Trent: Hey everybody. Welcome back to another episode of the Bright Ideas Podcast. As always, I’m your host Trent Dyrsmid and I’m here to help you discover what is working in the world of eCommerce and online business by shining a light on the tools, the tactics, and the strategies that are in use by today’s most successful entrepreneurs. My guests on the show today is a fellow by the name of Chris Meade. He’s the co founder and chief revenue officer for a company called Crossnet. The world’s first four-way volleyball game across nine has grown from zero to 2 million in sales in just under 18 months. And we’ll welcome Chris in just a minute before, before we get to that. Uh, today’s episode is brought to you by .store domains. The first step towards creating a great e-commerce brand is getting the right domain name, but since most good, a good domain names are unavailable, online sellers are often having to compromise on their brand.
Trent: However, with .store domain names, you can get almost any brand name you want. Plus adult store domain name instantly tells people that you’re selling something. It’s everything you need for a great domain name for your eCommerce business and over 300,000 businesses, including grammar, Grammy award winning artists like Khaleed, influencers like dude, perfect in fortune 500 companies like Emirates, trust.store domain names to build their e-commerce brand. Bottom line is this, if you’re selling online, you need to get a.store domain name, and you can get it now for just four 99 for the first year. Go to get.store/brightideas. And when you do use the coupon code, bright ideas, and that’s all one word. Hey Chris, welcome to the show.
Chris: Hey, thanks for having me.
Trent: Yeah, no problem. So a Crossnet, what does this tell us for people who don’t know?
Chris: Yeah, about two years ago we made a a four way volleyball net. Me a, my brother and our hometown best friend were home one night, uh, sat on the couch for about seven hours. They can have cool ideas. And then, uh, the last one that remained was a four way volleyball net. So here we are two years later selling it nationwide, uh, tons of eCommerce sales every day, cranking them out. And that has grown the company to $2 million in sales and literally less than 18 months.
Trent: Nice. So when you were sitting on the couch and you were coming up with all these ideas, I’m guessing this wasn’t the first idea you came up with, how did you, how did you brainstorm and come up with ideas and was there a process that you went through to vet each idea and ultimately land on this one?
Chris: Yeah, I mean, essentially what it was was it was a late night would grew up in a small farm town in Connecticut. So there’s not much to do up there when they’re home for the holidays. So we just sat on the couch. We had sports center on for about four hours on reruns and we just had a list. And Mike came over. Our other co-founder is, uh, has an engineering degree from Northeastern. He’s like, I want to design a product and I want to become an entrepreneur. We’re like, all right, Mike, sounds cool. Let’s do it. So we just started writing down things all night long of like this, Oh, a new candle. Oh, a speaker that plugs into a phone target that turns into a speaker, like the most crazy ideas. And they were all pretty bad. We’d just check them off. Like, all right, that’s never going to work. That’s never going to work. And then one of us was just like a four way volleyball net and we did a quick Google search and nobody had ever made it before. And we’re like, okay, this definitely could work.
Trent: So I mean, at that point in time, you guys are high on your own idea, but that doesn’t mean anybody actually wants to buy the damn thing. Oftentimes when you go into a product category where there’s no competition, there’s, there’s a reason there’s no competition because there’s no demand. So how did, was there anything before you went into production and started spending and investing your money in this? Did you do any market testing to validate the idea or did you just go for it and st wow.
Chris: Yeah, we made the idea probably about four in the morning. Um, and then we woke up the next day, we drove to our Walmart. We bought two nets. We rigged it together on the backyard and then we had our best friends come over. So we just made up a game on the spot. We included the typical Foursquare rules from like middle school recess and we’re all big basketball guys. So we made the rules a game to 11 win by two. Okay. We pretty much just had a free for all with the ball and whoever served it was the one who got the point. And if they stayed alive, they got a point and our friends came over. We played for hours, like legit, just all day long. And we’re like, alright, we gotta go, we gotta go play again. We’ve got to go play again. And sort of be like, all right, if it works with our friends, like why wouldn’t it work with all the kids across the world?
Trent: Yeah, sure enough, everybody was pretty stoked.
Chris: Yeah, we were stamped and we were off to the races.
Trent: Okay. So now you’ve done some market validation. Uh, you’ve got to make the thing before you can sell it. So nobody makes it. You can’t go into Alibaba and say, send me a forebay volleyball net. So how’d you get it made?
Chris: Yes. So we had a, a blueprint built up. I’m like the engineer. So he made all the design, all that good stuff. And then we found a sporting good manufacturers on Alibaba, uh, kinda sent out some NDAs being like, Hey, we have this great idea. Are you open to possibly creating it? Most of them kind of shrugged us off. We found one company that spoke English well enough to kind of have a good conversation, some trust there.
Trent: How many companies did you have to contact to find the one?
Chris: Probably at least 25 to 30 really solid ones. Yeah.
Trent: So there’s, there’s the, there’s the first takeaway for people who are listening to this. Even trying to find a supplier. You got blown off 25 ish times before you found somebody who would give you the time of the day. The reason I point that out is a lot of people would’ve given up after 10.
Chris: Well, definitely. Uh, and then when we found two or three that were pretty competitive, we kind of put the bidding against each other. We’d say, Oh, we’re going to buy 10,000 nets. But in reality we were going to buy 50 or a hundred to start our own. Yeah. That’s the one lesson we’ve learned smartly. Just don’t invest in too much inventory off the bat because you never know.
Trent: Well, especially when you’re launching a brand new product because your friends are going to have a bias. They’re your friends so they’re not going to come over and think and tell you, Hey dude, your, your idea sucks because they don’t want to harm the friendship. So how about gross margins? What a gross margins on a product like this look like?
Chris: Right now our margin is about 40% which is pretty happy with, it’s $150 product. So our margins are about 40% right now.
Trent: Is that gross or net?
Chris: Oh, sorry. Excuse me. That’s net net gross
Trent: So how about gross? In other words, for something. You know, what does it cost you to make the thing versus what do you sell it for? Okay. So you have a really strong gross margins, which is super important because without enough gross margins, you don’t have enough money for advertising and anything else. All right. And you haven’t really been at it long enough and to meet, well actually maybe you have, have your gross margins improved since day one or are they about the same?
Chris: Negotiating a lot with our manufacturing price. So we scaled from ordering a hundred units. See just yesterday we put in an order for 15,000. So yeah, so our margins have completely increased a lot of negotiation there. But uh, yeah, it’s been good.
Trent: And are you still dealing with the same manufacturer that you chose the first time around?
Chris: Yeah, surprisingly. Yeah, we are.
Trent: You haven’t seen pirated copies of your product anywhere floating around yet?
Chris: Not, yeah. And we’re, we’re fully patented, but I know that’s going to be a whole other conversation in China, but I don’t really care about that. So, uh, no. Right now we have a very good relationship with the manufacturer that, uh, they say that a lot of people reach out to them trying to get bootlegs made. And there we have this agreement that they won’t source the product to anybody else and they’ve been good on their word for the last two years. So.
Trent: And have you flown over to China to meet them yet?
Chris: I have not personally. Our other partner, Mike has been there twice.
Trent: I spent some time, stared out. I maybe had a dinner.
Chris: Oh yeah, yeah. A few years went around. Yeah, I got all the Snapchats in the videos meeting mom. So yeah, it was a good time.
Trent: Okay. Uh, let’s talk a little bit about your store. Uh, what software are you using for the store?
Chris: Right now we’re built on Shopify.
Trent: Okay. And are there some of the Shopify apps that are your favorite?
Chris: Yeah, we actually just purchased a new app called cart hook. So yes, it’s a really nice, a little bit expensive, but uh, essentially what it does is it shrinks down the amount of clicks that a customer has to do to reach that final checkout stage. So normally off five pages, it’s three, three clicks. Like you put your shipping and you put your billing, you put your credit card, now you do it on all one form. And we’ve seen our conversion actually go up a full percentage point since we implemented it a few months back.
Trent: Nice! And how about software for email marketing? What are you using for that?
Chris: We just switched from Privy, which was a nice affordable option to Klaviyo. So we’re working on kind of moving everything over to Klaviyo right now. Uh, just a lot more capabilities that we’re able to design more beautiful, legit looking emails that are going to resonate with our customers and also a lot more tracking, which is nice.
Trent: Okay. So aside from an editor that allowed you to create pretty, are emails and better tracking, both of which are important obviously, like was there any other key features in Klaviyo that,
Chris: Yeah, the biggest feature that I’ve seen so far is a welcome series. So we are getting close to 5,000 visitors a day to our site. So if I could cap as many emails as possible over the last year, we’ve built up a repository probably 75,000 right now. So once I get them into the funnel by offering them 5 or $10 off, they then go through a welcome series of about seven different emails. Provide value. You’re missing out, did you use a coupon, here’s a video, come to an event. So that welcome series, I could track how much money I’m making off each email, where people are in the funnel, and those are all just two massive features that money just drips in from. That was not offered on our previous email marketing.
Trent: Okay, so if you’re getting that many email addresses, you’re obviously getting a lot of traffic to the site. How much traffic are you getting?
Chris: Oh, we’re getting five, at least 5,000 visitors a day.
Trent: And where’s all that traffic coming from?
Chris: Mostly from Facebook and also Google.
Trent: So paid traffic?
Chris: All paid traffic, some good word of mouth because we have, ultimately what we’ve learned really quickly was if people are bringing the net to the beach and actually playing and the 150 bucks, people turn their head like crazy. Like when I go to the beach, when I go to, I’m in Miami, when I go set up the net, I’ll get 20 people just looking at the thing, asking me questions, trying to come play. So we quickly learned the more nets we got out into the world, the more organic marketing, and we would get sales just from people at the beach. So if our users are doing it, sales are happening that way to.
Trent: Yeah. Fantastic. So let’s talk about the advertising campaigns a bit. Um, so you’re using Facebook and Google. Are you using both of them for cold traffic or using Google for cold and Facebook for retargeting.
Chris: We’re using Facebook for retargeting. We’re using Google for some cold, uh, cold marketing. We’re trying to get more. Uh, the gym teachers is a huge element of our game that we didn’t even really think about when we first created it on the couch. But now we’re in over 2,500 schools. So gym teachers look all night long. They’re like Googling, Oh, I have this lesson plan in two weeks. I really don’t know what to do with my kids. So now we’re kind of getting on those terms that they’re searching and they’re like, Oh, a four way volleyball net. My kids can be engaged. There’s tons of good PR about how gym teachers are using cross net. So students are loving, they love to play and learn volleyball on a four way net where they’re hand-eye coordination is getting increased and they’re not just sitting around bored when there’s seven people and seven people like just waiting for the ball to come to them.
Trent: Yeah, no kidding. What’s the retail price point of the product?
Trent: So do you think these teachers are just buying it under their own money or are they getting school to pay for it.
Chris: they have a whole budget. So they have a budget that they use. And we’re also on the homepage homepage and also the front page of some of the largest physical education catalogs. So every semester they had a catalog and crawl set smack in the middle of it.
Trent: How’d you get in the catalogs?
Chris: Just a center cold message to all the buyers. Made my LinkedIn look as pretty as it could and uh, just sent him an email and said, Hey, I’ve invented a four way net. I know your teachers are going to love it. Our local gym teachers back in our hometown, they love it and they, they really find good use for it in their classrooms. Let’s try it. So they ordered about 10 and now they’re ordering in like hundreds after.
Trent: And did you personally go and manually send all those emails or did you automate that task in any way, shape or form?
Chris: Um, to begin, I, uh, I did it all personal because I just wanted to get personalized touches. Uh, for example, there’s a, a retailer we work with in New Jersey called the flag house sports. So kind of personal touch. I used to live in New York, so it kind of gives them that little New York touch that I wouldn’t be able to do just if I was automating all the messages and now kind of automation. I have lead lists that I’ve purchased and we’re kind of sending out daily emails as well.
Trent: Okay, so the lead lists, you’re just buying a list of email addresses and so you’re basically carpet bombing. Is it a single email or a multiple email sequence?
Chris: Oh, it’s a multiple email sequence and we have a kind of a small email team that will just be sending out, Hey, we have 2,500 gym teachers. Oh, have you seen Crossnet? Two days later I’ll use this discount code to purchase your net and it will be able to track that ROI and that lead list too.
Trent: Okay. Now is there any software or tools that you’re using to help automate that email outreach?
Chris: Yes. A nice $10 Google plugin called yet another mail merge.
Trent: And so that allows you to send an email what from a Gmail account to a whole bunch of people at one time,
Chris: Correct. Yes.
Trent: Is this email, do you send just one or do you have like six that are queued up and if they reply then they don’t get anymore?
Chris: Correct. Yeah. So you have the have an Excel sheet with all the leads on it. You hover over the column, you blast out the email and you pick the email that you want. And then from there it’ll actually say if the person responded or not, their column will change. So every day at the end of every work day we’ll delete or move people out and then put them on the next trip.
Chris: It’s a bit of a manual process, but for a small startup like us, like three founders where we’re cool with the $10 investment.
Trent: Yeah. And have you thought of using a virtual assistant to manage that spreadsheet for you?
Chris: Yeah, so we do have a virtual assistant managing that right now and sending out the emails.
Trent: Okay. Are there other areas where virtual assistants are helping you in the business?
Chris: Yeah, so right. We just hired about two weeks ago, uh, order fulfillment was coming in from a lot of our wholesalers sending off us one off orders. So they’d send us a purchase order from a client, you’d have to go into ups, put the tracking info, sorry, the shipping information in the billing information, the tracking, all of that. It took about 20 minutes per order. So that quickly became, we were getting 25 of those orders a day, a lot, a lot of my time. So I’ll just outsource that. Uh, she’s been a rock star over the last like two weeks during the busy season, so
Trent: Yeah. Yeah, I’d imagine right now you guys are pretty busy.
Chris: Yeah, we’re, we’re sending like over 200, 300 orders a day, which is really nice. So
Trent: Yeah, I like days like that. Huh. All right. So let’s, we’re going to, we’ve been talking a bit about marketing. I want to go deeper into the marketing now because that’s a such a big challenge for so many other store owners. Um, so first off, let’s cover off. What’s your year over year growth rate been over the last two years?
Chris: Yeah, so last year we grew up, so the first official, it was our first official year of selling. We were back ordered months at a time. So last year, a week or so, uh, we grossed about $250,000 last year. Yup. This year we are going to gross over $2 million.
Trent: That’s pretty phenomenal.
Chris: Not bad at all. That was a nice, a nice growth. Even I was just sitting with my founders yesterday and we had projected 400,000 for this year, over 400,000 in December alone.
Trent: So did that growth happen because you massively ramped up advertising or you massively ramped up outreach or did you just get lucky? Like what did you actually do shoot through your targets by such a wide margin?
Chris: We didn’t think we’d be able to get into vendors like target and Walmart and pretty much when you look at our product and we were actually sold out on those parts, those channels right now cause of the black Friday madness. But we all the retailers, I started sending out personalized emails and I never thought they were gonna write back to us and everybody loves the product. The outdoor game space is a little bit boring. So we’ve grown our retail sales tremendously this year. But then it’s also the eCommerce sales. Uh, we’re getting steady streams of traffic. We have three or four really high quality videos that we’ve invested in, had great influencers make content for.
Chris: We really locked in those demos. The moms are really are our target market. Moms buy it for their children all day long. They want their kid to get it off their cell phone. And it took us a while to kind of identify. We thought the end consumer was really going to be the millennials, which is still a good amount of our sales. But most of the time it’s families looking for a game to plan their yard and learn the volleyball skills.
Trent: That makes a lot of sense. Cause I know, I mean I have kids and everybody who has kids are worried or they’re staring at their screens too much. So mom is the target market. And you’re reaching mom, I guess predominantly through ads in search and exposure and retail stores. One person, but by the way, what percentage of your sales is happening online versus off?
Chris: 80% online.
Trent: 80% online. Okay. So that means that um, you are getting a lot of the moms through search, is that right? Okay. What kind of, how did you identify, and I’m sure all of this has been a very iterative process for you, but in the beginning, before you knew it was mom, you probably had no idea what the search terms were.
Chris: Yeah, exactly. We certainly didn’t. And we’re still learning. It’s a learning curve. Every single day. I sit down with our Google people on our Facebook people just to kind of get update somewhere. We are, my brother is the CEO of the company. He handles all the day to day social media marketing. But essentially what we kind of found from the data was that the people who are commenting and engaging in purchasing on the Facebook, which is our biggest advertiser, it was always families. Hey Sharon, we should buy this for the kids. Oh, Hey Luke, we need this for the kids. Like the kids would love this. So time and time again, the comments were let’s buy this for the family. So we’ve ramped up the spends so much just to geared towards family search
Trent: And what percentage of your sales are coming from cold traffic campaigns versus retargeting?
Chris: That’s a good question. I wouldn’t know the exact number to be honest and I probably should, but uh, yeah, uh, we definitely are getting, we’re seeing a lot of, the majority of the sales are people actually searching for the brand, Crossnet and they know they’re familiar. After two years seeing their timeline, I go even just go to a local bar and people that have seen the game, I have the cross net little logo on the back of my phone and people are like, Oh I’ve, I’ve seen that before. It’s because of the Facebook ads.
Trent: Nice. Do you know what your cost per customer acquisition is right now?
Chris: Right now it’s about $35
Trent: $35 okay. And how’s that changed over say the last six months?
Chris: It used to be about $60, sometimes even 70. So we use a nice big difference. So we’ve kind of honed in on what’s working, we’ve caught spend when it’s not working and we’ve kind of found find these places where like we’re bleeding cash. And before when it was just a small three man team, we didn’t know were spending money on search terms that weren’t working and just costing us a lot of money for no reason. So we’ve gotten a lot smarter over the last six months.
Trent: And are you guys managing the campaigns yourself or are you working with agencies?
Chris: We have an agency that we work with and on the Google side I have a close friend in town who is a paid expert, so.
Trent: Okay. And how did you find the agency?
Chris: Um, just through our online communities where we’re kind of very big in the Instagram world. We have a lot of friends who have owned their own eCommerce brands. So kind of a, a friend of a friend introduction. So that’s on them.
Trent: And are you in any mastermind groups?
Chris: Yeah, not at the moment.
Trent: Really. Okay. So when you say the Instagram world, tell me a little bit about that.
Chris: So we have a good friend who in
New Speaker: vented the breed of Leggett. Uh, he used to run our Facebook ads for a little bit as well. Um, got these viral burritos selling everywhere. They just got a partnership with Macy’s. Uh, we have a really good friend named Sean Kelly who creates jerseys for some of the biggest celebrities in the world.
Chris: He runs like number one, uh, custom Jersey company. So yeah, we have a lot of millennial friends who are just building up and coming Shopify stores and a lot of networks all together. So if something works for us, we’ll send out a text message, say, Hey, try this. And we’re just kind of growing together. It’s a good feeling.
Trent: Yeah, no kidding. So is there any formalization to the structure or is it just haphazard kind of happens whenever?
Chris: Well, I just, Hey, I’m coming. I’m flying to your house in New Jersey and spending a week on your couch and we’re gonna work on our laptops together and build our companies.
Trent: Nice! Are you on Amazon at this point?
Chris: So we are officially off Amazon as a 48 hours ago cause we sold out in our Amazon inventory. But yes we are on Amazon. Amazon has been incredible all throughout the year and we will be back on very soon.
Trent: And are you selling to Amazon as a vendor or are you running your own seller central account?
Chris: We actually work with a distributor called retail. They are a huge Nebraska e-commerce company and they actually buy in massive bulk from us. So he’s loved in Nebraska in June of this year. Kind of met with them, put a partnership together. They really, really trusted us with our products, a good future for the game so that they’re buying in bulk with us. And they’re our sole distributor on Amazon, target.com, walmart.com and a bunch of other channels. So they handle all the customer service, all the order fulfillment, everything gets pumped out with them like 24 hours. It’s a really good system.
Trent: And how did that relationship come to be?
Chris: Um, they sent me a cold email through our, they’ll chatbox online talk.com or talk.net. Uh, it’s a nice little Shopify plugin, but they said, Hey, I’m a buyer. Uh, let’s chat a bought 25 units. Didn’t think anything of it. Uh, they then sent me an email saying, Hey, we sold out of 25. Can we get on the phone? Got on the phone. And they said, can I buy 2,400? I said, of course you could buy 2,400. Uh, we’re just going to be sold out of our own inventory for our customers, but we’ll make it work. We always do. So 2,400 has turned into 5,000 units at a time and yeah, it’s been a good relationship.
Trent: So take note, my Amazon reseller listeners, there’s evidence for you right there, that cold email works. You just have to send a lot of them. Now, have you had, were they the first ones to ever email you?
Chris: No, they were not. Um, we got smaller like mom and pop stores. Uh, we actually got one, uh, excellent. Can’t look for a good partnership in about two months. Uh, one of the largest sporting goods stores in the entire world. Uh, we’ll be having Crossnet so can’t talk about that yet, but they called BM on those teams. So get a lot of traffic and people and check with, you know.
Trent: So are you planning on having more than one seller on the Amazon channel?
Chris: No. So not on the Amazon uh, channel. Uh, but
Chris: Yeah, as an exclusive distributor on the Amazon channel, um, they’re doing really well for us and they’re buying in the quantities that make us very healthy margin. So we’re happy with it.
Trent: And are they running ads on the Amazon marketplace?
Chris: Yeah, they are running a small, some small PPC ads. We’re kind of in a decision that we’ve got to make in Q one is if you see a lot of people bouncing from our own website and I go into Amazon to get free shipping. So we’re kind of like, are we doing duplicative spending? If we’re bidding on Amazon, the people that are coming from our Facebook ads and just bouncing from our site, are we actually losing money that we don’t need to be spending? Cause they came to our site anyway. So that’s, those are going to be some crucial decisions we’re making in uh, in key one for sure.
Trent: Yeah, that’s the thing about Amazon. It can be such a great boon to your business, but you’re not building a customer list. You’re selling all this stuff, building a customer list, and if you’re not building a customer list that has an effect on the enterprise value of your company. In other words, if you ever want to sell it one day, it’s not going to be worth as much. Especially if you end up where you’ve got a business where 80% of your volume is going through the Amazon channel, the value of accounting is actually going down, not up. Yeah. Have you gotten mentors that have been telling you about that kind of stuff?
Chris: Yeah, we definitely have. So he had some good mentors that have been consulting us, but right now our Amazon sales are probably about 25% of our business. So we still see a healthy margin coming from our.com where we’re, we’re building those emails and getting that customer data.
Trent: So do you have a plan right now to try and make sure that Amazon is, say never more than 50% of your sales?
Chris: Yeah, I mean right now we have a structured agreement with our distributor where we’re only getting them X amount of inventory per year and that’s a lot less than what we’re selling on our.com.
Trent: Yeah, that’s probably not the worst idea in the world. Just live with the inventory. It’s a pretty simple solution to what is otherwise for many brands who very, very complex problem.
Chris: Yeah. So we’re going to limit the inventory. If we see that the inventory sells out quicker than expected for the calendar year, uh, we’ll either a give more inventory if we feel like we need it or B, raise our prices before we give them more inventory. So we make more of a margin on it.
Trent: Yeah. That’s another thing you could do to sell it for a couple of bucks more on Amazon. People get free shipping, but they also pass like premium for that and that puts some extra money in your pocket. So how big is the team now?
Chris: Right now, there’s still three founders and then we have about anywhere on any given day, seven to 10 kind of freelancers working on us on various projects.
Trent: Give me an example of some of the things you’re using freelancers for.
Chris: Right now we have a coder creating a landing page for Christmas day and also for new year’s day, just so those pages are prepopulated ready to go when a, when a holiday emerges. I know last year we were like, damn, it would have been nice to have the little Santa Claus and a yellow cross knit hat. So we’re able to have the luxury of having some money to do that this year.
Trent: Yeah. It’s uh, it is more fun to be able to have some money to do stuff. Huh.
Chris: Uh, just have random team. Uh, another example would be we’re putting together a brand guideline document probably about two years late, but it’s always nice to have. So now I can send it off to uh, doing podcasts. Like, these are a lot of PR and newspapers are writing about Crossnet, but they might spell the name wrong or they might not know where color schemes or something like that or have a display photo. So having something like this just to kind of send out is a good look for the bread.
Trent: So at this point in time in your business, you probably have quite a few processes that happen over and over and over again. Right. Are you starting to document your processes and create standard operating procedures?
Chris: Well that’s actually when we get off the phone today, creating an org chart and then creating kind of a duplicative kind of message that I could get more people to start freeing up time in our day. Even automating my own personal inbox of just sales emails or gym teacher emails, um, even get the time off my plate so I could focus on bigger things.
Trent: Yeah, absolutely. I actually just spent my weekend at a mastermind with 50 other entrepreneurs, all of us doing six and seven figures online and that’s that. That’s the thing. We’re all focused on elimination delegation and automation. So, um, have you heard of my software company called Flowster?
Chris: No. Tell me a little bit.
Trent: It’s a platform for SOP. So I own an Amazon business where we sell a couple million bucks a year versus stuff on Amazon. And I don’t work in it at all. I delegated myself right out of the business within six months in a way that I did. That was, I looked at every single process from product sourcing through to listing, optimization, running PaperClick campaigns, shipping, receiving, reconciliation, Amazon account health, everything. And everything can be broken down into a process. And if you can break it down into a process, you can describe it in a document. And so our software, um, is, was built for exactly that purpose. So now my team and thousands of other come to Flowster and all of their standard operating procedures live in the software. We’ve got a bunch of them that are, you can, we’ve got premium ones you can buy, you can make them yourself.
Trent: There’s free ones in the marketplace that you can download. So, you know, like if you wanted one for keyword research or you wanted one for blog posts or you wanted one for posting a video on YouTube or building your brand on YouTube, on and on and on and on it goes. Um, so having been a multiple time CEO, uh, now I am a huge, huge, huge believer in processes because they really do set you free from that grind that, you know, I like to talk about entrepreneurial freedom. That’s the freedom for entrepreneurs to work 24 hours a day. And as the leader or Lee as the co-founder, you don’t want to be in that place. It’s like jail. No fun at all. So I’m happy to talk to you more on the offline if you’d like, but for anyone who’s listening or if even for yourself, it’s free to check out.
Trent: You just go to Flowster.app. You can create an account in about 60 seconds. You can go to the marketplace, you can download, look, just browse around and see what SLPs are of interest to you. You can download them and I promise you that whether you use my software or not, if you focus on documenting every single one of your business processes and then you figure out how to get it off of your desk so you never have to do it again, you will have a much more enjoyable experience. As an entrepreneur. That’s my life. I own three companies. I have a pretty relaxed schedule. It’s not full of appointments and activities and almost everything is off my plate because I document and then I delegate to somebody else and it’s an absolute game changer. Hopefully that was of some help. So what are some of your plans for, you know, you just come through a four or five X, whatever the math is, 10 X almost actually, but eight X eight X two 50 to 2 million. Um, what are some of the, have you made a roadmap for 2020 and what does that roadmap look like and what are some of the challenges you think you’re going to run?
Chris: Yeah. Um, inventory already we’ve seen so sentence sold out on Amazon. We’ve actually sold out on Amazon about 48 hours ago, like I said. And in the last four days, eight hours, you’ve seen our conversion and our sales double a, which is kind of a crazy feeling. So with that, our inventory is bleeding because we’re selling double the amount that we forecast it for. So we just put a rush order in for 15,000 uh, three nights ago. So we have the manufacturers working on that immediately around the clock. But also we know that that inventory is being pre-sold pretty much on our site. When we run out, we’ll say, Hey, you’re not going to get your shipment until January 15th or whatever it is. Making sure we have inventory for the stores that have already pre-ordered a, we’re going a store called Shields. So they have 2223 locations across the world, and they’ve already pre-ordered for February and June of next year for their stores. So
Trent: Yeah. So, so inventory businesses do that are dependent on inventory like yours that grow as quickly as yours do, suck up more cash than they throw off. So what are some of the things you’re doing to shore up more capital? Because obviously if you can’t buy inventory, then you can’t grow.
Chris: Yeah. So one thing we’ve done with our manufacturer is we had a deal where we only have to put 20% down of, uh, the PO upfront for them to start working. So they have a really nice trust relationship with us. And then essentially what we’re doing is we’re only paying for the inventory and fold once they shipped inventory to us. So once they’re released, we paid for it and we’re only shipping over what we need knowing our turnaround zone. So we’re not putting up hundreds and hundreds of thousands. We’re only putting up a couple hundred thousand dollars at a time. That way we have cash in the bank and we have orders coming in and we’re also not shutting down our store. When we’ve run out of inventory, we’re going to continue to take orders. We’ll just continue to set customer expectation, Hey, you’re not getting your order until here. We’ll give him that message a few times. That way, we still have cash in the bank to kind of fulfill these orders. And
Trent: So I have, I have three ideas for you on how you can get free money. Would you like to hear them? So idea number one, you’ve got an email list, you can do pre-sales. Say, Hey, you know, we’re this small company, um, we’re, we’re growing like crazy. I’ll give you a discount if you pay for your product now and you’ll get it in, you know, 30 days or whatever. So there’s, there’s one, there’s probably some money there you could get. You’ve got brick and mortar retailer partners. You could do the same thing. Hey guys, I’d like you to pay for, cause you know, Walmart and all these companies, they don’t want pay early. They won’t pay late, but if you give them a discount, maybe they’ll pay early. And so that’s number two. And then number three, just Google zero interest credit cards. There are plenty of credit cards out there where there’s no interest charge for the first 18 and sometimes even as much as 24 months.
Trent: And you can, um, there’s a number of ways to get the money off the credit card. So you could, you could directly pay your supplier, but let’s say your supplier doesn’t want to take a credit card, they want to check. So you can use this thing called plastiq spelt with a Q at the end. So instead of a C at the end, it’s at a Q. And I just learned about this at the mastermind I was out on the weekend. It’s a plastic will allow you to pay whatever you run it through there. They take a little bit of a fee and then they can send a check or you’re going to have to LLCs. You can have your credit card in one and you can have your other company invoice the credit card and then pay by the credit card and then that money ends up in your bank account and now you’ve got the money in your bank account to write a check or send a wire or whatever you need to do. There was one of the guys at the mastermind, a fellow by the name of Jeff’s second juror, I believe is his last name. And that’s essentially what he, his people, there’s, there was guys there who had raised like one guy in particular, $180,000 from in free money, no interest from these various credit cards. And then he used that money to go out and actually buy any commerce business, which I thought was brilliant. So there’s a lot more, if you’re clever, there’s a lot more free capital available than you might think.
Chris: Yeah. So we, we got the freeloaders coming in on our site. We’ll have that for a few months until all the inventory lands and yeah, it’s an easy for other pro, the orders are coming in and the conversion rates and not dropping too much when they tell people that we’re back-ordered for two weeks, we’ve been down this road, completely sell funded and uh, now we’re 100% profitable. So it’s a good feeling. Yeah, absolutely.
Trent: Do you think you’ll ever take investors at this point?
Chris: I don’t think we need to. Uh, we have an indoor model coming out in the first weeks of January. We have more than enough inventory that we need and we’ve been able to forecast without too many big hiccups. Uh, and it becomes a point where we’re selling 50,000 units every month. Like that might become a time where we need to inventory and we need some more cash up front. But as of now, we’ve kind of, every time we thought we need an investor, we’ve kind of gotten over it as a team and founders to get over it. And now that we’re 100% profitable and have zero debt, nobody to pay back besides me making a living. Um, yeah, I don’t, I don’t know. I really don’t know what the future holds right now. It doesn’t seem like we need one.
Trent: Don’t take them if you don’t need them, there’s really no reason to do it. All right, we are going to finish up here with five quick facts. These are five short questions. Just looking for five short answers. Um, favorite business book or podcast.
Chris: Reading. A favorite business book right now is the story of Netflix by the first owner.
Trent: I just finished it. It’s called, that’ll never work.
Chris: Yes, exactly. Yeah. Uh, 200 pages in and it’s at captivating. Yeah.
Trent: I listened to it on audible as I drive back and forth to the gym each day. A favorite online tool for growing your business?
Trent: How many hours a week are you working?
Chris: Uh, probably less than 40.
Trent: Less than 40. That surprises me. I would have thought being a, I’m assuming, are you single?
Chris: Oh no, I’ve got to go from, yeah, but you’re not married. No kids.
Trent: I would have figured that you were cranking at 60 or 70 a week and I’m actually pretty, uh, pretty, pretty pleasantly surprised to hear you’re working 40 now for other folks who are listening because a lot of entrepreneurs put in a lot hours. And w why is it only 40? Is it because you really only need to do 40? Or was there a conscious decision?
Chris: Um, well were I was definitely at 60 or 80 a few months back. But now it’s just kinda gotten to the point where I have these VA’s and I had these, that free that time that you’re talking about and now I’m not spending 20 minutes making a shipping label. I’m not doing it. I’m not answering the emails that I don’t need to answer. And now I have time to enjoy my life. I have a great business and I’d rather pay somebody $8. I didn’t have my freedom, you know.
Trent: Amen brother. So you’re still pretty young, but I’m going to ask you this last question. So what do you wish your younger self knew and when I say younger self, let’s just go back a year or two years. When you were earlier on in your journey.
Chris: A younger self knew, um, take the risk earlier I was working a pretty dead end job in my opinion, uh, right out of college. Uh, just really it was a grind every day going one of those jobs where I got an email, I remember one day I got an email from my boss saying, the back of your shirt is partly untucked. Can you please tuck it in? And I was just like, are you like, it’s 4:59 and my shirt is partly on talked and at that day I was just like, alright, I’m done with this. Like I can taking the risk sooner if nobody’s going to do it, like you have to do it. If not, somebody else is going to do it and you’re going to just reading it your whole life.
Trent: Yeah. Any other entrepreneurs in your family?
Chris: Oh, well my brother is the cofounder, her business. So it’s just.
Trent: but not your parents. You didn’t really, you didn’t learn this from your parents?
Chris: Nope. Just learn the hustle from my parents and try to just make it happen.
New Speaker: Yeah, we had on you man. You’ve done a phenomenal job, Chris. Super impressed with the results that you’ve achieved. I have no doubt you’ve got bright things ahead of you and thanks very much for being on the show.
Chris: Thanks man. I appreciate it.