You Should Take Your DTC Brand Into Wholesale (W/Jared Mehr From Pura Vida) transcript

Jared Mayer built the Pure Vita retail wholesale program from the ground up all the way to $35 million and has a lot to say about how DTOC brands build their retail program. Shared and I met because he started working with a client of mine to start building their wholesale program and it was one of those conversations where right away you talk with somebody where you go this person knows what they are talking about and over and over in my experience dealing with seven and eight figure e-commerce brands they have this idea that they want to go into retail want to go into wholesale brick and mortar that kind of thing and don't know how to do it.

It's just a sort of a black box. They don't know who to reach out to. They don't know where to start. They don't know what operational demands there are. And so Jared is coming on the show today to talk about exactly how he does that with brands now as a consultant, helping brands do exactly that kind of thing. This is going to be a really good conversation. If you have any questions about how to take your brand or a client's brand into wholesale relationships, Jared knows a lot about this.

He's built programs from the ground up, specifically in this way. You're going to like this conversation a lot. Let's get into it with Jared Mayer. >> What's up, Jared? >> Hey. Hey. What's up, man? How you doing? >> Good. It's good to see you again. I'm uh I'm really excited about this conversation. I've recorded probably I don't know hundreds of podcasts at this point over the last bunch of years. I probably I bet the total number is like 250 or something like that as my guess.

And I don't think I've ever done an episode specifically dedicated to this topic. So, I'm really excited about it because I've repeatedly dealt with clients asking questions, everything from should I take this tiny mom and pop retail relationship or should I take uh or like Walmart called and they want me to sell into every door. What should I do? And everything in between, right? I've watched brands do it when I started at Calo.

Calo added retail at some point and that was a really important part of their business. I just over and over I've seen this kind of thing happen. I think some brands really fetishize the idea of going into brick and mortar. It's really fun to see your stuff on store shelves. Um, and also it feels like you you're in the big leagues when that happens. Whereas TDC feels a little stardy in some of that. Some brands are scared of it.

They're like they don't know what's going to happen. Is if I don't sell through, is it going to ruin all retail relationships forever? Are they going to send me all my stuff back? You know, everything in between. So, um, so tell a little bit of your story with Pure Vita first so people know kind of where you came from because it's it's pretty compelling to see like what you were able to accomplish there. >> Yeah, definitely.

Um, first off, thank you for having me on here. I uh I feel honored that this is the first wholesale retail conversation you've had. So I got a I got big shoes to fill right here. But uh yeah, man. So kind of a cool story with Pure Vita. It was uh it was 2010. I was living with a couple buddies of mine in San Diego. Um they went down to Costa Rica on a surf trip. Came home with a uh trash bag full of bracelets um that they had gotten from some artisans down there.

And I was doing commercial real estate having to make a hundred cold calls a day. Hated it. And uh these guys launched a brand called Pure Vita. Uh my two buddies Griffin and Paul. And so they were selling for a few months, selling online, doing some cool stuff. And eventually I had had it with my commercial real estate job. I went to the boys and I said, "Hey, let me sell these products in stores. I don't really know how to do it or what I'm doing, but I will figure it out." and they were like, "All right, we'll handle ecom, you handle wholesale, we'll go from there." So, I was working with uh one of their sister.

Um her name was Aaron. So, it was me and Aaron just kind of tackling wholesale. So, how we got started was we were just kind of cold calling, dialing for dollars, sending samples, reaching out to stores, knocking on doors, um going to trade shows with not a clue what to do. And eventually we got this thing going from zero to 35 million annually. Um I have I had 32 sales reps under me ranging from Canada, the US, Mexico, the Caribbean.

Um and I've been to probably 150 trade shows. So it's been a fun ride. >> That is uh a monster thing. Just so we're clear. I think people know it's Pure Vita, but the 35 million is just the wholesale program, right? So in in the context of a much larger business that really was a DTOC business first so far as I understand, right? Like you know just just like really was a DTOC brand and that added on wholesale as part of it in in channel diversification which I think is a lot of where my audience is coming from.

Um let's let's just kind of start at the start for brands. Is there a revenue stage that's too early for brands like like timing for a wholesale program? Is there some kind of revenue stage you look at or other indicator that a brand is sort of like ready to start thinking about it or or not ready to start thinking about adding wholesale? >> Yeah, I mean I think there's there's no exact number of revenue. I think what I've told brands that have come to me and asked like should they do wholesale is just get your brand established first.

Get a presence online, get a website up, get some Instagram, some social media going, get a little bit of a proof of concept, you know, whether through e-commerce sales, even Amazon or something like that. Because these retailers, the first thing they're going to do when we reach out to them, they're going to look you up. And if you don't have a good presence online, if you don't look like you know what you're doing, if they don't see you anywhere, they don't really want to take a risk on paying for your product and bringing you in the store.

Is there anything like operationally on the ecom brand side on the DDC brand side where you go like hey don't even make the calls yet like you shouldn't do that or yeah because I mean obviously like you said like you're going to want to see some kind of social proof or something like that like I mean I'll give you an example I'm starting a brand okay right now I'm in the midst of of spinning it up um it it it has some potential I think for sort of retail presence at some point it's definitely not what I'm thinking about but like I I shouldn't pick up the phone on day one and start calling wholesale businesses right like I I should I should estab establish it, but like when when should I really make that next step? >> Yeah.

Yeah. So, what you definitely need to have is infrastructure there. So, a you need to have the inventory because wholesale orders obviously are different than e-commerce where someone maybe buys one or two. Wholesale, they're buying 10, 20, 50, 100 pieces. uh you need to make sure that you have uh UPC's, skew numbers, pricing, um all of that set up on the inside because when you sell to these retailers, they need to input your products in their system and track sales for reporting.

So, if you don't have that and you can't give retailers that probably not ready. And lastly, I would make sure that if you're using a 3PL, the 3PL has wholesale capability. Um, I know it kind of sounds funny, but I've definitely run into some 3PL's that can do really well on e-commerce with a couple orders here and there, but don't really have the ability to ship an order with 20, 30, 40, 50, 100 units. So, I think you need to get all of that backend infrastructure in first, and then we can start thinking about wholesale.

Now, obviously, before we actually get in and start dialing, we have to figure out minimum opening orders, minimum reorders, starter packs, displays, etc. But I think that kind of goes into step two of the conversation. >> Yeah, my sense is that uh brands really consistently, it's part of the reason I asked the question the way I did, brands really underestimate the operational lift because when you first think about it, you're like, "Oh, we'll just like send our product to the retailer at at X price and then they'll like sell it in their store and you know, we'll support it with our ad sell through and and all that stuff." But like I don't you just mentioned a bunch of things like UPC displays, you know, 3PL relationships and stuff like that that on the operational side I think people just are not necessarily thinking about mostly because if you're just not experienced in that area, you're not experienced there.

You just don't know what to look for, you know? >> Yeah. Yeah. I mean, look, wholesale retail, it's hard. like it's it's definitely manual labor um in terms of whether getting it set up or even doing the sales, doing the outreach, putting in the orders, and then following up with the accounts, too. Because like again, the difference is e-commerce, you have a customer, they buy online, it ships, maybe we email them again, maybe they see ads later.

With wholesale, we're manually calling the buyer, we're shipping the product, and then we're hitting the buyer up again in a couple weeks or a month to see how it's selling, to get reorders, to answer questions, and maintain this relationship. So, um, yeah, it definitely takes a little bit of manpower and a little more effort in terms of building and growing and scaling as well. >> Yeah. Um, okay. So, so do you think I mean if a brand is at 10 million, does that seem about right as like a all other things being equal starting place, you think they can go earlier than that?

Is there anything distinct you're looking for um to to sort of clarify that sort of thing? Yeah, I mean I honestly I think at 10 million a brand's perfectly primed for getting into wholesale. Honestly, I think even lower would work. I mean, for us personally, I think we we had some wholesale momentum when we were even at a million or sub a million. Um, so yeah, I think those that number is perfect because you have proof of concept, right?

Like I know it's not huge if you're only doing a million. I mean, a million is no small feat, but if you're doing 5 or 10 million online, you have a business. people like the product. >> So yes, I think that's a perfect starting point. >> Yeah, it's extremely difficult to sell even a million dollars worth of stuff uh without having a business. I think I think that way of framing it is right. I've thought about this a lot of times this way. is like at that level you you you really have to have gotten something even if your CAC is high or something like you have to have done something that has made it so that people are interested enough in the product to where there's there's you know uh no reason that you shouldn't be able to add some kind of sales channel.

Are are there brands that you think like when you look at it and you say you you like these are the fact factors that make it so that you actively should not uh do this besides being too early. Yeah. I mean, truthfully, I think a big thing that I find is honestly if you're selling on your ecom site and you are constantly running promotions, sales, half off, boos, that kind of thing, probably not the best idea to get into wholesale only because you're probably going to piss off a lot of these retailers.

You're going to get a lot of nos because when you go to cold call them or reach out to them and they check your site and you're half off every other day, I don't think it's going to work. Now, I'm not saying that's a bad strategy. if that works for you on your e-commerce strategy, do it. But I think that's a big big red flag that in this day and age, uh, with e-commerce becoming such a big thing over the last 10, 15 years, um, I know that sales are heavy, uh, Black Friday, these kind of things are heavy, and I think if you want to go into retail, you just have to kind of tone it down or find some middle ground.

That's that's one of the biggest, I would say, like no nos there. >> Yeah. Um, maybe let's let's sort of do a uh as as I'm as I'm asking you questions, I'm thinking about like maybe it would help us to have like a a ground up from beginning to end process to think about how we would do this for a brand. And also I'm al also thinking about the audience here and thinking like um like people are going to have all kinds of thoughts and questions about this.

So um a couple things right away as we as we kind of go through this exercise because it's going to change depending on different brands. First of all, leave a comment on this on this video if you're watching on YouTube in particular. And I will do my best to get this video over to you, Jared, uh, afterwards. So, if there's any way for you to interact, if you're cool with that, to to do that be an overwhelming number where maybe you could help some people out.

Hey, quick note, as Jared and I are talking in this episode, I asked him and he said it was fine if I told you to comment on this video with any questions you have specifically about your p your particular brand and he will try to get into the comments. send them to him so that he can interact with you because we're going to talk hypothetically about what brands ought to do, but your brand probably has specific questions.

So, um, so comment on this video with your specific questions and thoughts about this. Jared will try to respond and then Jared is building a consultancy where he is helping brands enter into wholesale, DTOC brands entered into wholesale just like he did at Pure Vita. So, reach out to him at jarmergmail.com. Send him an email, get going. You can also reach out to him on LinkedIn. The links for those two things are in the show notes.

Let's keep going. Okay, so let's say let's say a brand is like, "Okay, I'm ready to rock and roll. I'm ready to go into retail." What are the first things that they should be thinking about um to to sort of start off on the right foot? I don't know if it's retailer selection, retailer targets, operational stuff. Where would you start with a brand? >> Definitely. That great question. So, here's my little crash course in uh some things to start thinking about if you were to come to me and you were like, "Hey, we're selling on ecom.

We want to get into wholesale. Where should we start?" The first thing I would figure out is margins. Wholesale means if you sell a product for 20 bucks, your retailer is going to pay you 10. That's the minimum right now. If you can get them the product at $8, $850, $9, you look like even more of a star. So, first things first, figure out if you can even do that. Now, you also have to start thinking about down the road, I'm going to pay reps 10% commission.

Can I squeeze that in, etc. So, I think the first biggest thing is pricing, margins, etc. So once you check that off, all right, next step. >> Let's let's hang on that for just a second because I think it's an important thing. So basic margin expectation, this is what I've always thought of it as essentially 50/50 for between brand and uh and retailer. So you you just framed that as like actually if you can get the retailer more, they're going to like you more for obvious reasons, which is they have a stronger margin and more incentive if they can if they can do that.

But like so let's say you're selling a product for 20 bucks. your landed cost shipping it to the retailer is uh is let's call it $4 per unit. Okay, something like that. So you got 80% margin. Um first off, are they paying for shipping or are you? >> Most of the time they aren't. >> Okay, great. If you've been watching or listening to my podcast for a while and you have not switched your customer service help desk software to Rich Panel, what are you doing?

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It's really really good. Go to richpanel.com check it out today. rich rididge ppanel.com um and tell them I sent you. So uh so we'll kind of put that out separate. Um and and so let's say in that case now you've got $16 of margin left over. So $20 retail price, $4 in total cost. Some of that they're going to pay for if it's shipping. Um uh and so now there's there's 16 bucks left over. Where does that margin go in this in in the retail relationship? >> Yeah.

So like they they're paying you 10 for the product, right? So um then they're selling it for 20. Now the reason I say if you can give them more, it's better is just because these retailers, they have to pay their staff, they have to pay the bills, they have to pay for rent, etc. So, I would say if you can figure out your product and you can offer it to someone at $8 and they sell it for 20, you're going to beat out those other brands that you're competing with for shelf space and to get them to say yes sooner.

I think that was your question. Uh hopefully I answered it. Okay, cool. Yeah. >> Um I just know like from experience when pitching and cold calling and and talking to these retailers, if I go to them and I say, "Hey, we're you have a 55 margin or a 60 margin," you're going to just get that far ahead. Now, one caveat there is, and we can have a conversation about the big boys as the next topic here, but when you go to the big boys, they expect a 10% or a 20% discount off wholesale.

So, that's another thing. Like, if you want to get into wholesale and you also want to sell to the Nordstrom's, the Best Buys, the big guys, you need to give them at least 20% off wholesale. >> So, basically, take your wholesale price and then mark it down even further. That's what you mean with 20% off. >> Correct. So if you if you retail for 20 bucks, your standard wholesale is 10. Someone like Nordstrom or these big guys, they're only going to pay you eight, maybe even 750.

And it's no question if if you can't do it, you're not in there. So >> interesting. >> Build for that as well. >> And then you've also got to factor in, like you said, 10% for sales reps down the line, right? So you got to build your pricing with the expectation that at some point it's not you on the phone as the founder. It's a sales rep that you have going out for you and they've got a commission. That's how they're making their money. >> Correct.

Yeah. And I know that a lot of these like saying discount 50% then another 10 another 10 it kind of sounds daunting and it sounds like they are stacking on each other but truthfully uh in this day and age with meta prices being what they are and how hard it is marketing online like there is still a world where wholesale is more profitable than e-commerce and I think at pure vita we were 8020 ecom wholesale for the first like 8 to 10 years of the business co hit things kind of got wacky and Last year before I left um we were like 6040 6535 ecom wholesale and wholesale was more profitable.

So um I think people are cycling back into that and realizing like with the cl with the change in landscape online wholesale is more profitable it's definitely worth doing. Yeah, I mean I think you're right. Like if you actually reconceptualize what meta is, you know, in the early days of DTOC, probably in the days Pure Vita got started, I remember so much of the DTOC framework for brands was like, hey, we we cut out the middleman and that's like the value ad of of DTOC is like, we're just going to go straight to you.

We own the customer relationship and we cut out the middleman. Those are the two things that everybody said all the time. And um and sometimes brands did that as a way of making a price like claim, right? Right? So they would be like, "Hey, we're lower price than other alternatives because we cut out the middleman." The middleman being the brick and mortar retailer. That's who you used to have to go through to get our get products.

Now you can buy direct. You don't have to do that anymore. And what happened over time is that the middleman just moved actually. Uh the middleman is is now Zuck. And if you think about like most brands listening to this will take a 2:1 all day long on Facebook, which means it's ex almost the exact same volume proposition that you just said uh about like sort of the retail relationship, which is I'm going to pay half of my revenue to a middleman who is going to be the storefront for me.

And that's really what Meta Functions as as like a giant storefront that goes to the customer instead of the customer going to to the storefront. And and um and so yeah, so brands are very they have a weird idea about this. I think a lot of times which is that like their margin should be really different. They do the same thing with affiliates actually where it's like hey we'll give affiliates 10% of the revenue that they drive.

It's like what you want a 10 to one rorowass like it just doesn't it just doesn't uh make sense and they make that same mistake I think with retail but I think what people miss out on is the opportunity for volume uh and and just like what if you are selling through at retail like it is it is so profitable right like you just get these huge orders in uh and can be really I it's harder to measure there's some downsides there's sometimes some cash challenges but like which I want to talk about in a second but um but like there's real value ad and it's super profitable like you up.

If you have a sevenfigure e-commerce business or larger and you are not using Intelligj, what are you doing? It is time to use Intelligjs to test all kinds of things that actually drive profit for your business. Intelligence is just one of those pieces of software that I really think just about every DTOC brand should be using once they're to some, you know, like I said, mid7 figure revenue range or up. It just should be part of your stack, probably even earlier than that to do CRO testing on your website.

That's what Intelligence does for you. Except CRO is the wrong words for that. That's what you know it as. You know, this kind of thing is CRO testing or website split testing or AB testing. But it's not conversion rate optimization. It's profit optimization. And that distinction is critical because Intelligjam is built to make it so that you cannot just drive a higher conversion rate or whatever drive more revenue on your website.

It's meant to drive more profit. And the way they do that is first of all by allowing you to test things that are closer to the point of purchase have more impact on purchase than traditional CRO software does. For example, price testing, uh, sitewide offer testing, free shipping threshold testing. You right now watching this video probably have, if you're like most brands, a 10% off for new customers on your website.

Is that good? Is that just cannibalizing sales that you would get already? There's serious smart thinkers in e-commerce who say it does do that. There's others who say, "No, absolutely it's important and necessary." and maybe you should take it to 15%. Stop answering that question with a guess and start answering it with actual data and critically tie that this is the second part of what makes Intelligjam so unique. Tie that into your actual cogs on your Shopify store so that you uh can see the answer for how these tests are working out.

Not at the level of conversion rate, not at the level of revenue, not at the level of AOV, although you can see all those things too, but at the level of profit per visitor, which it is the core metric that Intel gems works off of. You should be testing those things because they matter in the customer experience and they matter for the profit that you are driving in your business. Some of you are going to work so hard to get two points of margin back with your supply in your supply chain and I commend that.

But what happens if you can just raise the price five bucks and it's that easy? You might be able to do that and you can know for sure by going to Intelligjs, running your split test and doing it really easy to install. You don't need a developer. Goes right, plugs right into Shopify, no problem. Uh you can be up and running with Intelligj extremely fast. You can also use the code Ferris 20. F A R I S20 to get 20% off your first 3 months by going to intelliggeems.io.

Ferris 20. Go use Intell. All of my clients, literally all of my clients use Intelligjs. Go get it. >> Yeah, 100%. And like I think a big misnomer in this whole world is like this whole e-commerce world is like oh ecom and wholesale compete right and like I have heard that so many times over all these uh you know over the past years is like oh e-commerce competes with wholesale cannibalizes customers etc. The truth is it doesn't like they they coexist.

There's synergy there. So someone gets an ad for your product online. They don't buy it. They go to a store. They see it in a store and they go, "Oh, I just saw this. I got an ad for it. I'm going to buy it." Vice versa. Somebody sees a product in a store, touches it, feels it. Maybe they didn't want to buy it at that point. They didn't have their wallet. Their phone was dead. Whatever it may be. They go home, they get served an ad.

They're like, "Oh, I saw this in a store. I love this thing. It was so cool." Boom. Bought it. They coexist, right? And like it's different customers and and what's cool about your product being in a store is obviously depending on the product, but there's a lot of products that are impulse buys or even just something someone didn't know about and they went to the mall on a Saturday because they wanted an outfit for that night or they wanted shoes or they wanted something.

They went browsing, they saw your product, they had never heard of you and they bought it. That is a different customer than people online. And so I think they're harmonious and they can work together. Um, yeah, I think that the the there can be complications particularly in some categories. I've seen this happen where like selling into true mass retail like Target, Walmart, those kinds of places where everybody shops basically can actually cannibalize some online sales.

Um, I I've watched that happen, but I think by and large you're right. And also that's okay. Like as long as it's generating total value in excess of of the output. It's just it's a little harder to measure, but it but it's okay. I I broadly agree with your sentiment and I I think that I think the other thing is that um people just still forget I think people who are in our world like over 80% of retail uh consumer uh activity happens in person still in the US over 80%.

I mean that's a huge amount of customers you're leaving on the table if you're not in in wholesale. And so if you're able to do it it's it's really massive. And of course of that remaining 20-ish percent uh 50% of that is Amazon. So um so it's basically a retailer. And so it's it's uh yeah, it's a huge huge opportunity. I mean, let's let's keep moving. So um so that's the margin expectation that you have up front. Um and then let's uh so having your your economics dialed is really important.

Let's just stay on the financial component of it. Can we talk about expectations for cash movement? I've heard really mixed things about this for retail. So for example, financing terms. I've heard of stories of like especially big brick-and-mortar retailers being like, "Hey, like we're going to place the PO and we're going to pay you in 90 days and so you got to front the cash for the PO and then you got to finance it and there's even loans you can take out against those PO, you know, sort of like AR loans." So, um so talk about cash movement and um and and that through the through the wholesale side of the business.

What should brands expect? >> Yeah, this is the million-dollar question. This is kind of my favorite thing to talk about here because um there's a few different aspects of it, right? So, in terms of cash movement, when you work with the smaller the mom and pops as we call them, which is maybe one door, twodoor, five door chain, um most of the time those retailers pay you with a credit card upfront right before you ship.

So, you get an order for a,000 bucks, you charge their card, $1,000, you ship the order. It's great, right? You get your money up front. Now, a lot of people are like, "Oh, well, a lot of the mom and pops are too much work. It's too many stores. It's low volume. I just want one big guy to write me an order for $300,000. Okay, great. On paper, that sounds amazing, getting a huge order. However, the big guys won't pay you for 60 days or 90 days, 30 days if you're lucky.

Minimum. Minimum. And the problem, too, is that they can also issue chargebacks. So, you ship them an order, you forget to write something on the box, $200 a box chargeback. You ship them the order a day late, $100 chargeback. So, I think there's definitely plus and minuses to both. But in terms of cash flow, what I usually suggest to people for the most part, if it makes sense for their brand, is build a baseline of these mom and pops.

Build a baseline of these retailers that are smaller so you can get some cash coming in. You have people ordering. You have places you're selling your inventory. And that way, if a big guy comes and something happens, let's say they order for $30, right before you ship, they go, "Actually, we only want it for 10." Well, now you have $20 doors worth of product that you can sell it to the mom and pops that you have versus being stuck with product you don't have.

So, it's it's kind of a fine line of like when I start, should I just go after a big guy or should I get a baseline of small guys? And I usually suggest getting a baseline while you start chasing the big fish. >> That allows you to build some of the operational muscles and some of those things too, right? Build your displays, see who's selling, see what kind of customers, what kind of stores, that kind of stuff. >> Yeah, 100%.

And I mean, if you ship a mom and pop, for the most part, you ship them a day or two late. Usually, it's just someone that owns the store is on the phone with you. Hey, no problem, Jared. I get it. It's all good. You ship Nordstrom's late, they might cancel the order. They may charge you back. >> So, you can really get your chops going with these smaller guys and really navigate. And the cool thing is, too, like you don't have to go after the big ones on day one.

They're also much harder to get into. There's a world where you get this baseline of retailers going, you're proving the concept at retail and I'm going to just use Nordstrom again just because it's a big one. But like even Pack Sun or Tilly's or something that buyer goes shopping on the weekend with their kid, sees you at a surf shop or sees you at a women's boutique, loves the product, and all of a sudden they email you and say, "Hey, saw your product here.

I think you would be a great fit for Buckle Stores or for Best Buy or for whatever it is." And then you're you're moving. >> I've heard that same story with that with Meta Ads actually a bunch of times. And in fact, Mike Beckham, I think a long time ago from Simple Modern mentioned that sort of the most underatted part of meta ads is that is is reaching retail buyers and having them reach out to you and and generating sales relationships that way.

It's a very similar thing you're describing. Um, but probably even better because if they can see your retail display, if they can see your pricing, if they can see where your position in a store, it's probably more transmiss uh like translatable in their mind to their thing. Um, yeah, that makes tons of sense. is um uh just uh at the sort of really baseline level are with those mom and pop orders, are you having them processed through like a Shopify wholesale separate login kind of deal?

Is that the simplest way to do that? Just take the order straight through Shopify? >> Yeah, I mean you can take it straight through Shopify. I think Shopify has a pretty good wholesale platform you can also set up. Um you can even just enter straight into QuickBooks if you use it. Um there's also some amazing B2B platforms out there. A couple of them are Repspark, Elastic, uh New Order. However, if you're starting out, you don't have to spend that 12K a year, 13K a year.

You can get scrappy, enter the orders yourself. Um, I don't think your buyers need a platform online yet to enter the orders because you the velocity isn't quite there. When it gets there though, I do recommend getting on one of these B2B platforms >> so the buyer can just go in and say like, "Hey, I need to replenish. I'm just going to go order myself." >> Correct. They they log on, they see everything with wholesale pricing.

Their info is in there, they place the order, boom, go. They're great. Like, we use them. They're amazing. I just sometimes for brands starting out, you can kind of get scrappy for a while while you get that revenue going. >> Yeah, I've seen people do this just with Shopify or like you said, just direct entering into QuickBooks on the early days. Um, okay. What about operationally? So, you you take your order or whatever.

You mentioned a few things up front that I think are sort of um interesting to chase down. Um, by the way, uh, really fast, where did where did Pure Pure Vita start with? Did you guys start Mom and Pop? like how did you how did you guys uh build it? What was the sequencing of the types of stores that you did? >> Yeah, it was it was mom and pop 100%. So, I would actually uh I was hopping on Google myself and uh the girl doing sales with me.

We would hop on Google and just type surf shops San Diego. Get a whole list of them on Google. Call, hey, what's up buyer? You know, or hey, is the buyer there? My name is Jared. I'm calling from a brand called Purvita. we've had a bunch of our fans tell us about your store um and said they'd love to see our products in there. I'd love to send you some samples. And it was just this on repeat every day, every day. Every day I'm calling 10 stores a day, 20 stores a day.

I'm going mailing out samples. We're doing, you know, women's boutique Seattle and just kind of going from there. And then eventually we got we we went to a trade show. Um crushed it. It was a magic in Vegas, it's called. It's like a women's fashion accessory. They have men's as well. Um, and then the baseline of mom and pop started growing and then at that point Pacson came to us and that was like one of our first big retailers.

And so yes, to answer your question, it was it was definitely the mom and pop baseline first. >> Do you know what the revenue like stages were? Like how much revenue was possible at the mom and pop stage like that when you sort of piled them all up? >> I mean early I think in our first year, two years we were doing a couple hundred thousand. Um, I mean, we got all the way up to about 7 million annually in sales before we even had any sales reps.

We were doing it in-house. We did have a couple majors, but most of our business was was these mom and pops, honestly. >> Yeah. Surf shops and stuff. >> Surf shops, women's boutiques, gift shops, Hallmark stores, hotel gift shops. We were doing some cruise ships, um, some resorts. Yeah. Honestly, it's so interesting to think about all the things you just rattled off because I've definitely walked through, especially since getting into e-commerce, you know, 11 years ago or whatever.

Walked through like uh uh you know, staying at a hotel somewhere with my wife or something like that. Walked through their little gift shop and thought, who is buying who is selling into these stores? Who is buying? There's there's a lot of hotels. Like there's like a lot of like that's probably a pretty you could build a big business selling into hotel gift shops and and and hotel boutiques and stuff, you know? you start to realize what the scope of these things are.

It's pretty serious. >> Well, I mean, it's so funny you say that because I think about cruise ships, right? So, I was always like, I've been on some cruises and I'm like, who buys here? Like, you were on points, weren't you? You're a big point guy. >> I love the points game. Don't We could have a whole another podcast about points, man. I flew around the world a couple months ago on points in first class only. It was incredible.

I could tell people how to do that one. That's my passion. But >> you told me you took a shower on on your flight, right? Yeah, I did I did I did the Emirates first class. I took a shower on the plane. I had unlimited caviar. It was unbelievable, man. >> That's amazing. Okay, so you're so Yeah. So, you're saying cruises? >> Yeah. So, like for example, cruises, right? Like I've been on cruises and I've gone in the gift stores.

I'm like, who's buying this stuff? But the crazy thing is is so many people are because they're at sea. Um they have money to spend. The parents get their kids money. They're at sea. They're bored. the parents are by the pool, whatever it may be, right? And they want a souvenir. And the best part about these cruises is every seven days there's a whole new plethora of thousands of customers. And I didn't realize how much business these guys were doing.

And they were crushing it. We had floor displays as tall as me in these stores. They were refilling almost once a month. Um, and same with hotel gift shops, right? Like, how many times have you gone somewhere or someone you know and you forgot sunscreen? Where do you buy it? you buy Sunbun at the gift store, you know, or like you want food, you want snacks, you forgot a hat, you forgot a towel, you buy something there, or you're in Hawaii, you're at Turtle Bay Resort, your kids are having a great time, and Turtle Bay sells bracelets that have turtles on it.

They want to remember this trip forever, right? So, like there's so much business in stores like that. It's crazy. >> It's really cool. Um, is um uh Okay, so let's talk about the the sort of like display side of things. Um, and the reason I, by the way, hit on that was because of the, um, just I think people think like, is it even worth doing if it's not getting into Target or something, you know, or or again, or Best Buy or Nordstrom or something like that, you know, but yeah, there's a real volume to be had in some of those stores.

Um, is um is so let's Okay, so >> uh, you've got a situation where you're getting set up, you've you've got your economics figured out, you have a sort of order taking system set up. You talked about displays and you talked about UPC's and things like that. Just talk through that whole process. But how should brands be thinking about building displays? Uh, and um, should somebody be helping them with that? Is it should is it a special service?

Is it a consultancy through somebody like you? Like just that whole sort of operational side of things, what they're going to actually do to make themselves sell through in a store. >> Yeah. Um, so I I'm going to start this off by saying displays are product specific obviously. So if you sell shoes, it's probably pretty hard to have a shoe display. So, um, with that in mind, a lot of other products can have displays, and I think they should have displays, whether you sell keychains, um, hats, bracelets, uh, sunglasses, anything like that along those lines.

Headphones, like gifts, things like that, magnets, whatever it may be. The reason is is the first thing that you will run into when you go to reach out to a store, obviously, you're going to tell them the story about the brand. But if they like the product, they're going to ask you, "Okay, so how do I display it? Where do I put it?" And the one thing you do not want is them to take your beautiful product, your beautiful brand, and stick you on some count, some peg display in the back of the store with 20 other things, products from China, whatever it may be, right?

Like you want to stand out. You want people to know what you have. So, what I recommend is if you have a product that can be used on a display, sunscreen, towels, um, anything like that, to look into making a display. Now, it can be as easy as like for Pure Vita, when we first started, we literally used wood from the ocean. This guy used to go to the beach, pick up logs, cut them into a little tree for us, and our display was a mini tree with two lines this big, and it said Pure Vita.

Was it beautiful? No. But it did the trick, right? And eventually we expanded and we upgraded the display. But there's a lot of outlets like you can even go on Alibaba if you want and find something. You can go um Google display manufacturer near me, talk to them. Um I know obviously there's plenty of display manufacturers I work with that do it for a bunch of big brands. But to answer your question, yes, because you want someone to walk into the store, their eyes catch a display, they see a logo, maybe you have your story on it, a QR code to the website.

Um and you want to be able to tell your story and stand out. is uh is there anything else on that initial launch that you think of as like how to set up be sort of before we ship the order to be as successful as possible when we get there? What are the questions somebody should be asking? So like again, you know, you sort of answer the financial stuff and you you let's just assume the operational stuff, your 3PL can handle it, all that stuff is dialed and you're starting to think about like I want to make sure we actually sell through.

Uh what what should we be thinking about there? >> Yeah. So, one thing that I really wanted to say that kind of happens in the beginning of the process that is is one of the first things I ask these brands obviously besides can you do it is what's your elevator pitch? What is your sales pitch? Think about it. And and what I've run into is is these e-commerce brands are like, "Oh, you know, we we're the number one Googled sunscreen or our ads are doing a three rowaz or something like that, right?" And I'm like, "Okay, awesome." But a retailer doesn't care about that, right?

Like that is not going to bring a customer into their store. That's not something that they can tell the customer and that's not going to sell the product in store. So think about your sales pitch and have it be something relatable. So I call a retailer and I tell them, "Hey, I am I have a really cool bikini brand I'm selling." >> Okay, tell me the story. Why Why should I bring it in? Well, first of all, um you know, we're influencers.

We do limited drops online and our product sells out every time we do a drop and all of our customers are saying they want to touch it, feel it, see our product in stores. So, we're going into retail right there. A retailer is going to be like, "Okay, this is a reason that I'm going to benefit from selling this product, right?" Or maybe, "Hey, um, we help employ artisans around the world. Um, so our product is all handmade.

It's all waxcoated string. It's bright. It's beautiful. And it'll bring customers into your store." Oh, I love that story. I love Costa Rica. I've been there before. So I think in step one of the process, think about your elevator pitch. Think about what is going to make a retailer bring you in. So that's part of Sorry to kind of get off track there on that question. >> No, that was exactly the question. Yeah. >> Okay.

Yeah. Like that to me is super super important because like calling these guys and pitching them and talking about e-commerce stats or Google Adwords or Facebook rorowaz, it's not going to do it. You have to have something that's going to like relate, touch their heart, and give them a reason to want to bring you in. >> Considering that Go ahead. No, sorry. Yeah, I was going to say besides that the financial aspect, the operations aspect, and yeah, honestly with your 3PL, I would just make sure that you have the product, you have the inventory, and they could ship it in a timely fashion because the last thing you want to do is start writing orders, promising products, and then shipping 50%, shipping late, missing windows, that kind of thing.

You want to you want to have a great first impression. >> Sounds like part of the answer to that is just is just crawl before you walk. like get a few of those first orders, dial in your process, make sure everything is good, and then kind of be ready to scale it from there before you go and like just try and get, you know, $100 or whatever on day one or something, something like that. >> Yeah, 100%. And like what's really cool with wholesale is is is it snowballs.

So like day one it may feel a little bit daunting, you know, going from zero to one store to 100 to a,000, right? But like you put in the work in the beginning and you get you cold call, you get your first few few stores, you have a wholesale inquiry set up on your website. So stores start reaching out to you when when they set up the ads or when they see the ads maybe or see you in a store. So you're getting your new stores, you're getting your new stores.

Well, after a couple months, you're continuing to get new stores, but the old stores that you got before are now reordering. So now you have two rows of orders, new stores and reorders, and that just keeps building and building and building, and it's a snowball effect. And then maybe you go to your first trade show and you write 20 orders there. And so I think like yes, crawl before you can walk. Don't stress about trying to get that $500 order on day one. >> Um and and so then let's talk about the actual sales process a little bit more too.

Is um in the early days you think the way you guys did it at Pure Vita is right. You described the process of just calling a bunch of different stores and uh and and making the pitch that you said you made. Uh like is that just is that is that the way brands should think about it? Just like get on get a team member whose job it is to start making those calls and and start selling. I, you know, identify based on gut feel basically, right?

Like you you said pure VA was surf shops. Like that makes all the sense in the world based off of kind of your guys' sense of who you were and and where you guys came from. Is that pretty much it? Think, okay, where are we likely to sell through? Start making Google do some googling. Start making some calls. >> Yeah, I think the first thing you need to do in that sense is figure out what kind of brand you want to be, right?

Like do you want to be a brand that's in surf shops, boutiques, gift stores, etc. Shoe stores? Like, okay, great. Go after those. Do you want to be a brand that's in 99 cent store, CVS, etc. That's fine. Go after that. I think the problem is if you want to be in low, you know, discount stores or grocery stores, etc., it's going to be hard to sell to the boutique store. So, figure out your path first and and where you want to see your product.

And then, yeah, honestly, you kind of just got to smile and dial, hit the pavement, and but there's there's a lot of tools out there now that like we didn't have um that will make your life much easier. One thing that I've told a lot of brands is like, "Hey, go to a competitor's website. If you sell sunscreen, like go to Sunbomb's website, or if even if you don't sell sunscreen, but you want to see where they sell, go to their store locator, use AI, scrape that list, and there you go.

You have a free list of leads of a ton of surf shops around the country or gift stores or boutiques. Um, so I recommend brands doing that. I definitely recommend just sending out samples, even going around in their neighborhood or their town. Like I'm in San Diego. There's a ton of stores here. Um a buddy of mine is kind is launching a sunscreen brand. He's just getting in the car and going door to door dropping off samples and he's already opened 20 stores in San Diego.

So I think it's just kind of like pounding the pavement on this one. Um and one thing with this too is that I want to advise and and you know maybe you would ask this next or not and it's a big question I get is well why wouldn't I just get a sales rep in the beginning? Um, which in theory seems like, yeah, duh. Like, get a sales rep. They'll just plug you into all their stores and call it a day. Problem is sales reps, showrooms, etc., most of the time, I don't want to say all the time, but most of the time, they have a finite time amount of time in the day, right?

So, they rep five brands, the showroom has 10 brands, whatever it may be. A buyer comes in, a buyer has one hour. These three brands make the showroom and the rep a lot of money. This brand is okay, and this is your brand. and they're new. Where are the reps going to spend most of their time with the buyer? These three brands. >> Yeah. And it's it's it's like a such an eat what you kill business, right? Like the idea is just like you you get uh 10% sales commission.

Like you you're just going to do sales sales sales people in my experience are just like ruthless about this. They're the most incentive driven people I've ever been around. they just know for sure what the possibility of their check is going to be and so they spend all their time and all their money on that. And yeah, I think it's uh it's uh uh what you're saying makes sense. Like you you have to do it yourself for a while, prove that it's worth it to a salesperson to get to a sales rep to get them on and then because I've never Yeah.

I've seen some people try to outsource this in the early days and it just it goes nowhere. Um yeah, >> you know, they just they don't have the time. It's 100% and like I I love I mean we use like I said 32 sales reps like we've used showrooms. I love it but I think just when the time is right. Yeah. Um and the other thing too is like when when you have that baseline established of stores, let's say we're looking for reps in Florida. >> Well, when I go to a Florida rep and and I say, "Hey, I would love for you to sell my line." And they go, "Okay, well, what stores are you in now?

What business am I taking over?" And then I know what I can grow. And you say nothing. Well, they know they have to now pioneer a brand and they might not want to do it. Now, on the flip side, if you have a great baseline, your e-commerce is great, you have an online social presence, the good reps are going to come to you and want to put in the work. And so, it's a win-win to just get this baseline going before you approach that path. >> So, let let's talk about that stage of things a little bit more, scaling things up.

So, so first of all, any other comments on just make on like just how to how to sell through, how to be successful once you're indoors? anything else a brand should be thinking about there to make sure those relationships are good? >> I would definitely set up a cadence of checking back in with these retailers that sell your product. Um, >> when you get them the opening orders, the opening product, send them information, a little backstory about the brand for them to put in the back room.

Um, hook them up with some extra product if you can. If you, you know, your product enables you to to get the staff wearing the product, get them stoked on the product. do a little um even a little uh a giveaway with the store, shout them out on your Instagram, whatever it may be, right? Like you want to make these guys know like they're a partner. We're partners with you. We want to make sure you're successful. So, I would say that's the first thing.

Check back with the store after a month, see how the product's selling, see if you can get reorders, and just continue to build that relationship. So, I think that's big when you get in is like I've seen a brands make the mistake of getting into a store, >> laying a baseline, and then not calling anyone for reorders, and it all kind of goes by the wayside. So, just making sure you have a pipeline set up and a and a process set up of managing the relationship. >> Um, is uh Okay.

And then beyond that, let's say scaling up the program. Uh so so you start having some success. You build a couple hundred thousand in revenue, you know, per year on this. You're like, "Hey, this is going to be a big part of our business. Now what what do I do to start scaling the program up?" Whether that's operationally, staff-wise, adding sales reps, like um going after some of the bigger doors, like you know, how does how should a brand think about that stage of things?

Obviously, this is super hypothetical. It's hard to answer in the in without a clear example, but yeah. What comes to your mind? Yeah, I mean I can give you kind of like a a perfect path etc. like a you know something that would be great. So like I think at that point once you have the revenue coming in the first thing I would say is start thinking about trade shows. Um the reason I say maybe trade shows not day one is cuz they are an investment they are expensive 5 or 10,000 for a booth travel hotel etc.

But once you have money coming in you have a little >> really really quick 5 or 10,000 to design your booth and then probably more money to have the booth there. Is that what you mean? Oh, no. That's like the booth cost to get like a a blank square table and cloth um is is probably five or 10,000 for a 10 x 10 booth depending on the show. Some smaller shows might be a little less like local route shows, but yeah, then you have to design the booth, fly your staff out there, do that kind of thing.

So, so that's why day one it's kind of hard, but like you said, if you have a couple hundred thousand in revenue, definitely do this. And the reason I say do it is because this is where you can see 100, a thousand, 2,000 buyers under one roof in a three-day period. This is where the big boys go, you know, with to the bigger shows, the Surf Expo, the Atlantic Gift Show, the Magic Show in Vegas. Um, this is where you will find those bigger chain stores, the box stores, uh, big box stores, maybe even CES in Vegas, you know, it just depends on your industry.

So, that's what I would do. Um, next is I would either staff up inside. So, if you're finding success with inside sales, maybe hire one to two more salespeople inside. Maybe split the US. Hey, you have the east, you have the west. Um, make calls, manage the accounts, grow it from there. Third thing would be, okay, we're ready for sales reps. Sales reps/showroom. So, these are great because they're uh location based. So, you might say, okay, I have a product.

I now have a a sales rep for the the Southeast. He handles Florida, Alabama, and Georgia. Um, this guy grows the the territory. He's now putting your product into the stores that he has his other brands in. And that's kind of like the normal path, right? So, like you're building, then you start going to trade shows. Now, you have either an inside team or an outside team, and that's how you can scale it up. >> Um, okay.

Awesome. and uh sales rep, you're you're just saying basically go through an actual rep group, contract them basically as a third party and and have them go start pushing on that. Um any like any way to help vet who good sales reps are? Uh like how should somebody think about working through that process? >> There's there's bas there's there's essentially two paths. There's like >> sales reps that are kind of an individual person.

Um they're all 1099 um and maybe they do your you know they they they rep four brands in the same space, right? So like um that's one good path. The next one is a showroom. So a showroom is kind of what it sounds like, right? So like they're based out of Atlanta or Dallas or New York. It's an actual showroom inside, you know, a trade show venue or a um big big building like that and then or a mart and they have 10 brands in there.

So So that's kind of how you do it. They're $10.99. The way to vet them is obviously to ask them a what other brands do they sell? Um and b who do they sell to? like what avenue, right? Because there could be you could have a sunscreen line. Let's just say for example, or maybe let's do bracelets and jewelry. So, we we you know, we want to sell bracelets and jewelry. A rep comes up to us and they sell office supplies and toys.

Okay, they might sell to a thousand accounts and they're amazing and they're the best toy rep out there, but like it's not really there's not a lot of synergy with selling bracelets because they don't sell to a lot of women's boutiques and surf shops. So, that's a big thing to ask. >> Awesome. Um Jared, uh there's a lot more we could say about this, but we're running low on time. I think immediately I'm thinking we should do a follow-up episode at some point that is specifically about uh like larger retailers essentially like cuz cuz the way we're doing this is sort of like getting up and going and we're for focused on mom and pop and then a stage of scaling it once you've gotten there.

Um and so you have to come back at some point and do something about like okay what happens when you want to go yeah Nordstrom, Best Buy, Target, Walmart, whatever. Um and and think about some of those things. I also have a lot of thoughts and questions about sort of how an internal brand operationally should think about the relationship of advertising to to supporting a a retail program and all those things. So we'll bookmark those things for a future conversation.

But for now I just want to give you any more space as you're thinking about these brands again sort of that early early 8 figure high seven figure brand is kind of getting their program going. Anything that we didn't cover that you think is just really important for them to understand think through etc. Yeah. I mean, one thing um as to why wholesale is great, and I know I'm biased because it's what I've been doing for 15 years, but like another reason wholesale is great is you can get really good information on products and purchasing and buying.

So, as you grow, there's something called pre-booking, right? And like what that is essentially is let's say right now we we are in August. Um a lot of brands, whether you're in apparel, retail, like jewelry, etc., whatever it may be, they're showing what they want to make next year. And what's really cool about that is they can get an a really good read on what is going to work, what people want, what they should buy, what they should invest in, what they should punt on, and what they should not carry.

And so I think a big reason why wholesale is a lot is very helpful versus ecom is like ecom, you launch a product, if it doesn't sell, you're stuck with the inventory and you're like, damn, I got to put this off price. With wholesale, you could have 20 pieces, you go and show it for two months, this is for next year. If 10 of them no one orders, scrap it. don't even buy it. Focus on the 10 that work. So, it's a really good forecasting tool also that like maybe it's not day one, but as you kind of get your wholesale program growing and building, it's going to be really helpful for your business, too, because it's going to tell you what to buy for ecom as well.

Uh the as I said before, leave a comment on this on this uh video, particularly on YouTube. I think it's the place where I'll see them the best of the different channels that I'm on. And uh and let us know if you have any questions about this. I think probably Jared will be more helpful to you than me, but I will try my best to get those in front of Jared so that we could have some interaction there. And do reach out to Jared atjaredgmail.com uh as the place to see if he's maybe a help for your business and getting this going.

I have watched him do great work right away for a brand that I've been working with for a long time. Uh getting them thinking about all of these things as they are entering retail. They're at the exact revenue stage we're talking about. So, it's just a it's just been a good fit. And like I said, um was one of those conversations where it was just very easy to see from day one that Jared really knew what he was talking about and really could help.

So definitely reach out to him about helping there. Jared, thanks so much for your time, man. I appreciate it. >> Yeah. Thank you so much, man. This was a great time and I uh I look forward to chatting with you again. >> Thanks so much for watching or listening. I would love your feedback on this episode. Leave a comment with that feedback. Email me podcastfgrowth.com. And the reason I specifically want your comment uh your your feedback on this episode is exactly what I said earlier, which is I don't know if I've ever covered this topic on this show before, even though lots of clients I've worked with have wrestled with all the questions that Jared and I talked through here.

Jared is one of those guys where, as I said, you just know when he starts talking that he has been down this road a lot of times. He knows his stuff. He's really speaking clearly to a lot of things. Reach out to him. Like I said, jared megmail.com. All the ways to follow up with Jared are also in the show notes and description. So, big thanks to him for being on the show. Uh, you should also follow up with my sponsors, Intelliggeems.

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Go use them. Uh, you can also sign up for my email list for my newsletter um, and get everything I'm doing at afgrowth.com. When you sign up for my newsletter, you get my four free essential e-commerce resources, including a guide to cohort forecasting, unit economics, all the things I'm using in my actual brand that I'm starting, all those things as well. Uh, that's it. You know how all of this works. Subscribe, leave comments.

Thanks so much for your time and attention. I appreciate it so much. I really take it seriously. I'll see you next time. [Music]