#333 - Michael Lebhar's Secret Sauce For Success In Walmart.com And Retail Stores

#333 - Michael Lebhar’s Secret Sauce For Success In Walmart.com And Retail Stores Speaker 1: Welcome to episode 333 of the AM-PM Podcast. This week my guest is Michael Lebhar. Michael started selling on Amazon when he was in the 10th grade about nine years ago and now he's doing millions of dollars on Amazon and off Amazon and that's what we're talking about today mostly is selling off Amazon specifically in Walmart and And actually getting into retail, Walmart stores and what he's done. He's got some really good tips and strategies. Plus, he's got a really cool technique to help you launch your products. Enjoy this episode. Unknown Speaker: Welcome to the AM-PM Podcast. Welcome to the AM-PM Podcast, where we explore opportunities in e-commerce. We dream big and we discover what's working right now. Plus, this is the podcast where money never sleeps. Working around the clock in the AM and the PM. Are you ready for today's episode? I said, are you ready? Let's do this. Let's do this. Here's your host, Kevin King. Speaker 1: Michael Lebhar, welcome to the AM-PM Podcast. It's great to have you here. Speaker 2: Thanks for having me. I'm excited. Speaker 1: You spoke at like a Helium 10 Elite event back in, I guess it was before the Sale & Scale Summit last September. I think that's where I actually first ran into you. Speaker 2: Yeah, so it was like that pre-Helium 10 Elite event before the Sale & Scale Summit. That was cool, yeah. Speaker 1: Yeah, and for those of you listening, Helium 10 Elite is normally closed for most of the year, but actually it's open right now. So if you've been waiting for an opportunity to actually get in to Helium 10 Elite, now is your chance. If you go to Helium10.com forward slash elite, you can get all the information, but it includes monthly training. You get free access to in-person events like at Prosper or at the Selling Scale show. You get some additional software, some extra limits. There's just a A laundry list of benefits to being a Helium 10 Elite member. So if that's something that you're into, be sure to check that out right now at helium10.com forward slash elite. It's going to be closing soon, so it's not always open. So there's a limited window of when you can get into that. But Michael, you've been selling for a day or two. I think you started about eight or nine years ago selling. I think you said when you were in high school. Is that correct? Speaker 2: Yeah, I started early in high school. I think it was closer to that like an end of 10th grade. Speaker 1: Oh, wow. And what were you doing? Were you just doing arbitrage at that point? Or did you actually start like with a full on like FBA brand? Or what were you actually doing? Speaker 2: Yeah, so it's interesting. When I decided I wanted to start selling online, there was these brothers in my community that were selling a ton and they were young and were doing really well. So I'm like, I just need to learn what they're doing. And they had a brand on Amazon. So I was like picking their brain. And then I knew I wanted to do that. But I knew it would take me time to find my product and do that. So until then, I actually just would find products for good prices and just sell them on eBay, but not even Amazon yet. And through that process, at that same time that I was doing that, which was a few months, I was looking for my first private label product. But I really pretty early on started with private label and it was just I was doing some arbitrage while I was getting my private label product. But the arbitrage was just on eBay. And when I launched my first private label product, it was honestly just on eBay. Speaker 1: Did you see a course or something or did you just hear from these two brothers and see what they were doing and that's how they got you into it? Or did you see some advertisement or a course or anything back then? I think like one of those courses that was out or you just got straight into it. Speaker 2: So interestingly enough, I really just got straight into it because of these brothers. They were already doing so well. They were young and their business was already by then doing in the tens of millions and they were in their 20s. I'm like, I could do it too. Like I just need to learn not that, but I'm like, I could just learn. And interestingly enough, I just remembered that there wasn't a lot of courses or information out in those times. That was amazing, but I didn't take that. I remember I would always call these brothers and just bug them about stupid questions. I would call these people who had 500,000 square foot warehouse and ask them questions on how I print a shipping label. And like I would get stuck on stupid things, but I remember the one thing that I did was I remember now that AM, PM Podcast, I think it was like a year or two into me starting to sell, was out and that was like the one thing I would always listen like on my way to school, the AM, PM Podcast. And it's funny because there wasn't a lot of content out there or anything, but I remember when Manny Coats had it and he would talk on that. So I remember that, that was one piece of content I would listen to. And I would just ask people like I asked people that just sold online and then I'm starting to know more people and just ask people like every single question. Speaker 1: In the early days, AM-PM Podcast was a good I mean, I listened to it. I think I picked it up. Manny Coach started it, I think, in 2015, and he was documenting his journey. So the first 15, 20, 30 episodes, something like that, were all about, you know, The process that he was going through to find products and to actually, and this is before Helium 10 existed, before he started Helium 10, so he was just documenting it and he would share his numbers every month I think. Speaker 2: I remember that. Speaker 1: And it was really good. And so yeah, that would have been a great place to learn. Back then there wasn't much software, there was just a couple tools, there wasn't much, there was only a handful of podcasts, like three or four maybe. So these two brothers, they were doing, you said they had a brand, so were they doing like the traditional, Find something in Alibaba and rebrand it or they created something from scratch? Speaker 2: Yes, so there were actually four brothers, two of them twins and then they had two other brothers and they actually build like a beauty brand so they were actually at that time already they were already manufacturing a lot in their own facilities. Speaker 1: Are you talking about Art Naturals? Speaker 2: Yeah, Art Naturals. Speaker 1: All right now, when you said two brothers are twins and then two others, yeah, Art Naturals. All right, those guys are super sharp guys, super sharp guys. So that's where you cut your teeth. All right, now, now this is making sense. All right, all right. Art Naturalist, for those of you who don't know, was one of the hugest brands on Amazon. They actually got into a little bit of trouble at one point down the road, but they grew, like you said, into hundreds of millions of dollars. I know during the pandemic, they were one of the first ones out with hand sanitizers, and they were just crushing it with hand sanitizers. They were in Whole Foods. They were everywhere. Speaker 2: Costco, every target, everywhere. Speaker 1: I mean they were just pumping this stuff out. And I met those guys at a mastermind. I think Howard Tai did a mastermind in Vegas like in 2008, 2018 I think it was. And a couple of those guys came out and I was like, man, these guys know their stuff. So if that's where you apprenticed or who you were calling, all right, now this is making sense. Speaker 2: That's it. So yeah, it was honestly just asking as much questions because there wasn't a lot of information out there. It's like now I tell it when some of my friends always tell me like, I want to get into selling online. I'm like, it's so great. I could tell you a bunch of stuff, but honestly, just go on these sites. There's so many resources like with EM10. There's so many layers of different resources. For every single level, whether it's like you like community, whether you like blogs, whether you like podcasts, whether you like training courses. So it was a whole different kind of game out there. You just have to fight for it and just try to figure everything out. But I learned so much throughout those early years because I had to figure everything out myself and try a lot of things. So, because there wasn't like, oh, am I making the right decision? There wasn't a lot of ways to know if I was doing the right thing. I just had to try things. So, there's a lot of errors made, a lot of money lost, a lot of money made, a lot of just playing around. Speaker 1: So, you're in high school going to school by day and playing business by night. Speaker 2: Yeah. So, actually, I went to like a Jewish school that was Very rigorous. So like we would, I would have to get there at 730 in the morning and we will only finish classes like 930 PM approximately. Um, and because there was a lot of Hebrew classes and also a very, um, a very rigorous English program. So, and like a lot of, um, a lot of other studies. So I would, what I would do is I had a car, so I would just, I would basically in the, like during breakfast I would go to my car work and then during lunch I would drive And then later on, I think a year and a half into selling, I got a warehouse a few blocks away from the school and I would just drive there, take care of stuff during lunch and then dinner again. And then at night, me and my brother, I worked with my younger brother, we would just stay up all night a lot of times and just hustle out, trying to find products, trying to, once we already found our products, trying to just play the Amazon game. So it was fun. Speaker 1: You said you started with a little bit of arbitrage just to get going and then while you look for your first actual true product, what did you actually find? What was the first thing that you actually launched that was like yours or that you found? Speaker 2: Yeah, so it was a workout glove and it was actually a pretty unique workout glove where it had like a strong wrist wrap. But the front was open. And yeah, that category evolved a lot. But early then it was really interesting because we were working out a lot, me and my brother. So it was cool for us that every time we got a new order, we would just use them, make iterations. Like, oh, we want the grip a little bit better. We want this stitching a little bit better. And yeah, so we launched that product and that one did really well. And we were able to grow from that product. Later on, that product and category became a nightmare to deal with. But just because the amount of a big wave of like Chinese sellers came into the market and just our listings would just get hit every single day with something else. And like, I don't even know how to deal with it back then. But it's just like every single day, there's just another reason why these listings would just get hit. Speaker 1: How did you finance? I mean, if you're in 10th, 11th, 12th grade at this time, how did you actually finance all your inventory and everything? Speaker 2: So prior to that, like earlier in high school, and even at like, you know, still in elementary school, I was always doing odd jobs. So like I, you know, I had like a bookbinding business, which I was making some money from, and then I would always save all my money. And then I did like a lawn mowing business. And then I had a car washing business where I I just ran it like I found a few kids that would do it. I would have all the cars pull up to my parents' driveway and then my friends would come help clean the cars and then I would make money that way and I just did everything to just make some money. Me and my brother had some money saved up and then we started with that. Back then, it didn't take that much to launch a product also so we were able to do it. We didn't even spend all our money on it originally. We were able to just do it like that. I remember their first order was like 100 of these workout gloves. We listed them on eBay, we went to school and then I remember it's like my phone's just buzzing and it's just like I'm getting so excited. I'm like oh and within a few days they all sold out and I'm like that's when I knew this was kind of like oh I have to do this. Speaker 1: So did you finish high school or did you? Speaker 2: Yeah, so I finished high school and then I actually went on to some further studies in Israel but once I finished high school I was on my own. I went for some further studies in Israel but that was more like On my own kind of schedule and I got like an office in Israel and I, um, and yeah, then I, then I came back and came back and moved back to LA. But yeah, um, I think I was always thought I was going to go, I was going to go to college and just, you know, by the time I finished high school, I was ready. Um, it was a full fledged business and we had a decent team by then already. So, so this is like 2016, 2017. Yeah, I think 20, I'm really bad. I think 2017 was I graduated in 2017 I think. Speaker 1: So, what did you expand into next after the workout clause when you started having all these problems with all these competitors coming in and it getting pretty nasty and competitive? What did you go into next? Speaker 2: Yeah, so what I went to next was home and kitchen. Now, with home and kitchen, I had another whole interesting story where we launched these laundry baskets. That were really cool, honestly. They collapsed really well. They were collapsible laundry baskets, but most of the collapsible laundry baskets in the space would collapse really poorly. They weren't collapsing properly. We found this laundry basket and this technology where it had a ring around the middle in between the rubber where it helped it collapse properly. And already then I was a little more experienced. So we did some patent searches. We couldn't find anything very brief. And then we saw that there was a couple of sellers selling, but their shapes weren't that good and theirs didn't look as nice. So we decided to launch it. But we did this one Put heavily invested in this product because we were already much more established. So I think our first order was like 240 HQ containers of it. So like it was a pretty large order and we launched it really aggressively. I, I, I built out, um, that was in the beginning of like people were leveraging like many chat, um, to launch like through giveaways. So I did like a big giveaway launch. I was really early in playing around with those things. So, I built a lot of those through giveaways and we were best seller in our category for a few days. But in general, for all the laundry work keywords, we were number one. And then I remember we had a really, really big shipment coming. We just placed a really big order for these laundry baskets. The listing was already getting really established and this is going to be like, Become a really stable product of ours. And then we got hit with a patent notice that this company filed a utility patent. I remember the date was like April 1st or something. A utility patent that just went live. It was like, we got the notice on April 2nd that just went live April 1st. And it takes five years for a utility patent. So the whole time, we were able to sell it, but we made this order right before. And not only they had a utility patent in the US, they filed for like, And I was like, oh my God. And then I was so confused because I was like, Black & Decker was selling the same one. And I was like, why would they sell it? And it turns out Black & Decker also had to stop selling it. And it was a company based out of China that had the pants. So we had to stop selling that, dispose a lot of inventory eventually. Speaker 1: What'd you do with those? Did you actually dispose of it or did you, wink, wink, dispose of it? Speaker 2: So, what actually became really interesting was as the trend was, as our basket was doing really well, I actually went and exhibited. I always really wanted to get into retail. I don't know why. I just always really wanted to get into retail. So, we exhibited at a show, the houseware show in Chicago. I forgot the exact name. Speaker 1: At the McCormick Place or whatever? Speaker 2: Yeah. Speaker 1: Yeah. The big one. Yeah. Uh-huh. Speaker 2: Yeah, so we had a booth there and people were actually really liking it because at the time our product had the number one bestseller badge, we were selling a ton. Our booth was just about the laundry baskets and people were coming and we got a lot of interest from a lot of big retailers. We went through this whole situation, but one of the retailers we met at the show was somebody based out of, I think, France. France was one of the countries that they didn't have a patent in, so we ended up redirecting and reshipping a lot of the units to France and we were able to liquidate a lot of them that way. So that was kind of good. You know, we did continue to sell some and it's like, we were able to kind of get through with that, but luckily thanks to that France supplier, we were able to get rid of a lot of the units. Speaker 1: Oh, that's cool. And that's, that's, that's like, that's a good out. I'm glad you were able to get that, get that out. So what was the lesson there? Like, so you said before you launched this thing, you actually did a search for a patent search. Did you just do that yourself on like on Google or did you have a lawyer do that for you? Speaker 2: I did a quick search on USPTO site and I couldn't find anything. Looking back, I should have used a lawyer for it, but I was like, there's other sellers selling it, big brands that are selling it. They probably did it. I should have just paid for a lawyer to do a proper search, especially with pending trademarks and things like that. To find those, sometimes it can be a little more difficult. Utility patents aren't that simple to read sometimes. You know, there's a lot of them and there's a lot of interest to them. So yeah, I should have just paid for a lawyer. I ended up spending all the money on the lawyer after. Speaker 1: Do you do that now for any new products? Do you actually have a lawyer that actually does the thorough investigation? Because a lot of people don't realize that the lawyers have access to a lot of additional databases that aren't public. And they also have teams and experience and what to look for and how to actually find the stuff versus us who could just do a cursory look and think we're in the clear. Speaker 2: Exactly. Yeah, I spend a lot on just making sure of that because I've learned my lesson the hard way. I spend a lot making sure that we're not infringing on trademarks and we're paying, but also I'm protecting my own, really protecting my own thing. So I file a lot of trademarks for our supplement brand. I probably have 30 to 40 trademarks. Every one of our product names that's unique and able to be trademarked is trademarked. Every single one of our, you know, a lot of our branding slogans, all that kind of thing, all those types of stuff. I'm very into having all that if I'm going to invest a lot of money in telling a certain story or promoting something, like making sure that I have that protected. So, yeah, I spend on both of those sides. Speaker 1: So after this laundry basket fiasco, what was next? Speaker 2: Before Prosper, they had this, they don't have it anymore, it was called Rise 25. So if you remember that, there was like a get together of like a hundred sellers, And there were large sellers. I spoke at that, actually, and I won the best speaker award. Actually, I spoke a lot about ManyChat and a lot of different things. It was new back then. And two of the people actually in the show were very successful sellers. And we got to collaborate and talk. And one of the sellers there was He actually built a really large brand in the oral care space, actually had the number one product in beauty for over two years. I think it was close to three years. He was selling like 3,000 to 4,000 units a day of charcoal teeth whitening. And he was able to build a massive brand off of that. He was able to leverage that to get into Walmart national retail, Target national retail. I also had an extremely successful supplement brand, one of the largest in probiotics and all that. But what I really liked was he came from the branding space and the creative space. And he wasn't like, let's say, what I would consider as like, You know, the typical marketer. So, and I really liked, you know, the branding and the creative space. He worked actually previously at all the big design agencies before he became an entrepreneur, worked at Apple. He worked on the design of the first iPhone. So, he worked at a lot of these things and you could tell in his brands on Amazon, they had that elevated approach to branding. So, he was like, you know, Amazon's a great platform. What about, like, we can literally leverage what we have to build, you know, a really strong category-defining brand. So, we partnered together and we started building a supplement brand. And I started growing my fitness brand as well that I had previously, but I transitioned to more focus on home fitness, where originally our products were much more focused on bodybuilding and more niche. I started opening up and rebranded and started focusing on the home gym, so to say, market. That was kind of that next stage of my journey was really building out one brand on the back end and scaling my fitness brand. Speaker 1: So you're in the right place at the right time with that because COVID hit and you're doing a home home-based fitness. I'm sure you saw a big bump off of that. Speaker 2: Exactly. And one of the things is actually we're selling resistance bands, but we were the second seller to have the fabric resistance bands. And really early on, we saw like there was one seller who had fabric resistance bands and we're like, that makes so much sense. Instead of these rubber ones that just rip and tear, they're annoying. We were able to actually be pretty successful on Amazon. Again, that's probably the hardest category resistance bands on One of the hardest categories I think after supplements is resistance bands on Amazon. But what was interesting is that product was great. We actually got featured in a lot of press for it. We were doing a lot of direct to consumer sales on that product. And we actually had that product on Walmart.com. I started expanding to multiple different marketplaces. So we were selling on HSN, we were selling with Target on .com, we were selling on a bunch of other .com platforms, we were selling with Groupon. But one of the channels we had our products listed on was Walmart. And on Walmart, especially when COVID hit, this product just started going crazy. And even a little bit before COVID, I started noticing that what happened is that we would have our products listed on all these marketplaces, but All of them would bring in a little bit of sales without a lot of work. You just list it. We just had one of our admins just work on listing our products there. But Walmart was just significantly growing. So I'm like, if I put my approach that I really put with Amazon, it's like really trying to crack the code, try to figure out the details, intricacies of the platform, there might be something there. And as I started getting more involved and focusing on it, I realized that there was much more sales opportunity there. And the idea of Walmart just excited me because I saw how much you're investing in the platform. I saw how much it was growing. And at the same time, the platform was getting much better. The marketplace was growing a lot. I started seeing much more sales. And I always said like, I always really wanted to get my products into retail and my brand into retail. And I also looked at Walmart.com. Walmart.com is like a gateway for retail. So, it was really interesting. During COVID, actually, those bands did so well that the buyer from that category in Walmart.com reached out and wanted to work out to get our products into retail, Walmart retail. So, that was really interesting. I was playing around a lot with that, with Walmart then and just getting to really understand it. Speaker 1: So, did you get that product onto store shelves? Speaker 2: So, because it was during COVID and we had inventory restraints, we went through their 1P program where they bought it directly and just list it on their sites, but we didn't have enough inventory to do in-store. We're actually launching and we're working with the buyer right now. We're scheduling when that's going to be on shelf, but that product as well as some others are planned to be on shelf sometime in late 2023, 2024. Speaker 1: It's a big change going from e-commerce where you can kind of call your own shots and there's a few regulations and a few things, but to go into retail where you're getting POs and you've got to meet those POs, you've got to finance those POs and wait to get paid. And then you've got to set up on their platforms, what do they call it, the ERC? EDI, that's it. The EDI system and you got to have all that tied in, then you got to have all your documents in order with all your insurance and all your certifications and everything. So it's a big jump to actually go from kind of seat of your pants e-commerce to actually being on store shelves, right? Speaker 2: Yeah, I'm starting to learn that. So our supplement brand, we got into CVS and that was a whole like drug chains are the hardest to deal with. And when it comes to fees, when it comes to marketing fees, slotting fees, just the regulations, CVS has a whole program called Tested to be Trusted. Where every product has to go through testing and it's like, not only it's a lot of work, you got to pay for every step in the process. And yeah, I think that, you know, retail is a big beast. There's a lot of advantages to it as well, but it's really a whole learning curve that I'm still getting very aware of, but what I've noticed is that out of all the retailers, Walmart, they're the easiest to deal with. They act as real business partners. A lot of retailers act, especially in the drug chain, they just try to see how they can get the most money from you. So, they'll just slap bills on you and everything. What we're learning is for Walmart, they want to be your actual real partners and they want partners. So, they'll work with you to make sure you're able to support what you need They'll actually, you know, they'll communicate with you based on how many stores and communicate with you based on what you could fulfill. There isn't any of these slotting fees or marketing fees, which cost a lot of money for other retailers. Like CVS, for example, you have to pay for when they take on a new product. So let's say one of our, we got four new products in CVS in a thousand stores. You have to pay now for three units of each SKU at every store. So, I remember the initial slotting bill for that was like, I think it was $140,000 or $150,000 just for slotting fees. Then you have your marketing fees and other associated things. So, with retail, you have to be very strategic about it because e-commerce, you can make a couple mistakes here and there and you just rebound. That's what happened with us. We had some bigger mistakes like the laundry baskets, but we had a lot of smaller mistakes we just rebound from. With retail, you have to be very calculated because one mistake could be really big. Speaker 1: Yeah, those fees, like you're saying, they nickel and dime you. They may say, okay, we want 70% off retail as our price. And then there's a 3% co-op marketing fee. There's a slotting fee. If your label on your cases is off by a half inch, there's a $50 per label fee. It gets crazy on some of the fees and it can knock another five, 10, 15% off what you're getting and then you have to deal with the returns and a lot of times they don't send the returns back. They just affidavit returns and all that kind of stuff. It can be a great thing but it can also be a big pain in the butt like you're saying. So on Walmart, why do you think you had such good success on Walmart? A lot of people, You know, I messed with Walmart about 2016, 2017 when it first started. It was a disaster back then. And I'm not selling on Walmart right now. But a lot of people have said it's hit or miss for them. It's a different type of clientele for the most part. And some people have great success on Amazon. They go to Walmart and it's a total failure. And then other people are the exact opposite. They can't crack the top 15 on Amazon, but they go to Walmart and they're crushing it. What do you think it is That's important to understand the differences between the two marketplaces and what works and what doesn't work. Speaker 2: Yeah, so that's what's really interesting about Walmart is there is scenarios where it's not right for some sellers and it is right for other sellers. I think some things important about Walmart are that You have to think like you said about the clientele, like who are the customers shopping there? And a lot of the customers shopping there are people that are going to Walmart stores and buy at Walmart stores. Now they're just, you know, starting to buy more online. So, they're looking for general household items. There are not a lot of products that do well on Amazon. People browse for different, a lot of times, interesting products. You know, this is a cool product. It's a cool accessory. On Walmart, it's very much based around needs. So, like they're coming, they're buying their household needs, whether it's food, whether it's, you know, let's say it's mops, brooms, extension cords, things like that. They do really well on Walmart and what's interesting is Walmart used to be two separate sites. It used to be like a pickup and delivery site where the products are in stores and you could purchase that and then there was their regular .com site and there were two separate checkouts. They last year merged them both together and now the products that you list on .com have much more exposure because people looking at these pickup and delivery products are now seeing your products, could see your products right next to them even if you're not in stores. And the products that do really good on Walmart, it's like products that are easy to understand, they're competitive price points. So it's like people can get mistaken. A lot of people want to say like, oh, my product's only good for Walmart if they're really low priced. It's more about if you're really competitively priced. People aren't looking to pay premiums on Walmart at all. It's everyday low prices. But, you know, if they're buying a toaster, they're going to expect to spend the price of a toaster. So it's like, you know, for us, honestly, the price of products that work best are between like the $20 to $30 range. You're able to get a lot of volume there, but also you have enough to spend on ads. Certain categories that work really well are toys work really well, general household items. Think, you know, extension cords, hoses, we used to sell a lot of Host tops, I don't even know what they're called anymore. A lot of, you know, garden scissors, things like that, garden accessories, you know, laundry baskets do really well on Walmart, all those sort of categories and products. Apparel does really well on Walmart as well. You have a lot of, you know, and when you think of categories that don't do well, supplements. Supplements, people are looking to really buy from brand, very simple product, not looking to try something new, they're trying to buy from brands they already know and they purchase every single day that are really low priced and it's really hard to compete with those because most of those products are in store so the shipping price doesn't show. So like you're competing on, you don't have their price, they don't know who you are, they're not trusting you but a lot of times with these other categories, even if you're not a trusted and well-known brand name, you could really still take Take over those sales and what people have to understand for Walmart, it's a massive, massive focus, walmart.com. So they're willing to do a lot to make walmart.com grow. And that means that any vendors that they have that's in stores, they're giving high requirements for what they need to perform on.com. Even if it's very minimal sales compared to their retail sales, they'll tell them like your POs, in-store POs are going to get a cutback if you don't, you know, improve your listing quality score, spend X amount on Walmart ads and all of these kinds of things. Yeah, it's been a big thing that Walmart's been focusing a lot on that and I think it's worked to two advantages. We went through this whole retail conversation and I think there's so much issues with retail, but from my experience, Walmart is one of those retailers where Turn units, they don't screw you on random things and they have a lot of programs, like you said earlier on, that you don't have to start massive. You could start in 100 stores. You could start really small and you could scale up with them. And they're really good to work with in that sense. And because they're putting a focus on .com, a lot of brands are seeing success. By being able to enter the Walmart and enter brick and mortar by leveraging their Walmart.com relationship and on the other side of things, these really big brands who have had success for decades with Walmart are now put in force to try to figure out .com and they're having a hard time with it because they're not equipped and they're not trained to really work like that so they don't understand the intricacies of getting ranked properly, of managing their catalog, of you You know, putting a big focus on reviews, things of that nature. Speaker 1: Yeah, it's a big change from the corporate world to the guerrilla marketing world, competing as a 3P. But also Walmart, when you're in retail, are they doing this for any of your stuff or you have to actually package it differently? For example, if you're selling, I don't know, protein bars and you're normally six to a box protein bars, Walmart for their shelves will say, we're not going to take that one. We want one that's five to a box. Or if your laundry detergent is 64 ounces on Amazon, they want one that's 60 ounces with a different UPC or something so that people can't, it makes it harder to price compare and price shop or in some cases it's to get a certain price point because Walmart says our customers won't pay $8.99 for a box of laundry detergent but they'll pay $8.62. That's the max we'll go so you need to take two ounces off of this bottle or whatever. Are you seeing any of that kind of stuff? Speaker 2: That's an amazing question. That goes into the whole story of how we got into Walmart stores. And, um, you know, as I said, like I, you know, I explore Walmart.com a lot. I wanted to get into Walmart stores. So we leveraged that as a channel to kind of open up, um, our Walmart, um, relationship. And what we did is have good performance on Walmart.com, even though the sales were not exciting. Speaker 1: What do you mean? What's not exciting, man? Speaker 2: I mean, the sales for supplements were like, it's so hard to compete in supplements. They were so minimal. It's like we had SKUs that were doing a few hundred dollars a month, but we would still manage it and still keep it on. SKUs that were doing a few thousand, which you can't even pay for the cost of even just an employee logging into it and managing that. Speaker 1: What was that same SKU doing on Amazon by comparison? Speaker 2: So at this point, we weren't selling specifically on Amazon, but some of those SKUs we're selling directly to the consumer and some of those SKUs are doing $20,000, $30,000. On a direct-to-consumer and on Walmart, they're maybe doing 1,000. Something along those lines. And what we realized is that for Walmart, they understand that these new supplements, they're bringing in a lot of revenue for new brands and all that. But we just knew we have to maintain really good listing quality score, really show we're spending on ads, show our listings are ranked well. And Walmart has this program called Walmart Open Call. And Walmart open call is actually really interesting where they invite brands that are made or assembled in the USA and to pitch your brand to a Walmart buyer. And what's really cool is that traditionally new brands have a very hard time getting into retail because Retailers don't care if you did really well on Amazon or any of that. They're old-fashioned. They look at IRI data, it's called, and they look in their helium tent, so to say, of their data, and they look inside, and if your brand doesn't pop up for selling on stores, they're usually not interested. There's some buyers who are more aware and are interested in products that did well on online marketplaces, but in general, it's very hard to get your initial break into retail. Walmart has this program where they open it up, and specifically for small businesses, And you get to pitch your, you come out to Arkansas, there's like a thousand sellers every year and you pitch your brand. Now, it's not all of a sudden, are you the best product that they could bring? Are you the best brand? It's more about, could they fill this initiative they're trying to do and help put a focus on this program that they're building out? So you have a little more on your side. We came into that meeting, we're like, our products, our supplements are priced a little bit premium. The packaging isn't really fit for shelf. So I'm like, we're like, are we going to come in like that? And maybe they'll give us 10, 15 stores as a nice test or probably give us nothing. Or are we, could we try to position ourselves to be the right fit for Walmart? And what we did is that we actually got to work and developed a line of SKUs. Well, they really priced $12.99 when our average products were priced $20 to $30. It was $12.99 in a form factor that was easier to understand. And then in packaging that we thought would make much more sense for Walmart. We went into the meeting and the buyer was so impressed. He's like, a lot of times I accept brands on the spot for small distribution and small amount of stores, but I think you guys are fit for Line review which line review was later in September and that's when they decide. They're main brands and the main refresh of their whole aisle. The supplement aisle is one of the most successful at Walmart. He's like, for a line review, I want you to see if you could get your pricing sub $10. He's like, it's not about squeezing you. It's like if you have to forego some other things and maybe make the margin for us a little bit less, that's fine. We just know that the turn rate for under $10 is very important. If you have to make it a little smaller or anything like that, he's like, that's really important. You have to understand we have a pusher system and that's why it's so important. You want to show your Walmart buyer you know what you're doing. We went into the stores and understood that in the supplement aisle everything is very condensed and there's pushers. So your packaging has to fit well within those pushers. So, you can have a great product, but if it's not positioned like that, the buyer's like, oh, you didn't think that through. So, we actually thought through a box for that. And what we did is took a step further is, another thing people don't think about, for Walmart and retail in general, on shelves, there's a lip. So, it covers a little bit of the bottom of your product. So, you have to think about what is your products, your packaging say on the bottom? Is it important that that shows? If it's important that that shows, you have to raise it a little bit. But not only that, a lot of times, a lot of products are not that high and they're very low. So if you have a 2-3 inch product and your packaging is just 2-3 inches, barely any of the product is going to show on the shelf. And Walmart cares about their shelf space and width, so they want narrow products because they can fit more of those. But the height stays the same. So what we did for our products is we made our products really narrow and what the buyer said is like, now I can take more of your SKUs, but we also made our packaging really tall. So even though our boxes for our product is double the height of our actual bottle and we just have an insert in there because it gives us so much more shelf space and awareness and you want to strategize things like that because not only they're going to help you succeed, Seed when you're on shelf, but it also shows the buyer that you actually thought through those touch points. And the reason why it came up for us is my partner who got the charcoal teeth winding into Walmart, and he got into Walmart from the start nationally in 3,300 stores from the first day because that product was growing so well on Amazon. But he said, As they were valuing their sales, they realized that their packaging barely showed on the shelf because it was so narrow, so people weren't even able to see the product. So in their second run, they actually made taller packaging and their sales grew like a crazy percentage. Things like that. You want to really think through those touch points. Long-winded answer, but it's a great question because that's a lot of what it is. You have to think about like Walmart, what they want and a lot of these retailers wants. They're the one retailer where it's worth making these adjustments for and it's worth making these adjustments. You just have to think them through. Speaker 1: So I'm assuming you have a house list from all the stuff that you've done. You got, you have some sort of mechanism that you're using from your Amazon sales or whatever to get people onto a list. Speaker 2: So, we'll just email customers and be like, do you want to, customers that spend like over a certain amount of money, do you want to join this program? You know, we'll give them something in, maybe like a gift card to our site and we'll just enroll them in it. Speaker 1: So, when you launch in Walmart later this year with these 1500 Walmarts, are you going to, you'll know which Walmarts those are. That's not all the Walmarts, but you'll know. So, if you know that in the Sacramento area, you're going in all the Walmarts, Could you not go into your list and find all your Sacramento customers that are in your list and say, hey, we're now in Walmart. If you go to Walmart and you scan the QR code or something that's on the box or an NFC or whatever, and show us that you bought at this Walmart, we'll give you some sort of gift of some sort. And then in exchange, the Walmart buyers going, holy cow, this stuff's flying off the shelf. Are you planning on doing anything? I know some people that have done that in the past when they got into retail. They got into a test, like a 10 store test and they just flooded their list. They just started running Facebook ads, targeting those zip codes for their product and stuff starts flying off the shelf and the buyers are like, holy cow, let's roll this out to 50 stores, to 100 stores. They just kept repeating the process and it worked. Are you going to do anything like that? Speaker 2: Honestly, those type of things are what sets you apart from the other brands there. All you have to think about when you're getting into Walmart is how do you turn more units per store per week. Then, you're expected, and then the other seller's there. And when you're a new brand, you don't have repurchase, so it's hard. You have to really get strategic about it. And that's one great example is capturing the customer there. So, what we're doing is actually getting, let's say, all our Sacramento buyers, targeting those people, but then also creating lookalikes of those audiences. So, we could target a lot of those people who are also good potential customers and are near, you know, just geotarget them near those stores to actually, you know, let them know to purchase our product. And we actually developed a really cool technology where you scan and it brings you through like this really quick, really intuitive video survey talking about the product and also Offering you different things that you could win. And through that, we're going to be pixeling these people, also targeting them, but also having, you know, a big thing is getting them to come in and buy some of the other SKUs, you know, because we have a few SKUs on shelf there. So getting them to, you know, want to come back in, purchase again, but also purchase some of the other products that we have on shelf and incentivizing to do things like that. And I think that's what really sets new brands apart without really crazy marketing budgets that could just throw money down the Like what ways could you really be creative about turning units in store and things like that make the difference, like getting them to scan, targeting those customer base. And that's one thing that you have advantage if you're selling before online. You have so much customer data you could use. So that's going to be really cool to use. Speaker 1: I agree. I agree a hundred percent. So what do you think, you know, what are you projecting that your retail sales will be compared to your online sales? Do you, are you expecting as you're growing this, that retail is going to be 70% of your business and e-commerce 30%? Is it a 50-50? Where do you think, where do you see this going? Speaker 2: So, yeah, we're trying for somewhere like 60-40 where 60% retail, like 40% e-commerce because even though we've had a lot of retail interest and we think that's going to be scaling a lot, direct-to-consumer is so important because of a big thing of how we want to really... We have to support our marketing at retail. Now, you could just do very retail-targeted marketing. Or what we're trying to do is really do awareness marketing that also brings in a strong drive to consumer sales because then it's much more sustainable. Through our marketing efforts of building awareness to try to turn more units at Walmart, the most important thing is if we could figure out really turning well at Walmart and performing well there, every other retail door is open to you. And we already are expanding in some other retailers, but every single other retail door opens up because every retailer is scared to be the first retailer. You can take on a new brand and innovative product. Speaker 1: They're watching each other though. You do good in one, the rest all watch you. Speaker 2: Exactly. And that's why it's like for a lot of brands, it's hard to get that first one. Right. And that's why the Walmart thing has been so interesting and why I've done it, you know, now for two of my brands and, um, you know, we're working with clients to do something similar as well is because you could be, you could start off very strategic, low risk by launching on walmart.com. The effort you make on Walmart.com, you could bring enough revenue where it's worth it on its own. Supplements happens to be a very hard category, but if you're in other categories, like with our fitness brand, we do very well on Walmart.com. We do, I think, a million and a half to two million just on our main fitness product line on Walmart.com. You could do strong revenue there. And even though that would be a fraction of retail revenue, but that's still strong revenue. You could do that. While you're doing that, you're building your relationship with your buyer. When we got into our Walmart meeting for the fitness brand, when I stepped into that room, it was with the director of fitness for the whole category. He walked in with eight supporting buyers and he's the director of fitness for the whole category. And what people have to understand is Walmart merged the buying team. So it used to be like a .com buyer and a retail buyer. Since they want to combine those efforts, the buyer that's in charge of buying all the fitness products is also in charge of how fitness performs on .com. He comes in with eight of these buyers and it's usually like one or two buyers in the meeting and I'm just getting scared. I'm like, oh no. And the buyer's like, Oh, I've seen you. You guys do really well on .com. Thanks for all your efforts on .com. The brands that he currently has on shelf are doing $100 million of business with them, but they're performing really poorly on .com because they're not putting the effort there. He's getting judged a little bit on how he performs in retail, but his managers are like, poorly compared to other dot coms and you know, your merchants have to step up there. So for him, you know, that really helped build that relationship and we were able to really expand on that relationship there. So it's, it's there because you know, Walmart.com is that passageway and then you have open call, which makes it easier for you to get meetings. It makes it much more attainable for smaller brands to have a, A position with getting into Walmart and it's not really risk because you're selling on .com anyway. You're going to be making money on .com anyway. So, it's really such good value there that you could have that. So, that's why it's been really interesting because traditionally like brands, you'll have to hire a broker to get you a meeting and brokers now don't just work on percentage if you're a new brand. They want 5, 10 grand a month and you're not guaranteed anything and all this. But with Walmart, you could take such a different approach where you're Making money through that process, it's not a risk, so it's been really fun for me. Speaker 1: Now you mentioned earlier that you actually, at Rise25 and stuff, you were doing stuff about Manichat and things like that, kind of when that first got going to help you launch products on Amazon or Walmart or wherever it may be. But you also now, you're involved in something else on the, it's like something to do with press releases and launching. You know, people have always talked about this since ever since I've been selling on Amazon, you should do press releases when you when you launch your product. And most of that, for me, you know, I tested it, I tried it. Most of it is a waste of money, to be honest, you know, and yeah, it gets some credibility, you get some backlinks, you can say as seen on, you know, whatever, NBC News or whatever, wherever those feeds go in, you know, the this is and at some credibility, but you're doing it a little bit different way, and had some really good success with that. Can you tell us a little bit about that? Speaker 2: Yeah, so it's really interesting. It's called press X. And, um, you know, if we take a little, you know, back, talk a little bit about press, right? And it's like, why doesn't press work? And if you just think about how traditional press is structured, it's, Basically, these publications, they have to write a certain amount of articles and they have writers. They have random brands reaching out to them, sending them product. And the way it works is these writers don't have any incentive to write about your brand or product. So how do some brands get featured? These writers have to write an article and they have to meet their quota of articles. Now, they're just going to look for, based on the topic they're assigned to writing and they get approved to write about, which products fit in best to that. So, if you reached out to that writer and that publication in the right time, you send them the product, your product is interesting, you have a chance of them maybe writing about you. Now, once they write about you, it doesn't mean the article is going to really get even really promoted or get any love or anything like that because writers don't have an incentive to write about your product, the publication doesn't really have an incentive to Really promote it. Sometimes they have small affiliate commissions from Amazon, but nothing where it really makes a ton of sense for them or to choose you over any other product. That being said, because they could choose any product for that affiliate commission. So it just never really worked out well. And brands would sometimes get lucky and get these massive placements. I remember for one of our products, we got a massive placement. In one of these publications, they wrote about our product randomly and we sold $70,000 of that one SKU in one day and it sold out. We had an FBM inventory. I think we ended off the 48 hours at $115,000 or $120,000 in sales. And then I was like, that's really interesting. Like these publications could really, if they're writing about your product properly and they wrote a whole article specifically about the product, it was dropped at a good time and everything. I'm like, that's really interesting. There's some interesting opportunity here. Started looking more into it and then I learned about a model where we could work with publications and a pay-per-click model. So now, the way it works is, we'll write points about our product. And about our client's product, and we'll pitch it to a publication that we think's audience makes the most sense for this, right? So let's say, you know, you're selling a supplement, you know, a kid supplement, like Scary Mommy is a great publication that the audience is really interested there. Then they'll write, we'll offer them a certain CPC. And then they'll write an article about that product. If they think it's the right fit, they'll accept it. They'll write an article about that product. Now you have a writer getting invested in it, writing a well-structured article specifically about your product. And then the CPC model is really interesting because now what the publication does is they publish the article and then promote the article. You don't pay on the clicks of the article getting clicked or any impressions or anything like that. You pay on the click when somebody reads the article and clicks to your product. So now what happened is a random customer goes on, you know, a random reader goes on Scary Mommy. They trust this publication. They're interested in what they have to say. They click on this. So there's already a certain level of trust. They're reading a really strong review now and a really strong just person talking about the product. So there's already a lot of trust and a lot of interest. A lot of people will bounce off, but that doesn't hurt because you're not paying for that. You're only paying once they click on the product. So then the people that are clicking on the product link, they're really highly interested in your product because they actually read the article, they're coming with trust, and they're clicking on it. They're not just shopping based on how many reviews you have. That's why for new products, it works really well because they're not review shoppers. They're not just looking at Amazon, oh, this one has more reviews than that one. They're like, they read something really interesting about this from a publication they usually read and trust, and you only get charged on a CPC model. So if that article doesn't get any views and doesn't get any clicks, you don't pay for that. And then you just had a really good article and you get all those other values of having a good article and people Google you, but you don't have any of those costs. And we take it a step further by even putting in Amazon attribution links in there. So now you're able to track on your side and you get the brand reflow bonus of 10% because it's external traffic. And you could put what's cool is a max budget on the article. You have to put a minimum budget, but if that minimum budget doesn't get hit, you don't get charged. But you could put a max budget. So let's say the max budget's $5,000. Now the article will still stay up after that spend hits 5,000, but you're not getting charged for any other clicks. So that article could be up for years and you'll still be getting clicks and you're not getting charged for that. We've been able to work with publications for that and it's really been interesting because there's so many different touch points. We've been able to see a lot of success with that, especially with products that you need to tell a story behind. A lot of times you could do whatever job you want with your main image, but you can't always tell the story there and you need somebody to be able to read about your product and learn about it. So that's been really interesting. Speaker 1: The days of press have changed a lot. Back almost 30 years ago I started a magazine and I needed to get some publicity for this magazine. I had no money and back then you would go to these services like PR Newswire or something like that. Some of them are probably still And you would pay them, I don't know, 300, 400, they had different packages. You could target like a nationwide package, you could target just the entertainment magazines, you could target just TV stations in Atlanta, Georgia, or just newspapers in the entire state of Georgia, you know, the main newspapers and the local little suburb newspapers, or whatever you wanna do. And you'd pay a fee based on that, from 300 to, I don't know, 1,000, 2,000 bucks, and then you would send them the press release, they would approve it, And then they would send it out over this like wire. It's like a special like fax machine or something. You know that special little printer that would sit in these press offices that would just be spewing print all day long and they assign somebody to watch that thing and just look at the headlines and like This one looks interesting. Tear the piece of paper off and give it to someone to write a story about or to follow up on. That's how it worked. And I actually did that. I had been traveling around doing my research for this magazine. I'd gone to all these different cities and I had all this data. And so I put out a list of like, here's the top 20 cities in the country for this particular subject. And I just put it in a press release and I literally faxed it to the company, paid the 300 bucks. And then the next day I had entertainment tonight in my little apartment in Austin, Texas, coming and actually shooting an interview with me. I had Lifestyles of the Rich and Famous call me up and say, we want to fly you to LA and we want you to be on this show. I became the, CNN flew me to Dallas to do something. I became the de facto expert in the space. I was on Redbook, I was at New York Times, I was in USA Today, everywhere. I have like these little plaques, you know, featuring the article and featuring me. That was the old day. That's my first experience with press. This stuff works if you actually give them something of value that they want. And you're not just touting how great your product is or something, but something that will pique their audience's interest or give them what they want. It's become such a big business that, you know, Wire, what's it called, Wirecutter? Actually, the New York Times bought it and Wirecutter's in a straight up affiliate website. I mean, you know, you look at NBC News, you know, doing the little feature on the products and stuff. It's become big business. So what you're doing there actually makes sense and they can probably actually make more money doing that and they have a better vested interest in actually promoting it, like you said, as well. So you're seeing really good success with that. Speaker 2: Yeah, it's been so interesting. And if you think about it, it's a different type of shopper a lot of times. And it's, you know, that shopper, you know, like shopping that way. They read something and they get very interested in it. And then they go purchase that. And that's why for new products, we've seen a lot of success there because They're not just shopping based on reviews. When they come to your listing, they're ready to purchase. So getting that initial boost is much easier. And yeah, it's all about the incentive for it because what we'll see with the press a lot of times is like you'll have a product, an article that comes out and then it just, your sales, you know, it goes crazy and then it just drops because they're not continually promoting it, putting it on the first page or recommending it more. But if you have an article that their audience is really resonating with, then they'll keep promoting it. And obviously, eventually their audience gets tapped, but then there's other publications you could just pitch it to. And if it's done well in other publications, they'll pick it up. And a lot of times, With these publications, what works really well is their audience starts knowing your brand. So now, you pitch them another product. The writer likes writing about your product because they know the audience resonated with your other product and the audience already has certain trust in your brand. So we'll see a lot like that. If you have a good product line, you just, one after another, and you just, you see conversion rates so high because they already trust your brand, already know your brand. So we'll just, as we release new products, just do it that way as well. Speaker 1: That's awesome. Well, Michael, we've been talking here for quite some time. It sounds like we might have to do a second version of this just to keep this up and talk about some other cool stuff, but I really appreciate you taking some time out today. You're a busy guy doing all these different things and I appreciate you taking some time to share with us here on the AM PM Podcast. Speaker 2: No problem. It's interesting. Speaker 1: If someone wanted to reach out to you or learn more or get in touch with you, what's the best way for them to do that? Speaker 2: You can just email me Michael at sellcor.co, which is S-E-L-L-C-O-R-D.co. And yeah, any questions about Walmart, about retail or anything like that, you can reach out to me and yeah, we can discuss. Speaker 1: Awesome. Appreciate it again, man. Speaker 2: Awesome. Thank you for having me. Speaker 1: Retail is not for everybody, but if you're at the point in your business where you're ready to make that leap, it can double or even triple your top line revenue and really, really help you grow your brand and get out there. So I hope you enjoyed listening to Michael's tips and his journey to actually getting into retail and some of the trials and tribulations and some of the things to do and not do. And if that's something that you're looking at doing, I wish you the best of luck. Remember, we'll be back again next week with another episode, but before we go, I've got a little tip for you, little nugget of the week. This one comes courtesy of Thomas Edison, you know, that Thomas Edison. He says, if we did all the things we are capable of, we would literally astound ourselves. If we did all the things we are capable of, we would literally astound ourselves. See you next time.