Hey, Rockstars!
Like my interviews with the eCom sharks who made themselves? Got another one for you
John Roman - is the guy! 8-Figure entrepreneur, made to mega successful exits, has a freaking great brand portfolio...and he’s just warming up, I’m telling you!
So we’ve discussed so many things with John:
the launch of the subscription model
Fb advertising strategies he uses
struggles he’s gone through for the past 5 days
leveraging Facebook’s double standards
alternatives to Fb and how to use them - Snapchat, Google,
There’s so much more to that, you’ll love it! Check it out now
Transcript from video:
0:00 alright guys hello uh this is Alex Fedotoff and today we have a very very interesting guest
0:06 we have john roman so john is commerce entrepreneur he led three acquisitions
0:11 he participated in two exits and uh his current brand portfolio generates 30
0:17 million dollars annually so he's next level entrepreneur eight-figure entrepreneur
0:22 so I'm very excited to have john with us
0:28 today [Applause]
0:36 thank you for joining us today yeah thanks thanks for having me Alex I'm excited to be here cool awesome and one of the projects
0:43 that you currently work with you know check the all of the you know the uh the brands that you currently work with
0:49 working on so this is the subscription box that you guys are offering right yeah so to the vast majority of
0:57 everything in our portfolio is subscription-centric um so Battlbot was a brand we we started from scratch
1:04 back in 2015 and it's it's the main pillar it's the the flagship if you will
1:09 and everything we've done since has been you know based off those learnings whether it's you know
1:16 through acquisition we've acquired a few um decent sized brands that are in the subscription space and then we've
1:23 launched quite a few ourselves launched some and sold them but um
1:28 you know really the our baseline of knowledge comes from from launching Battlbox and you know
1:34 Battlbox is um a juggernaut at this point for us but it's it's still about 90
1:40 subscription only 10 percent one time oh really so 90 of all of the orders that you get like
1:45 subscription like people just subscribe and like stay with us yeah wow
1:51 how do you get to that to those tremendous numbers right like normal because i'm not very familiar but for me it sounds like
1:57 wow the the in terms of the retention and the lifetime value of that customer this is pretty like pretty crazy yeah no so so we're
2:05 definitely non-standard when you look at the subscription box you know mystery box subscriptions box
2:10 space which you know the like you know the people that started it the the birch boxes with
2:16 with female makeup samples you know they're what og's look great who is kind of a round
2:22 still but not really i think they went you know they went through chapter 11 and got repurchased but you
2:27 know you look at all of those and we are a little bit different in the sense that our average order value for a
2:34 subscription is over a hundred dollars so our rpoo if you will is is over a
2:39 hundred dollars a user so it's a more premium luxury subscription so it's like it's like 100 bucks on a
2:46 monthly basis people pay yeah so our top and most popular offering is the pro plus
2:51 which is 160 a month 160 a month plus shipping wow i see that it has axe in it
2:59 and so so the we have four different tiers of battle box the basic the advanced the pro and the pro plus
3:05 and they they stack on top of each other so if you get the pro plus you get everything from the basic everything
3:11 from the advanced everything from the pro and the pro plus is actually a knife of
3:16 the month if you will or and you know knife or sharp tools so traditionally knives but an occasional
3:24 acts you know occasionally something that still kind of fits in that mold
3:29 wow this is awesome so what got you to do like subscription model in the first place you just seen the success you
3:35 evaluated the market and like what got you into it or like just attracted to the higher like
3:41 multiples because the multiples there are probably while you when you exit yeah so for me
3:46 it was it was probably honestly a little bit closer to the ladder but but the origin of battle box
3:51 is is a very cool one so my my business partner Daniel he's the one that came up with the idea
3:56 and the concept his uh fiance was getting a birch box in the mail right and he'd watch her
4:04 he'd watch her open it he'd watch that excitement level on the surprise
4:09 and you know he was like well i kind of want that for myself right so he you know he's uh he's an
4:14 avid outdoorsman and he he jumped online he's trying to find like a subscription box
4:20 for you know an outdoorsman a lover of camping a lover of hiking a lover of
4:26 getting outside and getting into adventures and you couldn't find anything and this was
4:31 this was early January 2016 and um within very creative guys so
4:37 within a few weeks he'd come up with a logo we have a newer logo now but
4:43 it was our logo for several years and he went to a platform that we're also no longer on called crate joy
4:49 which is like a very niche think of like almost like a shopify where it's a platform but it's
4:55 subscription box centric so it's everything's a template makes it super easy
5:00 um you can throw a website and a concept and an idea within you know probably a couple hours
5:07 so he had quickly launched a site in February of 2016. and um obviously
5:13 we've had a lot of revisions and you know it's a completely different animal than it is today but yeah it came
5:19 from a need of him wanting something couldn't find it so he said i'll do it for myself and it
5:24 turned out that you know tens of thousands of people i guess at this point hundreds of thousands of people you know
5:31 wanted that's wanted the same thing huh so that initial task so that your partner launched like
5:37 did it like was it successful you launched it on facebook or where did you launch it initially yeah so so out of the jump i would say
5:45 relative moderate success so in February that first month in 2016
5:51 we had um i guess 2015. i apologize we had 200 subscribers
5:56 the first month so it was facebook facebook ads you know none of us had a background in facebook ad i came on board
6:03 and and joined um about three weeks after launch so we were coming towards the end of end
6:09 of february um a combination of facebook and then him jumping in like bulletin board
6:15 forums reddits if you will for like outdoorsmen survival experts and saying hey
6:21 i'm you know i'm launching this box check it out so there's a lot of like gorilla old school like
6:26 feet on the street as well right and um 200 subs the first month the second one
6:32 the or was it like like or did you expect them to kind of turn into profit after a few months was
6:38 it profitable first months yeah i mean so the interesting thing about a subscription model
6:43 and this works obviously when you're small when you're when you get to a certain size it's it's not possible
6:49 anymore but um you know with a subscription model that first month is really proof of
6:54 concept because you're getting money from everybody before you actually send them send the first box out you're collecting
7:01 money for 30 days so when you're talking about 200 of a product you can quickly find 200 of a
7:07 product from a couple vendors buy it with the money you've already received money had to go on a credit
7:12 card but it was momentary and um you know it was quickly uh paid off so there was never any debt
7:18 besides the first couple months of just waiting for that first renewal and then
7:24 we we all started working on facebook ads in march march we had a little over a thousand
7:30 new subscriber sign ups wow and pretty good like for such fresh new business
7:36 right that's pretty yeah with us with us not being facebook experts either facebook was a lot different back then but still
7:42 and then uh month three we had a little over 2 000 new signups and at that point it was it
7:48 was off to the races i think so you would say it was almost like instant hit 100 100
7:53 so i mean we did you know that first year we did we ended up doing four and a half million in sales just to give you an
7:59 idea so it was very definitely it was definitely a perfect timing it was ebbs and flows of the
8:04 subscription niche and e-commerce but it was definitely a point to enter and uh that in outdoor gear
8:12 was something that was trending as well so it was kind of a perfect timing for for a few different reasons that's
8:18 awesome so in terms of the um obviously like things changed a lot and then are you guys still advertising on
8:25 facebook like you still like are you compliant like survival is kind of like some of the products are on
8:31 the island yeah so it's a good question and it's a weird story so we were
8:37 um when we started in 2015 that first full year on almost we were exclusively on
8:44 facebook right um that was our only advertising 99 of our traffic
8:49 came from facebook and i remember we were this just plays to our ignorance of not being experts at the time
8:56 we uh we're going into labor day weekend so we're in september-ish and we're
9:02 planning to go into this weekend we have some new ads that we're turning on like we're this we're expecting this to be our best
9:09 weekend we've ever had and there's no reason why it shouldn't be yeah and um 6 p.m
9:14 7 p.m friday evening all of our ads get turned off this is the first time this has happened
9:20 and our advertising account gets canceled we we go from you know top of the world
9:26 to zero traffic right because 99 of our traffic is coming from facebook we don't get back you know good luck
9:33 getting someone on from facebook on the phone right yeah that's a thing we're you know calling
9:40 everybody emailing everybody trying to figure something out ironically
9:45 we so we have a we we don't have it anymore but at the time battle battlboxforum.com it was a bulletin board for our customers and
9:52 just like-minded individuals that were outdoorsman and we had you know thousands of people in there we
9:58 post on there hillmary does anybody know anybody at facebook one of our customers works at facebook
10:04 and he's in the department next door to the team that does the manual
10:11 auditing of ads he walks over there we're back on an hour later this is the
10:17 following wednesday but at that point it was okay uh we're back on but
10:23 this is this cannot happen again yeah so our biggest effort at that point was
10:28 diversification as much as possible so we went we went a mile wide on on
10:34 advertising and and we didn't we didn't want anything to be too much of a lead source we eventually
10:41 got kicked off facebook completely oh really yeah we were banned for we
10:46 couldn't advertise at all and we we ended up in uh
10:51 at the end of 2019 spending quite a bit of money on a development
10:58 solution where i'm using what we call microsites and other domains and other facebook pages
11:05 that we were creating just for advertising we created a solution where if traffic originated from
11:11 facebook or instagram they got a completely different experience than a normal customer
11:16 um oh you mean cloaking right i don't know if that's the right term we were doing things like um the images would be completely
11:23 different we'd switch up copy copy would be different it was just a different a different experience if
11:30 if we could identify the the where the traffic was coming from is that what cloaking is i believe so yeah
11:36 okay you guys did it yeah i mean did facebook catch up to that yeah so we spend six figures a month on
11:43 facebook now um we're we're in full compliance we're doing exactly what they wanted us to do
11:49 we wanted it they want to give a pg experience where no knives nothing can be purchased yeah
11:56 um i mean they wanted us to change the business which wasn't an option and it's definitely a double standard
12:03 right like we're never positioning and selling our knives ever like that's just
12:08 something that exists but we're not promoting it but you know dick's sporting goods spends a million with them a month they
12:15 sell guns no yeah seriously but they're not advertising the guns and we're not advertising enough so it's a double
12:21 standard because if you're spending you know seven figures within a month they'll turn
12:26 they'll turn the their eyes yeah yeah exactly so yeah sometimes you see these as like how
12:33 is it even possible these people are still you know and i know some heavy advertisers like
12:39 doing you know nine figures a year and if if i would try or you try like
12:44 selling the same product and say like would get shut down like tomorrow good luck new shop yeah wow so how do you guys
12:51 like diversify so so you had those issues with facebook what other platforms you diversified to like how did you
12:58 yeah so we went anything you could think of so the all the logical stuff so you know
13:04 that first first year we weren't on on google adwords now google ads
13:09 which which is mind-blowing that we weren't on them but we didn't know any better so we quickly got on google ads google ads quickly became
13:14 our our number one source and then we went on all the all the other social channels so uh snapchat twitter
13:21 pinterest they they all have have their own um partner ecosystem went went deep on
13:27 podcasts um some some like tv commercials didn't perform very
13:35 well uh we do some print some print ads and uh publications that are in
13:40 in the outdoor space but honestly that's more of a it's so difficult for tracking right and
13:46 it's it's more of a let's just break yeah it's branding we
13:52 don't want to lose money on them but if we're break even we know from a branding perspective it's profitable
13:57 and then yeah we've at this point all those things i mentioned are just
14:02 part of our our wheelhouse and we try new stuff we're um we're a little bit behind the
14:08 ball with it already being 2021 but we we launched on tick tock this week finally so we're interested to see
14:14 how how how tick-tock works it um definitely seems to be a little bit of the wild
14:19 wild west like snapchat was you know three four years ago how do you approach attribution like
14:25 you know using all of this channel do you trust what platform says which probably you know it's like overlapping
14:30 with each other you know facebook google you know everyone says like attributes
14:35 that sail to their platform right we approach that yeah attribution has always been such a
14:41 nightmare if we took every if we took all the platforms at face value we'd be literally double the size we are
14:47 because if you add up all everything they claim together it's twice the number we actually sold so
14:54 it's it's a challenge what we do is we we definitely look at stuff on a siloed view which i know is not
15:02 always some people look at it holistically and look at the agenda overall what is your blended cac we
15:08 still we still manage each platform by its individual cat and what we've did what we've done just
15:14 cross-referencing our data you know from google analytics from looker we we have a good a pretty
15:20 good grasp on how much each platform lies you know with facebook we can typically say we know that they
15:26 take credit typically for 20 of the stuff that someone else is going to take credit for as well
15:31 um so we bake those in those numbers in and in our cac it's a double-edged sword by
15:37 being conservative you know our acceptable customer acquisition cost levels
15:42 are probably much smaller than they can be and still be profitable but we know with 100 confidence
15:49 that if we hit you know this cac or anything below we know even with multiple people
15:55 attributing it we know that it's still profit we have other channels like snapchat for us
16:01 we're finally for the first time in a few years we've had success with it finally for
16:07 prospecting but for the first few years snapchat was only successful for us for retargeting
16:14 other traffic that we sourced from google or resource from facebook or we sourced from somewhere else and it
16:19 was just mid funnel so mid finals you know a little bit having that different bucket you're able
16:24 to manage it a little bit different because you're not trying to get the the customer acquisition cost there per se
16:30 how is snapchat do you think that their platform itself becomes better they they just stimulate more data so
16:36 they can find buyers more efficiently or that just like maybe what do you think
16:41 is was seeing the reason i think i think it's all of that i mean i think you know like three or four
16:46 years ago is exactly how tick tock is now like it's just you know they they get better through their learnings and
16:53 you know snapchat prospecting was their audiences just it was i don't want
16:59 to say a joke but it was just it just wasn't very good either data was not what it needed to be
17:04 and i think it's i think it's taken time it's taken feedback you know it's funny three years ago
17:09 i remember having a call a snapshot and we're like like we can't keep spending this because there's just no return here and they're
17:16 like well you should look at snapchat is it's just brand awareness spent
17:22 no no it's not like yeah like great answer when the stats
17:29 suck but it was like no and finally they through the years they've changed their tune
17:34 and and now they understand like sure that might work for a giant company that doesn't care and isn't managing it
17:41 but we're we're still a small business so we you know we're not spending unless it's profitable yeah it's just not we that's not not
17:48 what we do um yeah so they finally their their audience um prospecting is finally working out i
17:56 think it just just took them some time just like tick tock will i think won't be where it needs to be by any
18:01 means for for a couple of years so we're just experimenting on there now seeing if the good thing is like with you can
18:09 accidentally sometimes unlock something like where you're getting where you are getting a sick return just because of uh their data and the
18:16 way they advertise works not being as tight as it should be as long as you can find something that works a campaign and you can just scale
18:22 it to an unbelievable point without seeing diminishing returns but for the most part you know it's it's a lot of missing but
18:29 now now stamp's good for us and uh we'll figure out what tick-tock is like cool i want to talk about the
18:36 so you mentioned one of the things that you mentioned like you guys have acquired like two companies or a few
18:41 companies that kind of like became part of your like your main kind of like company
18:46 right yeah so we the first two subscriptions we launched after battle
18:52 box one was called barbecue box which was a monthly subscription for uh
18:58 recipes rubs seasonings sauces um and then the second one third one was
19:04 called spartan carton which was like a subscription box for fitness supplements workout gear etc we
19:10 launched both of those and then we in in 2017 or
19:16 let's see i think 20 in 2018 we we exited both of those you sold it to a
19:21 a company that had a bunch of e-commerce brands and um you know we were at that point
19:27 focusing on you know do we continue launching new brands for both of those brands the fundamental
19:34 issue is we couldn't get them big enough and uh we were we were missing the mark with
19:40 our playbook of what to do and it just what they weren't worth our time so
19:46 we contemplated do we do we just try this again and try to find another Battlbox another big win
19:52 or do we find a middle of the road seven figure business that we know
19:59 we can just day one make a difference so that was that was our focus probably the biggest fig so we've done
20:05 it three times the biggest victory was in the middle of 2019 we purchased a
20:11 monthly subscription called carnivore club which is monthly subscription artisanal meats
20:17 salamis prosciuttos things that would go on a charcuterie board
20:22 and um you know carnivore club was had been in business for seven years
20:28 they had been on um dragon's den which is shark tank up in canada they had gotten a deal
20:35 it had had success but it was it was really kind of stagnant and growth and we knew that just uh with
20:42 clear economies of scale where we knew our shipping and our processing rates and all that instantly we could affect
20:49 the even up pretty exponentially we also knew with with our marketing strategy that we could um
20:57 grow the business rather rather quickly so with that one you don't have like with carnivore club you wouldn't have
21:04 any of like facebook issues for instance correct which was which was something
21:09 that we were excited to jump in a brand that we can advertise and not have to worry about
21:14 being turned off so so yeah so you know they they they were that and we've we took it
21:22 over in july um 2019 and you know we did our uh end of 2020 review uh last week and
21:30 we we've literally doubled the business already which is now you know a couple things
21:36 went our way covet you know getting uh meat delivered to your door yeah i have to go to the grocery store
21:43 it's definitely something blue apron or what's the name of that company right like yeah blue apron so so there's
21:49 there's a lot of them and they're those companies are massive um you know some of them blue apron i
21:54 think has a billion dollar company yeah but so we you know all of our meats are shelf stable so they don't
22:01 need the refrigeration they don't need to be shipped in dry ice which um
22:06 you know the managing of that from an operation stand would be very very expensive like our storage you know we have air
22:13 conditioning and we keep it you know temperature controlled but we don't have it in in giant fridges that
22:18 could be that would be costly so it's it's slightly different than you know a blue
22:23 apron but uh it works for sure that's awesome so so how do you how do you see it like in terms of this
22:30 so um subscription business so one subscription business so you you're you're planning to build like a
22:36 portfolio of brands and then sell it as a portfolio at a high multiple or how do you or there's like inter
22:43 exchange between customers like if customers buy survival products they might buy the meat or other way around like how do you
22:50 there's yeah so there's there's not there's not a lot of as much crossover as you would think but
22:56 there's definitely crossovers so what our what our model is is having
23:02 all these portfolio brands that are all very male centric and you know battle for example is ninety
23:09 percent of the buyers are male 10 are females but out of that ten percent sixty percent of them are buying it as a
23:15 gift for a male yeah it's a very very very male centric all the other brands are grenade soaps
23:21 another one very male-centric going gear very male-centric carnivore is a little bit different because
23:28 it's it's about a split of men and women you know men typically love salami love fatty meats
23:34 but women also love to make charcuterie boards so it is it is a nice it's a nice mix but but what we do is we
23:42 we definitely share the data in between the brands and we have you know we have automations
23:47 where someone comes in from one of from carnivore club or someone comes in from battle box
23:53 you know eventually depending on their behavior um to our newsletter and emails at some
23:58 point our math makes a decision like they are not going to buy and when we know that they're not going
24:05 to buy for Battlbox we start showcasing them showing them the other brands they'll start getting email for the other brands
24:11 they'll start getting ads for the other brands the goal is eventually to have some product in the portfolio that every
24:18 mail wants to buy and and just going through the list and eventually we're going to get we're going to get something where they're
24:24 getting like oh that's pretty cool i want that um so that's obviously the focus yeah i
24:30 think you know i think when when you start having all these brands it definitely becomes attractive from
24:37 from a multiplier if there if there is an exit right um you know a company that does a couple
24:44 million dollars a year that might get you know a smaller multiplier
24:49 all of a sudden because they're they're in this big portfolio it's it's completely fair that they
24:55 would all get the same multiplier and uh the cool thing is that it's funny
25:00 because when we look at our team and we're all talking we kind of run we have the feel of an
25:06 agent we're an agency that does everything because you know like so walter hicks so he's been with us
25:12 for over four years at this point he started in our warehouse uh doing fulfillment he was in school
25:19 he did an internship a marketing internship with us last year came on board as our marketing coordinator we've not just made him the
25:26 director of marketing but he oversees marketing for for all of our brands right he's looking at uh him or his team is
25:33 looking at the social calendar for every single brand the the email series the campaigns for
25:40 every single brand we've everything compartmentalized you know curtis curtis is up in toronto
25:45 he was with carnivore club he had been with carnivore club for four years three years prior to you know joining us
25:52 so he's been there close to five years now he runs amazon for every single brand
25:58 so we have this like very agency feel where we're all dealing with you know
26:03 four five six brands but we're all doing what we're good at in each one so it's
26:08 it also the day is never mundane because you're looking at different brands and taking our same high level strategy and
26:15 then making tweaks to it to make it work for for each brand and each message
26:21 it's it's interesting that's awesome so what are typically the the multipliers on like on subscription
26:27 um on subscription companies let's say eight figures a 10 million like in revenue
26:32 like subscription business what would be like so you start looking at comparables there's
26:38 there's definitely a magic number when you're when you're in nine figures you start looking at you know some
26:44 interesting multiple five max 5x 7x revenue right like sometimes
26:49 yeah you like stupid that doesn't make any sense now i think you start talking about
26:55 eight figure businesses like us you know depend depending on you know depending on the profitability
27:01 depending on really the what the acquirers plans are where can they you know increase
27:07 efficiency where can they day one make an impact on the bottom line i would think you're seeing
27:13 um ebitda multipliers typically between five and seven x okay all right higher than like
27:21 businesses that they're like let's say up to like five million revenue where would be like two or three works yeah so
27:27 so our our acquisitions of the of the small seven figures have typically been
27:33 um two and a half to three yeah exactly but it's it's one of those things you know again when you hit that
27:39 like if we're able to ever hit that that nine figure it then it's a completely different ball
27:46 game then but yeah i mean it's it's interesting but you start looking at
27:51 either type of company private equity or just very large company that would that would buy a
27:58 portfolio like ours and you know wow wow are you but it might be x
28:03 and they might be paying five or seven x at the end of the day with with their
28:09 efficiencies they're making that money back in way less time yeah they're still they're still figuring out a way to get
28:15 you know to get back uh their investment within two to three years
28:21 just just like we look at you know the the 3x multiplier how can we with our efficiency make it
28:27 happen in two years they're doing the same thing in ways that we just we don't have the the power to do right yeah that's very
28:35 interesting like chile for example right that they bought the business for like three billion and then they took it public for like 20 or like
28:42 did the valuation you know the the market cap so who made more money you know the founder or the
28:49 you know the company that but yeah it's insane but then you look at you look you look at those large
28:54 companies that are public and you look at you look at their market cap you look at you look at their uh their value in
29:01 relation to their revenue and you see a lot that are that are in that seven eight nine 10 11
29:08 range where their value value there is is pretty substantial uh it's a pretty
29:14 substantial multiplier of their revenue right which is interesting because then you look at you know bad example here but
29:21 chewy being publicly traded right let's say let's say they decided that
29:27 hey you know we want to go to chile went public right
29:35 yeah so so let's say they they decided that they want to start buying
29:40 e-commerce companies and be ecommerce subscription experts to go in addition with it right
29:45 you look at you know i almost kind of just want to look up let's see their nasdaq i'm just curious because you know you
29:52 look at i guess i could pull it up at a little time but look at the revenue you look at what what their market cap what they're worth
29:57 and it might be like 12x their revenue right so they can buy they could buy us
30:05 for 6x and then day one that 6x is now worth 12x yeah
30:13 they've already they've doubled day one just by signing so it's an interesting dynamic when you start dealing with large companies
30:19 probably traded that already have these very high multipliers off their revenue in value
30:25 that it makes sense to go seven x even up because not only can they
30:31 increase efficiency to make the payback less but day one it's it's worth double the price to them just
30:38 by them owning it for sauce yeah definitely how is um how is your in terms of
30:43 from the perspective of supply chain with subscription model how let's say because now you have like
30:50 four four main packages how your kind of like cost efficiency
30:55 as you increase the volume was this like substantially like decreasing in cost of goods and
31:01 services or was it more like yeah so we so we really hit um it's interesting so so our supply
31:08 chain um whole another story has been such a nightmare these last few months
31:15 um just with you know we're really feeling for the for the first time um dealing with covid
31:22 just uh just simply because things are staying in ports for weeks yeah not coming in uh the process
31:30 you know were stuff that should have been in our hands you know 60 days ago are not here so
31:36 it's that that's a whole nother story of just and then you know container prices are
31:42 are up like 300 percent in the last two months that's a whole another deal but when you
31:47 going back to your question about about supply chain um i mean there were there were efficiencies the biggest
31:53 efficiency was when we got to the the unit amounts and it was always dependent on different
31:59 brands and the type of thing we were purchasing but when the manufacturer doesn't have six thousand of something maybe five
32:06 four four five thousand is like the magic number but you know for some it'll be a couple thousand for some greater but when the
32:13 manufacturer uh which is a brand name that everyone's heard of sometimes doesn't have that on
32:18 on the shelf that means they need to go into a production run just for us so when they're going in a
32:24 production run it definitely the margin starts to look a lot better because they can then
32:29 piggyback that off and and get their costs down more and then the other the other big thing on
32:34 supply chain when we started going to manufacturing ourselves not specifically ourselves with you know
32:40 finding partners and finding manufacturers to build specific stuff gear for us um
32:46 obviously when we did that first first buying from a vendor that might have it
32:52 on stock you start seeing really the the economies of scale and the margins start getting better and better would this
32:58 business make sense for like manufacturing in the united states or no so what we we try when possible to
33:06 manufacture in the us right like we definitely want to when we can and some stuff
33:12 um so grenade soap which is one of our soap brands cool cool bars of soap you can see it
33:18 back there that uh you know they're they're shaped as a grenade they gives some great sense but we
33:24 manufacture that completely in the usa grenade soap yeah grenade soap oh nice
33:30 is it on amazon we might i'm not sure i i should know this but i don't know if we do grenade soap.com um oh where are they
33:37 wow that's nice to me so you know for example for all these soaps
33:43 we we make them all in the us we have a amazing soap partner we found in tennessee
33:48 and um you know we we were actually last time i was in my i was in miami
33:54 last was we were meeting a perfume company down there and they helped us come up with the
34:00 sense and then once we had that in their lab they came up with a sense you know we then would send the recipe over to the the
34:08 soap maker in tennessee and they would you know order large barrels of it but yeah so
34:13 when we can but at the the reality is for any products i mean it's it's it's a sad reality that
34:21 the cost is typically too prohibitive to have it made it made abated in the us of
34:26 a right like you want to buy the us item but do you really want to pay twice the price people say they want to buy it but
34:33 they don't want to pay the twice the price they want to complain that something's why is it so expensive well because it's made in the
34:39 united states right um tina we're just not and we haven't done ourselves any favor
34:46 becoming more competitive we're just not competitive with a lot of manufacturing it just is what it is even with tariffs
34:54 we're still eons more expensive i mean what have you seen have you seen
34:59 anything like that yeah this same the same i mean those yeah those products like you know the cosmetics i mean those can
35:06 be manufactured like in the united states and margins are still like
35:12 but then yeah all other stuff that's like requires heavy manufacturing it's like most of the time
35:17 also we have some of our clients they have the manufacturing in the united states for like apparel some custom
35:25 metal like fabrication you know those kind of things like print on demand so those type of things they they can be
35:32 more they can be worked out like you know the mat is still good in the united states but then other products
35:39 most of most of them still yeah the products that have like extreme high margins like apparel right
35:46 you can make it in the us of a because there's already the margins are stupid anyway right it's a couple dollars for a shirt that's
35:53 selling for 30. so it can it can cost 40 more to make it here
35:58 and it still is still makes you know tons of money and still has amazing margins it's interesting cool so
36:04 how do you guys you you take products from like other brands let's say when you when you compile the subscription boxes
36:11 you you take products from other brands or these are like your own private label products that you just put together in
36:17 the box um so so it's a it's a combination so we have a couple in-house brands
36:22 uh sometimes just battle box a few others lord and field sometimes we'll we'll do a grenade soap
36:27 co product in a battle box um and so we'll we'll manufacture those
36:33 but we actually go to a lot of you know half the box sometimes more is other brands we'll
36:39 just we'll just go to them and you know some of them have have seen and are familiar with battle box some of
36:45 you have to explain like look we're not a typical reseller like we're not selling this product
36:51 we're including it in a box so we have to educate on us you know truly being a marketing engine
36:57 and you know we're not gonna we can't pay wholesale rates like we need to pay cost plus
37:02 because part of the the the value that we give you get you buy this 160 box but if you source
37:09 it all on your own it would be three four hundred dollars sometimes so you know that's part of our
37:15 part of our value add so we we can't pay you know pay the normal wholesale rates
37:20 or we would lose money so so it's interesting it's uh you know as far as
37:25 as as the brands go though i mean a lot of them have seen so much so much value like it's it's
37:31 it's pretty cool when uh when you get the emails from the company like holy cal like we you know we include this coupon code
37:38 in your box to buy more and everybody's buying it so it's it's interesting it's definitely
37:43 a fine a nice balance of some stuff we manufacture but some stuff we go to go to big brands
37:48 and buy what's your typically like how many months you know the person you know stays with
37:54 like subscriptions it ranges by brand um we're typically seeing
37:59 across all the brands typical is is somewhere in the four to six month range
38:05 after that they typically fall off i i never thought i would be like buying subscription you know products but
38:11 i'm buying the athletic greens you know the um supplements and it's just like it's so convenient
38:17 try to have to think about it just like comes into the you know comes into the mailbox like every month
38:23 yeah i know that it's it's funny there's so many things that like are now subscriptions that you know we i
38:29 think covet just like how cove would helped e-commerce in general i think it helped it really helped the subscription box
38:35 niche because there's so many things that you're going to order over and over again or you want over and over again
38:42 might as well just not have to worry about getting buying them and they just come um you know amazon really they they
38:49 perfected this model with their subscribe and save yeah you know they figured it out now
38:55 ours is different because it's a surprise and it's different each month um
39:00 but you know if you're if you love salamis and for sheetas and cured meats that's good you want
39:05 you want it to be different each month yeah cool so slightly different topic like in
39:11 terms of hiring how do guys like structure your team like to have everyone like remote or
39:16 you have an office where you come together yeah so we so obviously we're pretty remote but
39:23 it's so we really we have everything kind of in three three silos if you will
39:28 so there's come to my my own uh last so daniel is the partner that came up
39:35 with the idea so he has so they have an office and it's about it's in georgia it's about outside of
39:41 savannah about four hours south of myself and in that office it's him
39:46 it's um our head of content a guy named brandon curran he's the one that's in all of our videos
39:53 um he's the funny one on our netflix show um he's there we have uh our cfo
39:59 lives about 30 minutes away so he'll come in the office a couple times we have another uh couple of guys there
40:06 but really that that place the focus is content content uh video content and then product
40:13 procurement uh gets right out of there so they're testing the products they're they're you know deciding what
40:19 type of purchase orders and on etc um and then you go up about north two hours
40:25 and that's our warehouse so it's in middle georgia so we fulfill um everything ourselves
40:32 so we have you know that's that's our largest of the two offices that's our largest or out of our three offices that's our
40:38 largest um office just because there's so many um employees that are packing
40:44 the boxes we all you know we obviously have um some leadership there are our co
40:50 another uh one of the the principles patrick um he runs that facility and then we
40:56 have the guy that runs the warehouse team the guy that runs inventory management
41:01 um jared who runs the the one-time shop the marketplace and then you go all the
41:08 way north past me completely up to toronto so we have an office in toronto that
41:14 it was originally the carnivore club office but um you know we kept the office when when
41:20 Carnivore joined us and um any of those guys are are up there and you know max is up
41:27 there he focuses on product procurement for all the meat boxes and then curtis is up there as well and
41:33 he focuses on amazon for all brands so we do have some structured offices you are back down to me
41:40 and my entire team is removed um including myself so you know we have people spread all
41:47 over uh walter's actually in georgia as well but you look over to luke luke um
41:52 heads up customer experience and customer service he's in tennessee and he was in indiana
41:58 before that so it doesn't matter where he is in his team all of our cs members are completely remote too so you know
42:06 it could we we can't all be remote because we need to shoot content so that you know that office has to stay
42:12 um in the warehouse can't be remote and up to toronto i mean
42:18 they do some fulfillment out of there too so they can't be removed so any anybody that can be remote that's
42:24 not actually physically needed is um so we're almost in a hybrid model if
42:29 you will that's awesome so was it before recorded or after they call it when you kind of
42:35 like adopt it like this we were always in in a hybrid model i've been remote
42:40 you know since since the beginning cool what would be your main like three pieces of advice you know
42:46 considering like all the mistakes obviously you probably made some mistakes along this journey what would be your main
42:52 like three pieces of advice to let's you know say entrepreneur who is let's say at
42:57 six seven figure level he wants to scale up to eight and wants to build you know the valuable
43:02 business what would be your main like three pieces of advice sure so
43:08 you know the we made the mistake when we were small seven figures but in in general
43:14 like it's laughable and it's definitely the biggest mistake we ever made is that we were dependent on a single lead source
43:21 to to someone that's doing that now that has been fortunate in our case
43:26 lucky enough to get to seven figures on a single source like don't wait for it to stop working right you don't want all your eggs in
43:33 one basket like immediately always test off um like some stuff you know has work that
43:41 we didn't think would and then some stuff hasn't worked more you know but test everything try to diversify as much as
43:47 you can on on resources and don't wait like it's easy to say oh we'll look at that
43:53 one next month and just keep pushing it off try to try to spread yourself as wide as
43:58 possible try as many different advertising avenues as you can and when you find something
44:04 um and that's the second piece when you find something don't like slowly scale it scale it as
44:10 fast as you can you know we made that mistake we were in in 2015 we were acquiring
44:16 new subscribers for for five dollars a piece why why didn't we why didn't we clear
44:24 out our bank account max out every single credit card and scale that as much as we could we got 2 000 new customers our third
44:31 month we could have gotten 30 000 wow now you know now now we're we're
44:36 giving high fives when we're acquiring a customer for for a 20x that
44:42 not not even 20x i take it for a 10x set um and it's just it's that that's
44:48 something that now when we find a new lead source that works we still you know tick tock for example if we'll
44:55 we'll do testing for the next couple months but if we find something that works that's profitable and we're confident
45:01 that the attribution's right on it because the customer acquisition cost makes sense
45:07 we are going to scale that 100 as fast as we can as fast as possible dump as much money
45:14 into it as possible like there's no there's not any like slow scaling
45:19 like um because you don't know when it's gonna stop working you don't know when they're gonna when that platform's
45:25 gonna make an algorithm change and your campaign strategy isn't as effective right
45:30 you've seen through the years so many campaigns uh you know facebook's the worst at it
45:36 something is working just great and we're getting like a 7x return on ad spend we're like this is
45:41 great and all of a sudden something changes in that same campaign that was getting a 7x getting a half
45:47 half a x and we're killing it and we're like what happened so i mean i think just going as fast as
45:54 possible and that goes into the third piece too it's um i i think entrepreneurs especially when
46:02 they have other stuff going on they like to talk and strategize and come up with the
46:08 strategy sometimes they spend too much time on that
46:14 and they it takes them six seven months to execute like get it half right get as much of it
46:20 as you can the bare minimum the mvp get what you need to to start and and
46:26 fire and go and keep course correcting keep getting better keep aiming and um
46:33 yeah i think it's better to to jump right away and make those course corrections and
46:39 slight pivots and changes and take those learnings in first six months of strategy to launch then
46:46 it's not doesn't work and then and then what you're gonna then make pivots i think
46:52 people in general sometimes are scared to pull the trigger it's not everything to be perfect in
46:58 reality it's never going to be perfect ever so many of the things we've launched look so vastly different from what they are
47:05 today just because we find learnings okay this isn't selling this we're not getting acceptable customer acquisition
47:11 costs okay what's the problem we need to change price point do we change offering does the does the val value
47:17 proposition need to change like let's start let's jump in if it doesn't work let's try to fix it
47:23 and launch again and run ads again and just keep going um as opposed to six months of deciding
47:30 what the price point should be now go and if you're wrong you can fix it um
47:35 that six months you could have lost your opportunity right such a good point um a lot of great
47:41 insights thank you so much john i know you're busy man you guys are running multiple brands
47:46 and uh thank you so much for sharing this insight so how do people find you how do people connect with you so
47:52 you can search search my name on linkedin it comes up um
47:58 you guys can connect with john yeah i have a job as i say i have a of a blog
48:04 onlineksto.com so i give random tidbits of insight things we're seeing working things that
48:11 aren't working venting and frustration as well just just my blog but it's a lot of good
48:16 stuff there awesome awesome yeah we'll share it also in the comments thank you thank you so much for jumping
48:23 on this guys thank you so much for watching i hope you got a lot of value from me i personally got a lot of you know
48:28 insights and a lot of perspective and especially you know from the perspective of you know the subscription business
48:34 as a whole because i thought it's like it's kind of like oversaturated right but you know i i think there's like there is
48:40 a lot of opportunities the same way you have found the opportunity for your brand right like
48:45 you know in that space there's probably opportunity for the subscription brand like in
48:51 in different like areas in different niches yeah the opportunity is in the niche for sure
48:56 and then and all of ours have been very been very niche it's just it's very competitive so
49:02 niche is niche is the way to have success cool thank you so much john and thank you thank you
49:09 thanks so much have a good one thanks for having me thank you hey thank you so much for watching this
49:14 video if you can just like this video and hit the subscribe button so you don't miss any of my videos in the
49:20 future thank you
