, thanks for being in studio.

Tim Case: Thanks for having me here.

Luke Peters: Awesome. And a little quick introduction for Tim. He has been cooking and inventing since he was a kid, wrote his first business plan and secured an investor when he was 18, had childhood inspiration from his father. And then prior to founding BakerStone was a business banker at Chase and Wells Fargo, I think. So kind of learned, I guess he saw a lot of what businesses were going up against during that time. Right?

Tim Case: Yeah, I saw the businesses from the inside and heard a lot of the pain points and the stories that they had before I’d even forayed into larger scale business.

Luke Peters: Awesome. And then you founded BakerStone and ramped up sales really quickly, which we’ll get into. And along the way in 2017 you were listed as Oprah’s, one of Oprah’s favorite things, so that’s a awesome milestone to have achieved. So why don’t we kind of like, before we get into the business, why don’t we just quickly talk about your childhood actually, just how did you drive your inspiration to become an entrepreneur and kind of what drove and pushed you as a kid?

Tim Case: Oh, well, I really have been inventing and cooking since I was 12 years old. Just really something sparked the drive to cook and then that led to ideas for inventing, for food-based things and actually invented a guitar that teaches you how to play the guitar by showing you the chords lighting up on the neck. My stepdad, who’s an engineer, had taught me about LEDs and I thought, “Oh that’s great. I could use those to light up the cords instead of looking at the book and figuring it out.” And then never did anything with it. But when I was 16 someone actually came out with that same idea. And I thought, “Okay, there’s something that I saw, didn’t have the means at 12 obviously to do anything with it, but there’s something, there’s some inspiration that grew into something, even though it’s for someone else.” And so that really kind of hooked me and kept me engaged in figuring out how things work.

Luke Peters: That’s awesome. Yeah, there’s always a childhood story behind everything, so it’s great to hear that and good for the audience as well. So on the BakerStone, let’s talk about, just give the audience kind of an idea for what the product and brand was about.

Tim Case: Well, BakerStone was really about bringing people together through food. It was trying to take a gourmet level experience and make it accessible to everybody just by throwing a pizza oven on top of your grill, which most people already had, and amplifying the heat and the efficiency with which you’re able to cook. And so we were able to cook pizzas in two to four minutes. Some of our gas appliances were actually able to cook pizzas in as little as 90 seconds.

Tim Case: And it really amplified that experience. Anybody can get a Tombstone pizza and throw it in the oven or some other frozen pizza and you’ve got food. But this was fun because people could actually take their pizzas, customize their pizzas, and create a party around, you know, just that fun and that excitement and that engagement while still turning out pizzas in two to four minutes. So that kept the party moving.

Luke Peters: So the product actually sat on top of a grill that was already open and it, so it didn’t use electricity or anything.

Tim Case: No fuel, nothing to plug in. You just sit it right on top of a gas grill, not an infrared because that blocked convective airflow. But by sitting on top of a normal gas grill or charcoal grill or wood pellet grill, it allowed the heat up and into the baking chamber. And so that amplified the heat in by trapping it into the stone. And then there was a metal housing that was insulated with ceramic fiber, that trap that heat from escaping. And so you had convective conductive and radiant heat at six to 800 degrees.

Luke Peters: Oh wow. So it actually would get hotter-

Tim Case: Yes.

Luke Peters: … than even the grill.

Tim Case: Yeah, because the grill, the flame is obviously burning much hotter than that. But the flames usually, the heat’s going right up into the air. So we were trapping that heat.

Luke Peters: Yeah. Oh wow. That’s awesome. So that’s an easy buy for a customer I guess because they’re not having to really, they’re not having to hook anything up, plug anything in, they’re just … it’s like an extra accessory that they can have and put on the grill.

Tim Case: Yeah. And it started out with just pizza, but it was able to amplify cooking steaks and vegetables and fish and anything else you would get in a high end steakhouse. It allowed you to do that in the baking chamber of it on a cast iron skillet. So that gave you the infrared heat that you get from like a high end steakhouse with salamander broiler cooking top-down and it gives you that infrared heat that would penetrate and so you had a steak, even if it’s an inch and a half thick, it was cooked perfectly all the way through.

Luke Peters: Wow. Tell me about the product idea. What’s the conception of the idea and how involved were you in that?

Tim Case: So the conception of the idea was becoming obsessed with a wood fired oven because I had tried to start a franchised pizza concept based around wood-fired ovens. Didn’t get the funding for that, but spent several years working through that and my wife one day when I said, “Okay, we’re not going to get the franchise stuff going. We’re not going to get one restaurant going, but we want some pizza.” And I said, “All right, let’s get a wood-fired oven.” And she said, “No, you’re not getting a wood-fired oven. We live in a town home with an eight foot patio. Like you’re not putting a wood-fired oven out there.” That’s really what kind of inspired, I said, “All right, well I’ve got a gas grill, I’ve got a pizza stone, I’ve got aluminum foil, fire bricks. How can I put this together and concentrate that heat and actually make it work?”

Luke Peters: Oh wow. So did you, you actually then kind of developed a prototype or something like that, that you brought to a factory?

Tim Case: So I actually, I developed a very crude prototype of a firebreaks aluminum foil and pizza stones that was just sitting on top of my grill. And then that worked. And so then I took a tile saw my father-in-law had gotten me for Christmas and some kiln shelves and started sawing things apart and drilling things together with masonry bits and bolted this whole contraption together. And then took that and did a Kickstarter project with that.

Luke Peters: And I was going to ask you about that Kickstarter. So you actually kind of created a prototype, launched it on Kickstarter, and then tell us about the results here.

Tim Case: Yeah, so I’d launched it on Kickstarter as a proof of concept just to see, did other people who were obsessed with pizza or even not obsessed with pizza, like the concept? And so I took to that and looked at how would I refine this, how would I develop this further from this thing that I cobbled together on my patio. And found that commercializing it required an industrial designer, required people helping you make sure that the engineering was sound, required so much testing to make sure that it didn’t invalidate warranties on your grills or cause issues are cause fire hazards.

Tim Case: And so that whole Kickstarter concept allowed me to get exposure to other people that already had experience in the industry plus kind of act as my proof of concept so people could say they do like it too. And then that gave me validation that it was worth pursuing.

Luke Peters: Okay, great. And then from that point, how long until you actually had, you were selling the product in the market and then kind of what were the top two or three things that had to happen between Kickstarter and then actually getting the product to market?

Tim Case: So Kickstarter was in December of 2012. We had our first presentations with, I want to say Bed Bath & Beyond in July of 2013, and so my first partner, July or August I believe. So my first partner who came from Kickstarter and seeing my Kickstarter project, getting me on the phone on a Sunday at my house on a Thursday in February of 2013, we quickly ramped up, he had industrial designers. He had experienced sourcing from Chinese factories. He had experience in going through the different testings, CSA, BV, all the different testing entities that are out there. And so they quickly helped source a factory, get the prototypes and then we pitched off of prototypes for our first big pitch.

Luke Peters: Wow. That’s so fast. So the first pitch, it was like less than a year after Kickstarter you’re pitching Bed Bath.

Tim Case: Yeah.

Luke Peters: Awesome. And did you get in store at Bed Bath?

Tim Case: Yeah, they ended up being our first major customer. We got in almost all stores with a full rollout. Had a video player in store at end cap. It was quite a good campaign that we had with them.

Luke Peters: That’s amazing. How heavy is the product? How big, like inches, both sides?

Tim Case: So, it’s three burner or larger grills. And so it’s about, racking my brain for a memory here. I want to say it’s 20 it’s just under 17 deep and around 22 wide.

Luke Peters: Got it.

Tim Case: And then the baking chamber is 15 by just under 14 deep. And then there’s a vent in the back that allows heat up and through, it’s about 34 pounds.

Luke Peters: Okay. Wow. So it’s a substantial product basically.

Tim Case: Yeah. Because of the refractory stone that’s in there. So it’s like a cordierite ceramic. And so you basically have pizza stone material on all sides, top, bottom, back and sides. And then that has a metal housing surrounding it. So it’s definitely quality, well-built product and very substantial.

Luke Peters: And what was it retailing for?

Tim Case: 129.99 for the original pizza oven. And then we had a $99 price point for what we called our basics. And that is something for two burner grills or small Weber kettle grills. And then we had a stove top unit that we launched.

Luke Peters: Oh wow.

Tim Case: So that sits over a single gas burner.

Luke Peters: So a total of three products.

Tim Case: We had a pro series as well. That was a higher end version at $179 and that was more like Costco, Williams-Sonoma, Touch of Modern higher end retailers.

Luke Peters: You got in some amazing retailers there.

Tim Case: Yeah, it was definitely well-received.

Luke Peters: Yeah. So at the beginning you brought on a partner. Are you able to share? Did you have to give up a substantial amount of equity at that point?

Tim Case: So at that point it was, we were working through how we would partner. I had already talked with a few people about licensing, talk to other people who had money that they were going to give me money, but just a chunk of equity. And you know, at the time I didn’t have the factory sourcing experience. I didn’t have an industrial designer on staff nor know the difference between a good or a bad industrial designer. And so the first partner came up and said, “Okay, here’s what I’ve got. I don’t necessarily have all the funding you’re going to need, but I can help us bridge that.” And so we had contemplated that it would be some kind of a split, but we weren’t quite sure until the money was there.

Tim Case: And so once that got underway, it ended up being a third and a third and a third, with the first person who came on to help us on a CEO capacity level, like advisory level and also bring some cash into the company.

Luke Peters: Gotcha. Okay. So, it’s kind of like having, at that point there was three founders essentially kind of split up evenly.

Tim Case: Yeah.

Luke Peters: Okay, cool. And that was in 2012-2013.

Tim Case: 2013, yeah.

Luke Peters: And who actually got you in store? Was that, one of the founders had those in store connections?

Tim Case: It was, yeah. My first partner had the connections to-

Luke Peters: Partner, yeah.

Tim Case: … to sales reps, manufacturers reps who then had the connections to the retailers and then, he was able to use those relationships to then get us the meetings and presentations where we went out and we actually cooked pizzas for their whole teams and got them to drink the Kool-Aid so to speak or eat the pizza to see that it was really a great product.

Luke Peters: Okay, great. Tim, so you had the one founder was really great to get you in store or the one partner was really great to get you in store and the other partner was the kind of acted as the CEO it sounds like. What was the main role of that partner?

Tim Case: Yeah, so he came in, my title was the founder. His title, he had experience in major, major level companies as CEO, CFO, we’re talking 400 million to $4 billion a year revenue companies. And he basically was interested in seeing how the small business startup world worked and not necessarily like the tech startup world but in the bringing something from nothing or creating something from nothing world. So he brought in his expertise in finding additional funding and helping make sure that we’re on track from a CEO and CFO level. And then the other partner helped really from the factory sourcing and industrial design level and he had a really good eye for products that were innovative or products that were going to do something and had a good track record with that.

Luke Peters: Yeah. Okay, great. So, you’ve got the different partners on, you guys sounds like great team because they got you in store at these amazing stores. You came up with a great design and then you had the leader who worked with larger companies and kind of had that CFO and fundraising background. Were you guys S corp at that time or do you have to go to a C Corp to kind of-

Tim Case: We were actually out of Canada-

Luke Peters: Were you?

Tim Case: … so, they were out of Toronto and so I ran the US operations under my, it was an an LLC at the time, and then we ran all the IP and all of the major business was done through the Canadian corporation.

Luke Peters: Oh, so there’s two different companies actually?

Tim Case: Yeah. Well, yes there have been, there have been even more. So after that first round, which was in October of 2013, we went out and we’ve got two other major players in brands that are beyond household name brands that came in on the money aspect of it. And then that was one of them. And another came in based upon actual logistics and sourcing operations wise. So they funded the purchase orders, they funded the shipping, they funded all of the things that it took to actually fulfill the products.

Luke Peters: Wow. That’s awesome. Okay. And so now I think that gives the audience a great idea of how the company started, how you guys got into store, the dynamics behind it, the people involved, which is really helpful. And also just the ingenuity that you had to kind of create the product, which is really interesting, more than I knew before we talked today. So that’s kind of cool to hear. Tell us about, just give us everybody a scale of the company. So if you could talk about total employees or percent of sales in store and online and kind of the size of the company at your largest point.

Tim Case: Yeah, so, at the largest point we had 14 employees on track for more. We had 70% of our sales were in store or to major retailers. And then the rest was drop shipping for other customers or owning e-Commerce, which we hadn’t really put a huge focus on originally because we didn’t have much domestic stock that we kept on hand. And so we were looking to ramp up keeping more domestic stock so we could ramp up our e-Commerce because obviously we have much better margins and much more profit at that point.

Tim Case: So, from there we were selling in the $5 million range plus or minus depending on the year in the first few years. And with introduction of new products, we were on track to go up significantly from there. 10 to $20 million just depending on how everything shook out with orders that were pending.

Luke Peters: Yeah. And then the other really incredible things you guys got into 15 countries when you’re in those countries, or more maybe. Right? But when you’re in them, does that mean in store or is that online or just a mix between the countries?

Tim Case: Primarily. So we used distributors for European markets, UK. Then we had direct sales in Australia, we had distributor in New Zealand and then we had some South American customers where we went direct and/or through a distributor. So with those, it was a good mix of how they sold. Some people would put it on some Amazon level sites, some people did, you know, they would drop ship for their customers, like the distributor would or they would sell into the brick and mortar.

Luke Peters: And what was the key role you were playing along at this time? So now you have those other partners in the business and how were you driving and like where were you plugging yourself into the business?

Tim Case: So, I mean, I pretty much ran everything with the company. I was in charge of all of the forecasting, accounting, new product development, overseeing the marketing. I oversaw everybody from the HR employees to logistics employees, sales, all of it. I was on most sales calls, almost every trade show. So while I had these partners, I primarily ran the business. It became … Well, so I had that group of partners, that group of partners ultimately sold to one new partner. We wanted to develop and grow gas appliances, which were more costly, more funding requirements and more risk. The partners that I had were closer to the end of their careers wanting to wind down the amount of investments they had and actually spend more time enjoying their successes. And so they said, “You know, we’ll happily sell to someone else if you want to continue to push that envelope and don’t want to stick with accessories. We get it, but we don’t want to fund that.”

Tim Case: And so they sold to another investor and that’s when we were going to be pushing into the appliance market. And so gas appliances were really where the growth was. But at that point I ran absolutely everything with the company.

Luke Peters: And are you able to share how much they sold their component of the business with?

Tim Case: Do you mean what percentage or?

Luke Peters: What dollar value, like what the company was valued at that point? Are you able to share or is that kind of a private transaction?

Tim Case: Yeah, it’s definitely a closed transaction. There are some other things surrounding that, but it was again around 5 million plus or minus for total transaction.

Luke Peters: Cool. That’s helpful to have scale for that. And you said that you talked about the product launches and you’re involved in marketing and sales and everything, but just like you explained. What was maybe the most special thing or something that you felt was really sets you guys apart on a product launch? I’m just curious on the marketing side, you know, what did you feel worked really good for you?

Tim Case: We tried to sell experience. Anything that we did, we pushed, why does it make your life better? Why do you want to have this product? What does it do for you? If I give you a pen, it’s nothing unless you know what that’s going to do, this pen will help you write your story. And so it’s, this pizza oven will help you entertain your family and produce better food and enjoy yourself more. And then, Oh yeah, it’s also going to make you pizza. So, that’s kind of what we really focused on.

Luke Peters: Focusing on the experience, the visuals, how it’s going to help people.

Tim Case: Yeah.

Luke Peters: Cool. That’s awesome. We talked about the percentages that you gave up and we also kind of talked about in return what you got. It sounds like your initial investors, it sounded like they were a great team. Did you have of legal counsel during that time kind of advising you on how you guys decided to split it up, a third, a third, a third or was that just something you guys did internally?

Tim Case: Well, no, I mean that, well, yes I always had advisers in some way, but that initial breakup was the third, third, and third. And then that quickly went to, you know, I ended up with 22% of the company by the end of 2013 when we brought the other investors in.

Luke Peters: Gotcha.

Tim Case: And so, I had 23.75% and went through another round of funding where I didn’t have the funds to put in. And so there was dilution. And so I ended up with 22% of the company and did pretty much 100% of the work, but 22% of something was better than 100% of nothing.

Luke Peters: What do you think, I mean, it sounds like you really needed them because they did bring key elements to the company. So, I’m speaking for you, but it sounds like it would be hard to get there without them, but in hindsight if you could do it again, what might you do different?

Tim Case: Well, that is a question that I ask myself regularly. The experience in the industry, I mean we’re talking between them decades of experience. That’s not something you can necessarily buy. It’s not something I can go out and secure funding on my own and it suddenly gives me that information, perhaps finding partners that were more of advisory role type partners with some kind of a short term cost basis versus a longterm equity basis would’ve been a better way to go. Or finding, it’s just hard because the magic part of what helped us grow so quickly was that experience and the ability to ramp up production within months of launching my Kickstarter campaign.

Tim Case: But doing it differently now or, personally, I would do it differently now in that I would find somebody who could advise, I would find access to capital, which now is actually more available than it was at the time. At the time it was go to a bank, it was a business banker. So you go to a bank, you try to get an SBA loan, you leverage your house, you borrow from the bank of your family, your friends, your parents. And there’s just different ways to bootstrap and start a company that way. You’re not going to launch into, selling into over a thousand Bed Bath & Beyond stores unless they know you have solid financial backing and you’re not going to really be able to fulfill without the right capital.

Tim Case: So now there’s access to capital that’s more expensive, but you know there’s Kabbage and OnDeck and those types of companies that are out there that will give you non traditional business financing. And so if you were able to then say, “Okay, I know my plan, I know my margins, I know I’m giving up 20 something percent a year on this money or I’m giving even the crazier short term, I’ve given up 20% over the next six months on this money,” you’re able to make a business decision that says, “Okay, I can launch and then I can reinvest.”

Tim Case: And then now you’re doing it without having given up as much of that equity. But back to that experience and that knowledge that the other partners had, that would’ve been such a steep learning curve for me to try to tackle on my own.

Luke Peters: Yeah, it doesn’t sound like an obvious easy answer to me, because it sounds like together you guys were the team, you had the idea right and perfected it and then they brought all these other elements and it wasn’t easy.

Tim Case: The industrial designer they brought in is I think pivotal in bringing that product to market. Any industrial designer could have rendered designs and helped us figure out how to manufacture it. But his background, going back to being a kid and his dad owning a metal shop and fabricating sheet metal at 15 years old, he was able to build our first here factory, here’s how we want you to build it prototypes. And so he gave them drawings, he gave them the actual design, the product, the way we wanted it. And then they did the first hand samples for us. And we had those prototypes that he did sitting in our office next to the production samples. And it’s just amazing seeing how similar they really are and how he was able to do that in just his dad’s metal shop. So, those things are invaluable.

Luke Peters: It takes a team. So you’re getting in store, I mean, it sounds like again you had really good guidance. How did you guys know you were profitable in store? Did you already know what all the back ends were and was that pretty easy to figure out when you’re selling pieces? What the back ends are going to be, what the risk is going to be? And at the end of the day you’re still covered, you’re still profitable? Or did you kind of run into some situations where not every retailer ended up that way because these back ends come into play and all of a sudden you’re not profitable?

Tim Case: We always looked at program costs ahead. We had a very I think 20 year veteran of the barbecue industry at the time as our director of sales. And he knew to go and plug in, “Okay, this retailer is going to want this kind of back end support. They’re going to want these marketing dollars. Their return rates are average this.” Now, it’s a little different because we’re talking about an accessory that’s unknown and it has breakage opportunity so the stones can break in shipping. We took a lot of precautions to make sure that didn’t happen. Our return rates were 1 to 2% globally max.

Tim Case: So, it was really good. We didn’t really end up with a lot of breakage. Costco, those kinds of retailers are usually the retailers that have maybe the weekend rental programs where-

Luke Peters: Totally.

Tim Case: … “Hey, I used it for my party and it didn’t work.”

Luke Peters: Yeah, exactly.

Tim Case: Really? Because your Instagram feed show-

Luke Peters: You’re footing the bill.

Tim Case: Yeah, exactly. So, those kinds of things. But, we built that in on the front end. We use the margin analysis and said, “Okay, they want this kind of invoice. They want this kind of return. They’re going to take this kind of ask for their trade shows support.” And we really tried to factor all that in ahead of the time.

Luke Peters: What was the key trade shows that you guys went to?

Tim Case: We did the National Hardware Show in Vegas. We actually won the Vesta, no Vesta award was at the HPBA Show.

Luke Peters: Cool.

Tim Case: So we won the Vesta award there, we won the Retailers Choice Awards at National Hardware Show. We did the International Houseware Show where it was one of the GIA finalists. So, we got a lot of acclaim and recognition from those. And that really helped us in that marketing effort too, that the DIY Network did a show on us at the national hardware show two or three years now. It was really [inaudible 00:28:14] on the I want that show.

Luke Peters: That’s awesome. Yeah. And now looking back at kind of your in store programs and how you’re selling, what is something you would do differently from what you’ve learned or is there one bit of insight that you’ve kind of gained from being in store?

Tim Case: That is an animal in and of itself. You take a product that people know and you put it on a shelf, you’re competing based on price and features and which shelf you got put on. You take a product to people don’t know and you put it on a shelf and it’s put on a shelf sideways and the side of your box looks like just what does that say? It says make pizza and three steps. Okay, what am I going to do with that thing?

Luke Peters: What does it mean?

Tim Case: And we definitely found that it was hard to educate the consumer on an in store basis. So much so that we were looking at launching our own type of app marketing type tool to allow people to go in stores and actually understand the products better. Never really got there. But it’s something that’s educating the consumer’s key. If you can have your product built or displayed instead of just in a box on a shelf and then for us we would have them build the product and put it on top of an existing grill to show, here’s what it is.

Luke Peters: For sure, that visual I could see being a big win. It’d take up a lot of space I guess though.

Tim Case: Yes and no. That was where having the box that’s 24 by 19 by 11, having that sit out on the floor is hard enough so they could push that back to a rack and then have it sitting on a grill and people walk by that grill and they look at it and they go, “Oh wow. What is that thing?” And then there’s a POP label on it so it explains what it is right away and it tells him to go to aisle this and there you go pick it up. And that was one of our absolute best retailers was Home Depot in Canada and they did that and then Bunnings in Australia. And they did that as well.

Tim Case: And they, per stores, had just numbers that were light years ahead of any other retailers because they assembled it, their employees knew about it and they sold through tons and tons of units per store.

Luke Peters: Wow, that’s awesome. So this, it’s an amazing story. And then are you able to share, I know you can’t share all of the details, but are you able to kind of talk about what happened at the end?

Tim Case: So we talk about it as if BakerStone doesn’t exist anymore, but it does, it just doesn’t exist with me involved anymore other than consulting during a transition period. And unfortunately there were issues that resulted in arbitration between supply chain, manufacturing, partnerships. Just a kind of a myriad of issues that arose after the previous round of partners sold. And it’s kind of a crazy, crazy ride ending up eight years later sitting here talking about not being part of the company that I launched. That was one of Oprah’s favorite things, that was on such a good trajectory. But at the same time it’s a great product. It is still going to provide those experiences for people. And so it does still exist and it’s going on with new management and new ownership.

Luke Peters: Yeah. And I’m sure it’s a tough story to tell, but at the same time you’ve probably learned so much through that process and you’re still there along all those years of bringing it from creating literally from nothing to the brand that it is now. So you got to feel good about that.

Tim Case: Oh yeah. I mean, I literally call it my MBA from an unaccredited university. I mean, I spent eight years building this company from building the website myself to hiring the people and handling all the forecasting and handling all of the financial packages, everything we did, retail agreements, buyers meetings. It’s a experience that I wouldn’t have had any other way. The same way I say, I wouldn’t have had the experience that those guys brought to the table had I not gone that path. At this point, I have experienced that is invaluable. There’s just no way that I can look back at that and say it’s a bad experience.

Luke Peters: What’s something you’d like to leave the listeners with? Maybe a learning that you have or some advice or just out of this whole experience, if you could sum up some sort of learning that you want to share with the listeners.

Tim Case: Ultimately, I mean, I think the key is to keep innovating, keep pushing it forward regardless of what resources are available to you. There’s always a path that you can take. And even when it comes to the position I’m in now, eight years later, and that door has closed, there’s multiple other doors that are open as long as you don’t stay kicking and screaming at that door that’s closed. Take the experience and take the connections and go move on, go do the next thing. I have a Rolodex of 50 plus other ideas that I want to go do and now is the time to do that. It’s just a matter of figuring out which is the correct path.

Luke Peters: Yeah, well, you certainly have the right attitude. So it’s been great having you here in person and learning about your story and it’s an amazing story and just being so authentic and being open to kind of telling the story I think is, it’s a great way to kind of engage with when people hear this story. So why don’t you go ahead and just share with listeners how they can find more about you. Where can they connect with you?

Tim Case: Yeah, I mean I would say the best way to reach me is through LinkedIn. Just look for Tim Case on LinkedIn and definitely feel free to reach out to me. I’ve been trying to pay it forward, if you will, and help other inventors and other small businesses that don’t necessarily know Facebook marketing or don’t know how to launch a product or how to design a product. I’ve been working to help them not go down the path that I went and yet still take the good learnings from the path that I went and be able to bring their products to light and kind of make the best of it.

Luke Peters: Awesome. So there you have it from Tim. If you guys, any inventors out there, early stage entrepreneurs, Tim would be a great guy to contact and can kind of help you along that journey. Thanks again, Tim.

Tim Case: Thanks for having me.

Luke Peters: You’re right down the street so I’m sure we’ll stay in contact and it’s been great having you here. And I and I want to thank all the listeners for joining us today on The Page 1 Podcast. Thanks again. And if you guys have your own businesses and you’re selling into, say, your focus is on Amazon but your products could be doing better on Home Depot or Wayfair, that’s where we can help you at Retail Band instead of waiting around for months for a new product to launch, let us help you with our influencer marketing and we can bring your product to market faster and get sales faster, get reviews for your products and we call that speed to sale.

Luke Peters: And literally we can take a product from launch, no reviews, and within 30 to 60 days have you lined up with great reviews, dominating YouTube content search, Google search, and even helping you on your e-comm site or syndicating those reviews out to the rest of the retailers online to help you with your investment in that product. And that’s exactly what we do for customers at Retail Band. And thanks again everybody for listening. You can find me on LinkedIn and please leave a review on iTunes if you enjoyed the podcast today. Take care.

Speaker 1: Thanks for listening to The Page 1 Podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about rCommerce? Check out www.retailband.com to get more great tips and tricks on how to accelerate your e-Commerce sales with the big box retailers.

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Home Depot Vendor Summit Takeaways – HD Online E-Commerce Sales – Geotargeting, Earnings, Sponsored Advertising, and Compliance – EP14

What you’ll learn:

Did you know 90% of the US population lives within a 10-mile radius of a Home Depot? In today’s episode your host shares key takeaways from the 2019 Home Depot Vendor Summit. Listen in, HD is a powerhouse player to help grow online sales.

About our guest:

Luke Peters, President and CEO of Retail Band, has 17 years of sales and product development experience in the home appliance space. A self-made entrepreneur and founder of 5 companies, Luke is skilled at taking a product from concept and bringing it to high-volume sales at Home Depot, Lowes, Walmart, and Amazon. Retail Band, Luke’s new venture, is a r-Commerce agency that works with brands to manage and accelerate online business through retailer platforms. He is also your host of the Page One Podcast, a twice-weekly Podcast featuring interviews with thought leaders on topics ranging from channel strategy, tariffs, influencer marketing, product launches, and eCommerce growth on big box retail sites.

Key takeaways from this episode:

Home Depot Stats: stock valuation, quarterly earnings, net profit margins, business model – 1:50
CEOs’ instore sales tactics and HD top customer – 3:32
Diversity Luncheon: HD’s networking event, training opportunities, what diversity means – 5:03
HD’S push towards brand partnership – 5:29
New Geotargeting for vendors – 6:15
Avoid channel conflict on HD – 6:43
Investing in HD team product training – 7:27
Bring your team: compliancy, operations, marketing, sales, and supply chain insights – 8:45
HD culture and PNL focus – 10:41
New 2020 HD Marketing Solutions: Sponsored Advertising, Dynamic Marketing, SKU enrichment – 13:09
HD is a key company to invest in (expand your reach beyond just Amazon) – 17:26
Act now: HD’s marketing and advertising is underutilized, low barrier to entry – 18:10
Develop a relationship with your Merchant – 18:16

Podcast Transcription

Speaker 1: Welcome to the Page One Podcast, a weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies to tariffs, influencer marketing, best in class product launches, and all the details about how to accelerate your eCommerce sales with the big box retailers or what we call r-commerce. Now here’s your host, Luke Peters.

Luke Peters: Thank you for joining me on the Page One Podcast. This is the podcast where we focus on consumer product industry and really the only podcast covering online sales in big box retailers. So today’s a special solo cast on a recent HD vendor summit. So the Home Depot Vendor Summit that occurs in late October. I was fortunate enough to attend this and this is the 40th anniversary. And I’m just going to give an update on what I thought about the vendor summit, what I learned and hopefully for those of you that didn’t attend, you’re going to gain some insights. And if you did attend, you can just see the things that I learned or my takeaways from the marketing side of Home Depot and the things they’re offering there and the culture and also just different aspects of why you should bring more of your team to this vendor summit, which I didn’t do this year so I won’t make that mistake next year.

Luke Peters: So why don’t we just jump into this short solo cast, probably going to be under 10 minutes and hopefully I can provide some value for you guys who sell into Home Depot. And also hopefully, if you’re not currently selling into Home Depot, you’re going to kind of see why they’ve gotten an amazing story and why you want to be selling with Home Depot and partnering with them. So the first thing, let’s just start out at the beginning. Night one, you get to listen to all the top executives from Home Depot. And again, it was just a great opportunity and a privilege for me to be able to attend this. And they pass out awards and they talk about kind of what Home Depot’s focus is on.

Luke Peters: And a couple of things that you can easily find out on the internet, but it’s just great for you to realize is that the stock is up this year. I mean, it started this year in 2019 around 180 and here we’re talking in early November and it is now 237 and they’re just killing it. Net profit margins at Home Depot are at about 11%. I mean, why do I point that out? Because there’s other online or there’s other big box retailers or even other online retailers that don’t even come close to that profit margin. So it’s really interesting to understand how Home Depot runs their company, how they focus on net profits above 10%. I mean that’s going to play into the pricing that all of their partners have and the pricing they’re going to need I guess to achieve those. So that’s just a good number to understand.

Luke Peters: One of the key things, I posted this on my LinkedIn account and I’ll try to put this into the podcast or into a blog, but it’s an image I have from their main presentation about how they track dollars sold per foot and how that’s been going up every year since the 2008 recession. And how in just the last year, I mean it’s been taking up every single year and just to last year that increase basically amounted to $4 billion in sales. So you’ll see on the graphic, but generally what I’m saying is that how this number just keeps tracking up, 200, 300, well above $300 per square foot per store. So it’s a number they focus on and I guess what that means to you is if you’re in store, and literally I heard this from a lot of CEOs at the conference, that they’re spending so much time in store when they are in store, they’re spending so much time understanding how their products doing in store, going to the stores weekly, talking to the merchants at the store. So there’s just a maniacal focus at Home Depot to increase sales per square foot.

Luke Peters: Another interesting thing is that the pro business is more than 50% of their sales. So understanding that, how that fits into your business. Definitely when we look at online sales, a lot of them are shipping to store, like 50%. It’s a huge and I always wonder why? I would just rather have the products show up at my house but there’s obviously a big incentive and a reason why customers are doing that. And just thinking about who your end customer might be. It may not be a household, it might be a pro customer and how Home Depot is really catering to those pro customers and how that’s an important metric and I’m sure something that the stock analysts look to see if Home Depot is growing that component of the business.

Luke Peters: Okay, so that was from kind of night one and just some themes that came in. And then on day two and three is the supplier summit. So day two basically actually and into day three there’s a big opportunity for networking and a lot of training and learnings that go on because there’s these seminars where Home Depot’s talking about merchandising and advertising and supply chain and gain lots of insights and kind of see the cutting edge of what Home Depot’s focused on, but maybe not what all of the brands actually know. So I’ll kind of go through a couple of those things.

Luke Peters: So first before on day one I was fortunate enough to be invited to a diversity luncheon. It’s really an amazing event. If you ever get an opportunity to go, make sure you say yes and go. Lots of diverse companies and smaller businesses in the room and you get to sit with a bunch of high level Home Depot executives and they’re really kind of display the partnership and the different way of thinking that Home Depot has. A couple of takeaways there is that Home Depot really does support a diverse company both in their employees and in their suppliers. And literally, I thought this was just an amazing comment. I guess we’ll see how this plays out at year end if we have to renegotiate some of our allowances and backends with Home Depot. But it was interesting they said that our checkbook is their checkbook, meaning they want us to also be profitable.

Luke Peters: Obviously they have to make money and Home Depot really drives and pushes for that net profit margin I talked about earlier. But I just think that other retailers, maybe a really big one that you guys might know would never make that comment. But with Home Depot, they really are focused and want to partner with the brands kind of in a way that even Wayfair talks. So I just thought that was a really positive message for them to say that. And obviously it doesn’t mean they’re going to be unprofitable, but they want to partner. And that’s a pretty cool quote that our checkbook is their checkbook.

Luke Peters: Companies also found out this at the diversity of lunch, a lot of companies are really winning by geo-targeting. Now these are for in store companies and maybe they’re not in every Home Depot store or they’re in certain geographies and they’re really winning with social and geo-targeting social. And I’m sure they can use Facebook, but I’m talking about even some of the other social channels. So I thought that was an interesting call out because I know probably 99% of companies are not taking advantage of that.

Luke Peters: And this is just an operations thing that kind of came out. And the only reason I bring this up is because it’s not obvious. To some people it is obvious and to others it wasn’t. But that if you choose to field destroy your products, that there’s an option to eliminate HD from taking and reselling the product maybe as a blem. And I know this is obvious to some, but it definitely wasn’t obvious to everybody. And I guess what I mean by this is if your product is being returned and you want to avoid channel conflict or you want to avoid that product ending up on an eBay, in the portal you’re able to make that decision that the product will be totally destroyed and not sent back to be sold as a blemish or some backend channel that can then cause channel conflict to you.

Luke Peters: And, again, kind of like I mentioned earlier, and this is just from the diversity luncheon, it was just a common theme is that the CEOs of the successful in store, when they’re successfully selling in store, they’re out at the stores every single week. They’re there talking to the merchants, they’re seeing how the products doing, they’re even asking customers why they bought or why they didn’t buy. So I just thought that inquisitiveness and dedication was really interesting. And even to top that off is that they’re sending out teams to train. There’s a huge investment in training the HD team to understand what their product is so that they kind of get a leg up on the competition. And that was a common theme from the successful companies. And I know it’s a big investment and if you’re going to stores, you probably just mostly have time to go to local stores because you can imagine how many stores there are. By the way, there is 90% of the US population is within 10 miles of a home Depot store. Just think about that. That’s a just an incredible factor right there.

Luke Peters: So those are a lot of the key things I got from the diversity luncheon along with great networking. Just met some, some great people, some great people close to me here kind of in the SoCal area. Met the top merchant in appliances, which some of my team had met but I hadn’t personally met. And so just a great event overall and great networking at the diversity luncheon. Okay.

Luke Peters: And next what I wanted to talk about is just the next comment, bring your team when you go to this event. So when I was invited, I thought it was a CEO only event. And I think the reason was that I was invited to the diversity of luncheon, but I didn’t understand at the whole Home Depot supplier conference that obviously we could have brought more of the team, which is like most of the other companies did. And here’s a couple of reasons. So the networking is going to be amazing. You’re going to see the Home Depot merchants that you’re going to be working along. Those are the obvious things. But here’s the things that really stood out for me, there’s so much to learn from a compliance, a marketing and a supply chain side.

Luke Peters: So when you go here, your team can really learn. I mean you could probably go as deep as you can and bring ops people, not just your sales team. Because I was able to meet with key folks from Home Depot on AR collections, on compliance, on supply chain, and I learned so much about the contract, the things that we should be doing and not doing, how to collect on short shipments, why we’re receiving some short shipments and hint, that’s because if you’re back ordering a PO and the PO, if you ship it too late, you can’t ACE in the original PO and the receiving team at the Home Depot DFCS is not going to have a PO to relate to when your product comes in. It’s as simple as that.

Luke Peters: And we were getting hit on this a couple of times because we thought we could back-order PLs and we were told literally that we could by some folks internally on the HD team. So we’re getting the approval to do it. But the point is kind of getting deep into the ops there. But the point is that you can go to this thing and learn and talk to the people who are making these decisions and they’re just awesome people and I’ll kind of get into that later. And, again, so just think of your whole team, Ars, compliance, supply chain, all of those areas that in this world of tariffs and if you can save a percent or two or three, stop making mistakes or lean out or understand how to better work with HD. I mean it’s worth it 1000%. Along with that all the top portal support.

Luke Peters: Another thing I wanted to talk about is the HD culture. And I know most top companies, they’re there for a reason, they have amazing cultures. But I just really wanted to point out that I think companies have different kinds of amazing cultures. Some companies, they have an amazing culture because they’re just intense and they’re not often the nicest people to work with but maybe they’re the smartest and they’re just going to win at that PNL. Which going off on a tangent doesn’t create a good vendor-company relationship. And some companies are like that because it’s, they’re all into win, but they still have a great culture because they create a team that’s really focused around winning. And so for them, I guess, they do create a great culture.

Luke Peters: Home Depot is different. I mean, the people are so nice. They’re so smart though. I am going to talk about this later on about why Home Depot’s a company to partner with in the future because they’re going the right direction. I mean, they’re hiring every bit the smartest people you’re going to meet. But at the same time, they build this amazing culture, diverse culture where they care about their partners. But at the end of the day, they got to win as well and so it’s very unique how they do it. Their term merchant, I mean they’re merchant first. Everybody there is a merchant, that’s kind of what they’re passionate about being. They do care about their suppliers and brands just I said, unlike most other large companies. And the people who are working for HD, they’re all in, they love HD. There’s long tenures there, they move around. You can see how people have grown within the company. And when you think about this company, it’s not as old as you might think. And this is a 40-year-old company, it’s not an 80-year-old company and it’s just amazing to where they’ve gotten in that somewhat short time.

Luke Peters: And the other thing that really stands out, which I know is obvious for most of the big companies, but for whatever reason I think they have a better grasp at it, is that they’re really incentivized and focused on their PNL’s. I don’t know what that means. I don’t know how to kind of give you guys more of a concrete answer, but I’m just saying compared to other big box retailers, whether it’s better systems that HD has built in on the back end, whether it’s better, I don’t know from an accounting and finance standpoint, whether their platform is easier to quantify these things or whether it’s just a culture thing from the top, they really have built a bottom line focus and I think that kind of shows in that net profit of 11% and the results that they’re turning. And everybody at the team is focused that way. I mean, PNL it just seems to be in the back of mind of everybody at HD so be aware, make sure they’re making their money and you’re making your money. But I’m really impressed by the HD culture.

Luke Peters: Moving on to marketing. So I spent some time in a marketing seminar, it was marketing and then merchandising. And I just wanted to go through a couple of things that really stood out. And I know from a retail band stand point and also other topics I’ve talked to on the Page One Podcast we’ve done talked about actually had talked about the Home Depot move, the recent move to promote IQ. Talked about Wayfair and their sponsored ad platform. And we’ve talked about Amazon and theirs. And so here is just a little bit more detail on marketing. And I think it’s just a couple of episodes ago that I talked about their move from Criteo to promote IQ. That is HD’s move.

Luke Peters: And so now I got to see some case studies and also learn that the sponsored ad platform is just one component of the HD marketing. There’s other options that I’ll quickly go over. And one of the things that stood out is that this is the time to get involved with HD. There’s still not a lot of people using it. You could tell by their case study. The case study I think that they showed was quick-set locks. The numbers weren’t that huge for a company as substantial as HD so I could tell just by looking at the volume numbers that… I mean it it’s a great case study and beautifully done, but my point is that they’re not working off huge numbers yet. They’re going to be in the future and this is probably a result of the sponsored ads shown at the bottom of the page and also a result that there just isn’t a ton of awareness built in.

Luke Peters: You can also work with HD on something called Dynamic Media. This is basically retargeting. We haven’t tried this option, but it looks like a really good option that these are separate teams you’d be working with. You’d deposit money into an account and whatever you want to test out, 10, 20, 30,000 and just go on their dynamic retargeting. These will be that shop your product, they go on to HD and they leave. Okay, so they had the intent to go to your product, for whatever reason they left. They go out on the internet somewhere else and HD now has the ability to retarget this customer and bring it back to your product. My guess, you’ll probably return a lower row as than sponsored ads, but we’ll find out. But I still think it’s going to be positive. It’s cool that they’re offering it. And that was kind of a key component of the seminar.

Luke Peters: Skew enrichment. I thought this is really interesting. So HD’s partnering with a studio in China. So you can literally send your product from your factory in China to this studio, have all of your photos, creatives done. And think about what that means if that’s getting done. A lot of times, by the way, factories can do this for you as you know, but sometimes they don’t really have the best folks to really understand the marketing that you’re going to need on your end. So here it sounds like HD has a partnership with a factory that is kind of this is what they do or the studio that this is what they do. So it’s going to save you, it’s going to, I guess let you launch products quicker because by the time that product hits shore over here, you’ve already got all the creative stuff well ahead of the product getting here. Now this is really good for big product. I know with with smaller products you’re able to kind of air freight it over, but just think of the larger products and how hard it is to get all the creatives done and the time of inventory sitting in warehouses while you’re doing that. So I thought that was pretty cool and you can check with your merchant on that.

Luke Peters: Right now another comment, sponsored ads are, they’re showing at the bottom of the page. We’re talking November 2019 right now and it was mentioned that they’re going to start moving up higher in the ranks. So, again, this was a newer initiative from Home Depot. This is going to drive a lot more volume. There was talk about if your CPC was high enough on your sponsored ad that you would then gain the eighth ranking, the eight spot in the ranking. So these are all things that we’re going to test out. I thought it was really interesting and just kind of getting into the weeds, but kind of, I guess you could look at who you’re competing with and where you’re ranking and then understanding your CPC and finding a way to move it up with the various ways that you’re able to do that and see if you can bump into that number eight spot like they talked about.

Luke Peters: So great, great conference and meeting overall, I learned a lot. I actually spent a ton of time in the backend fixing some, just some compliance things and learning about some compliance things that we could better here at NewAir. And also now my team is a lot more educated on that as well after a lot of back and forth and a lot of great contacts that we met and the people are just so helpful.

Luke Peters: But here’s my key takeaways. So while we all think that Amazon is so far ahead of everybody else digitally, I was really impressed with what HD is doing. And I know they’re trying to get to this one portal and the one portal really isn’t one portal with Amazon. So they’re not where Amazon is on the portal. But wow, HD is a powerhouse. I mean, they own this niche that they’re in. I know Amazon and Granger and other companies are kind of coming at them, but, but they’re really a powerhouse in this niche. And they’re really strong with their pro customers and they’re really thoughtful and progressive on kind of how they’re thinking and growing things in the future. So that was one key takeaway.

Luke Peters: The other one is that, as I said previously in the previous podcast that HD advertising and marketing is still totally under utilized. Get on it now while you can. Next takeaway is if you have a problem with your account, and I know this could be obvious, but maybe it’s not and if you can’t get something done, then you just, you need to get yourself involved with your merchant and the other people at Home Depot. And I’m just saying this from the point of view that sometimes your team might hit a brick wall, but you as a leader, if you get involved, these folks really are usually wanting to work with you. So that was just to take away I had from the event. And if you’re not seeing that, then maybe best to attend the event because it seems that everybody’s really collaborative at the event when you get to meet with him in person. People at HD want to help their vendors. They repeatedly said that so I’ll definitely use that next time I’m trying to work through a deal that we feel isn’t too fair on our end. But, again, just win-win. Great people over there.

Luke Peters: And kind of aligning with the first takeaway I said, but this is the last one is that HD is growing, they’re profitable and they’re investing online. And I know it’s kind of repetitive and it’s what I said earlier, but they’re moving the right direction. You’re looking for key companies to align with outside of the obvious, outside of Amazon. HD is going to be one of those key companies. And, again, I know people who are selling through them are ready. This might be obvious, but from my experience there’s two areas that aren’t obvious. It’s number one is people are selling online with HD, but they’re not taking total advantage of everything HD is offering. So that’s a big miss. And number two is people that are all in with Amazon as an example, but they’re not with HD and so they’re missing the boat even more. And just my takeaway is that HD is moving the right direction. They’re really investing online and in their team and in the core areas and they’re not going… They’re not diluting themselves and going into categories that they’re not going to win in. And so if you’re in their categories, you want to align with them and grow with this amazing company.

Luke Peters: So that’s it on this short solo cast and update on the HD supplier conference. Hope you guys can all attend next year. If you do, find me on LinkedIn, I’d love to connect with you and I just want to thank everybody for listening to this week’s episode of the Page One Podcast. Please leave a review on iTunes that really helps me and the podcast. And if you need help growing in your big box online stores or product launches, VR influencer marketing platform, find me on LinkedIn, ask. I’d love to help you guys. We can provide a free audit on your business and no pressure, we’ll just show you if we can help you and sometimes we can, sometimes we can’t. We’ll honestly put everything together and show you what we can do via Cool Deck and you’ll gain some as well. You can find me on LinkedIn or luke@retailband.com. Take care and we’ll see you next time.

Speaker 1: Thanks for listening to the Page One Podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about our commerce? Check out www.retailband.com to get more great tips and tricks on how to accelerate your eCommerce sales with the big box retailers.

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Amazon IP Accelerator – Protect your business trademarks & learn how to increase the value of your business with patents & IP from Tina Loza – EP13

What you’ll learn:

What’s the point in investing in IP? Tina Loza joins us on The Page 1 Podcast to talk about why brands can leverage Trademarks, Copyrights, and Patents to add value to their business. She also walks us through how to handle a Cease and Desist Letter and gives us a breakdown of Amazon’s new IP Accelerator.

About our guest:

Tina Loza founded and manages Loza & Loza LLP, an intellectual property law firm with almost 40 IP attorneys and an amazing staff located nationwide. She works with clients on creating a branding strategy and having a strong portfolio of trademarks that add value to their businesses. Her firm, Loza & Loza, just became one of 10 trusted law firms to partner with Amazon IP Accelerator and provide quality service to brands securing a trademark.

Key takeaways from this episode:

Trademark vs Copyright vs Patent: which one is best for your business? – 2:57
How IP assets will increase the value of any business – 7:43
Should and how do you design for a Patent? – 11:07
A breakdown of the patent approval process (also known as nonobvious) – 12:43
Steps to handle a Cease and Desist Letter – 14:18
Loza & Loza’s unique law firm structure is challenging the way firms work – 18:10
What is Amazon’s IP Accelerator? – 26:14
Who needs Amazon IP Accelerator? – 32:30
What was Loza & Loza’s biggest win this year? – 33:44
How a company comes together in a virtual environment – 35:13
An actionable step for creating value with IP – 38:33

Podcast Transcription

Welcome to the page one podcast, a weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies to tariffs, influencer marketing, best in class product launches, and all the details about how to accelerate your eCommerce sales with the big box retailers or what we call r-commerce. Now here’s your host, Luke Peters. Thanks for joining us on the page one podcast. I’m your host, Luke Peters. This is the podcast where I bring you the best and brightest leaders to share consumer products, sales and marketing strategies that are going to help you grow your business. I’m the CEO and founder of NewAir appliances where I cut my teeth selling products online and now have started Retail Band where I hope to help other brands succeed in product launches, influencer marketing, and B2B online sales strategy. In this episode, this is a special episode an in person episode with Tina Loza, you will learn all about intellectual property and trademarks for your products, why you should grow and protect your IP and why you should care about Amazon IP Accelerator, which is definitely, you’re gonna want to stay tuned and listen to the details from Tina about that. Few things about Tina. Tina’s the founder and managing director of Loza and Loza LLP, an intellectual property firm and she founded and manages this firm with about 40 IP attorneys and a distributed staff located nationwide remotely. And we’ll dive into that and see how Tina does that as well. Loves to work with their clients on creating a branding strategy and having a strong portfolio of trademarks that adds value to their businesses. So thanks for joining us today Tina.

Thanks so much for having me on. I’m really excited to be here. Cool. And a couple more things details about Tina. You have a BS in biology. I don’t know if you knew this, but I have one in microbiology. Oh, I actually looked you up earlier. You saw that? Yeah. Alright, cool. So and you went to Loyola, which is funny cause I have a daughter who’s going to be going to college and we just stopped at. We just actually drove that campus.

It’s a beautiful campus. She loved it. She loved it. It is a beautiful campus. You just go on the block and you can see the ocean and it’s gorgeous. Oh, and my first time there, I couldn’t believe it. It’s like a little jewel actually. Yeah, absolutely. I hope she goes there. Yeah, that’s a great great college. And like I already mentioned Tina is a managing director of the firm, has about 40 attorneys and one of the largest minority owned firms in the country and as an expert in patents and trademarks and for this audience for you guys, I thought it would be really great to talk about Amazon brand registry and IP accelerator. So again, thanks for joining us Tina, and looking forward to diving into these questions with you. Happy to be here, happy to answer anything. Okay, cool. Why don’t we start with something pretty basic here, but what are the, just, just a basic understanding cause you know, you hear patent and trademark all the time and, and there’s design patents and then there are the patents. Right. And how about, can you give us like a quick breakdown of the differences? Sure. So we’re just focusing on patents right now. There’s, there’s three big areas of IP as I look at it as patent, trademark and copyright. Patent protects new and useful ideas. A trademark protects a symbol that you use in connection with your business. And copyright protects, you know, content is probably what’s the most relevant or anything you write or pictures that you take, things like that. And so patents, there’s two different kinds of patents that you can file. There’s utility patents, which protects how something works and design patents, which protect how something looks. So I’ll give you a good example of a design patent. We’ve had tires and wheels since we’ve had wagons forever. So the way it works is not really what you’re going to protect, but there are tons of design patents for the way wheels look.

So you can have a really cool looking wheel and you can get a design patent on that. Right. So that’s, that’s the difference between the utility patent, the way the wheel works as opposed to the way that wheel looks. Gotcha. That makes sense. It makes a lot. So, so on shark tank, they always say, Oh, you only got a design patent. They want the utility patent. Usually that one is broader. Right? So it has claims and it lists out what you think your invention is and it’s usually it will nab more infringers. Whereas if you have a design patent, they would have to make it look substantially similar to what yours looks like. And so if they just changed the way it looks, then they don’t infringe your patent and then you can’t really monetize that invention as much. Okay. Yeah. So it’s a little bit narrower, but it’s a good idea to sometimes do both because the design patent usually issues much faster.

And you can’t really sue on a design pattern or have a design patent number until it issues. And so the design patent will come out in a year or so. You’ll get an issued patent, whereas the utility might take three years. So you don’t want to wait all that time so you get something in there so that you can start asserting that patent against people. But you know, the, the better broader patent is usually that utility that will come out. Oh, okay. That’s good. So just to reiterate, just for the audience so that you can file both at the same time. Yeah, absolutely. But then you get the design one right away and you can well right away. Yeah. Right away for the government. So yeah, about a year. Yeah. Used to work for the government. I’m sorry, I’m sorry. But many years ago, yeah, it’s about a year. And so that’s, you’ll get it much sooner, which if you’re trying to go after infringers, that’s nice.

Sometimes if you can, if you can do it both ways. Okay. So yeah, you can file them both. It’s better to do it before you put it to market. Obviously there is a a one year bar before you can file, you know, before you if you don’t file a patent application within a year of putting out in public, then you can no longer file it. So you don’t, you’re barred from doing so. Right. You know, long if there’s a quid pro quo from getting for getting a monopoly for your, for invention. Right. So the government says you could have a monopoly for 20 years, but you have to tell us your invention in the first year or else we’re not going to give it to you anymore. So yeah, so you don’t get to put it out there and kind of expose it to the public and then not actually get protection for it. You have to do that.

Okay. Okay. And then to follow onto that, just because we’re working with you on several, we’re all over the world actually, right? I am not allowed to agree to that. I don’t, I, you know, attorney client privilege, you can talk about it if you want to. Oops. Okay. I didn’t realize. I was messing around. Okay. So yeah, we’re working on stuff together, working on stuff. So it what first use, let’s define that one. So what I would, it seems to me is, you know, you’ve got to sell it before you can actually file it. Are we tracking trademark world? Or patent world , we’re doing patent world. Ok patent world, if it’s in a publication, if you go to a trade show, if you’re selling it, all of those things are enough to trigger that one year clock. Okay. So if you’re going to a trade show, you’re showing a really cool wine cooler that you’ve created and that you want to share with people and someone sees it there, then there’s a clock ticking. You need to get that thing filed.

Yeah. You don’t want to wait on something like that. Trademark use is totally different. So I don’t want to confuse everybody unless I have a chart and things like that. So I think we need over here, you know, just for our mere marketing minds over here, we need like a little checklist. Yeah, exactly. Word Mark. Trademark Design Mark. Yeah. There’s all kinds of fun little terms that we can use for trademark. So absolutely. Okay. All right, cool. So now I guess it does get complicated like you’re talking about and it can get expensive to protect or expensive to well, to defend yourself if somebody comes after you. Right. So one of the questions I had is why would anybody bother with IP? You know, when it’s infringed upon so often it’s expensive to kind of defend yourself. I think it’s an asset of your business, first of all. So you’re in a certain, you’re investing in something that makes you business stronger. If you never plan on selling your business or, or appreciating your business in any way, which would be, I think, unfortunate, then yeah, maybe don’t bother. But I think that if you’re treating your businesses as an asset as something that you wanna appreciate, IP is an important tool to get there. It’s much more expensive to to not have done anything with your IP and then have people doing things with it because eventually you’ll be excluded from the market because of that. It’s much better to have your monopoly on your stuff and, and and really spend time protecting it early on because that actually saves you a ton of money down the line. I mean, it’s much easier to enforce if you have something, you will have your market. If you trademark your brands people know you because of your brands, they acquire goodwill over time. And so if you haven’t protected that, then someone could just use something very similar and your, your options are very limited. So it’s, it’s much better to invest in it early on and treat it as the asset that it is.

Totally makes sense. And all of the in, so to clarify, if, if, if one gets a design patent, it’s good for 20 years, is that the time on it?

14 on a design patent. Yeah. So it’s a little shorter. It’s still long. It’s still a really long time. Absolutely. And I think they’re, they’re I think design patents, you don’t have to pay for renewals, whereas utility patents, there are certain you know, milestones at which you have to pay renewals and whatnot. So it costs you more over time. It’s a good idea to get a design patent and it’s more affordable. Honestly, it’s, it’s a little bit, it’s a, has a lower price point as well. So sometimes it’s a nice way to enter into the IP world without sinking, you know, eight, 10 grand on a utility patent.

Yep. For sure. Yep. And for the audience, we’ve, we’ve worked on a couple of them, so we’ve got, and I was just showing Tina, one of the, one of the newer ones. So it’s a lot of fun and, and it, and I can tell you guys firsthand that it does bring value and our customers, when they hear, you know, the, the patented idea that we have and they see the value in it, it can make it, it can close a deal versus a deal that might not have closed. So you’ve seen it firsthand.

Yeah, I know you have. And it’s, it’s exciting when you have that, you definitely have a leg up on your competitors if you have some of that IP in place. I mean there’s, there’s no doubt that I’ve seen that play out over and over and over again. So I mean first question on the shark tank, right. So they always ask that. I just had a client on the shark tank and they got three sharks. Were they on like literally a newer episode just recently? Just in the last couple of weeks they had the era, they had the the charging pad that you could put all of your electronic toys on. Yeah, those are, those were my guys. So I’ve had a couple of friends that were on it and you become a celebrity basically. Yeah. Cause this thing keeps rerunning. You’re always out there.

It’s crazy. It’s, it’s super cool. It was fun to see my clients on there and I put my kids around the TV and we all watched it together. So it was fun. Yeah.

Okay, cool. Okay. So here’s a broad question and I, and I thought about this one cause I think it’d be great for the audience. Cause again, the audience, mostly brand owners and they’re thinking about this already and and probably some are more sophisticated and have a lot of patents and trademarks and some, some don’t. When designing a new product, what should one be thinking about as far as the patent goes? Is there like a basic guideline or like we’re launching 50 skus is, I mean do people literally say, Hey, every every new product I’m going to find a way to have a patent or is it more happen more organically? Like I’ve found this cool invention now we’re going to turn this into a product or what have you seen?

I’ve seen both. It really depends on the mission of your company and the way you approach an IP and how, how much it’s a part of your culture. I know that you’ve talked about how it’s a part of your culture. You have people here who are committed to getting X amount of inventions a month or whatever it is. If that’s your culture, then you’re, you’re looking at every product and you’re saying, can I make this patentable? Is there something new and non-obvious about this invention that I could put out there and get some protection on that I can monetize but I could license to other people potentially. There’s all kinds of things that you could do with that. Some people are like, Oh, they’ve been doing the same car stuff for a hundred years and they come across something and they’re like, Oh, maybe this is patentable.

I’ve really saved myself a ton of time the last few months doing it this way. Maybe I can do this. So it really depends on the culture of your company. And I think that if your culture is one that you’re looking to do, so then that’s something that you’re constantly, each product potentially thinking, okay, is this patentable? Are there other people in this space? How do I get around that? So you’re thinking as you approach your brand about how to make sure that a, you’re not infringing on someone else, but B, is this something that I could really monetize for myself? Yeah. And then some of the ideas that we brought up, you know, there’s that approval process, right? And some of them in non-obvious is that, is that the terminology that’s used? Not obvious. Okay. So is is kind of, it’s not super tangible. What does non-obvious actually mean? Someone’s gotta decide on that at the end of the day when they approve or disagree.

Right. And that’s why you have to hire attorneys unfortunately, because we’re the ones who are sort of like the arbiters of that I, I guess so. But yeah, that’s sort of a joke. But it’s one of those things where a non obvious is one of those things that you file the application, it goes to the examiner at the patent office and they’re looking at the art that’s already there and saying, Oh well there’s this piece of art and we think that this new thing is obvious in light of what’s already there. And you basically pay attorneys to convince the examiner that is not obvious in light of what’s already out there. So it’s literally, it’s just a back and forth process. It’s called prosecution. So you file your application, they reject it, and you try to figure out how your claims will end up so that it’s not obvious in light of the prior art. Okay, cool. I didn’t think about that back and forth part actually. Yeah there is. There’s a back, I mean that’s how the government makes money on your back and for every back and forth there’s a charge. Right, right, right. Oh man.

Okay. So now talking about the back to getting sued, cause I know this is everybody’s dream, right? They, they, they put a new product into the market and maybe there’s already patents out there protecting a competitor or something like that. What is so I guess the question here is if somebody gets that letter, which, which we’ve gotten, I mean, just for random ideas, but usually the people work with you and we’re like, Hey, we didn’t know. And you know, we work it through with them and we never actually have to do anything big with it. But let’s say it’s coming from a, you know, a company that kind of wants to do battle. What are the first steps? Should they engage with their attorney right away on this kind of

You get your cease and desist letter in the mail, you know, it gets served to you, you know, on a Friday afternoon usually, and you’re looking at it and you’re saying, okay, great. And then the first thing you should do is who’s sending the letter, right? If it’s the CEO from the other company sending it to the CEO of this company, there’s usually less of that chance of it becoming super litigious. It’s like, let’s figure out a ways that you stop doing what you’re doing and we can continue doing business together. And I think business people try to approach this this way. If they’re smart cause IP litigation is super expensive, it’s something that, you know I hate to say it wastes a lot of time because it’s profitable for me, but it wastes a lot of time for a business. Yeah. It wastes a lot of time for business having to, you know, go through all your paperwork and produce discovery and you know, you’re flying to wherever to get yourself deposed.

And you know, half your staff has gone doing that. I mean, that’s not productive for you. So everybody wants to come up with a solution. I think so. So if it’s a CEO sending a letter saying, Hey, knock that off, you figure out a way to kind of resolve it. Maybe you talk to your attorney and say, how would I approach this? Or you get some ideas from them, but that’s that, that automatically is a more friendly way to do it, right? If they’ve engaged their attorney to send a letter and it’s gone to you or your counsel, that’s it makes more sense at that point to how the attorney’s communicating with each other. And what you tell your attorney is, listen, I really don’t want to invest a ton of money and litigating this thing unless it’s a big moneymaker for you. And that makes more sense to fight it.

The, the, the proper response or the usual response is let’s respond back. You know, tell them, Hey, we don’t think your patent is as valid for whatever reason. Even so without admitting any guilt, we’ll stop doing this or we’ll phase this out if it’s a trademark situation, but usually you try to come up with a solution. And, and it’s really a matter of instructing your attorney and working with your attorney so that you’re not, you know, everybody’s on the same page and they know how you want to treat the situation. If you want to be litigious about it and you want to be aggressive about it, there’s plenty of opportunity to do so. Any attorney, we’ll be happy to take that on. So, but yeah, that’s basically the way I see a cease and desist letter is just an opportunity to talk to the other person and figure something out.

Okay. And then from your experience, if they’re coming, not from the CEO but legitimate companies or most of those settled, I mean, I gotta imagine most are settled before they’re going to court. Yeah. I mean, most of these things do settle. Most people don’t just go file in federal court. Oh. Without having some back and forth to start. It’s usually when they’re, the back and forth is not really accomplishing anything. And both companies, you know, or the, the patent owner is losing money allegedly. And that’s when you get into the situation where they go to court. But it doesn’t usually start out where you get served with a complaint that’s been filed in the central district. It’s just not usually like that. You’ll get something first. So got it. So take it serious, but it’s not the end of the world. Yeah. I don’t think it should be the end of the world.

Absolutely not. I think there’s a way, most of the time these things are getting worse, especially in the trademark world. These things get resolved. You know, I, I get, I see a cease and desist letter like three times a week, like new ones. So it’s, it’s part of my everyday and I try to, I know it’s new for the person who’s gotten it, but I think that there’s a way to kind of work through it and keep everybody calm. Everybody wants to settle. It’s a huge business expense. And so there’s a way to get around it. It’s usually we try. Okay, cool. And think that’s the good words of advice for the audience is don’t freak out. Especially if you’re like a newer business owner. You’ve never seen one of these before. Yeah. Take a deep breath. It’s going to be fine. It’s okay. Yeah. Just call counsel, figure it out and it’ll, it’ll be all right. Okay, cool. Yeah. Okay. And then what now what I wanted to transition kind of into your law firm structure cause I thought that was interesting. I think a lot of the business owners out there will find that interesting cause you kind of have a, I what I would call, you know, call it a distributed workforce and, okay. Do you want that? I like that better than virtual, but yeah. Yeah. It’s a, it is distributed. I started the law firm by myself almost 15 years ago now. Oh. And then my husband was really jealous that I was working in my pajamas half the time. You’re smarter than all of us. I mean me getting, I didn’t get an office space. I mean, I never went and met a client in, you know, I never had people come to my home at any point in time. And we, I always had office space that I could meet somebody at, but from the very beginning, it was just much it made more sense to work at home and have as low overhead as possible. So that was the goal was how do we keep overhead as low as possible. And my husband joined me, we continued to work out of home.

We thus Loza and Loza and he’s the second Loza. So let’s be clear about no, we happily worked together most of the time. We we definitely have our areas where we just we take care of our own thing and we try not to cross over very much because we, we don’t agree on everything, but we do agree on the mission of the firm and what we’re trying to do. So that’s the most important thing. But you know, he joined me and little by little we started adding attorneys and we really liked challenging the way that law firms worked when we started. We both worked at large law firms. We both had that experience and where we had to crank billable hours, meet our billable hour requirement. We were basically, you know, third of our, you know, a third of what we were billing was going to pay for the pretty fountain out front.

Yeah. So we were always really focused on how do we keep overhead really, really low staff, really, really low. I mean, not every attorney needs their own assistant. So we were always very cognizant of like where the money is lost in a law firm. And so we tried to make decisions that kept attorneys happier or kept staff happier. I don’t think we’ve had any staff attrition and all this time everybody, the vast majority of people who started with us have stayed and continued on. Which I think is really cool. I really enjoy working with my, you know, my employees and my partners because they seem to like working for us. I mean it’s been really good. So distributed means that we have always found the best attorneys who do really great work. It doesn’t matter where they are in the country as long as they do good work, we want to have a really quality work that’s being turned out.

So if that person has quality work, then we hire them and we don’t care where they are. And so if they’re in Chicago, then great. Here you’re are in Chicago. Get you a virtual office to meet clients there whenever you want to meet somebody or if you don’t want to do that and you want to have real estate, we will get you an office. Like it just depends on what that person’s needs are. They have a noisy dog or they have a noisy wife or whatever it is. They have the opportunity to work somewhere if they want to. Our staff all works from home. Wow. So they’re distributed all over. They’re all over the country. They’re great to work with. And I think that they also like that quality of life where you know, they can drop off their kids at school and they are saving on gas and they’re saving on clothes. They’re saving on all of those things and they’re able to spend more quality time with their families because they’re not commuting to and from work. And so that’s been, I think why a big part of why we’ve been able to retain our staff. And I think there’s always that followup question like accountability. I could let you ask it.

Well, it’s accountability. It’s also so the, so you have, you know, 40 or so attorneys and how is the work getting to the attorneys? Is it is each one getting their own work or is work funneling through the firm and down to the

Both. Okay. So that was another way that we really felt like we had to challenge the way law firms work. The way it works at a regular, a law firm, most of the time is that you have the partners, the big partners making, you know, connecting with clients and funneling all the work to their associates and junior partners. Yep. And that never teaches that associate or that junior partner how they got that person to begin with. So I’ve always felt very strongly that all attorneys at every level should be hitting the pavement and making their own connections. They all got to sell. If I had to do it and I started with zero clients when I started as an attorney, I had not one. And I managed to grow the firm and grow my book pretty quickly after I started, mostly out of necessity because I got out there and it is super important.

It’s, and it, and some people don’t feel comfortable with this concept of getting out there and networking and you have to do it in whatever way is organic to you. So if it’s writing articles or if it’s speaking or if it’s going to networking events or, you know, I have all kinds of things that have made me more comfortable with it over the years. I’m a true introvert, but I figured it out and I think everybody is able to do it in a way that feels good for them. So it’s just kind of learning your way and doing that. And so that’s the, they do get work from us because we have lots of work. All of our partners have, you know, some of our partners have more work than others and so they’re sharing some work. But our expectation is that our attorneys, all of our attorneys are trying to get their own work as well. And we, you know, we support them by giving them marketing dollars, giving them the ability to go to events and we pay for it. We support that effort as much as possible and we take them.

Okay, cool. Now and I want it, and I selfishly wanted to ask that just cause you, you, you know, I’m starting up this other company called Retail Band and it’s, it’s not the same as a firm, but it’s a similar idea of total. I mean, we’re having to network and get in front of clients versus sell a product, right? Totally different business model.

And I’ve asked so many different people how they run their firms or agencies and how people are incentivized and who has to sell and who doesn’t have to sell. But I like your philosophy. It’s like everybody’s got to learn that part of it because now you’ve got a huge sales team, which is right and how do you, how do you grow if you don’t know how to do it? And then you got thrown into this sales role because that’s how you grow in a company. Yup. And you don’t know how you, it’s like you’re starting all over again. It’s something that you should be able to do the entire cycle of your work forever. And we incentivize it. We give you a higher origination if you’re originating a client. I’ve always felt that you’ve, you, you take pride in the work that you’re doing for the client that you got for yourself.

It’s just a different kind of thing. If you were able to retain that client on your own. It’s different. And it’s like they’re my, they’re my client and I’m, you know, you’ll go above and beyond for them. And I think that that’s different sometimes when you’re working for someone else who’s just handing you the work, you have less invested in it. So exactly have that personal relationship. Yeah, absolutely. Cool. Okay. And then just quick question on the end of that. So is anything centralized? I mean if, is there like a, a hub word, you know, marketing or any of that’s done or not? No, nothing is, I mean other than a server that’s in the cloud, nothing is centralized. There’s not a headquarters for our firm. So unless you consider headquarters our home. Yeah. I mean otherwise there’s no headquarters for the firm and there doesn’t need to be, there hasn’t ever been a need where someone has been like, I need to see your headquarters. Yeah, no, that’s good for you. Cause you’re like, and now I know it’s a big theme for people. You know, people are like, they’re starting businesses and they’re, they, they don’t, they don’t want, they don’t want employees, they just want it. But in California, you don’t want employees at all.

Yeah. I mean that’s it. That’s where you’re thinking a lot of your dollars, your overhead as an employees of, you know, obviously an employee, you know, and it’s just part of the deal. But you know, sometimes we choose to an employee that’s not in California because there’s just more headaches here. I mean, they’re making it difficult. More and more and more difficult. Yes. Come on Gavin and help us out. Sorry. No comment. No. Oh, that’s funny. Oh, Oh cool. So why don’t we transition over to Amazon IP accelerator and I know this is an area that you have a lot of expertise in and of course our audience with product and brand donors are going to be selling a lot into Amazon as well as Home Depot Wayfair and all these other places. But I gotta embarrassingly, I have never heard of this Amazon IP accelerator until you and I were talking about it. So we’ll go ahead and share kind of what it is. Well, it’s not that embarrassing because it just rolled out October 1st. So it’s very new to Amazon and to the attorney, you know, to the law firms that are associated with the IP accelerator. Just a little background for people who don’t know why this might’ve existed or why this came about is there are infringing goods on Amazon. I mean, I think we all know that that’s happening. And, and sellers get really frustrated because they have IP and they’re not getting help from Amazon at the pace or the rigor that they want it to happen. And that’s frustrating to people. And Amazon has really made this effort to try to find ways to support its sellers, right? They care about their sellers. That’s how they’re able to have, you know, 600 million products or whatever they have on Amazon right now. So that’s where IP Accelerator was born, right? It was, let’s give well there’s an Amazon brand registry that already exists, right? If you have a registered trademark, yeah, you have a registered trademark, you go to, your rep at Amazon, you tell them, they, you know, register your stuff and brand registry and then you have a whole host of services that you’re gonna use through Amazon and you’re able to shut down infringers quicker and all of those things, right?

So that’s what you get for it. Now you had to wait until your Mark registered though. Now what Amazon has done is said, okay, we have chosen 10 law firms that we have vetted. They’re here on our, our website. You can contact them, we have prenegotiated prices for you. So Amazon gave me a do not exceed and I do not exceed that. And the they say these people are vetted. If they filed a trademark for you, we know that it’s probably got a better chance of registry. And so we are going to enroll you in brand registry from filing, not from registry on the United States patent attorney. The main difference right there. That’s, yeah, it’s a year. Yeah. That’s huge. So yeah, it can be really big, a big deal. And that, I mean that is a number one question.

Okay. So this, this rolled out October 1st. You know, I’ve been contacted about 300 times now from sellers 300, you know, original contacts from each person. And what we’re seeing is, is this true? Is are you real? Are we really going to get invited to enroll in brand registry as soon as you file the trademark application? Like, because people can’t, they’re incredulous. Like they can’t believe that this is actually a thing cause usually they’d have to wait a year to be able to access all these many, many features that Amazon provides on brand registry. Right. So yeah, absolutely. Within 10 days of our filing a trademark application, we submit the serial number to, to Amazon and Amazon invites you to enroll in Brand registry and you’re one of the 10 firms that Amazon selected. Yes. We’re one of the 10 firms. Thank you very much.

Yeah, we’ll can find you. So brand owners here who want to learn more about this can go to Amazon and find you in their cell. In their account. Yeah. And their seller central. Yeah. So it’s all there. The IP accelerator page has the 10 firms there. You can contact each person. There’s like a little contact us tab for each firm. You click on it, you can contact us directly and we respond back and start a dialogue. Wow. And so the main thing is that you, you file a trademark or patent or let’s say a design patent. It’s for brand registry. It’s only trademark. Okay. So you see you have a trademark of that take at least a year or so to go through to register and they give you protection from day one and then they follow through. Is there any follow through on their part to see if it was registered or not? So we’re, what is it today, the 28th or 28 days in? It’s all my, so it’s all new. But that’s what Amazon is saying that they’re going to do. They’re going to keep tabs on the prosecution. And if your Mark doesn’t register for whatever reason, they’ll pull you off a brand registry. Oh, gotcha. Right. But that gives you nine months or so. I mean you get your first office action around three to four months. So, and we have the opportunity to respond. I don’t know exactly when Amazon pulls their power but I do know that there is support there. There’s supposed to be keeping tabs on how your prosecution is going with the trademark office.

And Amazon is only going to well they’re only going to allow trademarks that were filed from these 10 or so companies only from the 10 firms that are listed there. So what, what’s happened a lot unfortunately is there been a lot of sellers who either recently filed trademark applications or have trademark applications in the process right now who they’re looking at a year off from where they’re filed and they’re saying, well, if I just went through you 10 I would already be on brand registry. So there’s definitely some of that going on where people are like, I’ll refile, refile it another way, I’ll do this, I’ll do this or I’ll, I’ll file for the logo. So most people have been advised to file for their word Mark, which is just the letters in black and white times, new Roman, whatever the word is. Now they’re filing the logo, which is not something most companies would invest in, but that will get them onto the brand registry. So they’ll file that and that will give them that, that ability to do that, which is, you know, people are creatively doing that so that they can get access to that brand registry.

Well, and back to that part, just cause that’s interesting to me. So most people just file for the actual words, but not the design of the logo. Or can you file for both or both at the same time? It’s really a budget thing. So if a client, the most important Mark to file the broadest Mark to file is your Mark at black and white times new Roman, nothing going on, right? That’s the broadest one because if someone infringes, all they have to do is infringe the word. They don’t have to, you know, infringe the wave behind it and the colors and all of those things. The second Mark that you would invest in is that logo. So that’s, that’s why most people will file for that black and white word Mark first.

Awesome. Okay. That’s, that’s pretty. And so it’s tied to the brand registry. It’s just an extension of it and kind of gets you in there sooner. And that’s the main purpose of it. Now I get it.

Yeah. Yeah. It’s, yeah, it gets you in there and it gives you access to some features. Like I think you could have videos now. It allows some like enhanced features that you have access to now and it gets you on that ability to start, stop violators much sooner. So all of those things are, you have access to as soon as you get on brand registry.

So, so if somebody already has their brand registry set up then they don’t need this IP accelerator. This is more for companies that don’t quite have brand registry set up yet. I think both can access it actually. But so if you have a vendor who’s selling a vendor seller as opposed to seller network with it. Yeah. So I think both can actually do it. I’m not 100% certain because I’m still working out some of these issues, but you can go ahead and get that trademark in a little bit sooner as well. So you would just add that serial number into your, into your vendor central and then your rep should be able to make that go through. Okay, cool. Yeah, so it’s kinda neat. Yeah. Cause if you have an infringement issue now, you don’t want to wait until that Mark continues through, so, yeah. But, well, this’ll be, that’ll be super helpful for the audience. I mean, everybody’s pretty much on Amazon, so.

I think so. I think it’s been super helpful. There’s been a lot of interest in it. You know, I’ve gotten a lot of people calling in, so it’s not, people are really trying to get this handled. And because of the do not exceeds, you’re getting really fair, you know, trademark rates. So it’s, it’s good.

Cool. Yeah. Okay. That’s great. So this is a question that I think will be helpful to the audience, but you shared a lot about your business and just even, you know, trademark side or legal side or just business side, just what you succeeded in this year. What would you say is your biggest win?

You know, I see wins in different kinds of way. One is what does my what are my attorneys and my staff happy to work where I, where I am and I, we just had our, a firm retreat a couple weeks ago and to see everybody together, I mean, we were only together once a year to see everyone together and working together and enjoying each other’s company. That feels like a win to me. Right? Cause I feel like this is a group of people who not only are working separately and distributed but are coming together and they, they have similar values, a similar mission in mind and everybody’s working towards a goal. And that’s great. I love that. So that’s exciting to me and I think that’s, that’s something that always is good. Now for me, like for the firm, this IP accelerator thing has been a big deal.

It’s, it’s a really created work for other partners at the firm. It’s been really exciting and it’s, it’s a really interesting niche to be in. So I’m learning a lot and it’s pushed me to kind of be like, Oh, I need to understand this Amazon stuff at a whole new level. And I got it before, but now it’s like, Oh, I really need to get this because people are demanding that, you know, I have all of a sudden had to become more of an Amazon expert in this way. And so that’s been really interesting and I love being challenged a little bit. So that’s, that’s been a neat thing for, for me personally at the firm.

Cool. And tell me more about the retreat again. If companies are just, because back to distributed company, so you guys got to get together once a year. So how do you guys do that? Where do you do it at?

We did it in San Diego. Thank you. It was a lot of fun. It was good to see everybody and we did some fun activities. But we do try to do some, like we have a, a whole bunch of attorneys, for example, in Pasedena, Pasadena area. And so get together for lunch every now and again. But it’s really interesting in a virtual environment that people forget that the person that they’re sending an email to is human. And so please, and thank you goes a really, like all of those things are really nice. And then also I happen to be working with basically 40 engineers who don’t have that. Like I love engineers. I’m married to a, you know, E but it’s one of those things where they just, the niceties get lost a little bit. Yeah. Right to the point. And so I think that that’s really hard for staff sometimes.

And so when you see people, it comes home with you and you’re like, Oh, I know about that person’s kids. I know what they do. And so we really, we do do work stuff. We do have, we talk about different work, things that we need to get through or whatever. But most of the time we’re really just doing fun activities. So we did a great like cooking activity where all of us there were four, you know, I don’t know how many people were there over 40, but we were 50 something and each, each group took a course of a meal and cooked for everybody. And then we ate a big meal family style together. And that was super fun. And like that’s team-building, but it’s also fun. Like we had a good time and there might’ve been alcohol involved. So all of all of that made it a really good experience.

And then we went on a boat and we did that. We had a great dinner and like we spent a lot of time together and we actually we used to invite, you know, plus ones and we stopped doing that because people would be with their plus ones. And so we, you know, so I think people were like, why’d you stop that? And it’s like, because we want to spend time with you, we don’t got to do that. Yeah. And when you’re with your spouse, you end up like making sure that they’re okay and Oh, she’s tired, she doesn’t want to go wine tasting or he’s, you know, his foot hurts and he doesn’t want to do whatever it is. Yeah. So yeah. So it almost forces that mingling, but it’s been a good forced mingling because people get to know each other which is good and that like that cooking idea, it’s really fun cause it’s, so, it must be a, is it a place that caters to that?

Were they? So it had like four super long tables. All the ingredients were there and the recipe was there for your dish and you all had to be like, okay, you chop the garlic and you do the parsley. And they had, there was a pasta making table so they were rolling out the dough and they were feeding it in the pasta machine and they were doing that whole thing. I mean, so everybody took a course, owned it and we all ate that food that we made. So I didn’t like come from the back afterwards. It was like actual food that we made. It was really good and they, mine was a little garlicky but it was really great. So that’s a good one. I’m going to have to, yeah, I’ll give you the name of the place in San Diego because that was a really good, it was a really good experience for us.

So you have a bigger, bigger shop here than I do though. So I dunno if you can get all of these really big meal. It’s a really big meal. Yeah. You can throw in dessert as well. And you cocktail. Yeah, custom cocktail. Wow. Yeah. That’s awesome. What do you think is, so there you shared like the biggest win and how you think about it and that’s a really thoughtful way to think about things. But what do you think is something actionable that brand owners should get from this conversation that we had today? That they should be thinking about their products or their business? Well, I think that sometimes business owners end up getting in the weeds of the everyday nonsense. I, we all, I mean, I’m running a, I mean, I’m running a business too, right? So we all get in the weeds of, Oh, this employee issue or whatever.

Like, why isn’t this working? Or Oh no, the computers are down. And then you get, you deal with all this nonsense that slows you down, but ultimately you need to look at the big picture. And so when I’m you know, thinking as a business owner, well, what am I trying, like when I’m done, when I like retire one day, what do I want to be left with? And hopefully it’s, you know, you have some money to spend and travel and go on a cruise or whatever it is you are passionate about, but you also want to have something that you can, you can sell it, right? You want to be able to be like, I have things to sell IP to sell. I mean, that’s why you invest in it. And for me it’s like you don’t need the trademark certificate. How many of them have I sent you in the mail?

You’ll probably just throw them in a drawer or whatever. I don’t think you’ve seen them posted around the office. But it’s one of those things where it’s, you’re not doing this for a certificate. Like if you’re not, if you’re not going to create your, your universe and get other people to stop doing it and really enforce your monopoly and create a really strong asset that has value. If you’re not trying to build something, then then what are you doing? Like big picture, what are you doing? Like you have to, you’re trying to build value and so that you can sell it one day or you can, you know, so you can walk away one day and have really look back and you can say, I built something. And part of that is IP. Yep. And I do think IP is a luxury.

It’s not something that you think of the first day of your business, but once you’re getting established, it’s something that you need to have and it, it really adds value. So, and it’s the first thing people are gonna ask, right? What you’re selling, ok list your assets. Well, IP is one that can’t burn down. Yeah. So that’s such good advice. So I think the takeaway is, is all the business owners, everybody should be thinking about and how are they investing in IP and how are they building value for their enterprise so that they can have a future exit and, or that it can help increase the size of that exit. Right. Absolutely. I think that’s, that’s music to everybody’s ears. Okay. I hope so. Good, good advice. How can listeners find you? Well apparently on IP accelerator now, but you know, my name is Tina Loza. My email address is tina@lozaip.com. So L O Z a I P is in intellectual property.com. Yeah. And or you can go to our website and lozaip.com and all of our numbers are there and you can contact me and I’m happy to talk to anyone and I provide free consultations and I’m easy to get ahold of so I’m happy to talk to any of your listeners. Cool. So the website again is Lozaip.com.

Oh good. I like that. Good domain. And you do a lot of domain work as well. I do domain work. That’s fun. I love domain work. It’s really cool. I, I don’t know why people keep choosing trademarks that they cannot get a .com for, let me just throw this in as an extra. Okay. But if you decide to choose a, a product name that you cannot get the .com for, then try again. I think it’s super important to have that you should be able to get your Instagram handle, your Facebook handle, you should be able to get your dot com at least if not a dotnet a dot. Everything. And once you have that, you need to get all of them because it’s $10 now as opposed to $30,000 in the future. So by, you know, my advice is to just buy them all up right now.

You’re going to save yourself a ton of time and money in the future. But yeah, everybody should have their, their .com and if not, you should do a search and look for another name. That makes more sense. Yeah. And I can tell you, so for my new company, retailband.com was available. So we got that. Awesome. That’s really great. And I liked that is short enough and I can say it in for newair, we never bought the name, so I had to buy it like five years into it actually. Right when we are going from a direct to consumer brand to this new model where we’re selling into retailers and I had to go buy it from a squatter. Luckily we didn’t have to pay too much money for it, but it was an expense, right. As an expense. Right. So first things first like yeah, if you can do it, get the domain.

Did you have the.net or something for a little while or what was that? No, we just did cause we were, we had the companies under a different name at the time and so newair was just a brand. We didn’t, we weren’t even selling on that website once I wanted to turn that brand into the focus of the company. Right. I had to go get the domain, but if I would have waited, it would have been even more so we just bit the bullet. Five years. That’s good. I’m glad you got that handled. You got it handled. Yeah. The domain stuff is fun. You should definitely get that handled. That’s part of your trademark. That’s an asset. Same thing. If you don’t have that, then people are going to ask why don’t you have that? Yeah. So, okay. Yeah. Yeah. Well it’s good having you in person.

Thank you so much. I was, am I your first in person caller? Second. Okay. Second in person or in person guest. Like it’s much easier for me to be in person. We did a big Photo shoot so we’ll get some. Oh good. Where are you going to have that? What’s your, what is your what’s your hashtag or what’s your so we can put something up on our website. I’d love those pictures. So we’ll be on the page one podcast. Usually we’re posting all over LinkedIn. Oh, okay, good. All. Yeah, well we’re on LinkedIn. Okay. Yeah, that would be great. I’d love phone. Okay, perfect. Thank you so much, Tina. Thank you. Thanks everybody for listening to the page one podcast. If you need help selling into Home Depot or Wayfair or you need help with influencer marketing or any help on sales and marketing, then you can reach us over at retailband.com or find me, Luke Peters on LinkedIn and happy to help you there. Thanks for listening.

Thanks for listening to the page one podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about r-commerce? Check out www.retailband.com to get more great tips and tricks on how to accelerate your eCommerce sales with the big box retailers.

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Turn customers into influencer marketers with Neel Grover, Founder of Indi.com and past CEO of Buy.com – EP12

What you’ll learn:

A seasoned eCommerce leader and startup founder tells owners of consumer brands how they can take more ownership of their brand image and connect to their audiences on a deeper level. Plus, you’ll get insights into how to turn customers into a powerful sales channel for your business.

About our guest:

Neel Grover is a seasoned eCommerce leader who has led great teams at multiple fast-growing companies. He ran the 3rd largest marketplace in the U.S. with over $5 Billion online sales and over 20 million products from 7,000 retailers. He also ran a top fashion marketplace with over 1,000 brands integrated. Upon becoming CEO, Grover turned Buy.com into a company that was losing almost $100 million per year into a company with 13 consecutive profitable quarters, competing with Amazon on every product. He has now founded Indi, a SaaS Engagement Cloud that helps brands initiate their customer engagement directly in their digital properties rather than in social media as social media platforms are seizing control of customer engagement and data.

Key takeaways from this episode:

Lessons from a lawyer: how Neel’s law background influenced his business decisions – 3:18
The journey towards becoming a CEO of a $600 million-dollar revenue company – 4:52
The shift from a large company to startup: what you need to know as CEO – 6:04
How to turn a business around: from major loss to major gains – 7:31
Innovative ways for competing against the giant: Amazon – 9:50
Is it a good idea to help your competitors by sharing your business model? – 12:07
A new perspective on Social Media is and how to utilize it as a business – 13:11
How to use Indie to approach Social Media and Affiliate Marketing differently to drive sales for your business – 15:54
How to integrate video testimonials into your D2C site and why it matters – 19:17
The importance of investing in your D2C Channel for long-term rewards – 20:37
The day-to-day sales process for acquiring new customers as a startup – 24:34
One of the biggest challenges for acquiring new customers as a startup – 25:53
The most important factor to focus on when growing a D2C business – 28:06
Neel’s biggest business win in the past year – 29:53
One actionable business step to take to help your company – 31:05

Podcast Transcription

Speaker 1: Welcome to the Page One podcast, a weekly podcast featuring a variety of guests and thought leaders, on topics ranging from channel strategies to tariffs, influencer marketing, best in class product launches, and all the details about how to accelerate your eCommerce sales with the big box retailers or what we call our commerce. Now here’s your host, Luke Peters.

Luke Peters: Thanks for joining us on the Page One podcast. I’m your host, Luke Peters, and this is the podcast where I bring you the best and brightest leaders to share the consumer product sales and marketing strategies that will help you grow your business.

Luke Peters: I’m the CEO and founder of Newair Appliances, where I cut my teeth selling products online and have now started Retail Band, where I help other brands succeed in product launches, influencer marketing, B2B online sales, and generally selling into Home Depot, Wayfair and all those channels like that.

Luke Peters: And I’m really thrilled today to have an experienced guest who’s been in all different retail channels, from running large direct to consumer websites, to creating a new startup that’s kind of challenging some of the traditional influencer marketing and social media websites that are out there right now, so I’m pleased to announce Neel Grover. Thanks for joining us today, Neel.

Neel Grover: Thanks for having me. Appreciate it.

Luke Peters: Cool. And I’ve known Neel now for a couple of years. He’s in a CEO group that I’m a part of, and has a really amazing story. We’re going to kind of dive into your story, Neel. And it’s funny, we’re actually on the… And just a little bit more of an introduction for Neel.

Luke Peters: Neel is the founder of Indi.com, the past CEO of Bluefly.com and Buy.com, has a JD from University of San Diego. And that last part was impressive. My daughter actually is graduating from USD, so I was on your LinkedIn and it’s funny, I’ve known you a while, but I didn’t realize that you have a law degree, a doctorate, right? That’s what a JD is, right?

Neel Grover: It is. Correct. Yep. I actually practiced for about three and a half years.

Luke Peters: Cool. I actually have a question later on that we’ll kind of dive into that. Thanks for joining and specifically, hopefully the value that I want to bring the listeners today is, Neel’s got so many different insights from the different companies that he’s been a part of. Specifically what we want to learn here is how brands can kind of take control over their brand image, protect their brand image, and how brands can kind of work with their own customers to become and create brand advocates and influencers out of their own customers.

Luke Peters: And also we can kind of talk about the dangers and challenges of Facebook and Instagram, and while they’re great and obviously everybody definitely needs to take advantage of them, it’s good to hear a different opinion in how brands can kind of take more ownership over their content and kind of their connection with their customers.

Luke Peters: So that’s what we’ll focus on. And I guess to kick it off, well, why don’t we go back to that JD? It sounds like you practiced for three and a half years, but specifically curious, how’s that helped you along your career?

Neel Grover: Yeah, I think it’s been really helpful. One of the things that I did, when I was practicing, when I was a corporate securities lawyer, and the great thing about when you practice corporate law is at the end of transactions or deals, you kind of all get together and celebrate over a closing dinner because at the end of the day, you’re working together to a common goal. And that’s what our approach really has been. And I think utilizing that background has been really helpful in trying to find great partnerships and ways to advance our business, by seeing who else’s business we can work with, to partner, to grow both sides of it.

Luke Peters: Yep. And then, looking through your history, you’ve had a lot of opportunities in different jobs and sit on a ton of boards. But specifically what I thought would be interesting is kind of quickly going through your experience at Buy.com, which I think is Rakuten right now. Right? They got purchased by Rakuten?

Neel Grover: Correct.

Luke Peters: And at the time, how many total employees when you were CEO? Kind of give us a scale for how big the company was.

Neel Grover: Sure. When we sold the company, we were north of 600 million in revenue and we had about 130, 135 employees. At different times, the company had different revenue and different employee head counts, but also different bottom line numbers. When we sold the company, we were at a pretty lean 134, 135 employees that had been profitable for several years consecutively, and the third largest marketplace in the US, behind Amazon and eBay.

Luke Peters: Awesome. And then how did you become CEO, if you want to quickly take us through that journey? I just think it’s interesting just because what is that, a couple of million dollars per employee? So it’s a significant company, and I definitely remember the company. And so just understanding how you got to that position I thought would be interesting to listeners.

Neel Grover: When I was a corporate securities lawyer, we were representing the company when it was going public. The founder had left the company, started a private equity group and I had approached him about joining it. So I worked with him at his private equity company first for a couple of years and then I had gone public, and I had about a $6 billion market cap right when it went public. Ten with the dot com crash it was crashing pretty heavily. And ultimately we took the company private, and there was an opportunity in which they were going to make a change in executive management and I kind of asked to step into the president role at that time, and with a great team we just changed the business pretty dramatically and turned it around, and then ultimately took over CEO.

Luke Peters: Great. And actually I have a question about that, what you learned in the turnaround, but how would you compare being a CEO from a pretty large company to the startup? I know there’s some obvious differences, but has anything surprised you, or what did you like and dislike about the different CEO roles at the different level companies?

Neel Grover: I think they both have their own unique challenges and some are bigger. It is usually the more personnel, cultural issue you’ve got to work with but also growth at both sides can different in what you’re pushing towards, but again, both have their own unique challenges. And I think ultimately, if you think that you’re a big company, no matter what your size, there’s always bigger companies. And so that was one of the things that we didn’t look at it like we were a big company because as compared to Amazon, we weren’t a big company. So the great thing about the team and the culture was everybody realized that we were competing against, probably the best company in the world in retail and at least in online retail, and we had to constantly be shifting and adjusting. And I think that’s one of the things you learn at a startup. So although different challenges, and in some ways similar as well.

Luke Peters: Right. And then further on about the story, it looks like Buy.com was losing a lot of money and then you became CEO and turned things around. And I guess the obvious thing might be cost cuts and just ensuring that you’re profitable, but I thought it’d be useful, interesting to understand if there’s any specific things that you learned or did to turn it from what looks like a hundred million dollar a year loss into a profitable company, beyond the obvious cost cuts. Was there anything else that on the margins or any other way that you attacked that problem?

Neel Grover: Yeah, I mean, we had to look at every single facet of the business. There was only so much costs you could take out of the business. And so early on the model was to sell products at a very low margin and try to make it up in advertising revenue. And it just wasn’t working at scale. And so ultimately, we turned the business from being more of a pure retailer, although we didn’t really own inventory we partnered with some of the largest distributors in the world, to really building a marketplace. So we created a marketplace where we had third party retailers selling on our sites, similar to Amazon or eBay or net Walmart and a couple others. But at the time we were really the second retailer to do that, and Amazon. And starting with a strong kind of first party business, so to speak, but heavily pushing the third party business, that made a big difference, I think.

Neel Grover: One of the other big things was really just talking to our employees and our customers and trying to figure out what things we did well and why people wanted to shop with us, and then trying to take advantage of that. And then looking at some of where really Amazon wasn’t able to excel. Amazon obviously is an amazing company, but at the same time Amazon was selling product directly kind of competing with their marketplace.

Neel Grover: And so one of our commitments and one of the great values that we brought it to our merchants was that we were not going to actually buy that product or compete with them. And so we ended up building a marketplace of 7,000 retailers and having those retailers really want us to win. So we created more of a partnership with these retailers and overall really looked at every facet of the business. I had a great team, took a non retail approach so to speak, and we’re just, because we did that last year and grew this much, let’s look at how we could do some things differently. And start with the customer, but we got to figure out a way to do it in a profitable manner. And thankfully a lot of things came together and worked out well.

Luke Peters: Yeah, I mean, distilling it down, it sounds like you essentially created a new business unit that was a service model, the third party models. And you’re not having to hold inventory so it wasn’t capital intensive and it was probably very cashflow positive. Does that kind of sum up that part of it?

Neel Grover: It does. I mean that was a big part of it. But our core business, the way Buy.com started very different than Amazon was Buy never held inventory in the first place. And so it was more of a virtual drop shipper for the largest distributors. Like we were Ingram, Microsoft’s largest partner for many years. Or largest customer for many years. That’s an example, but not just Ingram. We had several partners like that, but taking it where we were the single retailer of these different collections of products, let’s call it 2 million products, to say, expanding up from 2 million products to 20 million products where we had 7,000 merchants from Toys R Us to little mom and pops. But those merchants really, we partnered together so they really, they’d give us extra promotions. They would want us to do well. We were their home away from home, and we really partnered together with them.

Luke Peters: Awesome. Well, thanks for that deep dive. I just thought it was super interesting and I always like to try to learn new things, so, you’ve got a cool background.

Neel Grover: Well, thanks. One other thing I’ll mention is, kind of along the services line was, one of the other things that we developed was really given the fact that we had this great marketplace, we thought other retailers needed that marketplace experience as well. And so for some time we were pitching some of the largest retailers in the world to, “Hey, well, you know what, we’ll provide you a marketplace as a service business.” And after a couple of years of persistence, we ended up powering Best Buy’s marketplace and ran that for a few years, which as a service business definitely helped our business overall profit, in our profitability towards our business.

Luke Peters: Yeah, I mean, I guess the company’s investing in making these, investing in software and then so you’re selling it to other brands or are utilizing it more than just yourself. So yeah, smart. Similar to what Amazon’s doing, I guess, right, with all, with AWS and a few other things that they’ve done.

Neel Grover: It is, and it was a little bit more of a risk for us I think than Amazon in the sense that Amazon is the 800 pound gorilla. They know that they’re going to be fine. The question is, do they want to help their competitors by also bringing down some of their cost structure and ultimately, they’ve created an amazing business around that with AWS and some of their other pieces.

Neel Grover: With us it was a little bit more of a risk in the sense of do we want to help much larger competitors to us, be able to have a business model that is similar to us that they didn’t have, but ultimately we thought someone like a Best Buy as an example who has tremendous brand equity and brand value. The customers that were shopping at Best Buy were not necessarily leaving Best Buy to come to Buy.com and so if we were able to ultimately support them and drive profit and ultimately sales over all together, that that was going to help us in our overall quest to A, being profitable, and B, not necessarily having everyone shop at Amazon.

Luke Peters: Yep. Okay, cool. Now with that background, why don’t we dive into your new venture? But what I’d like to start with is you have a different perspective on social media, so kind of quickly if you can share that with the audience on how you view social media, and then we can get into talk about Indi and what it does and how brands can utilize that, and then a few other things around that subject.

Neel Grover: Sure. Social media is a great place I think for what it is, and I think brands just need to realize what it is. For the last seven to ten years, pretty much every brand has said, “Thank you for shopping with me. Thank you for coming into my store. Thank you for having this direct experience with me. Now go engage with me on my Facebook page, my Instagram page, et cetera, et cetera.” And that made sense over the last, like I said, seven to ten years when there was a free flow of information going on. You had your email list that you could talk to your customers and then you had your list over on social media that you could, or you had your followers on social media that when you posted they were seeing it. Everyone was there. It was great. In fact, every brand, we’re pretty much giving out discounts to go build up their followers list.

Neel Grover: The problem with that happens, really, when Facebook and Instagram changed their algorithm, started changing them a couple of years ago and much more dramatically of late, where now a brand reaches really less than 1% of their followers organically. Meaning if you have a hundred followers and you post something on your Facebook page or your Instagram page as a brand, only one is really seeing that. Back on Facebook, it’s less than about a half a percent, maybe even a quarter percent. And the reason being is, ultimately the reason being is that those platforms want you to advertise on there, and that has in turn driven advertising revenue significantly higher and made it more competitive and more expensive to advertise. But as people have gotten used to getting that traffic from social and they’ve lost that free traffic, they’re now paying more and more for that traffic. And so social is important. It’s just one aspect.

Neel Grover: I don’t feel that it’s important for brands to chase how many followers you have. I think that’s a vanity metric that end of a day does not drive any sales. And one of the things that we always did at Buy, because we were working on razor thin margin and competing with the largest and best company in the world, was making sure everything we did was profitable and that had a positive ROI. And it’s very tough now, on pure Facebook ads or Instagram ads to make sure you’re making up early profitability. So then you have to look at lifetime value of the customer and are you driving that? And so it has its place. It’s still, I think the best place for targeted advertising. I do think they are amazing platforms for that. You just have to know that it’s a pay to play platform and it’s not this organic reach that you used to be able to get in the traditional sense. And that’s where we come in and really try to do things differently to help enable that organic traffic from social and organic discovery in social.

Luke Peters: Cool. And that makes a lot of sense and hopefully everybody knows what you’re talking about. But if not, then now they do, because it’s a key concept on how Facebook and Instagram and everybody else has kind of changed the algorithm and what you post is not seen by everybody.

Luke Peters: And then I guess how about just quickly explaining what Indi does, how a brand can utilize it? I mean, just in fact, this week we’re implementing it on our, well we’re implementing your app on our newer dot com sites. I just talked to Scott about that, just kind of ahead of our interview right now. So just it’d be interesting for the audience to hear what this app can do for them.

Neel Grover: Sure. So we, Indi basically helps brands engage their customers, employees and influencers directly on their website or in their own app, their mobile app, to get video and photo testimonials directly on your product pages to help drive and influence additional sales. And also to get those individuals, whether they’re your employees, your customers, your influencers, to share their content and a personalized tracking link that they get through our system to share that into their social media. So as I said, a brand is limited and blocked to really less than 1% of their followers seeing it. Well, when you get your customers and employees and even influencers sharing that content, they’re really not blocked and they can drive much more organic awareness. And it’s really driving word of mouth awareness, but we put a performance metric around it.

Neel Grover: So there’s really two main things. There’s a couple of other ones as well with some social context and community, but really focusing on the two main ones for brands. It’s first and foremost getting video testimonials so you can get great reviews, in essence, video reviews that sit on top of your current text review platform. We get customers actually show how they’re wearing their products, using their products, how they unbox it, how much they love it. And that real life UGC video content, those photos that come in from real customers are driving significant increase in conversion.

Neel Grover: And then secondly, asking those same customers, employees, influencers to share into their own social and driving word of mouth awareness. But more importantly, when any of their friends or followers click on their link and drive traffic and ultimately sales from your website, they earn commission based sales. So, it’s performance based commission, and that can be a couple of percent to double digit or percent of sales, or you can give away free products or credits back to your store.

Luke Peters: Cool. So it’s affiliate marketing and user generated content but on a different scale than what’s been done in the past, and also utilizing your own customers. And I guess part of the reason I thought you’d be a great guest for the podcast is because what I have noticed in talking to a lot of brands, just with the retail side, Retail Band side of the business is a lot of brands, they don’t even, they’re not even selling on their website. If they are selling, they’re doing a really poor job of it and they’re not really even gathering reviews. So I guess they need to, brands kind of have to first get that part figured out first, right? And then they can plug into Indi. Yeah, it seems like a huge gap.

Neel Grover: Part of our platform is it’ll provide you these video testimonial video, photo testimonials, and so even if you don’t have review capabilities today, you can utilize us to drive that. It’s a really easy snippet of code that comes on. If you’re on Shopify, we do have the Shopify app. Otherwise, it’s literally a 30 minute copy and paste to get the code on your site once it’s configured. And yeah, I mean, selling on marketplaces as an example, it’s a great, great way to get instant sales and to drive awareness and brand, drive your brand. But again, if you’re selling somewhere else, you don’t own that customer ultimately. And if you can get your customer instead of necessarily asking every one of those customers to follow you and like you, ask them to engage with you and drive them back to your site to drive these reviews.

Neel Grover: Well, the other great thing with everyone that engages with you on your site, you can get their email address, you can get explicit remarketing rights term, you can get ownership of all the content they submit and you can get them to drive sales for you. And now it’s totally up to you. You own that content. You can go provide it back to the marketplaces, whether it’s Amazon, Walmart, wherever it may be, to continue to drive higher conversions in sales on those pages as well. But it also gives you that relationship with your ultimate end customer.

Luke Peters: And interestingly, that ties in. So earlier I did a couple of podcast episodes or a couple, maybe three or four ago, interviewed Mark Dufilho, he’s the managing director at Houlihan Lokey and he’s in charge of the consumer division. And they’re an investment banking firm. And I know this is, it’s common knowledge, but one of the interesting things was how important the direct to consumer sales channel is for any business. In other words, the multiples are so much higher, for future investors that might be interested in one’s business. So I mean that indirectly ties into this, but it’s like I said, it’s a wonder how many companies are not investing in their own site because it is hard now, and instead just kind of leaving it up to the sales, all the internet channels like Amazon and so on and so forth. But it’s key to grow that channel.

Neel Grover: It absolutely is. I mean, it depends on what you’re doing with your business. If you just want to generate cashflow in a short term, being on a marketplace or somewhere else’s can be great. If you want to build a longterm business and own that relationship with your customer and ultimately sell that business or do something bigger with the business, owning that customer list is really important. Just because, again, the algorithms on these marketplaces can change or through social media can’t change, rules can change, margins can change.

Neel Grover: And I’m not saying they’re not important aspects to have as a part of your business. Obviously I ran a marketplace and I wanted, I needed people to participate on our marketplace and I think it’s a great way to drive sales and an incremental brand awareness. But generally speaking, you should not, again, unless you’re just looking for short term cashflow, have that be your only outlet. And trying to own that customer, the multiples are so much higher if you can own that customer, own that relationship, and we try to help you do that or we do help you do that in a few different ways.

Luke Peters: All right, cool. And then I just thought it would be this, I’m selfishly asking interesting questions for myself here. Hopefully they’re interesting for everybody else. But I wanted to kind of get into your startup a little bit here. So on the business process, just a couple of quick questions on sales and marketing because it’d be interesting to see how you’re approaching it since you’ve come from these larger companies in the past. First, how many total people are on the team?

Neel Grover: We have 15 people.

Luke Peters: And then on the sales process, can you kind of give us a basic idea? And there’s a reason I’m asking about sales and namely that you’ve really pitched some large companies. So I’m just curious how your sale, like how many people are running it, are you having to do a lot of that and just quickly, how does that look?

Neel Grover: Yeah, I mean I handle the enterprise sales and that’s really because some of these folks I know from my prior experience of running the different retailers. And so I handle that and I’m very passionate about that. And it is like you mentioned the very beginning, it’s a little bit different way to think about as most people are looking just to drive that next new customer, I think your best influencer is always your existing customer and employee who already love you, and so it’s really incentivize them to do that. So I work mainly with the enterprise clients and then we’ve got a team that works with kind of the mid market retailers. We work with agencies, different marketing agencies to help them now drive new customer acquisition and even further engagement in CRM.

Neel Grover: And then on the mid to smaller size, we have a Shopify app now live as well. So we work with all the different platforms. We work with the agencies, we’re creating different strategic partnerships. Again, going back to the early days as being a lawyer and I bought accommodated and then we worked with our competitors at Buy, made great partnerships with Best Buy and eBay. Here in the same vein, we’re looking at who else can we work with and partner with to bring extra value to drive sales for us and for our clients.

Luke Peters: But what is happening just on a day to day basis? I just really want to understand what’s the day to day, who’s pounding the pavement, or you guys have just like a massive leads list of all the brands out there and so you know who to contact? And you guys were running different drip campaigns or making phone calls or like how’s the actual acquisition occurring? I’m just curious if you’re able to describe any of that back end because I know that’ll be valuable for anybody selling and just curious to understand how you look at it.

Neel Grover: Yeah, I mean it’s a combination of those things. We do have a leap list. We do get a fair amount of inbound now, which is great. We do drive word of mouth. As I said, we do have a drip campaign, and frankly we also speak at a lot of different events that drive a lot of the leads, speaking at events and in working with several partners in the industry that are driving folks to us. And then we do… Generally, I mean nothing ever gets anything was generally a pretty good sales flow once we get people to understand what we do.

Luke Peters: And I was going to ask this question. I think you kind of answered, I was going to ask, I mean you’ve pitched some really big brands, like impressive names out there, some of the biggest companies and some names everybody would know. And I was going to ask how you’re getting in front of those brands because I thought that would, your insight there would be helpful. But it sounds like it’s mainly some past connections that you’ve had already from previous business life. Is that most of it or is anything else you can share?

Neel Grover: That is a good amount. I mean, the one thing that I’d say is tough for startups across the board is that a lot of times bigger companies, companies in general will want to see, okay well who else is using your technology or your product? And so it really depends on who you’re talking to. When I deal with an executive for the most part across the board, executives understand it very quickly and don’t really care. Although we’ve got some great brands now, some very large sheet of brick and mortars and others using our platform, they understand the value proposition very quickly. Sometimes when you work further down the organization, they’re just looking at their peer set and think, who else my peer set is using your service? And that’s where it gets tougher for folks. When you’re starting out and doing something very different, I think you got to just be persistent. You’ve got to try to get to the right people and you always have to get referenceable clients. And those are some of the most important things you can do.

Luke Peters: Yeah, I’m finding that out by the way, Neel, with my new business, Retail Band, because it’s totally, it’s a completely different business than selling branded, creating a brand and selling products and just focusing on the product. And like you said, it’s all about, I mean every, the sales process is longer and you have to have just kind of prior work and show what you can do for clients. It’s just completely different.

Neel Grover: Well, and like what you’re doing with your business, it’s a great novel business but nobody else is really doing it. And that’s a good and bad thing. Ultimately it’s a really good thing and you’re going to basically make a platform out of what you’ve had to do over the last decade and all your learnings, and that’s going to save brands significant amount of time and money. And it’s just once they realize that it is a very hard type of thing to do what you’ve done and then utilize your services, I think everyone’s going to realize that that’s a great, in your industry at least, in those categories they’re going to want to utilize your services.

Luke Peters: That’s the plan. So yeah, it’s coming along really good, actually. Do you think so in today’s day and age, it’s different, and I know there’s a lot of good DTC companies out there. It just seems, my impression, I guess you can totally agree or disagree, but my impression is it’s harder now to have a straight D to C company than it was say ten years ago, right, because more people just are buying from Amazon. Is that kind of fair to say in your eyes?

Neel Grover: It is harder. But at the same time, I think more niche brands are, like you said, there’s certain things that Amazon does very, very well and there are a lot of things they have done very well, but creating that experience and creating that relationship with your customer is more important now than ever. And it is harder but it’s more important to do it because ultimately, we can’t be left with a world that has three retailers or five retailers, one dominant one and others that are very significant.

Neel Grover: Still, until, I think at the end of the day, because brands need to keep really trying different things. Building that relationship, utilizing our services, building that direct relationship with your customer. DTC is so important, and it’s easy to sit there and say, “Well, I’m just going to be part of Amazon or part of these other places.” And they definitely are a great added piece. But I think you have to work even harder, again, realizing that social media is there to help, but they’re not the savior completely by any means. The same thing with Amazon or other marketplaces. And ultimately you’ve got to drive that direct relationship back with your customer where you own that relationship.

Luke Peters: Yep. I agree 100%. I mean, we’re doing that as well. So that’s why we’re implementing the app, and I’ll give you some feedback on that shortly as we come along with it. So you shared a lot about business and we talked a lot about your career and the different companies you’ve been with, but just in the past year, just with Indi or it could be with any other projects you’re working on, but if you can share what your biggest win has been in the past year?

Neel Grover: I think without mentioning a specific brand, I think it’s really just proving out that everyone has great ambassadors, great influencers for their product today. That you don’t need to go pay somebody that doesn’t know about your product and that your customers really are your best ambassadors. You should always be creating a deeper relationship with them and now giving them the ability to kind of, the incentive to talk about you. Seeing that drive, with these micro influencers where they’re very authentic, organic, that’s been our feeling all along. They are your best influencers in seeing ambassadors and employees being really successful. We’ve got certain individuals for brands that have driven over $25,000 of sales within a couple of months that don’t have big followings, but just really love the products. We’ve got programs doing really, really well from that. And so it’s great seeing that that resonates so well with the consumer. It’s very just authentic and organic content.

Luke Peters: Cool. And then, with your experience at Buy and everything along the way, what’s something actionable, if you could maybe package up one big life learning and business or something like that, that the listeners should think about implementing in their own companies?

Neel Grover: I think just always trying to reinvent yourself for the positive. If you’re doing something really, really well, that’s great, but always think that you need to keep improving and maybe even modifying significantly over time. I mean, I think one of the things that, because we competed with Amazon for so many years, it had kept us on our toes every single day and we could never get complacent. I remember in the first quarter we had that was profitable, it was like you had to work even harder now to stay profitable. And we had other challenges come up, but thankfully we had three plus, more than three years of continued consecutive profitability. But we kept on changing, revising, adding, doing things differently. And don’t be afraid to do things differently. Just because others in the industry are not doing it, don’t feel like you can’t do something or try something. Try things, and try to do and try new things as efficiently as possible, but always try to reinvent yourself as you go, no matter how big you are.

Luke Peters: 100% agree. Try things. And I’ll jokingly say try things even though all of your team and employees will complain about you, because-

Neel Grover: Absolutely, especially then. I mean, I used to say it some more times, the best thing about our company is our tenure and the worst about it is our tenure. You’ve got to keep pushing the envelope. And you’ve got to keep pushing even though you’ve got a super smart team and they say no and that’s great, but there’s a reason why startups and other companies come along and are ultimately able to sometimes knock off or take a piece of the market from very well established companies is because they are trying to do things very differently.

Neel Grover: The other thing I’d say is partner, partner a lot. I’ve never felt like we have to build everything ourselves. And when we were a technology company, bought a company, if we found a company that did things better than us or more unique than us or had a value proposition, I would never be afraid to partner. Actually, my cofounders now in India are from a company that we partnered with and we ultimately bought thereafter. But it was because they had something that I wanted us to build, and they had built it and they were very novel in how they did it. It was because we were willing to partner and look to others to help us get there or further.

Luke Peters: Cool. Great advice, and thanks for just being a great interview. I mean this is, we kind of talked about so many different things today and I think hopefully we hit a lot of valuable points not just on influencer marketing and how brands can take control over their brand image, but so many other things. So thanks for that, Neel. How can listeners find you? How can they reach out to you and how can they learn more about Indi?

Neel Grover: Great, thanks Luke, I appreciate it as well. You can come to indi.com, that’s I-N-D-I dot com. You can email us at sales@indi.com and we’ll make sure to get back to you. If you’re on Shopify you can download our app as well. And so several different ways you can get in touch with us and learn about what we’re doing, and hopefully we can help you very quickly.

Luke Peters: Great. Thanks again, and thanks everybody for joining us on the Page One podcast sponsored by Retail Band. And if you’re looking at launching new products and you need to gain sales quickly and move that inventory, or if you need help running your home depot or Wayfair or Walmart or Lowes.com online channels, we can help you. What I’ve noticed in talking to people is that they… Usually those channels are kind of the back burner at Amazon and they’re not getting the attention, the love that they need, and that’s exactly what we do at Retail Band. We essentially can become your sales and marketing arm. And you can find me on LinkedIn or email me directly at luke@retailband.com for more information there. Thanks everybody for joining us on the Page One Podcast, and we’ll see you next time.

Speaker 1: Thanks for listening to the Page One podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about our commerce? Check out www.retailband.com to get more great tips and tricks on how to accelerate your eCommerce sales with the big box retailers.

Get in touch with Neel: Visit www.Indi.com or email sales@indi.com

Need more expert advice? Learn more at www.retailband.com

Positive thoughts? Leave us a review on iTunes

Want to connect? Follow us on LinkedIn

Want more information? Listen to EP8 of the Page 1 Podcast for more insights into growing your D2C Channel

Home Depot Sponsored Product Ad Campaigns – Making the Most of your Marketing Spend – What to Expect from the new PromoteIQ Platform – EP11

What you’ll learn:

In today’s episode we dive deep into the new Home Depot Advertising Platform, PromoteIQ. Luke talks about the new PromoteIQ features, what makes it different from other ad platforms out there, and how this new shift in services will affect your consumer product brand (for the better).

About our guest:

Luke Peters is the founder of five companies. Skilled at taking a product from concept to high-volume sales at Home Depot, Lowes, Wayfair, Walmart, and Amazon. He is also the president and CEO of Retail Band, an expert r-Commerce agency that works with select brands to manage and accelerate their online business on retailer platforms such as Best Buy, Home Depot, Lowes, Wayfair and Walmart. Retail Band started the Page One Podcast. It is a weekly Podcast and as the host, Luke interviews a variety of guests and thought leaders on topics ranging from channel strategy, tariffs, influencer marketing, product launches, and the details about how to grow ecommerce with big box retailers. Luke is the President and CEO of NewAir Appliances, Inc. which ranked as one of the fastest-growing private companies (Internet retailers) in America for three consecutive years.

Key takeaways from this episode:

An overview of the new Advertising Platform on Home Depot – 2:05
What makes PromoteIQ different and how it will affect your business – 2:54
Why brands should consider using Ad Platforms across all retailers – 6:23
What are In-Grid ads and how will they help you – 7:12
The two major reasons to use PromoteIQ and features unique to it – 7:50
The future of geo-targeting through Home Depot – 9:37
Essential features to understand about PromoteIQ – 10:05
The shocking data difference between PromoteIQ and Criteo – 10:59
How to think about the long-term benefits of your ad campaigns – 11:33

Podcast Transcription

Welcome to the Page 1 Podcast, a weekly podcast featuring a variety of guests and thought leaders on topics ranging from channel strategies to tariffs, influencer marketing, best in class product launches, and all the details about how to accelerate your eCommerce sales with the big box retailers, or what we call rCommerce. Now here’s your host, Luke Peters.

Thanks for joining us on the Page 1 Podcast where we talk about online channels like Home Depot, Wayfair, Walmart, and all of these other big box retailers, how to grow your sales, how to optimize sales and everything in between the portals, the advertising platforms. And today, I have a special solo cast and what we’re going to do is we’re going to talk about Home Depot advertising platform changes that have just happened. And are you driving your listings with HD’s ad platforms? Are you using analogous to what’s happening on Amazon? Are you getting the most out of your platform and your products? And we’re going to dive deep into this subject today. The Page 1 Podcast is sponsored by Retail Band. Do you need help growing your online channels like Wayfair, Home Depot, Walmart, Target, Best Buy and all this other big box retailers? We can do that from start to finish with your account. We can manage your products, all of your product launches, and all of your account management. And for more information, contact us at retailband.com.

Back to the podcast, this podcast today, it’s going to be, I mean, honestly, it’s kind of a little bit of a nerdy podcast. So this may not be for everybody and I’ll forewarn you, but at the same time, I’ll pose this question to you. If you’re selling at homedepot.com do you want to make more money on homedepot.com? Then you will want to listen into this and see this new advertising option, and honestly, most folks don’t even know this even exists. So let’s get right into the big change here in the advertising world of Home Depot and that is that Home Depot has dropped Criteo, who was primarily serving the ads for homedepot.com as its preferred ad platform. And now, PromoteIQ is now serving the new ads on Home Depot, and interestingly, PromoteIQ is owned by SpotFront, which was acquired by Microsoft. So I just kind of curiously thought that was interesting and kind of says something about the company, if Microsoft is purchasing them and Home Depot is switching over to them.

So I’ve got a few thoughts later on about the changes that we’ve seen, why that’s going to be important, and maybe what we might see in the future and some of those ideas have already been talked about or they’re kind of out there already and we’ll get to those. Okay, so let’s talk about the main differences. So this change happened on September 16th. And on August 8th, Home Depot dropped Criteo, so there was a little bit of a gap. And, by the way, if you’re running a Criteo campaign and you’re wondering why your ROAS or ROI essentially dropped off and you look back into early August and all of a sudden you see a drop and you see a drop maybe even in spend or clicks, impressions, whatever, all the different metrics that you’re following, that’s probably what happened. And the interesting thing is, I mean, there’s quite a few differences.

So we’re going to dive into the details, I told you. I warned you up front this is going to be a bit of a nerdy podcast. And Criteo, one of the main faults was you couldn’t tell which retailer your ads were going to and the results on each of those individual retailers. The reporting wasn’t great and that was a main complaint, even on our side. I guess you could measure your ROI, but honestly, in the back of your mind, you’re wondering if you can trust these numbers. You don’t have anything tangible that you can track it back to. The best option, honestly, truthfully, that I got from our external account manager was, “Well, you can turn it off for a week and see if your sales change.”

And you don’t get a lot of confidence when that’s kind of the answer that’s given to you. But we still were getting results and we felt we could tie those indirectly to sales and so we were moving forward. And then we did notice that the results dropped significantly and that was right at the time of this change that we just talked about. So let’s go through a couple of the major changes. So, again, apparently the main reason that Home Depot made this change was to improve the reporting aspects. I’m sure there’s other things behind the scenes. PromoteIQ now gives you the ability to see all this reporting and it’s based off category and not keywords. Okay, so let me just repeat. It’s based off category. That’s going to make it a lot easier honestly to run it. But we’ll see what happens down the road. Hopefully, they get down to the keyword level, because it’s going to give those running the campaigns a lot more flexibility.

You can now control where your ad placements show up on Home Depot. This is huge. You couldn’t always do that with Criteo. You kind of could. Some things you had to get approval on the back end to get done, or they would force you into it ad placements that absolutely were not profitable. Okay, so now you can choose. You want to be on the home page, category page, sub-category page, and sub-sub-category page. So you have a few different areas and basically, it’s taking advantage of some of the HD features on the website and in the location, I’ll get into this where it’s showing, is there is some indication that it’s actually showing in some of the organic results and for sure it’s showing down at the bottom of the page. So you’re not going to get top of page placement yet. And again, at the end we’ll talk a little bit about what I think is going to happen in the future.

So for this time period, we’re seeing a ROAS. So we’ve been working directly within this campaign and we’re finding 10X return. So ROAS of over 1000, which is a big increase from what we had been seen on Criteo. Criteo was actually performing even better at the very beginning and then we kind of saw a drop off and it’s really hard to explain why some of these advertising campaigns are dropping off. And then, of course, when they dropped Home Depot it got even worse. So when comparing it to AMS, and I guess that’s worth a quick conversation right now, and we did a podcast earlier on Wayfair sponsored products so everybody’s familiar with AMS on the Amazon side and the Google product listings and text ads, Facebook advertising. Those are the biggest ones.

But Walmart has their own platform, Wayfair now has their own platform, and Home Depot has its platform. And everybody is pretty much taking a cue at least from Amazon, I guess it all started from Google, but they’re taking the cue there because these retailers are able to drive a lot of margin through their advertising platforms and as brands we have to remember that. We have to factor those margins into our products when we’re launching new products and think about what that’s going to end up costing us. So we’re going to turn this into a blog and we’ll have some graphics to show and you can check that out at retailband.com. And we’ll have some graphics to show exactly where the placements are and how they’re showing up in the sponsored listings. And what they call it is they have in-grid advertisements and that, in their terminology, is where the products show up in the organic search.

Currently, there’s not a lot of competition. I mean, we’re seeing Dyson vacuums, we’re not in the vacuum category. There’s only one or two kind of in the beverage categories. Cost per clicks are around 50 cents or so right now, and you get a ton of impressions. Not a huge click through because it’s down at the bottom of the page. And, again, I’m diving really deep into this. I’m hoping any folks that are actually running some of these advertising campaigns, you’re going to get some value. And on the back end, if this just sounds like jibberish and isn’t helpful, well, you’re still going to want to learn how to run this campaign for your products because not only is it are you going to get incremental sales, but you’re going to drive up. I mean, think about the strategy here. If you run this campaign and you invest, say, 5, 10% of your sales into this campaign, or that may be on the high range, but still, on a new product launch, you’re going to drive the organic ranking of that and it’s going to pay off for you big time.

And if the ROAS is this high, you’re not losing any money on that investment that I was speaking about earlier, about 1000% or higher. So more details about this program is the campaigns can be set on an individual product level. Okay, and that’s another big advantage over Criteo. Criteo would let you put products in there, but it would kind of alternate your products or you wouldn’t really be able to specifically sell or advertise a certain product on a certain retailer. So PromoteIQ on Home Depot is allowing you to do that. It’s a big advantage. There’s a 5K minimum per campaign commitment and here’s some just interesting features that you can get. A brand specific ROAS and sku level attribution. Just huge to have that and really track your advertising costs. Addition of sponsored banners, which will be a different template and when it’s clicked it’s going to lead to a brand filter search just for your brand.

Again, if you just think about what that means, you can actually do that with AMS, by the way, in some of the advertising and kind of create your own landing page within Amazon. And so it looks like you’re able to do the same thing here in Home Depot. I mean, that’s for a brand and you’re going to have all of your branded skus on that page. That’s a huge advantage right there. And you also can do some dynamic retargeting ads, are built into this platform. But I think a future development and something that’s really unique is you’re going to be able to do geo-targeting. So think about if you have a seasonal business, think about if you have a weather dependent business and you’re able to do geo-targeting within Home Depot, it’s going to be super powerful. It’s going to really push a higher ROI. You’re not going to be wasting ad spend into areas that you think your product won’t sell into.

You can target by audience in the future and then eventually, hopefully, by keyword. A couple more essential things to understand about this platform is that sponsored ads show up on category page as well. Amazon category pages do not have ads. AMS does offer the ability to see trends and keywords and impressions, but PromoteIQ only allows you to see impressions of your campaigns. Placement of ads is not ideal, as mentioned earlier. Amazon kind of shows at the top of the page with their AMS platform and these are kind of spaced throughout the bottom of the page. I mean, as a prediction, I would definitely look for that to change in the future, especially when retailers like Home Depot realize that this is a pure profit generator and if customers aren’t bothered by advertisements at the top of the page, it’s probably going to end up that way in the not so distant future.

There’s currently not a lot of competition, all of these things, just like Wayfair sponsored products. This is the perfect time to jump into this stuff and versus Criteo, so in our comparison, again, this is data in early October, 2019 that we’re seeing a click through rate of three times higher on this platform versus Criteo. So, even though it’s at the bottom, I guess, Criteo was at the bottom too, but what I think what’s lost in this is that Criteo was throwing a lot of advertising spend into certain pages that nobody was ever going to, and you didn’t have control within the backend platform to adjust for that. And you have more control here with PromoteIQ. So lots of advantages. I know it’s kind of a nerdy little specific thing we’re talking about here, but there’s so many ways to play this on the strategy side.

And I mean, the key and obvious way is just to promote new products, especially in this world of tariffs where there’s a lot of new product launches and having a way to move those products up to page one is probably the no brainer way to think about it, but then also to drive your campaigns. And it might be cheaper promotionally to put some dollars into this versus running the standard promotions that you might be running with your retail partners. So thanks for listening to this solo cast and a special episode on the big advertising change at homedepot.com. Hopefully, this provided some value to you guys and I just want to say that I really truly appreciate any of your reviews on iTunes. It means a lot to me. It’s a great way for the podcast to get some notoriety, so thanks for that and we’re doing great so far.

And, again, the Page 1 Podcast is sponsored by Retail Band. All of the things we talked about today, all of the advertising platforms we run, we can run these for clients, the cost to you is minimal. We take over the operations that you’re already paying your internal team to do and when you consider that and the growth that we’re going to drive, it’s basically a lateral move. It’s not costing you more, but you’re getting more in sales, you’re going to get more in profit, you’re going to be more efficient, and we can manage everything from the sku level. And if you want to learn more about that, please go over to retailband.com. And I just want to thank you, everybody for listening today and see on the next interview.

Thanks for listening to the Page 1 Podcast with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about rCommerce? Check out www.retailband.com to get more great tips and tricks on how to accelerate your eCommerce sales with the big box retailers.

Need more expert advice? Learn more at www.retailband.com

Positive thoughts? Leave us a review on iTunes

Want to connect? Follow us on LinkedIn

Want more information? Read more at https://retailband.com/blog/