My guest in today’s episode is Ryan McGrotty, half of the team behind a rapidly growing fitness equipment manufacturer by the name of Rep Fitness.

Much like me, Ryan and his brother got started way back in 2012, building niche websites way back that they used to earn affiliate income. In fact, we each used the same post in the Warrior Forum – by a user by the screen name was LMC – to get started.

Unfortunately, for Ryan (and me!), the niche website strategy that we were using got annihilated by Google Penguin and it was at this point in time that Ryan and his brother set out to build their own brand of fitness equipment.

In the beginning, they focused on drop shipping. That evolved into a retail store (7K foot showroom + 60K foot warehouse) and an extremely successful company that sells on Amazon, their own website, and their one retail location.

Full Transcript

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RyanMcGrottyFinal

Trent: My guest on the show today is Ryan McGrotty, one half of the team behind a very rapidly growing fitness equipment manufacturer by the name of Rep Fitness. Much like me, Ryan and his brother got started building niche websites way back in 2012 that they used to earn affiliate income. In fact, we each used a post in the Warrior Forum by a guy whose screen name was LMC to start our respective businesses, so a tip of the hat to LMC whoever he is.

Unfortunately for Ryan and for me, the niche website strategy that we were using got annihilated by the release of the Google Panda and Penguin algorithm updates. And it was at this point in time that Ryan and his brother set out to build their own brand of fitness equipment. In the beginning they focused on drop shipping and that evolved into a retail store, plus an extremely successful business that sells on Amazon and their own website in addition to their store. Please join me in welcoming Ryan to the show. Hey Ryan, welcome to the show.

Ryan: Hey, Trent. Good to be here.

Trent: Yeah, very good to have you. So for the folks who may not have heard of you, aren’t familiar with the brand that I just introduced in the introduction to this episode, let’s start off with an easy one. Who are you and what do you do?

Ryan: So my name is Ryan McGrotty, and I’m the co-owner of Rep Fitness and we’re a fitness equipment company. We specialize in home gym equipment, CrossFit gym outfitting, and most recently we’re starting to get into commercial gym outfitting.

Trent: Cool. And you started this company roughly how long ago?

Ryan: It was 2012 with my younger brother Shane.

Trent: Okay. And where is the company at today in terms of revenue or number of employees, or some way that the audience can kind of get an idea of where you’re at?

Ryan: Sure. Yes. So, this year we expect to do somewhere between 17 and 18 million in revenue.

Trent: Excellent. So it’s been quite a success.

Ryan: Yeah, no, we’re definitely happy with how things are going. We think we’re at number 450 on the Inc 5000 for 2018.

Trent: Hey, top 10%. Bravo.

Ryan: Yeah, I’ll take it definitely.

Trent: I wish I had my little — I have actually an applause sound effects, but it’s upstairs. Otherwise I would hit the button. So let’s kind of unpack the story of your success so that the folks that are listening can hopefully walk away with a couple of actionable golden nuggets that they would be able to implement in their businesses, so idea generation, something that for new entrepreneurs they seem to get stuck on. And then for those of us who’ve been after it for a while, we have more ideas than we have time. How did you come up with the idea for this?

Ryan: So my brother and I used to have an internet marketing company where we were basically doing a lot of SEO work for other companies, and then for our own affiliate sites. And through that we well, I guess in addition to that, we also had early exposure to CrossFit back in like 2010, 2011 when it was kind of first getting started. And so, one of the affiliate sites that we had gotten up was for gym equipment and for CrossFit type of equipment, and we saw that doing well. But the companies that we were working with as an affiliate, we just saw them making a lot of mistakes with the type of equipment they were offering and with their website navigation and being able to find what you need quickly. They just weren’t making very good decisions.

And so, we tried to help them out because we figured, hey, if we help them, we help ourselves, and everybody makes more money. But they really just weren’t having it and so we got frustrated and said, let’s see if we can start finding this stuff ourselves. And so yeah, we fired up Alibaba and kind of went from there, and just have kept expanding from there.

Trent: Nice. Now help me remember because I think in the pre interview and I discovered, didn’t we follow — our first foray was an LMC, was that…

Ryan: Yeah, it was so crazy.

Trent: Yeah, so that’s actually a story that we should probably share. So when Ryan and I were doing the pre interview, I was asking all the questions that I ask, and you told me, how did you answer it? You said there’s something in the Warrior Forum blah, blah, blah.

Ryan: Yeah.

Trent: There was this guy who had very charitably posted this huge long post in the Warrior Forum explaining how to build niche sites. And that was literally one of the very first things I’d seen I think just around the time that I met the surfer [ph] and people who have been following me for a while will know who the surfer is. But for the purposes of this story is not too terribly important. And we discovered much to our mutual surprise in the pre interview that LMC’s post had actually inspired both of our careers online, so rather bizarre to say the least.

Ryan: Yeah, no really crazy that — like we both read that, both realized wow, this could actually work and then it actually worked for both of us. And yeah, if any of your listeners actually for whatever reason somehow know this guy, I’ve always tried to find out who he was, be able to reach out but he’s not active on the forum anymore, and I have no way to like reach out to him because I always wanted to say thanks for that, because that really did kick start everything for us.

Trent: Yeah absolutely, I would echo that. So LMC if you’re listening; thanks very much. All right, so back to the interview, so you got your idea, how did you then generate your first 100 sales?

Ryan: So, that kind of we cheated a little bit there because as part of the affiliate sites, the network that we’d set up, we had like dozens of sites that were kind of like SEO keyword domains like  bestolympicpark.com and that type of thing. So we were sending that traffic to affiliate links with Amazon and then also to some of the other companies that we worked directly with. And instead of sending that traffic towards them, we started sending it to our own website. So that was a lot of drop shipping stuff. And then also we gradually expanded the number of products that we actually carried in our store and shipped out ourselves. So yeah, we got a head start there.

Trent: Yeah, no question, nothing like having all that traffic to tap into whenever you need it.

Ryan: For sure.

Trent: So today, your largest source of traffic is probably not the same as it was for the first 100 sales I’m going to guess. How have things changed?

Ryan: Yeah, no, absolutely. I mean early on, it was Google just people doing organic searches, finding our site, then clicking a link and then eventually getting to the Repfitness.com site. But since then, we have pretty much about a 60% Amazon sales or 60% of our revenues from Amazon sales, about 20% going through our website, and 20% walking into our retail store. So yeah, the traffic from Google definitely still helps going directly to our site. But yes, sales on Amazon, it’s a lot easier to get sales there.

Trent: So when you started on Amazon, your space is pretty competitive I’m going to guess yes.

Ryan: It is to an extent, but the products since so much of our stuff is heavy and a pain in the butt to ship, that kind of it keeps away a lot of the guys that are going to seminars and courses and just air shipping small amounts over. You have to be competitive, you got to be sending over full containers, and that requires a little bit of investment up front.

Trent: Mm-hmm, which most people either don’t have or don’t have the risk tolerance to be able to do it.

Ryan: Right yeah.

Trent: And in your case, you were willing to make that investment because of the background that you had and the fact that you have this network of small sites, which wasn’t going to enable you to generate sales almost immediately. Is that about, right?

Ryan: Yeah, no, it definitely helped. Part of it was when we started, as soon as we decided to make that transition from just drop shipping stuff to getting our own brand, we knew immediately we’d open a retail store because you really couldn’t find a lot of this type of equipment that you would use for CrossFit workouts. You couldn’t find it in exporting goods or any other local sporting goods store. So we had a huge advantage for pricing because if we shipped the container directly to our store and then sold it locally, you didn’t have to pay for shipping which on items that way 200, 300, 400 pounds, like bumper plate sets and things like that, you just, we had a huge advantage early on.

And we had the advantage of knowing based on our affiliate sales what was selling really well for all of our now competitors that we were sending that traffic to. So we knew what items were popular and we knew that we could make sales with those items. And one tricky thing we did was actually to be 100% confident before we put this order in for a full container, we put an ad on Craigslist saying, hey, like, we’re going to be getting these things here in like 90 days, if you’re interested, we’ll put your name on the email list. And so we built this huge email list before we even had the product here and most of it was sold before it even got here.

Trent: Really, that’s pretty crafty. Just most of it was sold obviously to people who are just in your local geo market.

Ryan: Exactly yeah, because you couldn’t find bumper plates because you’re just basically rubber Olympic plates and you couldn’t find those in any stores. So, when we said, hey, we’re going to have them here for this price; that got a lot of people interested.

Trent: Yeah, the first order that you’re talking about this container, how much capital did that require?

Ryan: It wasn’t even — at the time, it wasn’t even a full container. I think we only did half a container, which was probably about $15,000.

Trent: Okay. So a meaningful amount, but not like hundreds of grand. You lose $15,000, you’re going to survive.

Ryan: Yep. Yep, for sure.

Trent: And you had opened — you’d mentioned you’d opened a retail store. I want to make sure that I don’t gloss over that. Where in the timeline did the store actually get opened?

Ryan: It was probably about nine months in, so yeah, right around nine months in from when we first created the site in 2012. It was probably right around December, January or so of that first year.

Trent: Okay, so well after that $15,000 shipment, the store happened well after that.

Ryan: Well, the $15,000 shipment was probably a few months before we opened. So we knew we were going to open that store as soon as those plates arrive, so we kind of timed it to right around then. And before that we were just drop shipping.

Trent: Okay. And remind me why the store exists because if 60% of your sales are on Amazon, I think you said 20% are the store and 20% on your own website. Why did you open a brick and mortar store?

Ryan: So, you’ve got a couple of things going on, basically the brick and mortar store is attached to the warehouse. So it basically, we need to have employees here. We need to be here at the offices to answer the phones and ship product out, and coordinate all of that. So really, it’s then it’s a question of well, if you set aside a few thousand square feet for a store, which now it’s 7,000 square feet for the show room, how much of sales is that generating and how many employees do you need to run that side of things? And then more importantly, what’s the margin. The margin and walk in sales is way better than yeah online and on Amazon.

Trent: So you’ll get folks who walk into your store and buy something and they know it’s on Amazon for less?

Ryan: No, it’s not an Amazon for less. That’s exactly it is the shipping costs built in.

Trent: Yeah, are you doing mostly FBM on Amazon?

Ryan: We’re doing FBA on everything that we can, which is pretty much anything that doesn’t ship freight can go FBA. So we have a vast majority of our stuff, I mean, we’re sending in truckloads of stuff to Amazon’s warehouse, it happens all the time.

Trent: Yeah, the big shipping costs are Amazon FBA fees because your products are so big and heavy. That’s where the margin is getting eroded, versus someone walks into your retail store and pays exactly the same price and you just hand it to them.

Ryan: Exactly. Yeah.

Trent: Okay. So my next question I was going to ask is average order value versus cost to acquire a customer, so this would be predominantly for traffic to your own website, how do you drive traffic there now?

Ryan: So traffic to our website, we rely on a few different things. One of them is we will send out product for a review. So we have an affiliate program and part of that is a discount for people that want to purchase our equipment for reviews on their site. So we’ll cut them deals like that. And a lot of these people have really good built in audiences of people that go to their websites or watch their videos on YouTube, and will rely on their advice for what to buy for home gym equipment. So we definitely rely on that.

And then the other part is just going out on to the social media platforms like Reddit, like the bodybuilding forums like other places where people talk about weightlifting. And if you establish yourself as a credible expert, or at least somebody that’s willing to give them an honest answer about, hey, why should I buy your equipment versus somebody else’s, and you’re not just giving them marketing speak, then they respect that. And I think that helps to build your reputation and get more people who will recommend your stuff that way.

Trent: So it would seem to me, so if I boil that down into two nuggets. One of them you’ve got essentially blogger and vlogger outreach, and then you’ve got participation in Reddit. What’s the ongoing labor commitment look like for the blogger and vlogger outreach?

Ryan: That’s not bad at all. We actually just hired somebody that’s going to be spending a little bit more time on that because it kind of ebbs and flows where we have some of our assistant managers will spend some time doing some of that outreach. But a lot of them now just know about us, so they will come to us and want to be part of the affiliate program and then set something up, and there’s not as much outreach that needs to take place from our end so much anymore.

Trent: Okay, and then what about on Reddit and any other social platforms? I’m assuming that’s all just manual labor to respond to people’s questions, you’re not automating that in any way?

Ryan: It is yeah. And I actually do that myself, for the most part. It’s something I actually enjoy doing. So for me, it’s like, I don’t even care if I’m doing it a few minutes while I’m at work, or if I’m at home or on the weekend, it doesn’t really matter. If it’s something where I feel like I can contribute, then I’ll do that. But it’s not — we’re not actively out there trying to spam our links and [inaudible 00:18:32] our products as much as we can. It’s just where it makes sense; I’ll chip in my two cents.

Trent: Okay. And now with respect to Amazon, what are some of the things that you’re doing? Aside from the obvious, hey, we have product listings, we have great photos. We make sure we have good titles and we have a good product listing, but what are some of the things that you’re doing to get eyeballs on to those product listings?

Ryan: So we are doing the Amazon paid advertising. We actively work on bringing our ACOS down, the average cost of sale. So, that’s one of the things that our marketing team looks at and tries to balance that versus the quantity of sales and margins and things. So, there is like – I’m not sure, that part of it is I’ve offloaded somewhat to my brother so he handles more of that side, but I know that they meet often about dealing with the paid ads there. We’ve also just noticed keeping in stock FBA is super critical. The sales boost there is, it’s a night and day difference versus when we’re fulfilling out of here. So, we’ve really tried to keep that under control too.

Trent: What would you guess the boost is FBA versus FBM?

Ryan: FBA versus FBM, sorry, you said the sales boost?

Trent: Yeah, you said it’s a huge boost when you’re using FBA, which because I understand it’s two day Prime shipping. People are really, they trust prime and they see the prime badge, they’re going to buy it.

Ryan: Yeah, we typically see, I mean, for a lot of products it’s 100% boost.

Trent: Wow.

Ryan: Yeah.

Trent: Yeah. That’s massive. Okay. Are you doing — so aside from — what are you spending a month on advertising do you think?

Ryan: How much are we spending a month on advertising? I can actually ask my brother, he just walked in. Shane, how much are we spending on advertising for Facebook, sorry for Amazon?

Shane: Amazon?

Ryan: Mm-hmm.

Shane: About 15,000 a month.

Ryan: Yeah, ballpark about 15,000 a month.

Trent: Okay. So you’ve got probably dozens or maybe hundreds of campaigns going right now.

Ryan: That probably is about accurate. Yeah.

Trent: Okay. And so managing those campaigns fairly how many people does that take?

Ryan: So we have a marketing team of two people that are, they’re not in house. They’re basically friends of my brothers that worked at another marketing company and then started their own. So we were their kind of first major client, and they will manage a lot of that and work with my brother on that stuff.

Trent: Okay. All right, and then are you doing other types of ads on Amazon besides sponsored product? Are you doing any headline search? Are you doing any product placement?

Ryan: Yeah, the headline search I know that’s worked well for us as well.

Trent: Okay. All right, let’s talk about mistakes that you made because we all make lots of them. The more successful you are, the more you’ve made because that’s where the best education seems to come from. In your let’s say, in the early years, was there any mistakes that you made that nearly took you out of the game or what comes to mind?

Ryan: For sure, yeah. A couple years in, we were definitely considering whether we needed to just close up shop, we kind of plateaued and really couldn’t figure out a way to grow and couldn’t expand beyond basically just kind of a subsistence level of revenue. I think we were under a million, or just kind of right at that, hey, it’s a full time job but we’re not really doing that well, and there wasn’t a clear path forward there. And then that was caused by a couple of things, really was we were trying to do what the market leader was doing which was actually producing some of the equipment in the USA.

So we started out like that. And we’d partnered with a couple of guys who actually approached us and said, like, hey, we can make this stuff for way cheaper than this competitor is doing it for, and if we just come out with stuff that’s kind of similar, but like way better price, we’ll kill it. But they just kind of didn’t really do their homework and didn’t realize that actually, it’s going to be really expensive to do that, and that we really can’t undercut their price very much. So that part of the plan kind of failed. And so there wasn’t really a compelling reason to buy some of these items from us because we weren’t any cheaper, and it really wasn’t any better.

So that was definitely a mistake. And we weren’t selling on Amazon. We kind of figured like, oh, giving away that 15%, that’s way too much. We don’t have the margin to do that, which at the time we didn’t with items we were looking at. So yeah, I mean, basically starting to go overseas and selling on Amazon were the two really big keys for us.

Trent: So by selling over, by sourcing overseas, you were able to cut your cost of goods by a significant amount so that you could then be at a lower retail price point and to be on Amazon and pay Amazon’s fees and still have enough margin left at the end of the day, even though you’re at a large retail price point vis-a-vis your competitors to make it all work, did I get that about right?

Ryan: Yeah, absolutely. And the first products we tested on Amazon were actually ones that we already were importing, because we had a mixture of some stuff in the made in the US locally and then some stuff importing that just you couldn’t really find. And the stuff that we sold that was imported that really we weren’t selling very often on our own website or to walk in customers, but then as soon as we put it on Amazon, it was just selling itself. We were like, wow, this is amazing. So that’s when we realized, well, if these products are selling themselves with not much effort, what if we started finding these other products and did some research there? And yeah, I mean, the price difference between overseas and China, and what it was to produce that product here in Colorado, I mean, it was a huge difference.

Trent: So why do you think your competitors are not doing the same thing as you and just having a race to the bottom for everybody?

Ryan: Sure. Yeah, no, there is definitely, there are plenty of competitors that are manufacturing overseas. We’re not unique there by any means. But early on in the game, it was a lot of the competitors were old school. And they really hadn’t paid attention to the shift of the consumers looking for products that were built to withstand a much heavier workload like CrossFit equipment. Stuff in CrossFit gyms gets really abused, and it’s a little bit different than what the old school designs were offering.

And so those companies were a little bit slower to adapt and offer what people were really looking for. So their designs were just old. And so we were one of the first few companies to be looking at producing overseas to a higher standard of quality, and built with this 11 gauge steel, a heavy gauge steel and stuff that’s really built for heavy use.

Trent: And has that advantage remained? I mean, you’d think that these competitors at some point in time, the light bulb would go on and they’d revise their designs and they would go and manufacturer overseas just like you and that would negate any benefits that you have.

Ryan: Yeah, no, absolutely. There’s definitely been stronger competitors that have come into the scene. But there’s still that is one of our advantages, I think, is that because I do spend quite a bit of time on these forums and message boards and talk to guys that have seen every piece of equipment under the sun, we will still have designs that people haven’t seen before that have some sort of unique advantage to them. And so, I think our designs and just maintaining quality standards, that’s one thing that anybody that’s ever manufactured overseas knows is it’s difficult to get and maintain a high level of quality. And that’s one thing that I think our land has become known for.

Trent: Have you had much turnover in the factories that you’ve had to deal with to get this high level, this consistent high level of quality?

Ryan: Yeah, for sure. I mean, early on the first few years yeah, we had factories that would just send us junk, and the sample would be good, but we wouldn’t get things inspected before they left. And so I mean, I remember one time we had a shipment of kettlebells that were supposed to have a stainless steel handle, but they sent it like it was like either iron or just bear steel. And they’d left the crates out in the rain. So by the time they got to us, the handles were all like rusted out. And so, they weren’t rusted out, they just had surface rust on it. That made them obviously look awful and the packaging was almost trashed.

And so yeah, it was me and my brother in the back of the warehouse, scrubbing these handles with vinegar, and just get it out. So we’ve had yeah, definitely suppliers that haven’t worked out to say the least.

Trent: Yeah, because with stuff that heavy, it’s not like you’re shipping it back to get a refund, because they’re probably just going to tell you to go pound sand at that point, right?

Ryan: Oh, yeah, exactly. Yeah, we’ve learned a lesson really quick there that like if there’s a problem and you don’t find out until it’s here, it’s too late. You’re just toast. There’s nothing you can do.

Trent: Yeah, now it’s your problem, not theirs.

Ryan: Yeah, sure.

Trent: So let’s fast forward to say today. The last six or 12 months, what would you say is the biggest challenge in getting the business to grow?

Ryan: Biggest challenge is really managing inventory for us anyways. That’s been a challenge; a consistent challenge in some of the factories that we’ve worked with over the past few years. We’ve grown and almost kind of outstripped their growth so that when I’m going overseas to visit these factories, it’s clear that, hey, the production levels are not quite meeting what we need. And so, then they’re having to invest to build up their production facilities.

And yeah, you don’t want to leave them because you’ve built up so much history with them, they understand what you need, they have the product specs and all this, but stock outs are definitely something that consistently still happens to us. So, yeah, I mean, that’s kind of getting that production process streamlined so that we don’t have stock outs is really key for us right now.

Trent: And the reason for people listening that stock outs are such a big deal is because if you have an FBA listing with a BSR of randomly picking a number of 5,000 and you’re out of stock, the BSR just gets absolutely pummeled.

Ryan: For sure.

Trent: And then when you’re back in stock, it doesn’t just go back to 5,000 or where it was before, it’s still a byproduct of its sales velocity, which while you’re out of stock was zero. So how do you keep from going out of stock when your suppliers can’t fulfill? Do you start jacking up the price to slow the velocity down, or what are some of the ways that you can mitigate that risk?

Ryan: Yeah, we’ve definitely done that. We’ve jacked the price up before which we don’t like doing that because obviously you get upset customers when you actually get stock levels back to where they should be, then now you’re lowering the price and now people want refunds. So yeah, that’s definitely just like a short term solution. Long term for us though, it’s been really talking to the factory and saying like, hey, we understand you might need to work with a partner on these things. As long as we can maintain our quality levels, we’re open to you guys partnering with another factory until you get your production facility up to the level we need. So that’s what we’ve been working on recently.

Trent: Okay. And I would imagine at this level, all of these suppliers that are in China that you’re speaking to, you’ve probably met them all, you’ve probably had dinner with them all, you actually have relationships with these people. Would that be an accurate statement?

Ryan: For sure yeah. I mean, some of them I’ve met them a dozen times.

Trent: Yeah, over the years. Okay.

Ryan: Mm-hmm.

Trent: All right. If you were interviewing yourself because you have all sorts of hindsight and knowledge in your head, is there any question or any topic that we haven’t talked about that you think the interview would be remiss if we didn’t include?

Ryan: That’s a good question. I would say really focusing on what your competitive advantage is and even just digging deeper into like you said, there’s competitors that can come out and they can produce overseas as well. And gym equipment isn’t exactly rocket science for people to develop products of their own. So, really understanding long term, why do you have an advantage over your competitors, and how are you going to maintain that advantage in especially if you deal with products that are really difficult to patent, which gym equipment is, there’s not really that much you can patent with it. So yeah, I mean, we’ve had to look at that as well to understand really, where do we feel like long term, why would somebody pick our products if somebody else has a cheaper price for a similar product?

Trent: Yeah. And so how do you do that? Because I’ve gone to your website, I’ve been staring at it for the entire interview. It’s funny because I literally bought a bench last night off of Amazon and it had been so long since you and I did the pre interview. I think it’s been over a month. It never even occurred to me to go and look up your brand name. So I typed in workout bench and scrolled through a whole bunch, and found one for like 122 bucks that the back tilted up and down and had four and a half star reviews. So like, I’ll take that one.

And had I known that, oh yeah, I’m interviewing Ryan tomorrow, I’m quite sure I would have waited to till today. It’s, can I buy one of yours? So even someone who kind of sort of knew you didn’t end up buying your product, and I feel like an absolute dip for that. But how do you deal with that question of like, what is your long term sustainable competitive advantage?

Ryan: Yeah, for sure. So definitely, if you bought an adjustable bench for 122 bucks or so and I’m kidding, I’m going to say good luck to you, sir.

Trent: Oh, yeah. Did I buy a pile of crap?

Ryan: Maybe. Yeah, I mean, it’s really difficult to get a good one for under 200 bucks. And that really just depends like, and that goes for pretty much any product category. It’s always the cheapest stuff that sells the most on Amazon, not necessarily the best. So, I tend to think that our products are — we sell the most of a high quality product. So if there’s something that, there’s a bench that sells for 200 bucks, ours is probably going to be the number one selling bench for 200 bucks. But we definitely focus in on the mid and high range.

So yeah, for instance, the bench you’re talking about just to give you an example there, that one is probably going to be a thin gauge steel and maybe it’ll be rated for 300 or 500 pounds something in that range. But if you want something that, hey, I’m going to do a flat bench press on and I weighed 200 pounds and I’m trying to get up to being able to do 250 or something like that, well, you want a little bit of a safety factor there. So you kind of need the thicker steel, you need the thicker padding. You want something that isn’t going to be flimsy because again, like if you have a barbell over your head, and you’re worried about whether this company did a good job with the welds, or used thick enough steel, it’s better to spend a few more bucks and get something that’s going to be really solid and not have to worry about your safety.

So if I was going back to advise you, that’s what I would say. Like, don’t spend less than 200 bucks. And I think our cheapest adjustable is right around 220 on Amazon. But yeah, and that’s for something that you can put 1,000 pounds on. I mean, we tested it with 3,700 pounds. So I know that that’s not going to have an issue.

Trent: Yeah, let me let me clarify. The bench that I bought is similar to your AB 3100. It’s not for barbells. It’s just for using dumbbell work.

Ryan: Yeah, if you’re using for dumbbell work, then yeah, you can definitely go cheaper. And that’s something we’ve thought about too is potentially offering an even cheaper option specifically for dumbbell work. But yeah, we just haven’t done that yet. It’s kind of a little bit more multipurpose right now.

Trent: Okay. So we kind of went down — my fault, I took us down a bit of a rabbit hole. And we didn’t really get to an answer to the question of how in your space. And this would apply to a lot of different businesses, not just yours. You have a product that is, as you do put it relatively easy to copy. It’s something that you can’t patent. How do you ensure that your company has a future that isn’t going to get killed by commoditization and race to the bottom in pricing?

Ryan: Yeah, so I think there’s a few things. One is the stock issues we mentioned on Amazon is once you come out with something that is — I mean, let’s assume that you are smart enough about the product that you’re selling, that you’ve figured out some sort of little benefit or design change that makes yours better than everything else that’s offered at that price point. So let’s assume you have that, you come out with that product, then you have to keep it in stock and keep it at a price that isn’t a super greedy margin. Because what we’ve seen is if you run out of stock, often your competitors notice that. If you’re taking a super greedy margin, your competitors also notice that.

And then you kind of invite this competition of like you said, the race to the bottom or somebody thinks they can come out with the same product and price at $10 less than yours. Or you run out of stock and now here’s this other product that looks almost the same as yours, and it’s the only one available because you’re out of stock. So, that’s really the first thing I think that’s really been key for us and that we’re going to be focusing on going forward.

The second part is quality and it’s easy to say that and just think, oh, yeah, I can make high quality product. But how do you consistently offer a really high quality product where it’s not just yes, five out of 10 are good and three out of 10 or okay, and then two out of 10 I got to give discounts and refunds. It’s getting your quality to a level where somebody feels confident if they order this as a gift for somebody, or if they just don’t want to waste their time with exchanges and customer service and everything else, they know if they order a product from your company, they’re going to open up the box and be happy with what they have.

And that costs money because the prices you get, if you want to go cheapest, you’re just going to have to cut corners somewhere, and that’s usually with quality control is what we’ve seen in our industry. So, those two things are definitely key. And then really the third for us is always staying one step ahead where you might come out with a product that’s great for a few years and then it does get copied and then you do see sales start to decline. But then your defense against that is you are coming out with version two or version three or something completely new that is clearly superior at a different price point or maybe it’s just a better product period. And all those competitors that are just copying you are just playing catch up. And that I think, those three things are really, really going to be key for us going forward and have worked well for us in the past.

Trent: Mm-hmm. And I think I would add to your participation in the communities that you participate in and simply adding value in a way that you are without being Joe pitch man. There’s always going to be word of mouth reward, I think for that effort.

Ryan: Yeah, definitely no. I’ve noticed people — and that’s why I handle that personally myself because yeah, I’m sure I could train somebody here to take that part over. But it’s something that’s so key and clearly has such a good feedback from people when it feels like you’re offering something of value with no expectation of them buying something. Sometimes I’ll just give them advice on different things that have nothing to do with our products or just some product in particular that we offer. It might just be yeah, generally you need this type of equipment, and this should be your budget, whatever it might be. And people really respond to that and respect the company more when you are genuinely trying to be helpful.

Trent: Yep, absolutely they do. All right, I think Ryan; we will wrap it up here. For anyone who wants to know more about Ryan’s products, if you just go to Repfitness.com, you’ll be able to see them all. We didn’t talk about this in the pre interview. So apologies if I’m putting you on the spot, but it’s something I’ve just started to do recently with people who have eCommerce stores. If you do want to create any kind of promo code, or what have you, for people who are listening to the show and want to buy your stuff, I’d be very happy to put that in the show notes. I don’t even know if your website has the ability to do that. But if it does, we can figure that out after the recording.

Ryan: Yeah, a good deal. We do have a discount code area. So yeah, I’ll figure out if we can do something. I know our Black Friday sales are going to be starting up here shortly and that kind of usually negates all the codes because it’s the best sale of the year.

Trent: Yeah, no doubt. Okay well Ryan, thank you so much for making some time to be on the show.

Ryan: Yeah I appreciate it. Thanks a lot Trent.

Questions Asked During the Interview

  • Who are you and what do you do?
  • Tell me about where your company is at today
  • How did you come up with the idea?
  • How did you generate your first 100 sales?
  • What is your largest source of traffic today?
  • Is your AOV high enough to cover your COCA? How?
  • How does Amazon fit into your eCommerce strategy?
  • What was one major mistake you made along the way?
  • How do you maintain a competitive advantage?
  • If you were to give your younger self some advice, what would it be?

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Today’s Guest

Partway through law school, Ryan had heard enough stories of grinding out 70 hour work weeks doing paperwork to realize it wasn’t for him. Shortly after graduating in 2009, he tried – and failed – to revive his father’s home building business. However, during that process he learned a lot about Internet marketing and building websites from reading forums online. Ryan combined those skills with a passion for fitness to start Rep Fitness, a fitness equipment company, in 2012 with his younger brother. In just 6 years, they’ve grown from a 1200 sqft garage to a 63,000 sqft of warehouse, showroom, and office space.

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