1 00:00:00,000 --> 00:00:07,720 Kevin Mako: Hello, product innovators. Today we learn from one of the top names in the retail sales space on how to scale up a product once landed in a retail chain. 2 00:00:11,180 --> 00:00:20,100 Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors, 3 00:00:20,440 --> 00:00:28,780 Narrator: product developers, and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial 4 00:00:28,780 --> 00:00:37,800 Narrator: idea to getting your product on store shelves. We're taking you step by step to build a functional product and scale your product business. 5 00:00:38,040 --> 00:00:47,680 Narrator: Hosted by Kevin Mako, one of North America's leading experts on hardware development for small product businesses. Now, on to the show. Welcome back, everyone. 6 00:00:47,900 --> 00:00:55,860 Kevin Mako: Today I'm very excited to welcome back Yohan Jacob to the show. Yohan is the founder and president of RetailBound, an agency that helps emerging hardware brands get into 7 00:00:55,860 --> 00:01:02,800 Kevin Mako: major retail stores and sales channels. RetailBound has been around for 14 years and has worked with over four. thousand product companies. 8 00:01:03,120 --> 00:01:11,720 Kevin Mako: Yohan himself has spent 30 years in the industry, including being a major buyer for Sears and OfficeMax. Last episode, we talked about how to get into retail store chains. 9 00:01:11,980 --> 00:01:16,280 Kevin Mako: Today, Yohan is going to give best practices on how inventors, startups, and small manufacturers can 10 00:01:16,280 --> 00:01:25,400 Kevin Mako: scale up their product sales once they land a retailer by building a buyer relationship, enhancing products exposure, reviewing your placements and more. Now on to the episode. 11 00:01:26,440 --> 00:01:30,700 Kevin Mako: Hey, Yohan, welcome back to the show. Good to be back. You're at Kevin. Really excited to have you on again. 12 00:01:30,700 --> 00:01:40,220 Kevin Mako: And you are the man when it comes to retail and getting new products into retail stores. Last time we talked, you gave all kinds of tips and tricks to a new product or 13 00:01:40,220 --> 00:01:48,760 Kevin Mako: even an existing company that's developing something new or a new startup themselves. What's the best way to actually get into retail? And we had a great conversation about that. 14 00:01:48,820 --> 00:01:54,340 Kevin Mako: If you haven't listened to that episode yet, as the listeners out there, I'd highly recommend you look up our other show with Yohan and take a look at that. 15 00:01:54,420 --> 00:01:59,160 Kevin Mako: But now on this episode, we want to talk about what happens when you actually get into the retailers. 16 00:01:59,160 --> 00:02:05,060 Kevin Mako: So you cut that big deal with Walmart or Costco or Best Buy and you're in the store. You're now on the shelves. 17 00:02:05,800 --> 00:02:13,540 Kevin Mako: How do you actually scale and grow and build a multi-million dollar product business through that channel? That's what we're here to talk about today. 18 00:02:14,200 --> 00:02:19,640 Yohan Jacob: Yohan, anything new since we talked last? There are a few more wrinkles. A few more gray hairs, not too much. 19 00:02:19,920 --> 00:02:29,100 Yohan Jacob: But I think the last book in the fall of 2021, you know, retail was still, you know, with the pandemic still coming on strong, a lot of retail. 20 00:02:29,160 --> 00:02:33,080 Yohan Jacob: We're concerned how it's the quarter to be. Yes, there were some shortages. 21 00:02:33,860 --> 00:02:38,340 Yohan Jacob: However, it forced people to go to the store and buy things for their loved ones. 22 00:02:39,020 --> 00:02:43,240 Yohan Jacob: And retailers in 2021 saw an increase around 6% over 23 00:02:43,240 --> 00:02:50,500 Kevin Mako: 2020 in sales. So retail was solid. Very interesting. Yeah, it kind of came back around. And, you know, now it's a hot topic. 24 00:02:50,700 --> 00:02:59,140 Kevin Mako: So the big question is, once you're into the stores and you've got your product, what are some of the main things that a company or a person, 25 00:02:59,160 --> 00:03:04,100 Kevin Mako: or an inventor needs to do to actually scale that within that store channel. 26 00:03:04,280 --> 00:03:11,480 Yohan Jacob: That's a great question. That's why I redeveloped credit, you know, over 14 years ago, I call it a lot of 27 00:03:11,480 --> 00:03:20,900 Yohan Jacob: young brands or brands in general when they get into a Best Buy or a Walmart or a major retailer. There's a lot of excitement. It's almost like they get married, right? 28 00:03:21,680 --> 00:03:24,200 Yohan Jacob: There's a lot of love on both sides of the desk. 29 00:03:25,150 --> 00:03:33,550 Yohan Jacob: But what happens when the high moon phase is over, right? We've all been there, right? What happens when you're not getting the same loving from the buyer, same opportunities? 30 00:03:34,210 --> 00:03:40,990 Yohan Jacob: I think for a lot of young brands, the key is like a marriage, right, or a relationship is keeping that love going strong. 31 00:03:41,450 --> 00:03:45,970 Yohan Jacob: So it's about, you know, find things to make the bar look good, you know, it's promotions, 32 00:03:46,750 --> 00:03:54,570 Yohan Jacob: it's exclusives, things that, you know, to drive traffic. Because in any day, most large retailers for a one 33 00:03:54,570 --> 00:04:03,150 Yohan Jacob: skew, two-skew brand that's unknown like a Sony or Samsung, they're not going to have. spend an effort generally speaking of driving for you right all 34 00:04:03,150 --> 00:04:11,790 Yohan Jacob: Best Buy or Costco or what I'm going to do is quite a platform for you as a manufacturer to succeed whereas in store 35 00:04:11,790 --> 00:04:19,870 Yohan Jacob: online on air or in print instead of you as a as a manufacturer take advantage of those opportunities 36 00:04:19,870 --> 00:04:27,630 Yohan Jacob: I would say as a as a merchant in my past life for two different build our retailers less than 37 00:04:27,630 --> 00:04:32,290 Yohan Jacob: And the last 10% of my vendor base took advantage. I went over and above. 38 00:04:32,970 --> 00:04:41,350 Kevin Mako: I mean, it's our 90% were easy, replaceable with other vendors down the road. It still weren't going to hit those goals. 39 00:04:41,550 --> 00:04:46,090 Kevin Mako: I mean, overall, it's a really interesting theory you're talking about here because it's something that's a bit of a misconception. 40 00:04:46,550 --> 00:04:54,470 Kevin Mako: Once you get into the big retailer, first of all, if you're a one or two or three-skew product, you're not going to be getting into every store on day one anyways. 41 00:04:54,530 --> 00:05:02,470 Kevin Mako: You are probably getting put in five or ten stores. or whatever the initial pilot project might be unless obviously it's some special scenario 42 00:05:02,470 --> 00:05:08,070 Kevin Mako: and there are some exceptions to that rule. But the reality is you're generally starting small. They want to test you out and see how it works. 43 00:05:08,650 --> 00:05:15,950 Kevin Mako: And that's where a lot of product owners, as you mentioned, 90% of product owners, they set it and forget it. Correct. And that's what's 44 00:05:15,950 --> 00:05:22,670 Kevin Mako: so amazing. To me, that's the opportunity because you can be the 10% that really helps and 45 00:05:22,670 --> 00:05:32,010 Kevin Mako: that the buyer likes that is doing things to really advance that product within that store. making that buyer look good, making the store look good, building that relationship. 46 00:05:32,590 --> 00:05:41,050 Kevin Mako: So what are some of those things that you can do once you're actually in the store, once you've got the pilot, what are some of those things that form that 10% of people that 47 00:05:41,050 --> 00:05:47,710 Kevin Mako: make that 10% of products that look good to that product buyer? And what are some of the key, I guess, before we go too deep into the tips and tricks, 48 00:05:48,170 --> 00:05:50,050 Kevin Mako: what are the key things that buyers want to see? 49 00:05:50,170 --> 00:05:59,190 Yohan Jacob: You mentioned to be some KPIs, which are critical, that buyers are looking for. And then how does that distill down to certain things that an individual 50 00:05:59,190 --> 00:06:06,770 Yohan Jacob: or brand can do to help support that product line as it grows? Sure. It's like in the school, you know, each, each has a report card, right? 51 00:06:06,970 --> 00:06:12,830 Yohan Jacob: And the vendor, you know, has to meet or exceed that internal report card. 52 00:06:13,590 --> 00:06:19,650 Yohan Jacob: Retail buyers, doesn't matter, you know, if it's an on-air, in-store, in print, or online, 53 00:06:20,290 --> 00:06:29,950 Yohan Jacob: they have at a very, at a very core, at least three KPIs, key for the end of care. One is, will your product drive top line revenue for my business, right? Number one. 54 00:06:30,990 --> 00:06:38,890 Yohan Jacob: Number two, will your product, right, drive my profit? If I'm not making money, can't keep the doors open, the lights on. 55 00:06:39,490 --> 00:06:48,770 Yohan Jacob: And find a third thing, Kevin, that Rita Bars are looking for for your product is will your product turn X number of times, meaning that if I buy a 56 00:06:48,770 --> 00:06:55,190 Yohan Jacob: thousand widgets will sell through a specific amount of time? Now, that number will vary. 57 00:06:55,370 --> 00:07:04,870 Yohan Jacob: So if I'm a consumable, you know, it's a bag of pay of chips, that number is a lot higher in number of turns 58 00:07:04,870 --> 00:07:09,970 Yohan Jacob: per per week per month than a $4,000 HD 59 00:07:09,970 --> 00:07:18,270 Kevin Mako: AKTV at Best Buy, right? So that number varies. But those are three KPIs, top line sales, bomb and profit, and 60 00:07:18,270 --> 00:07:23,290 Kevin Mako: email and you as a vendor need to hit all three KPIs. 61 00:07:24,650 --> 00:07:33,700 Kevin Mako: to continue in the buyer's assortment for next year. That's great. Now, what can they do to drive those numbers up? 62 00:07:33,860 --> 00:07:40,420 Kevin Mako: And I think that really comes down to, you know, a big thing is how do they get people into the store? Because that's such a big thing, 63 00:07:40,520 --> 00:07:42,820 Kevin Mako: especially when we're talking physical retail stores. 64 00:07:43,480 --> 00:07:50,640 Kevin Mako: The retailers want to get people in there. You see, that's why they have coupons and lost leaders and flyers and their huge massive internal marketing campaigns 65 00:07:50,640 --> 00:07:58,520 Kevin Mako: that they have to get people into the stores. But one of the best things, you can do, of course, as a vendor, as a product, is getting people into the stores for them. 66 00:07:59,000 --> 00:08:04,740 Kevin Mako: And of course, if you have a brand following and loyalty and you've got a great product or innovative, you can do that. 67 00:08:04,860 --> 00:08:11,620 Yohan Jacob: You can actually get those people into the stores to help increase those KPIs, increase at least 68 00:08:11,620 --> 00:08:18,920 Yohan Jacob: the sales number, increase the amount of turns, and as well, increase the foot traffic for that store as well, which is all good things for that buyer. 69 00:08:19,000 --> 00:08:25,160 Yohan Jacob: So what are some of the tips and tricks you've seen along the way to really accelerate and grow that for an emerging brand. 70 00:08:25,320 --> 00:08:32,780 Yohan Jacob: So there's really three things, like three pegs to a stool, right? The first one is the marketing, right? 71 00:08:32,980 --> 00:08:42,120 Yohan Jacob: That's the, so that's common sense. A lot of young brands forget. So it's doing promotions, you know, not all the time because it devise your brand 72 00:08:42,120 --> 00:08:49,920 Yohan Jacob: and teaches the customer to wait until you there's a sale. But key times, like boxing day or Thanksgiving or 73 00:08:49,920 --> 00:08:56,760 Yohan Jacob: or dads and grads, right? where are key times to drive sales when they say the geese are flying 74 00:08:56,790 --> 00:09:05,230 Yohan Jacob: doing a PR right these are more internal stuff on your own side but you know doing where it's you're placed in online media 75 00:09:05,230 --> 00:09:12,610 Yohan Jacob: or print media being aware of hey this is a really cool product and where to buy our forms 76 00:09:12,610 --> 00:09:18,090 Yohan Jacob: of marketing influencers right it's been a big a big kit over the last the last couple of years 77 00:09:18,090 --> 00:09:25,870 Yohan Jacob: find a person who's has a large following does unboxing video and drives traffic to a retailer. 78 00:09:26,770 --> 00:09:34,510 Yohan Jacob: A lot of retailers like Best Buy Kevin or Staples have a marketing calendar, 79 00:09:35,090 --> 00:09:42,250 Yohan Jacob: what you call external market leverage. It could be paid search on their site like Amazon has, like per per click. 80 00:09:42,710 --> 00:09:52,610 Yohan Jacob: It could be a blogger or paid reviews, email blast, banner ads. There's certain things that a, you know, 81 00:09:52,630 --> 00:09:59,150 Yohan Jacob: retail has. It could be as little as, it could be little as free to $100 ,000, right? 82 00:09:59,230 --> 00:10:08,530 Yohan Jacob: So you can pick and choose what lever makes sense for your brand to drive sales off the in-store or online. Besides some of the typical marketing 83 00:10:08,530 --> 00:10:10,710 Yohan Jacob: levers, right, that you could do to drive 84 00:10:11,710 --> 00:10:15,470 Yohan Jacob: sales. Also, it's in-store, you mentioned, training. 85 00:10:16,130 --> 00:10:25,110 Yohan Jacob: Okay, so it's Best Buy. I think all those great blue shirts, right? They have 100,000 of products in store, right? And a love more online, educating the blue shirt. 86 00:10:25,290 --> 00:10:34,790 Yohan Jacob: That's another, that's another task, another part of that stool where, okay, it's educating the blue shirts about your product, right? Why is it different 87 00:10:34,790 --> 00:10:37,190 Yohan Jacob: than our six products on the shelf, right? 88 00:10:37,950 --> 00:10:46,170 Yohan Jacob: Some retailers allow you do spiffs or sales contest to educate the sales show about your products, right? So when someone comes to the 89 00:10:46,170 --> 00:10:55,070 Yohan Jacob: store and say, hey, Kevin, I'm looking for a really cool pair of Bluetooth headphones. There's 50 on the planogram, right? What do you recommend? 90 00:10:55,750 --> 00:11:01,910 Yohan Jacob: Hopefully you train an associate and well, what are you looking for? Is it comfort? Is it price? Is it this? Is it that? Right? 91 00:11:02,570 --> 00:11:07,650 Yohan Jacob: And then by the third thing, besides promotions and marketing, you know, internal and external 92 00:11:08,830 --> 00:11:11,110 Yohan Jacob: and training, you know, as sales associates. 93 00:11:11,950 --> 00:11:17,350 Yohan Jacob: The last thing is making sure that your product actually on the shelf. We call Planogram compliance. 94 00:11:19,270 --> 00:11:21,470 Yohan Jacob: We audited two different companies. 95 00:11:22,210 --> 00:11:30,390 Yohan Jacob: this past November in store and found that over third of stores, the products were on the shelf. 96 00:11:31,270 --> 00:11:32,530 Yohan Jacob: They were in the backstock room. 97 00:11:33,230 --> 00:11:35,570 Yohan Jacob: They were in a wrong location in the store. 98 00:11:36,610 --> 00:11:38,710 Yohan Jacob: Or they're truly out of stock, right? 99 00:11:38,990 --> 00:11:44,110 Kevin Mako: So you've been all this money in marketing, trying to try to a store, right? Train and sales associates. 100 00:11:44,870 --> 00:11:50,830 Kevin Mako: The product on the shelf, you know, it's like it's at the last mile, right? You drop the ball at the goal line, right? 101 00:11:50,830 --> 00:11:58,790 Kevin Mako: So it's important that as a manufacturer, that you cover all three things. Make sure that your products action the shelf versus the backstock room. 102 00:11:59,290 --> 00:12:08,830 Kevin Mako: Two, make sure your sales associate is gnaws well your product and just reen a box, right? And finally, the third thing is you're doing some promotions and some PR and whatever you 103 00:12:08,830 --> 00:12:16,770 Kevin Mako: feel aware of your product and say, hey, this is where you buy. Best Buy, QVC, and so forth. That's great tips. 104 00:12:16,890 --> 00:12:22,810 Kevin Mako: And the best thing about a small brand or somebody that's first started to get into these stores, as we talked about before, it's going to be a pilot. 105 00:12:23,370 --> 00:12:28,810 Kevin Mako: Likely, the pilot is going to be regional. So it's going to be maybe five or ten stores within a specific geography. 106 00:12:28,970 --> 00:12:37,030 Kevin Mako: Maybe it's around, you know, if you're an Austin, Texas inventor, maybe it's, it's all the areas within, you know, 100 kilometers of Austin, for example, in a particular store. 107 00:12:37,650 --> 00:12:45,810 Kevin Mako: The beauty about that is you can do a lot of this work yourself. You don't have to pay, you know, a whole team of experts in order to check out the stores 108 00:12:45,810 --> 00:12:50,730 Kevin Mako: when you're small, of course. You can just walk to the stores and make sure that they're there. In fact, it's a really excited. 109 00:12:50,830 --> 00:12:58,210 Kevin Mako: time. Many of our clients love that part of the process when they get to walk into the store and take the Instagram photo and whatever else. 110 00:12:58,410 --> 00:13:06,450 Kevin Mako: Their product that they had is just an idea months ago is now sitting there on the shelf ready to get bought. The other thing that I would say in 111 00:13:06,450 --> 00:13:16,170 Kevin Mako: terms of the marketing, again, when you're talking about geography, it's far easier to do what we call guerrilla marketing, which is marketing to a small area, one specific 112 00:13:16,170 --> 00:13:23,510 Kevin Mako: niche region, to drive a lot of traffic there and see how that impacts just the sales within that local area. 113 00:13:24,030 --> 00:13:33,190 Yohan Jacob: The beauty about the PR side of things in conjunction with marketing as well is that PR, especially if you can get media, it's called Earned Media, that's free. Yep. 114 00:13:33,530 --> 00:13:41,450 Yohan Jacob: The best way that you can get earned media is in your, or one of the easiest ways, I should say, is in your local town selling to local retailers. 115 00:13:41,710 --> 00:13:50,350 Yohan Jacob: And the fact that you're in the retailer, you can use just the very fact that you're in Walmart as one of the big pitches to why a writer should write about you 116 00:13:50,830 --> 00:13:56,390 Yohan Jacob: because you landed in Walmart you're there, you're all the shelves, you're taking the photos in there, you're driving us some hype on social media, 117 00:13:56,670 --> 00:14:05,530 Yohan Jacob: then you're leveraging that to get free earned PR to then drive more traffic into the store and then this thing starts to snowball. That's the beauty of a small brand, right? 118 00:14:05,630 --> 00:14:13,970 Yohan Jacob: Yeah, as a foreign merchant and as a consultant who works a lot of young brands, that gets you to the most side. You work so hard with your client, right? 119 00:14:13,990 --> 00:14:23,110 Yohan Jacob: He has a really cool product. You spend six, seven, 12 months of development strategies, selling the product in, negotiating, right? It does well online. 120 00:14:23,270 --> 00:14:32,810 Yohan Jacob: It gets in a couple of stores, right, where it's a 50 store test or 200 store test. And just seeing your local store, it gives me the biggest high, right? Like the runner's high. 121 00:14:33,010 --> 00:14:40,730 Yohan Jacob: I love seeing our client, and we take a lot of pictures. We have our clients, especially if clients who aren't based in the U.S. or North America, 122 00:14:40,810 --> 00:14:44,470 Yohan Jacob: they're based in London or based in Hong Kong. We can tell me, hey, look, 123 00:14:44,470 --> 00:14:53,930 Kevin Mako: we were at a Best Buy in Toronto or a Best Buy in Orlando and look, there it is. It gets them so excited as well as we do. 124 00:14:54,330 --> 00:15:01,970 Kevin Mako: And if by chance, if the stores aren't local, right, to your community, there are companies like Retabound. 125 00:15:02,090 --> 00:15:08,450 Kevin Mako: We have a service called Reetbound Vision that can go to any store in the U.S. and Canada and audit 126 00:15:08,450 --> 00:15:14,450 Kevin Mako: and make sure that your product is actually on the shelf and do a mystery shop for about 127 00:15:14,470 --> 00:15:21,950 Kevin Mako: 20 bucks US per store for you know for 50 stores you know it's a very affordable way that's fine flying 128 00:15:21,950 --> 00:15:29,310 Kevin Mako: down to from Hong Kong to you know the US thought at 50 stores you know so it's a 129 00:15:29,310 --> 00:15:32,370 Kevin Mako: it's a good day for you well let's talk about some of the stuff that you guys do because 130 00:15:32,370 --> 00:15:35,730 Kevin Mako: that's really big especially as you're scaling right you're you're only local when you start 131 00:15:35,730 --> 00:15:44,350 Yohan Jacob: and you're only local when you are those first few stores but at some point the and the point of listening to this podcast is you want to scale beyond that you want to become 132 00:15:44,470 --> 00:15:50,710 Yohan Jacob: in hundreds, if not thousands of stores across the U.S. and ideally, then worldwide, internationally. 133 00:15:51,450 --> 00:16:00,770 Yohan Jacob: So one of the things that I think is very important to what you do at RetailBound is strategizing all these intricacies, especially as, well, first and foremost, 134 00:16:00,950 --> 00:16:05,750 Yohan Jacob: to get you into the stores, which is a big piece of the puzzle. But then once you're in the stores, how to actually scale. 135 00:16:05,830 --> 00:16:13,310 Yohan Jacob: So talk about some of that big picture thinking about some of the things that you're doing in terms of bigger scale beyond just the regional play. 136 00:16:13,310 --> 00:16:21,050 Yohan Jacob: And maybe how that regional play actually helps in the expansion as you go statewide or national or international. And it's a great good. 137 00:16:21,190 --> 00:16:30,550 Yohan Jacob: So, you know, retail's not for everybody, right? There are certain brands that we talk to you on a daily basis that tight youth, stay direct to consumer. 138 00:16:30,910 --> 00:16:31,750 Yohan Jacob: Retail's not for you. 139 00:16:33,370 --> 00:16:43,290 Yohan Jacob: Success in retail varies. You know, being in 10,000 locations, maybe great for one brand, where I'm going to say, you know, we're in three retailers, best buy Apple and Home Depot. 140 00:16:43,310 --> 00:16:44,330 Yohan Jacob: and we're fired that, right? 141 00:16:45,790 --> 00:16:54,950 Yohan Jacob: I think there's, you know, a lot of confusion out there of, hey, is retail going to be dead, right? Brick and mortar. The answer is no. A retail to continue to change, right? 142 00:16:54,950 --> 00:16:59,190 Yohan Jacob: And our job is to be the experts, the Sherpas, helping that 143 00:16:59,190 --> 00:17:04,950 Kevin Mako: young brand climb that mountain, right, and say, hey, we'll create a strategy for you, right, 144 00:17:05,150 --> 00:17:12,930 Kevin Mako: where you're a small, once you're a brand or you've been a brand for 50 years, what makes sense for your company, right? I would say to answer your original question, 145 00:17:13,650 --> 00:17:22,930 Kevin Mako: Now, the things that you should do in retail, right, is, you know, go over and above, you know, making the bar look good, right, driving 146 00:17:22,930 --> 00:17:30,730 Kevin Mako: traffic to the retail use in various internal market levels you have, as well as some of the external market levels that are retail have. 147 00:17:31,210 --> 00:17:37,170 Kevin Mako: And you're guaranteed, right, a long-term relationship with a retail buyer. 148 00:17:37,290 --> 00:17:47,190 Kevin Mako: Because, again, why it's easy to get in the store, is that even easier to get kicked out of the store, I guess. So it's important to do a good job and do it 149 00:17:47,190 --> 00:17:48,270 Kevin Mako: for a very long time. 150 00:17:49,140 --> 00:17:54,420 Kevin Mako: I think something that you mentioned there is really important to highlight is the fact 151 00:17:54,420 --> 00:18:02,410 Kevin Mako: that you should really overcommit and do great to your partners. I mean, this is just good in business in general. 152 00:18:03,020 --> 00:18:11,420 Kevin Mako: Always try and give more than you're taking. Always try and be that reliable partner that goes the extra mile. That goes so far. 153 00:18:11,420 --> 00:18:18,020 Kevin Mako: And that's not something you stop at from the beginning of this conversation. We talked about getting in the retail and then setting it and forgetting it. 154 00:18:18,240 --> 00:18:22,780 Kevin Mako: It's something that you should continue to massage. Keep in touch with that person. That's one of the easiest things you can do. 155 00:18:23,460 --> 00:18:24,200 Kevin Mako: Talk to your bar. 156 00:18:25,480 --> 00:18:30,600 Kevin Mako: See what they think about what you're doing, right? How is your product going? What are they seeing internally? 157 00:18:31,120 --> 00:18:37,920 Kevin Mako: What are some tips that they might think to help you continue to scale the product? Talk to them about what you're doing in the industry? 158 00:18:38,960 --> 00:18:46,040 Kevin Mako: What is some of the PR that you just landed potentially? as we were talking about earlier, what's some, maybe an influencer that just started talking about it on social media. 159 00:18:46,420 --> 00:18:54,040 Kevin Mako: What are things that you can do to make them look good? Because if you can over commit in the beginning, even, and I would argue, and a lot of people don't like to hear this, 160 00:18:54,160 --> 00:18:58,220 Kevin Mako: but I would argue, don't worry about losing money on your initial orders. So definitely your early 161 00:18:58,220 --> 00:19:02,520 Kevin Mako: orders. And even as you start to scale, if anything, be reinvesting that money back in, 162 00:19:02,620 --> 00:19:07,120 Kevin Mako: double down. You've got a product that is growing, that people are buying, that there's an interest in, that there's a hype. 163 00:19:07,460 --> 00:19:15,140 Kevin Mako: So you're far better off from an equity valuation standpoint of your product business to start showing that growth in revenue than it is to start showing the growth 164 00:19:15,140 --> 00:19:19,340 Kevin Mako: in profit. Profit is something that you can eventually get to when you get to scale because not only 165 00:19:19,340 --> 00:19:23,520 Kevin Mako: are you growing in retail stores, not only is there the snowball effect happening in your community 166 00:19:23,520 --> 00:19:31,180 Kevin Mako: so you've got more buyers and people are spreading the word faster and all of that. In addition to that, remember, you have economies of scale on the manufacturing side as well. 167 00:19:31,520 --> 00:19:36,820 Kevin Mako: So as you're producing more units, you're working with the manufacturers and with your design teams to continue to cost down 168 00:19:36,820 --> 00:19:46,100 Yohan Jacob: that production to make it more efficient, to make it essentially less costly per unit. So eventually your margins will start to grow. And the craziest thing I would say right now, 169 00:19:46,140 --> 00:19:51,620 Yohan Jacob: if you look at 2022, is look at valuations to some of these hardware companies that are coming out. Look at Peloton is a great example. 170 00:19:51,820 --> 00:19:57,800 Yohan Jacob: I mean, I must say it was a great example on a launch, maybe not so much now. Who knows what's going to happen in the future. But no matter which 171 00:19:57,800 --> 00:20:06,800 Yohan Jacob: way you cut it, that's a multi-billion dollar company that is still operating at a loss. We have countless examples of this, right? But what they are doing that's much more value 172 00:20:06,820 --> 00:20:12,000 Yohan Jacob: than the day-to-day cash flow is they're building a community and they've got a product brand 173 00:20:12,000 --> 00:20:15,820 Yohan Jacob: that's expanding and they're growing their sales and revenues and they're being really good to 174 00:20:15,820 --> 00:20:23,280 Yohan Jacob: their partners, anybody that they're involved with along the path, as you said, those three KPIs is working very well for them. 175 00:20:23,460 --> 00:20:32,140 Yohan Jacob: So the reality here is keep pushing on those levers in the early days. Don't worry so much about profit. Don't worry so much about going the extra 176 00:20:32,140 --> 00:20:36,740 Yohan Jacob: bile. Do that in the early phase so you can get that traction going. Yeah. And I would say the 177 00:20:36,820 --> 00:20:41,540 Yohan Jacob: at the add top of that, you just about the economy of scale, you do a good job with one skew brand, 178 00:20:41,620 --> 00:20:51,230 Yohan Jacob: you're spending the money and you're going over and above the dry sales, you know, are in store and online, right, where you get those repeat peos, 179 00:20:51,690 --> 00:20:58,230 Yohan Jacob: right? It's a good chance with a good opportunity to expand your show space. So now it's that one skew, now you have four 180 00:20:58,230 --> 00:21:06,930 Yohan Jacob: skews, and now you can amortize some of the loss on skew one by making up on skew two, three, and fourth on the plan ground, right? So now you're, it's that you've, you've, you've, 181 00:21:06,950 --> 00:21:15,010 Yohan Jacob: You average the margin overall, and now you're making more money. And we continue to drive sales. You have more products on the shelf with a bar. 182 00:21:15,390 --> 00:21:21,470 Yohan Jacob: Now you mean more to them. They mean more to them. You can be your one skew brand. You're not doing well. I can kick you out, right? 183 00:21:21,790 --> 00:21:28,590 Kevin Mako: We have five skews, 10 skews on a planet gram, and maybe one's not doing too well. I'll tell you, too, you've got nine that's doing well. 184 00:21:29,070 --> 00:21:37,690 Kevin Mako: It's a good chance you're going to stay in that a servant, right? And finally, you know, if you continue to drive sales, you can add more of your product in store, right? 185 00:21:38,290 --> 00:21:46,630 Kevin Mako: You'll continue to be a long-term vendor with your, with your retail buyer. And guess what? Your cost of marketing actually goes down. 186 00:21:46,810 --> 00:21:54,010 Kevin Mako: When you first start in retail, you're probably some more money and market percentage of good. Simply around 20% of your, 187 00:21:54,030 --> 00:22:00,590 Kevin Mako: of your cost of marketing, right, is driving sales, right? But as you can more now, 188 00:22:00,830 --> 00:22:06,430 Kevin Mako: is your product and your brain is more well known with both sales associates, as well as, 189 00:22:07,030 --> 00:22:13,650 Kevin Mako: customers, your cost of market or cost of a car and a customer actually goes down, right? 190 00:22:13,950 --> 00:22:17,550 Kevin Mako: So like you said, Kevin, you do, if you need to drive more business, your cost of marketing 191 00:22:17,550 --> 00:22:23,530 Kevin Mako: goes down, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, your, of, just driving more sales. 192 00:22:23,570 --> 00:22:31,250 Kevin Mako: So it all kind of works out in a nice way you to do the, do the right things. Well, and then this whole competitive nature comes up because if you've got a growing and 193 00:22:31,250 --> 00:22:36,590 Kevin Mako: scaling brand and you're starting to increase shelf space and the retailer likes you, well, now, like, 194 00:22:36,690 --> 00:22:43,950 Kevin Mako: said that somewhat the negotiating table switches, but not just between you and that retailer, now you've got other retailers that will be interested in that product. 195 00:22:44,590 --> 00:22:52,110 Kevin Mako: Now you've got a bit of a competitive landscape where you aren't just getting pushed around or potentially bullied around. 196 00:22:52,130 --> 00:23:01,490 Kevin Mako: You're getting potentially fair deals because you are a hot product. And it's not just on the retail space, but now you're likely to get in conversations with 197 00:23:01,490 --> 00:23:06,630 Kevin Mako: bigger potential partners or influencers or other channels to sell product as well. 198 00:23:06,690 --> 00:23:15,910 Kevin Mako: or other folks maybe to white label or bigger brands that may even want to acquire you or do other things, right? So the key to really anything as you start to scale 199 00:23:15,910 --> 00:23:23,250 Kevin Mako: is really focusing on long-term value. And that all comes down to putting in the time, effort, money in the early days so that you 200 00:23:23,250 --> 00:23:27,010 Kevin Mako: can push all these value proposition items really prove that your product is a good one. 201 00:23:27,330 --> 00:23:31,250 Yohan Jacob: One of the greatest things I find to this, too, you know, not only adding shelf space and all that, 202 00:23:31,350 --> 00:23:36,080 Yohan Jacob: you talked about skews, but think about it if you've done a great job on launching your first 203 00:23:36,080 --> 00:23:43,840 Yohan Jacob: product with a particular vendor and they look good to their boss, like you say that report card, how much easier is it going to be for you to approach them with your next idea? 204 00:23:44,340 --> 00:23:52,500 Yohan Jacob: Or let's say the pro version of your product or maybe even an accessory to that product or something totally different, but it's in the hardware space as well. 205 00:23:52,760 --> 00:23:58,300 Yohan Jacob: You have now established yourself as a reliable expert that launched a great product out of 206 00:23:58,300 --> 00:24:04,540 Yohan Jacob: the gate and therefore they're much more likely to take a risk on you for the next one that comes through and so on. That's how you build your brand. 207 00:24:04,680 --> 00:24:11,340 Yohan Jacob: That's how you build your equity. That's how you also build your personal name with these various relationships. You can really build something substantial. 208 00:24:11,520 --> 00:24:19,100 Yohan Jacob: And that's how if you look at so many of these hardware startups that use retail to get to the seven, eight, nine figure categories, this is the path they took. 209 00:24:19,480 --> 00:24:23,600 Yohan Jacob: They started all the way from ground one with just that idea, that sketch on a napkin. 210 00:24:24,420 --> 00:24:29,740 Yohan Jacob: And then they brought it to, you know, got it to the point where they could go to retail, but then they focused on scaling in retail. 211 00:24:29,740 --> 00:24:36,860 Kevin Mako: And that's how you can go from a, you know, a business, which were six, seven figures to something that could be exponentially more. Yeah, that's how you actually built. 212 00:24:37,000 --> 00:24:44,220 Kevin Mako: Yeah, where it's Fitbit, where it's Spiro, where it's NASDAO, we're one's few products, right? They start small online, maybe a couple of stores. 213 00:24:44,620 --> 00:24:49,240 Yohan Jacob: I'm looking today and you brought a good point, you know, that, you know, if you're good to your bar, they're going to take care of you. 214 00:24:49,400 --> 00:24:58,170 Yohan Jacob: In my book, retail about one household products for retailers, you know, I said if there's one tip, you take me from the book, 215 00:24:58,170 --> 00:25:06,710 Yohan Jacob: working from today's podcast is always make the bar shop easier, right? To make it easier, right, first you know those younger buyers who are just starting out, 216 00:25:07,210 --> 00:25:14,850 Yohan Jacob: as they go up and move up the food chain, guess what? They're going to take it with you, right? Or the buyers do move. 217 00:25:14,990 --> 00:25:21,850 Yohan Jacob: They went from, especially they have to go Best Buy Target in Minneapolis, right? Or Costco and Amazon, Seattle, right? Bires change, right? 218 00:25:22,190 --> 00:25:29,090 Yohan Jacob: So if you're doing, if you bring your present Best Buy, right, with that pick a buyer, but he or she goes to Target, you think you have a chance? 219 00:25:29,770 --> 00:25:33,750 Yohan Jacob: Heck no, but you've done a great job at Best Buy with that pick a buyer and he or she moves to 220 00:25:33,750 --> 00:25:42,230 Yohan Jacob: target, a good chance and an opportunity to work at that buyer at that at that ref retailer. So always take care of your buyer, always follow through on your commitments. 221 00:25:43,630 --> 00:25:48,570 Yohan Jacob: That's great advice, Yohan, for retail buyers and just for business in general in the hardware space. 222 00:25:48,790 --> 00:25:54,770 Yohan Jacob: I want to thank you again for taking the time, a second time around to give us advice on now scaling up when into the retailers. 223 00:25:54,770 --> 00:25:58,190 Yohan Jacob: Yohan, appreciate it, and we will talk soon. Thanks, Kevin. Take care. 224 00:25:58,730 --> 00:26:02,130 Narrator: Thanks for tuning in to this episode of the Product Startup Podcast, 225 00:26:02,810 --> 00:26:09,130 Narrator: the show that teaches you what it really takes to bring your product to market and turn it into a big success. 226 00:26:09,610 --> 00:26:18,150 Narrator: This podcast series is brought to you by Mako Design + Invent, the original and leading firm in North America to provide global caliber 227 00:26:18,150 --> 00:26:24,710 Narrator: in-to-in physical consumer product development to startups, inventors, and small product business clients. 228 00:26:24,770 --> 00:26:30,590 Narrator: If you're looking for product development help on your invention, head over to Mako -design.com. 229 00:26:30,790 --> 00:26:39,770 Narrator: That's M-A-K-O Design dot com for a free consultation from one of Mako-designs for design studios from coast to coast. 230 00:26:40,090 --> 00:26:42,130 Narrator: Thanks for listening and see you next time.