September 3, 2024 • 46 mins
Unlock the secrets behind the phenomenal success of Battlbox with our special guest, John Roman, CEO of the booming outdoor and survival company. Journey with John from his humble beginnings as a small-scale investor to becoming the driving force behind a major e-commerce platform. Discover how Battlbox's innovative shift from subscription boxes to full-scale online retail, their growth during the pandemic, and their hit Netflix series "Southern Survival" propelled them forward. John also shares candid insights on the company's strategic acquisition and buyback, providing a real-world look into the complexities of business valuation and ownership transitions.
But that's not all—we dive deep into the financial strategies that can make or break an internet retail business. Learn the critical importance of tracking financial metrics, budgeting effectively, and evolving from basic tools like QuickBooks to more sophisticated financial management systems. Plus, get inspired by our discussion on leveraging short-form vertical video content to engage customers and build a vibrant community. Whether you're a seasoned retailer or just starting out, this episode is packed with actionable advice, cautionary tales, and the firsthand experiences that can set you on the path to success.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Intro (00:03):
Welcome to the Adventure Retail Podcast, your go-to
destination for all thingsoutdoor retail.
Join us as we embark on ajourney through the captivating
world of outdoor gear shops,exploring retail triumphs,
challenges and everything inbetween, from product sourcing
to customer engagementstrategies.
We're here to support andempower outdoor gear retailers
every step of the way.
(00:23):
Here to support and empoweroutdoor gear retailers every
step of the way.
Dale (00:32):
Today we've got John Roman on from Battlbox.
Happy to have you, John.
John (00:36):
Okay, glad to be here Good to see you again.
Dale (00:39):
So, and John, we've been lucky enough to have an hour and
a half of amazing conversationin the last two weeks, and I'm
really excited to.
I think it's set it up reallywell for this conversation.
I know a whole lot more aboutyou, sure, and I'm excited to
dive in and and share your storyand expertise with everybody.
(01:00):
If you could start with a, giveus a one minute intro to who
you are and what Battlbox does.
John (01:09):
Sure, so my name is John Roman.
I run a company called Battlbox, so Battlbox is an outdoor and
survival company.
So a giant part of our revenueis a subscription box, a mystery
box, but we don't look atnecessarily that lens, we're
(01:31):
just outdoor and survivalexperts.
So we're spreading content,building community, really
showcasing the great outdoorsand educating while doing that,
and we do happen to have amonthly subscription box that we
(01:53):
send out.
We also have traditional e-com,so probably about 600 SKUs, and
we're almost solelydirect-to-consumer on our
website.
Dale (02:05):
I love it, man.
I love the clarity of we'reoutdoor and survival experts and
we happen to have asubscription box.
John (02:16):
Yeah, it's a different approach and a different lens,
but it's how we behave and Ithink it's the correct one.
Dale (02:25):
Yeah Well, yeah, no, it having that as the frame and the
foundation, you act differently.
I'm an outdoor shop, OK, so yousell outdoor stuff.
No, we are experts and weprovide, Anyways.
It just kind of gives me chillsa little bit.
I, I love that clarity.
Um, so you, uh, and because Ihad the, we've had conversations
(02:51):
so you, um, well, let's, let'sshare the with the listeners a
little bit.
Um, what got you here to be theCEO of Battlbox?
If you could give us the quickstory of you know of how you got
to where you're sitting, soearly, early 2015,.
John (03:09):
I was investing in companies very small, small
check size, not traditionalinvesting Definitely like people
in my network that I knew, madea few investments.
I made a few investmentsBattlbox I found out about a
(03:49):
week after it had launched andmade an investment.
The plan was limited capacity,a couple hours a month of, maybe
, business advice, businessacumen and a board seat, and it
just quickly became a lot morethan that and I was putting in a
lot of hours.
It went from five a month tofive a week to five a day fairly
quickly, and then it even grewgreater than that and about a
year in, I made the decision tojoin full-time in the capacity
of a CMO, overseeing marketing,customer experience and
(04:12):
technology.
And we just kept growing.
Everything just kept gettingbigger and bigger.
We hit, you know, like a lot ofdirect-to-consumer brands.
The pandemic was not necessarilya bad thing for the business.
We saw a nice uptick in salesand then we parlayed that into
(04:36):
so you have to think, the salesstarted to increase in March,
april of 2020.
And then our parlay was in July, we had a Netflix TV show drop,
a Netflix original seriescalled Southern Survival, and
that just further shot thehockey growth, hockey stick
(04:56):
growth up.
And then there were three of usoriginally four, down to three
principals of the business atthat time and we just we weren't
aligned.
Two of us wanted to keepbuilding this into something
amazing.
Um, one of one of us was readyto retire and and be done with
(05:17):
with work and it just it didn'tmake sense, um, from an economic
standpoint for the two thatwanted this data to acquire the
third's equity, just simplybecause what might make sense to
a large company from like amultiplier and valuation,
probably doesn't make sensenecessarily to just some
(05:39):
individuals.
So we found what we thought wasa great partner, publicly
traded company, and theyacquired us in 2021.
At that point, I took over inthe CEO position my previous
business partner was the CEO atthe time and then fast forward,
did that for about a year and ahalf year and a half just stuff
(06:05):
outside of our control and ourparent company's control, just
with the markets and beingpublicly traded.
There was an opportunity inApril of last year we acquired
Battlbox back from them and tookit back private and that's
where we're at now.
Dale (06:27):
Yeah, Can I give not necessarily the details on the
buyback but just the details ofthe sale?
Can I give that high level realquick?
John (06:31):
Yeah, absolutely.
Dale (06:32):
So because I think it's, it's interesting for people.
Uh, you hear crazy numbers andmultipliers around things, so
people are it's really hard toknow like what is my business
worth.
And so I think it's interesting.
You were able to you know placeand you were.
You were saying which I thinkis super cool Like you were
making two, five, $10,000investments right as a sales
(06:54):
professional, with your extramoney.
You invest in battle box, youknow, get involved and
eventually you know, now you'rethe CEO, you sell it.
You grow to 18 million inrevenue with a $3 million EBITDA
and you sell it for about six Xthat profit EBITDA number for
about 18 million, where if youwere only a million in earnings,
(07:17):
it may only get a three or fourX.
John (07:20):
Correct.
Dale (07:21):
Multiplier, but because you took it from one to 3
million in earnings.
That's what got you the extramultiples.
John (07:29):
And if we weren't 18 million, if we were over 100
million in revenue?
All of a sudden it's a newequation and we might not even
necessarily be looking at EBITDAwe might actually be able to
get a multiplier off top line.
It's a wild different.
There's different tiers, rightyeah, on where you're at and
what you can get out of it.
Dale (07:47):
And and my expertise in familiarity is mostly in that in
that, you know, you know, a fewhundred K up to a few million
is where I'm comfortable to sayit's probably like that.
But yeah, you hear this crazystuff like, hey, there were a
hundred million and they soldfor 200 million bucks and you're
like, but they probably onlymade 10.
It's like a 20 multiplier.
I don't even.
It blows my mind.
(08:08):
So thank you for sharing that.
Um, going back a little bit towhat you said hey, we're a
product and we're a outdoor andsurvival experts.
How long has that been the thetheme?
How long has that been?
You may not have talked aboutit in the same way but how long
has that been?
John (08:26):
You may not have talked about it in the same way, but
how long has that been a part ofyou?
I would say it was a part of us, probably starting in 2017,
2017 ish.
So, you know, initially, offthe jump, we didn't know what we
didn't know.
We didn't know what we didn'tknow and, you know, none of us
had any experience in direct toconsumer e-commerce, Truly,
(08:48):
building a brand like this.
This was all of our first firstrodeo with with that Wow, when,
when you know, in 2016, towardsthe end, we brought on a
(09:10):
creator, brandon curran, um, whowas he was a paying customer
initially that was doing reviewson his youtube channel.
We were seeing a lot of umcustomers coming because of his
videos.
So he joined the team in afull-time capacity and and moved
down to georgia, um, with thesole focus of we're going to
shoot more content.
He was doing one 30-minutevideo a month.
We were going to say, okay,well, if you're doing this
(09:31):
full-time, let's just startcranking out content.
And it was at that point wherewe knew content was important
and we just made a consciouseffort at that point.
Yes, we had the subscriptionbox.
Yes, we talk about it a lot,but like it's bigger than that.
You know we saw that there werethese formings of community.
(09:52):
We had a Reddit style bulletinboard at the time.
Now it's been converted.
It was called the Battlbox.
Now it's been converted to aFacebook group where you have to
be an active member to be in.
It's been converted to aFacebook group where you have to
be an active member to be in.
But seeing the community andthe engagement level, seeing the
opportunity with Brandonjoining the team and really
(10:13):
getting to spend every moment ofhis working day on content, it
just seemed that that was theright direction, that let's just
focus on what we all enjoy andwhen we know there's a lot of
other people that enjoy, whichis the great outdoors, and
everything else will just kindof fall in place.
Don't get me wrong.
We spend a ridiculous amount oftime in spreadsheets and
(10:37):
formulas and figuring out theeconomics of the subscription
box and acquiring new customers,but still the focus isn't
necessarily that from the from,from the outside.
Dale (10:52):
Yeah, so tell me, cause that's nice and it all sounds
amazing.
Sure, um, and, and I would.
I would love to think like heyfor grand trunk, like I want to
run a content company.
I'd much rather you know I loveadventures.
I would love for our toconvince our to go upstairs
after this call and convincePaul, our marketing director um,
(11:16):
that man, let's go in.
And I've actually.
For years we've had thatconversation.
I've kind of been more of theproponent.
We're working on product mixand other things, but how have
you seen that affect your bottomline from a sales perspective
and like an engagementperspective, can you share
anything with pre-2017?
(11:37):
Here's kind of what ourengagement was and then, once we
really invested there, how itchanged yeah, so it was a.
John (11:45):
It was a slow build.
Obviously the the the netflixshow, you know changed some of
the traffic a little bit, but itwas a.
It's, you think, traditionaldirect-to-consumer e-commerce.
They see an ad, you're tryingto get them to buy, right.
Then, um, it's verytransactional and you know
you're looking for, you know,specific kpis on conversion rate
(12:06):
and and cpms, um cost per click, and then it was a slow, slow,
slow transition.
Now you look at it don't get mewrong we run a lot of ads, um,
but what we've found is, insteadof trying to, in a
transactional manner, closesomeone immediately and get them
(12:26):
to buy and hope that they thatwe set proper expectations we
see this this longer um in thetooth.
50 of our customers um knowabout us and are following us to
engage with us for greater thansix months before making that
first purchase.
So it's uh, they're engagingwith you for six months before
making that first purchase.
Dale (12:44):
So it's uh, they're engaging with you for six months
, six months beforehand.
John (12:48):
Um, but it's, it's just a different sale, right?
So, yes, we do advertise a lot,but it's, it's a it's a longer
process.
A lot of our top of funnel isorganic and they come in
organically through YouTube orTikTok or other social channels
and they subscribe to our email,they follow us and watch our
(13:11):
videos and eventually theadvertising does work.
But even if, like, we'retargeting, we're in Facebook and
trying to target and prospectnew, the reality is even
prospecting is a lot of timesjust retargeting for us.
Yeah, moving them along thefunnel how are you so?
Dale (13:32):
how?
Organic is a great way to trackthat.
Like.
These are people and I don'twant to get too technical
because, um, your, your businessmodel is a lot more technical
than a typical from as far aslike the online sales side, than
a typical retailer.
A lot of retailers have onlinesites and so on, but that's your
bread and butter.
You live and die on on that.
(13:53):
Organic is a great way to trackthat.
Like how, as you, as you andall of your content, enabled
your Netflix show right, so thatwas the reason it happened.
How, uh, how, did your?
What was the main thing thatchanged?
If I'm a, if I'm just anaccountant and you're justifying
(14:16):
to me, we invest more incontent and community.
Um, in our last call, you saidcontent, community.
That's some of the core thingswe, you know we focus on.
If I'm an accountant and you'retrying to justify to me that
that's a good strategy and thatit worked, is there anything
would you say like, well, hey,look, our organic or our
(14:36):
conversion on paid went up, orour, which is always changing,
or our organic changed in ameaningful way, or what kinds of
things would you mention?
John (14:45):
Um, I, I would.
I would point to lifetime valueof the average customer, the
amount of money from theirwallet that they choose to share
with us.
It goes up significantly.
And it's interesting there'sdirect correlation between the
(15:10):
customer that came into usorganically, looked at us and
made a decision over six monthsto purchase, versus the guy that
saw our ad yesterday, boughtyesterday.
Their OTVs are not going to bethe same, yeah, yesterday, their
LTVs are not going to be thesame.
Setting over half a year orgreater, setting proper
expectations, letting peopleknow what we're genuinely about,
(15:32):
what we're trying to accomplish, and there's no like buyer
remorse after six months.
You know what you're buyinginto, you know what you're
joining, you know what thismembership's about.
So it's such a a more valuablecustomer.
(15:53):
Um, because it's the farthestthing, it's a, yes, it's a
transaction but it's nottransactional, it's, it's great,
um so it's, it's, it's higherltv, which, at the end of the
day, you know, know, means meansmore revenue, means um more
profit, more, you know, itraises all ships.
Dale (16:10):
Yeah, so higher lifetime value.
Um, you, you've been able tosee that increase as you pumped
in your yeah, yeah, I love itAwesome.
So one of the uh, one of thecommon struggles for a shop and
and I guess my background isinternet retail, selling online.
It was mind-blowing to me, solet me share.
And then I want to get yourperspective on this.
(16:33):
We had a distributor whoconsolidated a bunch of
financials from other shops likeours, other online retailers,
and they broke it down intopayroll as a percentage of sales
.
You know, fixed costs as apercentage of sales, or rent,
you know like.
You know rent as a percentageof sales, marketing as a
(16:55):
percentage of sales, shipping asa percentage of sales, and as
basic as that sounds.
And we were making money, wewere profitable.
But it kind of blew my mindlike, oh, wow, tracking it like
that deal.
Your payroll is a percentage ofsales, 14% where based on.
You know, to get you to aneight or nine margin in retail,
(17:17):
you need to be at you know 12.
Right, where.
But when my, when my employeesare saying I need to make more
money, they're like well, Ireally want you to make more
money too.
I care about you, I want you tobe here, but then when you know
in the background, well, wehave to be 12th, we need to work
towards getting to 12%.
It just really helped us outand we made a lot of different
(17:39):
decisions based on that.
So is there anything similar orother advice that you would
share to a retailer to get abetter handle on their
profitability?
John (17:53):
Yeah, so I think what you said is paramount Now.
Did we do that back in 2016?
I wish we did not.
We didn't know what we didn'tknow.
Today, we absolutely manageeverything to percentages.
We know that our marketingspend is not going to be greater
(18:14):
than 12% of our total revenue,which some people are shocked
that we don't spend more thanthat.
Dale (18:23):
I am shocked.
I am shocked.
John (18:26):
But we don't go more than that.
I am shocked.
I am shocked.
Dale (18:29):
But we don't go above it.
John (18:29):
That's the budget.
Now there's one-off situationsthroughout the year.
We find a campaign that'sworking really well and we know
that it's going to make it wherethat spend is less than 12% in
the in the following six monthsbecause we're we're we're going
top heavy.
Now there's, there's one offsand ebbs and flows but it's a
(18:53):
budget.
Dale (18:54):
Yeah, I think.
How have you budgeted incontent?
How have you, how do you lookat that spend within your
financial umbrella?
And and I guess I asked thatlike um A common theme of shops,
and I'm excited to have more ofthese conversations.
But, man, it seems like thoseshops that I was always jealous
(19:14):
of or looked up to when I was inthe bike business.
I'm like man, they are the onesthat have built real community,
that have a real reason toexist outside of.
They just are stocking productin their town.
John (19:27):
Sure.
Dale (19:28):
Right when I'm curious how people would see that
investment on their P&L, becauseit's probably closely related
to a marketing expense.
John (19:37):
Yeah, so so a lot of us marketing, but like our team
members that are in themarketing, they're just on
traditional payroll.
We're not.
We're not isolating that.
We know that.
You know we want to be at, youknow, 10 percent or less for
payroll and yes, it's heavy withmarketing people.
Yeah, but it's not isolated andnot separated at all.
Dale (20:02):
Yeah, cool.
It's funny how similar all ofthis is.
You're like, hey, we need tokeep marketing at 12.
And I'm like, yeah, marketingfor us back in the day was was
10 to 12 percent, right, youknow uh blended that are.
John (20:18):
That are 20 that that recommend.
Dale (20:21):
Oh, you need to be at 20 or 25 percent, that's, that's
tough yeah difficult well, it'sa quick way to make two percent
net margins, you know, and it'sa quick way to be out of
business too, yeah, and I guess,if you've raised money and it's
not your money, you tend tomaybe look at things slightly
different yeah, okay.
(20:43):
So so you're doing very similar.
You're bucketing it into.
Hey, our payroll expense is xMarketing spend.
We keep here.
We're willing to make somevariations.
How did you track thatinitially?
John (21:01):
So I mean, when I look at where we've come from, call it
financial astuteness in 2015 tonow is vastly, vastly, vastly
different.
So the first two years wedidn't have anybody that was
(21:22):
necessarily the head financialperson.
We were all kind of wearing thehat and the hat didn't fit any
of us and we weren't trackingthings very well.
We had a couple of spreads.
She's obviously like we wereusing QuickBooks.
Dale (21:40):
You knew you were growing profits each month.
John (21:45):
Yeah, but man we were making we made some wildly poor
decisions in those first firstcouple of years.
Dale (21:54):
Can you highlight a funny one for us?
Can you highlight?
I think it is important, forsometimes if you say John and
team built something fromscratch to 18 with a five or
$10,000 investment, you know hecomes in and then they build
this to $18 million.
That's a crazy wild successstory, right?
And?
And sometimes you say, well,they must be geniuses and um,
(22:19):
but it's, it's so.
That's why I think it's evenmore important to share, like,
look how funny this, you know,can you, can you believe we did
this?
But you grow on top of allthose stories and while the
stakes are small, that's whenyou need to make the dumb
mistakes anyways.
John (22:34):
Yeah, no, it's true.
So because we didn't have thatfinancial, we didn't have that
person that owned finance, right, there wasn't that single
person of accountability.
We obviously have to get ourtaxes done.
Every year we send them to thecpa, but we're we're just
(22:55):
sending them an x, we're notgiving them the full picture.
They don't understand thebusiness fully.
Um, it's become a complicatedbusiness, has become very just.
You know, black and white onpaper.
Um, so the cpa to, to no faultof their own, they're working
with what they've been given.
It's definitely our fault.
(23:16):
It's like, hey, you guys needsome more expenses, like go get
some cars.
So I remember vividly we'reabout to fly out to Salt Lake
City and we're going out thereto meet, we're going to shoot
some content with Black RifleCoffee.
Dale (23:38):
They've killed it right.
Black Rifle's, another company.
Who's just killed it.
John (23:42):
That's an interesting story, all the different
iterations and chapters and justsome of the things they've done
.
But they're publicly traded andnow they're putting brick and
mortar up everywhere, um, whichis, yeah, so cool, it's uh, so
we're going and, um, this is therecommendation from the cpa.
(24:04):
And you know, they're obviouslysmarter than us and we're we're
naive and thinking that wehaven't shared all of the
correct picture of of thebusiness with them.
So we're, the three of us, aresitting at the airport talking
about this and, well, I guess weshould get cars.
Well, okay, we didn't, didn'ttalk about budget.
(24:30):
My previous business partnerthat he that was the ceo, daniel
.
He was like, well, I want twocars.
And we're like, okay, cool, youget two, we'll both patrick and
I'll both get one.
Um, and within, literally, wegot back from salt lake city and
daniel called me.
He's like hey, will you go downto miami with me and drive
(24:52):
these two cars back?
I was like you already foundcars.
This is on my to-do list, butnot immediately.
I didn't think we were movingon this that fast.
And that week I flew down toMiami with him and he drove this
Corvette back and I drove thisRange Rover back up to Georgia.
(25:14):
I then I bought a BMW 650i.
It was just not like an unsight, it was just wildly
inappropriate.
Dale (25:27):
That's really funny.
John (25:30):
But it was because of you, know.
We didn't understand fully.
Dale (25:37):
You didn't understand the principle behind.
Like what do you mean thisthing, like just why that would
happen.
So, going back to hindsight,what do you do differently?
John (25:51):
So, not that.
So the reality is, you know,this business is very cash
intensive at times, right?
So at the end of the day, themembership is a big part of the
business still, and the biggerwe've gotten, we're having to
work out, you know, months andgreater in in advance and
(26:13):
putting in purchase orders.
Um so it, yes, we're, we'regonna, we're gonna buy something
today.
Hope we're right on theforecast and the number.
It's not like we can, becausethese are custom manufactured,
runs from these vendors.
So you can't like say, oh, justkidding, I told you this, but I
only need this, like they'vealready, they've made them and
we're going to pay.
(26:33):
You know, six, seven monthssometimes before we're going to
get paid ourselves.
Yeah, so we're, you know,putting out millions of dollars,
possibly every month.
So it's, it's cash and you getthe cash back, obviously, but
it's not something we should betrying to add.
(26:57):
Additional OPEX for cars.
Dale (27:01):
So you're just taking some income, paying the taxes and
stacking cash away.
John (27:06):
Yeah, yeah um yeah, so we were.
You know, we were um.
Another laughable moment is wewere taking the first, first
year taking distributions.
Um, well, we were, we werethought they were distributions.
We couldn't take distributionswhen you have a negative basis,
(27:29):
um to like what were we doing?
So, like we had years where,like that was basic had to
basically sit on our books as aloan because it couldn't be a
distribution, because therewasn't anything to distribute.
Uh, it was just just wild, justignorance, if you will.
Dale (27:46):
Yeah, in the beginning yeah, no, well, that's it's good
to.
It's good to point out.
Um, I know that I made.
I hate, I hated paying forprofessional services.
I was really cheap and we haddone my.
My dad and I were in businesstogether.
We had done.
This was 2010.
(28:06):
Um, we probably did 4 millionin revenue and made about
$550,000.
Maybe we did 5 million bucks,made 500 K and we were still
filing as a partnership, as anLLC.
A year later they said, youknow and I, we benefited cause
(28:27):
we could go back and fix some ofit.
Um, but and it may have happened, you know I might be getting my
timeline wrong but we talked tothe accountant and he says both
of you should be taking asalary of, say, 65k back then
and then all profits above thatwon't have self-employment tax
If you file as a C-corp.
(28:48):
You can stay in LLC If you fileas a C-corp.
So I'm immediately seeing whatI put off spending a hundred
dollars in consulting with theCPA and we, we lost $40,000 in
taxes, you know, two years agoor whatever it was.
And I'm thinking, man, wherejust to not know that was hard,
(29:16):
and you hear that a lot.
That's so common.
The one that you mentioned withthe car, like, hey, you should
just buy a truck.
You're showing too much inprofits, buy a truck.
John (29:25):
There's more and if the plan, yeah, it's just not, it's
not a fully, if it's a lifestylebusiness and you're not trying
to do something bigger, greateror have a larger end goal, sure.
Dale (29:43):
Yeah, make no money every year, just make no money.
And there may be some shops outthere that say, hey, our goal
is, in order to keep the bankhappy, if we do have bank loans,
we need to make a cash coverage, debt coverage but other than
that, we're going to program ourprofits and whatever.
But yeah, that's.
I think having a good cpathat's going to watch your back
(30:04):
and protect you is reallyimportant.
Yeah, that's savvy um.
So I guess that knows yourgoals and such Um and and and
you know, the, the, the CPA thatwe used had our best interest.
John (30:17):
We just never.
They didn't know what theydidn't know Right and we didn't.
We didn't offer the correctinformation or any information.
Intro (30:24):
Yeah.
John (30:25):
So it's it's tough to do your job when you don't have all
the pieces.
Dale (30:29):
Yeah, for sure.
Um, so well, that's awesome.
Um.
Another thing I wanted to getinto was the and we've talked
about it a little bit butcommunity and content going,
maybe just going back to that,like, if I'm a, if I'm a retail
chain and I was just on thephone with somebody that are
(30:50):
retail chain, they've got fivestores, um, and they, you know,
want to find ways to add valuemaybe through that community
content piece.
Like, what does that even looklike?
And I, I'm real, that's not,I'm not asking that in a very
clear way but for somebody to uhfocus more on on community or
(31:16):
creating content, like, what are, what are some of the steps
that you might recommend?
John (31:20):
Sure, so so the the the community piece is a is a little
bit of a?
Um, not straightforward answer,but you can, but you can.
You can get a lot of the answerand guidance that you need from
content.
Um, so, on the content piece,you know if we're talking about.
Hey, I'm a retailer and it's2020, it's may 2nd 2024.
(31:43):
Like I, I don't have anycontent.
I need to figure out content.
Um, you know all the algorithmson the social channels.
Um, all still treatingshort-form vertical video
content as the best type ofcontent.
Dale (32:00):
That's funny.
You say that Short-formvertical content, not landscape
vertical the phone.
John (32:08):
Um, yeah, you know when, when tiktok came on the scene,
uh, a few years back it, they,they quickly became a force.
So you have, you know, googleand uh and and facebook,
instagram, overcompensating ontheir platforms for the type of
content, because, because thereality is, consumers enjoy that
(32:30):
content, it's easy to digest,and if you're putting that
(32:52):
content on those TikTokInstagram Reels, youtube Shorts,
if you put out content likethat on those channels, you have
this ability, if it's actuallygood content, to hit this
virality piece, and the viralitypiece is just simply more
(33:12):
eyeballs and you can quickly, um, quickly become, have something
, have an identification onthere where, like, um, you're
starting to get more peoplefollowing and and understanding
and engaging with you.
Um, and if it's just genuinecontent and you know certain
(33:33):
things are going to work fordifferent brands and certain
people, but once you find yourvoice that people identify with,
the engagement can kind ofprobably lead you down the path
of what that community should orwill be able to look like yeah,
I like that.
Dale (33:50):
So leading with content and then responding.
John (33:54):
Yeah.
Dale (33:54):
In a way.
John (33:55):
Yeah, responding appropriately.
Now, your, your, your.
Your audience, members orfollowers or customers will
always tell you what they want.
If you just listen and if you,if you do want to build
community, they're going to tellyou what, how the community
should be.
You just have to listen andengage with them and ask yeah,
(34:18):
be you just have to listen andengage with them and ask
questions.
Dale (34:26):
What tips do you have for people who want to start paying
for some ads and I'm not talkingabout advice to run like
campaigns at your scale, becausethat's a whole other business
that most shops like you'll liveand die on that.
But if somebody says, yeah, Iprobably should pay in a little
bit to boost some things, likelike what do you tell that shop
that is starting to create somecontent and wants to do a little
paid media?
John (34:44):
um, I mean the.
The platforms make it reallyeasy.
Now, right, you literally can,um, you know you don't have to
be.
Yes, you can go the traditionalway.
Open up facebook businessmanager, connect your page,
create an ad, add an asset, putsome copy, set a budget um, a
url, target to go to the website.
(35:04):
You can go that way, um, andthat way is is 100, an absolute
solution.
But the platforms make itreally easy.
Can open up tiktok right now, orinstagram, and you can go to
any of your pieces of contentand there's a boost button or a
promote button, and it's superstreamlined.
Next, next page will tell youwhat are you trying to
(35:26):
accomplish.
Are you trying to get morelikes or followers, or are you
trying to send them to a url ora website, um, and next page is
is how long is is running andhow much are you spending, and
within um, within a couple ofminutes, you can, you can boost
or promote um one of your piecesof content, and it's most of
(35:49):
them.
Most of the platforms also areable to track um to a certain
degree and tell you what, whatwas accomplished and, depending
on your size, you can probablynotice was accomplished and,
depending on your size, you canprobably notice, notice, if, if,
if there was something, yeah,yeah, that's awesome.
Dale (36:03):
So one last thing, Um, and then if there's anything else
you want to add, you know, feelfree to add it, but the uh,
you'd mentioned that you hadbought a shop and then you ended
up selling it again, and thatwas you know.
I'd love to just hear thatexperience and if you had a
takeaway on here's what Ilearned about doing.
(36:24):
You know, as an internetretailer, you know, online
content creator, media company,almost with a Netflix show, my
experience jumping into a shopand jumping out was, you know.
John (36:37):
Maybe here's what I learned a shop and jumping out
was you know, maybe here's whatI learned, sure, so you know.
So back then had a theory Um,and I still think this is this
is the truth that um, direct toconsumer is just a sales channel
.
Um, it's not.
It's not the full picture.
I think that, and I hate sayingthe word omni channel, um, but
it's.
It literally stands the hair upon my arms.
(37:00):
I hate that word, but thereality is but, John, you got to
be omni-channel.
Okay, I'm just kidding yeah, butit's the reality is.
Direct to consumer is just achannel.
So, you know, I still believethat we're still working on the
uh, the correct, the, thecorrect retail model and it's
(37:21):
not what we thought it was atfirst and that was, I guess,
2017, 2018?
I'm trying to think no 2019.
We made an acquisition in 2019.
So we knew we wanted to have aretail presence.
(37:46):
Now, I believe a retailpresence is not a Battlbox
branded store, but Battlboxproducts in other people's
stores.
Dale (37:54):
It's a private label.
That's another thing and Iwasn't going to jump into that
too much, but is that somethingyou're working on?
And developing your ownBattlbox brand?
John (38:02):
Yeah, so we have a lot of branded products now and we have
some health brands now andwe're actually in the midst of
putting together a morepretty-looking, graphic-friendly
catalog of our products to taketo retailers.
But we didn't necessarily knowthat that's the right approach.
(38:23):
Now Go to 2019, we saw anopportunity where it was a
business that Flashlights andCamping Gear, so right in our
wheelhouse, where they had anice online presence, really
nice website, respectable amountof traffic and sales.
But they also had a traditionalbrick and mortar store and it
(38:49):
was in Georgia another site andthen retail.
We can have all of theirproducts.
We can also have our productsLike this is great.
Dale (39:13):
It's the best of all worlds and everything's going to
be a honeymoon forever.
John (39:17):
Completely false.
I've been there.
Dale (39:19):
I've been there.
I've been there before, yeah,yeah, too many times, and we
just you know we had become good, and arguably very good, at
direct-to-consumer onlinee-commerce.
John (39:32):
And pure naivety.
Again, we were under theimpression that, yeah, you know,
selling retail, that's.
How is that any different?
Dale (39:41):
Clearly, you're going to kill it.
You're going to be a master ateverything else you do, because
you, you know, and everythingyou, everything else you touch,
will turn to gold.
John (39:50):
Right, clear, clearly we're wrong with that approach.
And there's just so many othernuances.
Right, there's, yes, therethere's staffing, management of
people in other businesses, butstaffing for a store is
completely different and it's acompletely different approach.
And inventory management iscompletely different.
(40:14):
Instead of hundreds of aspecific product, we might only
have three or four of this andhave more SKUs as opposed to
less, in greater amounts andjust understanding.
Um, you know, the great thingabout direct to consumer and
digital is you're able to, evenin a post iOS world, you're
(40:35):
still able to track stuff to acertain degree.
Like it's not that easy totrack stuff and and getting, and
it's not as simple as justrunning some facebook ads to get
people into your store.
Like it's a.
It's a completely differentanimal.
It's a it's.
It's a different species.
Yeah, and we, just we just gotour teeth kicked in.
(40:57):
We, we just didn't know what wewere doing and while we, for
the most part, are arguablysemi-intelligent, the learning
curve was just, it was a lot andI think we could have figured
it out, but in order to figureit out, it would mean we would
take our eye off the ball ofwhat we knew was working in our
(41:21):
current core competencies.
We couldn't have figured outboth and we didn't.
You know.
We could have made some hiresthat that came from that world
and maybe put ourselves in abetter shot, but it it was
becoming a pain point and afrustration and we saw an
(41:46):
opportunity to arguably cut ourlosses at no real loss, and we
took it.
Dale (41:52):
That's a big win.
I laugh and kind of joke withyou about that because I've been
in that place a lot of timesand one of the best businesses I
sold I I sold it for like$2,000 down and I'm going to get
another $8,000 after.
It was a small project that Ipaid 50 K for and it was the
(42:14):
best sale ever and probably mymost favorite forty thousand
dollars to lose.
Actually, yeah, because it waslike, oh, just like, get it away
from me.
I don't even care, just get itout of my life.
John (42:26):
It was a bad decision, oh you know, and it's then, and
then that's a win.
Dale (42:31):
You were able to to move on from it with yeah, with some
learnings probably lots of, lotsof learnings and a lot of it
are those things, a lot of thoseof like taking your eye off the
goal and realizing.
On our last episode, actually,with paul he mentioned, you know
we talked to retailers who are,hey, I want to get into online,
I'm going to do it online,totally, do whatever you know,
(42:51):
great, do that.
Do private label, you know,build whatever dream business
you want to, but just realizingthat they're their own
businesses with their ownproblems and struggles, and you
can't just spin one up with youraura and expertise to just like
go and succeed because you'resome special deal and yeah, I've
(43:15):
learned that with certain.
Yeah, there's a lot ofcomplexity.
So, well, that's cool and I'mglad you were able to get out of
it without you know, justgetting your teeth kicked in is
a good thing compared to losing,you know, losing an arm or
dying in the process.
John (43:35):
All of it is still present , so yeah To win.
Dale (43:38):
Yeah, yeah, that's awesome .
Um well, John, it's been reallyawesome spending this time with
you and learning more aboutkind of how your mind works and
props on everything you've donewith battle box yeah, we talked
a lot about the mistakes we'vemade, but that mistakes are
important yeah, well, well, andit's all.
(43:59):
It's all a part of growing acompany to 18 million in revenue
, selling it, buying it back.
You know, dealing with COVID inthe transition, which was crazy
, and still being in business,paying your vendors on time,
right, paying your vendors, evenlike, just like.
There's a lot yeah, there was.
John (44:20):
There was in the first couple years, just us not doing
what we're we?
We paid all of our vendors butwe were.
We were late sometimes and itwas because we didn't know.
It was the naivety of ofmanaging cash flow correctly.
Um, yeah, that's a whole notherI could talk about the
learnings we took from that.
Dale (44:38):
That's a whole nother I could talk about the learnings
we took from that Gettingsomeone in place smarter than us
on the finance side, though,was such a good move.
Yeah, in my business, I waspartners with my dad, who I took
all the credit as theentrepreneur.
I'm the guy that's buying, I'mthe entrepreneur, I started the
(45:03):
company and I, you know,definitely took too much credit,
but he was the steady forcebehind paying everyone on time,
and only after selling thecompany did I realize, oh, wow,
like, not everybody acts likethat.
Of course, people wanted towork with us, because we always
paid our bills, and the threetimes we were late, it was like
a phone call hey, I'm going tobe three minutes, I'm going to
(45:24):
be three weeks late.
Is that OK, right?
And?
And people like, oh, that'sfine, realizing now as a brand,
you're like wow, we were a dreamcustomer dream.
So I think you're right.
Is having somebody responsiblethere that will maybe fight the
rest of the company to?
We've dealt with plenty ofpeople who just, you know, tell
(45:45):
that story of hey, we got tomeet with accounting and I'm not
going to slander anybody onthis call, but it's amazing how
far that goes.
And if and that's what willhappen, though, if you don't
have your numbers in in line, ifyou don't know your model and
have your outfit put togetherright um, you're running your
challenges like that yeah,awesome.
(46:08):
Well, hey, thanks for spendingthe time with us, John.
Intro (46:10):
Thank you appreciate it thank you for joining us on the
adventure Retail Podcast.
Until next time, keep exploring.
No-transcript.
Welcome to the Adventure Retail Podcast, your go-to
destination for all thingsoutdoor retail.
Join us as we embark on ajourney through the captivating
world of outdoor gear shops,exploring retail triumphs,
challenges and everything inbetween, from product sourcing
to customer engagementstrategies.
We're here to support andempower outdoor gear retailers
every step of the way.
(00:23):
Here to support and empoweroutdoor gear retailers every
step of the way.
Dale (00:32):
Today we've got John Roman on from Battlbox.
Happy to have you, John.
John (00:36):
Okay, glad to be here Good to see you again.
Dale (00:39):
So, and John, we've been lucky enough to have an hour and
a half of amazing conversationin the last two weeks, and I'm
really excited to.
I think it's set it up reallywell for this conversation.
I know a whole lot more aboutyou, sure, and I'm excited to
dive in and and share your storyand expertise with everybody.
(01:00):
If you could start with a, giveus a one minute intro to who
you are and what Battlbox does.
John (01:09):
Sure, so my name is John Roman.
I run a company called Battlbox, so Battlbox is an outdoor and
survival company.
So a giant part of our revenueis a subscription box, a mystery
box, but we don't look atnecessarily that lens, we're
(01:31):
just outdoor and survivalexperts.
So we're spreading content,building community, really
showcasing the great outdoorsand educating while doing that,
and we do happen to have amonthly subscription box that we
(01:53):
send out.
We also have traditional e-com,so probably about 600 SKUs, and
we're almost solelydirect-to-consumer on our
website.
Dale (02:05):
I love it, man.
I love the clarity of we'reoutdoor and survival experts and
we happen to have asubscription box.
John (02:16):
Yeah, it's a different approach and a different lens,
but it's how we behave and Ithink it's the correct one.
Dale (02:25):
Yeah Well, yeah, no, it having that as the frame and the
foundation, you act differently.
I'm an outdoor shop, OK, so yousell outdoor stuff.
No, we are experts and weprovide, Anyways.
It just kind of gives me chillsa little bit.
I, I love that clarity.
Um, so you, uh, and because Ihad the, we've had conversations
(02:51):
so you, um, well, let's, let'sshare the with the listeners a
little bit.
Um, what got you here to be theCEO of Battlbox?
If you could give us the quickstory of you know of how you got
to where you're sitting, soearly, early 2015,.
John (03:09):
I was investing in companies very small, small
check size, not traditionalinvesting Definitely like people
in my network that I knew, madea few investments.
I made a few investmentsBattlbox I found out about a
(03:49):
week after it had launched andmade an investment.
The plan was limited capacity,a couple hours a month of, maybe
, business advice, businessacumen and a board seat, and it
just quickly became a lot morethan that and I was putting in a
lot of hours.
It went from five a month tofive a week to five a day fairly
quickly, and then it even grewgreater than that and about a
year in, I made the decision tojoin full-time in the capacity
of a CMO, overseeing marketing,customer experience and
(04:12):
technology.
And we just kept growing.
Everything just kept gettingbigger and bigger.
We hit, you know, like a lot ofdirect-to-consumer brands.
The pandemic was not necessarilya bad thing for the business.
We saw a nice uptick in salesand then we parlayed that into
(04:36):
so you have to think, the salesstarted to increase in March,
april of 2020.
And then our parlay was in July, we had a Netflix TV show drop,
a Netflix original seriescalled Southern Survival, and
that just further shot thehockey growth, hockey stick
(04:56):
growth up.
And then there were three of usoriginally four, down to three
principals of the business atthat time and we just we weren't
aligned.
Two of us wanted to keepbuilding this into something
amazing.
Um, one of one of us was readyto retire and and be done with
(05:17):
with work and it just it didn'tmake sense, um, from an economic
standpoint for the two thatwanted this data to acquire the
third's equity, just simplybecause what might make sense to
a large company from like amultiplier and valuation,
probably doesn't make sensenecessarily to just some
(05:39):
individuals.
So we found what we thought wasa great partner, publicly
traded company, and theyacquired us in 2021.
At that point, I took over inthe CEO position my previous
business partner was the CEO atthe time and then fast forward,
did that for about a year and ahalf year and a half just stuff
(06:05):
outside of our control and ourparent company's control, just
with the markets and beingpublicly traded.
There was an opportunity inApril of last year we acquired
Battlbox back from them and tookit back private and that's
where we're at now.
Dale (06:27):
Yeah, Can I give not necessarily the details on the
buyback but just the details ofthe sale?
Can I give that high level realquick?
John (06:31):
Yeah, absolutely.
Dale (06:32):
So because I think it's, it's interesting for people.
Uh, you hear crazy numbers andmultipliers around things, so
people are it's really hard toknow like what is my business
worth.
And so I think it's interesting.
You were able to you know placeand you were.
You were saying which I thinkis super cool Like you were
making two, five, $10,000investments right as a sales
(06:54):
professional, with your extramoney.
You invest in battle box, youknow, get involved and
eventually you know, now you'rethe CEO, you sell it.
You grow to 18 million inrevenue with a $3 million EBITDA
and you sell it for about six Xthat profit EBITDA number for
about 18 million, where if youwere only a million in earnings,
(07:17):
it may only get a three or fourX.
John (07:20):
Correct.
Dale (07:21):
Multiplier, but because you took it from one to 3
million in earnings.
That's what got you the extramultiples.
John (07:29):
And if we weren't 18 million, if we were over 100
million in revenue?
All of a sudden it's a newequation and we might not even
necessarily be looking at EBITDAwe might actually be able to
get a multiplier off top line.
It's a wild different.
There's different tiers, rightyeah, on where you're at and
what you can get out of it.
Dale (07:47):
And and my expertise in familiarity is mostly in that in
that, you know, you know, a fewhundred K up to a few million
is where I'm comfortable to sayit's probably like that.
But yeah, you hear this crazystuff like, hey, there were a
hundred million and they soldfor 200 million bucks and you're
like, but they probably onlymade 10.
It's like a 20 multiplier.
I don't even.
It blows my mind.
(08:08):
So thank you for sharing that.
Um, going back a little bit towhat you said hey, we're a
product and we're a outdoor andsurvival experts.
How long has that been the thetheme?
How long has that been?
You may not have talked aboutit in the same way but how long
has that been?
John (08:26):
You may not have talked about it in the same way, but
how long has that been a part ofyou?
I would say it was a part of us, probably starting in 2017,
2017 ish.
So, you know, initially, offthe jump, we didn't know what we
didn't know.
We didn't know what we didn'tknow and, you know, none of us
had any experience in direct toconsumer e-commerce, Truly,
(08:48):
building a brand like this.
This was all of our first firstrodeo with with that Wow, when,
when you know, in 2016, towardsthe end, we brought on a
(09:10):
creator, brandon curran, um, whowas he was a paying customer
initially that was doing reviewson his youtube channel.
We were seeing a lot of umcustomers coming because of his
videos.
So he joined the team in afull-time capacity and and moved
down to georgia, um, with thesole focus of we're going to
shoot more content.
He was doing one 30-minutevideo a month.
We were going to say, okay,well, if you're doing this
(09:31):
full-time, let's just startcranking out content.
And it was at that point wherewe knew content was important
and we just made a consciouseffort at that point.
Yes, we had the subscriptionbox.
Yes, we talk about it a lot,but like it's bigger than that.
You know we saw that there werethese formings of community.
(09:52):
We had a Reddit style bulletinboard at the time.
Now it's been converted.
It was called the Battlbox.
Now it's been converted to aFacebook group where you have to
be an active member to be in.
It's been converted to aFacebook group where you have to
be an active member to be in.
But seeing the community andthe engagement level, seeing the
opportunity with Brandonjoining the team and really
(10:13):
getting to spend every moment ofhis working day on content, it
just seemed that that was theright direction, that let's just
focus on what we all enjoy andwhen we know there's a lot of
other people that enjoy, whichis the great outdoors, and
everything else will just kindof fall in place.
Don't get me wrong.
We spend a ridiculous amount oftime in spreadsheets and
(10:37):
formulas and figuring out theeconomics of the subscription
box and acquiring new customers,but still the focus isn't
necessarily that from the from,from the outside.
Dale (10:52):
Yeah, so tell me, cause that's nice and it all sounds
amazing.
Sure, um, and, and I would.
I would love to think like heyfor grand trunk, like I want to
run a content company.
I'd much rather you know I loveadventures.
I would love for our toconvince our to go upstairs
after this call and convincePaul, our marketing director um,
(11:16):
that man, let's go in.
And I've actually.
For years we've had thatconversation.
I've kind of been more of theproponent.
We're working on product mixand other things, but how have
you seen that affect your bottomline from a sales perspective
and like an engagementperspective, can you share
anything with pre-2017?
(11:37):
Here's kind of what ourengagement was and then, once we
really invested there, how itchanged yeah, so it was a.
John (11:45):
It was a slow build.
Obviously the the the netflixshow, you know changed some of
the traffic a little bit, but itwas a.
It's, you think, traditionaldirect-to-consumer e-commerce.
They see an ad, you're tryingto get them to buy, right.
Then, um, it's verytransactional and you know
you're looking for, you know,specific kpis on conversion rate
(12:06):
and and cpms, um cost per click, and then it was a slow, slow,
slow transition.
Now you look at it don't get mewrong we run a lot of ads, um,
but what we've found is, insteadof trying to, in a
transactional manner, closesomeone immediately and get them
(12:26):
to buy and hope that they thatwe set proper expectations we
see this this longer um in thetooth.
50 of our customers um knowabout us and are following us to
engage with us for greater thansix months before making that
first purchase.
So it's uh, they're engagingwith you for six months before
making that first purchase.
Dale (12:44):
So it's uh, they're engaging with you for six months
, six months beforehand.
John (12:48):
Um, but it's, it's just a different sale, right?
So, yes, we do advertise a lot,but it's, it's a it's a longer
process.
A lot of our top of funnel isorganic and they come in
organically through YouTube orTikTok or other social channels
and they subscribe to our email,they follow us and watch our
(13:11):
videos and eventually theadvertising does work.
But even if, like, we'retargeting, we're in Facebook and
trying to target and prospectnew, the reality is even
prospecting is a lot of timesjust retargeting for us.
Yeah, moving them along thefunnel how are you so?
Dale (13:32):
how?
Organic is a great way to trackthat.
Like.
These are people and I don'twant to get too technical
because, um, your, your businessmodel is a lot more technical
than a typical from as far aslike the online sales side, than
a typical retailer.
A lot of retailers have onlinesites and so on, but that's your
bread and butter.
You live and die on on that.
(13:53):
Organic is a great way to trackthat.
Like how, as you, as you andall of your content, enabled
your Netflix show right, so thatwas the reason it happened.
How, uh, how, did your?
What was the main thing thatchanged?
If I'm a, if I'm just anaccountant and you're justifying
(14:16):
to me, we invest more incontent and community.
Um, in our last call, you saidcontent, community.
That's some of the core thingswe, you know we focus on.
If I'm an accountant and you'retrying to justify to me that
that's a good strategy and thatit worked, is there anything
would you say like, well, hey,look, our organic or our
(14:36):
conversion on paid went up, orour, which is always changing,
or our organic changed in ameaningful way, or what kinds of
things would you mention?
John (14:45):
Um, I, I would.
I would point to lifetime valueof the average customer, the
amount of money from theirwallet that they choose to share
with us.
It goes up significantly.
And it's interesting there'sdirect correlation between the
(15:10):
customer that came into usorganically, looked at us and
made a decision over six monthsto purchase, versus the guy that
saw our ad yesterday, boughtyesterday.
Their OTVs are not going to bethe same, yeah, yesterday, their
LTVs are not going to be thesame.
Setting over half a year orgreater, setting proper
expectations, letting peopleknow what we're genuinely about,
(15:32):
what we're trying to accomplish, and there's no like buyer
remorse after six months.
You know what you're buyinginto, you know what you're
joining, you know what thismembership's about.
So it's such a a more valuablecustomer.
(15:53):
Um, because it's the farthestthing, it's a, yes, it's a
transaction but it's nottransactional, it's, it's great,
um so it's, it's, it's higherltv, which, at the end of the
day, you know, know, means meansmore revenue, means um more
profit, more, you know, itraises all ships.
Dale (16:10):
Yeah, so higher lifetime value.
Um, you, you've been able tosee that increase as you pumped
in your yeah, yeah, I love itAwesome.
So one of the uh, one of thecommon struggles for a shop and
and I guess my background isinternet retail, selling online.
It was mind-blowing to me, solet me share.
And then I want to get yourperspective on this.
(16:33):
We had a distributor whoconsolidated a bunch of
financials from other shops likeours, other online retailers,
and they broke it down intopayroll as a percentage of sales
.
You know, fixed costs as apercentage of sales, or rent,
you know like.
You know rent as a percentageof sales, marketing as a
(16:55):
percentage of sales, shipping asa percentage of sales, and as
basic as that sounds.
And we were making money, wewere profitable.
But it kind of blew my mindlike, oh, wow, tracking it like
that deal.
Your payroll is a percentage ofsales, 14% where based on.
You know, to get you to aneight or nine margin in retail,
(17:17):
you need to be at you know 12.
Right, where.
But when my, when my employeesare saying I need to make more
money, they're like well, Ireally want you to make more
money too.
I care about you, I want you tobe here, but then when you know
in the background, well, wehave to be 12th, we need to work
towards getting to 12%.
It just really helped us outand we made a lot of different
(17:39):
decisions based on that.
So is there anything similar orother advice that you would
share to a retailer to get abetter handle on their
profitability?
John (17:53):
Yeah, so I think what you said is paramount Now.
Did we do that back in 2016?
I wish we did not.
We didn't know what we didn'tknow.
Today, we absolutely manageeverything to percentages.
We know that our marketingspend is not going to be greater
(18:14):
than 12% of our total revenue,which some people are shocked
that we don't spend more thanthat.
Dale (18:23):
I am shocked.
I am shocked.
John (18:26):
But we don't go more than that.
I am shocked.
I am shocked.
Dale (18:29):
But we don't go above it.
John (18:29):
That's the budget.
Now there's one-off situationsthroughout the year.
We find a campaign that'sworking really well and we know
that it's going to make it wherethat spend is less than 12% in
the in the following six monthsbecause we're we're we're going
top heavy.
Now there's, there's one offsand ebbs and flows but it's a
(18:53):
budget.
Dale (18:54):
Yeah, I think.
How have you budgeted incontent?
How have you, how do you lookat that spend within your
financial umbrella?
And and I guess I asked thatlike um A common theme of shops,
and I'm excited to have more ofthese conversations.
But, man, it seems like thoseshops that I was always jealous
(19:14):
of or looked up to when I was inthe bike business.
I'm like man, they are the onesthat have built real community,
that have a real reason toexist outside of.
They just are stocking productin their town.
John (19:27):
Sure.
Dale (19:28):
Right when I'm curious how people would see that
investment on their P&L, becauseit's probably closely related
to a marketing expense.
John (19:37):
Yeah, so so a lot of us marketing, but like our team
members that are in themarketing, they're just on
traditional payroll.
We're not.
We're not isolating that.
We know that.
You know we want to be at, youknow, 10 percent or less for
payroll and yes, it's heavy withmarketing people.
Yeah, but it's not isolated andnot separated at all.
Dale (20:02):
Yeah, cool.
It's funny how similar all ofthis is.
You're like, hey, we need tokeep marketing at 12.
And I'm like, yeah, marketingfor us back in the day was was
10 to 12 percent, right, youknow uh blended that are.
John (20:18):
That are 20 that that recommend.
Dale (20:21):
Oh, you need to be at 20 or 25 percent, that's, that's
tough yeah difficult well, it'sa quick way to make two percent
net margins, you know, and it'sa quick way to be out of
business too, yeah, and I guess,if you've raised money and it's
not your money, you tend tomaybe look at things slightly
different yeah, okay.
(20:43):
So so you're doing very similar.
You're bucketing it into.
Hey, our payroll expense is xMarketing spend.
We keep here.
We're willing to make somevariations.
How did you track thatinitially?
John (21:01):
So I mean, when I look at where we've come from, call it
financial astuteness in 2015 tonow is vastly, vastly, vastly
different.
So the first two years wedidn't have anybody that was
(21:22):
necessarily the head financialperson.
We were all kind of wearing thehat and the hat didn't fit any
of us and we weren't trackingthings very well.
We had a couple of spreads.
She's obviously like we wereusing QuickBooks.
Dale (21:40):
You knew you were growing profits each month.
John (21:45):
Yeah, but man we were making we made some wildly poor
decisions in those first firstcouple of years.
Dale (21:54):
Can you highlight a funny one for us?
Can you highlight?
I think it is important, forsometimes if you say John and
team built something fromscratch to 18 with a five or
$10,000 investment, you know hecomes in and then they build
this to $18 million.
That's a crazy wild successstory, right?
And?
And sometimes you say, well,they must be geniuses and um,
(22:19):
but it's, it's so.
That's why I think it's evenmore important to share, like,
look how funny this, you know,can you, can you believe we did
this?
But you grow on top of allthose stories and while the
stakes are small, that's whenyou need to make the dumb
mistakes anyways.
John (22:34):
Yeah, no, it's true.
So because we didn't have thatfinancial, we didn't have that
person that owned finance, right, there wasn't that single
person of accountability.
We obviously have to get ourtaxes done.
Every year we send them to thecpa, but we're we're just
(22:55):
sending them an x, we're notgiving them the full picture.
They don't understand thebusiness fully.
Um, it's become a complicatedbusiness, has become very just.
You know, black and white onpaper.
Um, so the cpa to, to no faultof their own, they're working
with what they've been given.
It's definitely our fault.
(23:16):
It's like, hey, you guys needsome more expenses, like go get
some cars.
So I remember vividly we'reabout to fly out to Salt Lake
City and we're going out thereto meet, we're going to shoot
some content with Black RifleCoffee.
Dale (23:38):
They've killed it right.
Black Rifle's, another company.
Who's just killed it.
John (23:42):
That's an interesting story, all the different
iterations and chapters and justsome of the things they've done
.
But they're publicly traded andnow they're putting brick and
mortar up everywhere, um, whichis, yeah, so cool, it's uh, so
we're going and, um, this is therecommendation from the cpa.
(24:04):
And you know, they're obviouslysmarter than us and we're we're
naive and thinking that wehaven't shared all of the
correct picture of of thebusiness with them.
So we're, the three of us, aresitting at the airport talking
about this and, well, I guess weshould get cars.
Well, okay, we didn't, didn'ttalk about budget.
(24:30):
My previous business partnerthat he that was the ceo, daniel
.
He was like, well, I want twocars.
And we're like, okay, cool, youget two, we'll both patrick and
I'll both get one.
Um, and within, literally, wegot back from salt lake city and
daniel called me.
He's like hey, will you go downto miami with me and drive
(24:52):
these two cars back?
I was like you already foundcars.
This is on my to-do list, butnot immediately.
I didn't think we were movingon this that fast.
And that week I flew down toMiami with him and he drove this
Corvette back and I drove thisRange Rover back up to Georgia.
(25:14):
I then I bought a BMW 650i.
It was just not like an unsight, it was just wildly
inappropriate.
Dale (25:27):
That's really funny.
John (25:30):
But it was because of you, know.
We didn't understand fully.
Dale (25:37):
You didn't understand the principle behind.
Like what do you mean thisthing, like just why that would
happen.
So, going back to hindsight,what do you do differently?
John (25:51):
So, not that.
So the reality is, you know,this business is very cash
intensive at times, right?
So at the end of the day, themembership is a big part of the
business still, and the biggerwe've gotten, we're having to
work out, you know, months andgreater in in advance and
(26:13):
putting in purchase orders.
Um so it, yes, we're, we'regonna, we're gonna buy something
today.
Hope we're right on theforecast and the number.
It's not like we can, becausethese are custom manufactured,
runs from these vendors.
So you can't like say, oh, justkidding, I told you this, but I
only need this, like they'vealready, they've made them and
we're going to pay.
(26:33):
You know, six, seven monthssometimes before we're going to
get paid ourselves.
Yeah, so we're, you know,putting out millions of dollars,
possibly every month.
So it's, it's cash and you getthe cash back, obviously, but
it's not something we should betrying to add.
(26:57):
Additional OPEX for cars.
Dale (27:01):
So you're just taking some income, paying the taxes and
stacking cash away.
John (27:06):
Yeah, yeah um yeah, so we were.
You know, we were um.
Another laughable moment is wewere taking the first, first
year taking distributions.
Um, well, we were, we werethought they were distributions.
We couldn't take distributionswhen you have a negative basis,
(27:29):
um to like what were we doing?
So, like we had years where,like that was basic had to
basically sit on our books as aloan because it couldn't be a
distribution, because therewasn't anything to distribute.
Uh, it was just just wild, justignorance, if you will.
Dale (27:46):
Yeah, in the beginning yeah, no, well, that's it's good
to.
It's good to point out.
Um, I know that I made.
I hate, I hated paying forprofessional services.
I was really cheap and we haddone my.
My dad and I were in businesstogether.
We had done.
This was 2010.
(28:06):
Um, we probably did 4 millionin revenue and made about
$550,000.
Maybe we did 5 million bucks,made 500 K and we were still
filing as a partnership, as anLLC.
A year later they said, youknow and I, we benefited cause
(28:27):
we could go back and fix some ofit.
Um, but and it may have happened, you know I might be getting my
timeline wrong but we talked tothe accountant and he says both
of you should be taking asalary of, say, 65k back then
and then all profits above thatwon't have self-employment tax
If you file as a C-corp.
(28:48):
You can stay in LLC If you fileas a C-corp.
So I'm immediately seeing whatI put off spending a hundred
dollars in consulting with theCPA and we, we lost $40,000 in
taxes, you know, two years agoor whatever it was.
And I'm thinking, man, wherejust to not know that was hard,
(29:16):
and you hear that a lot.
That's so common.
The one that you mentioned withthe car, like, hey, you should
just buy a truck.
You're showing too much inprofits, buy a truck.
John (29:25):
There's more and if the plan, yeah, it's just not, it's
not a fully, if it's a lifestylebusiness and you're not trying
to do something bigger, greateror have a larger end goal, sure.
Dale (29:43):
Yeah, make no money every year, just make no money.
And there may be some shops outthere that say, hey, our goal
is, in order to keep the bankhappy, if we do have bank loans,
we need to make a cash coverage, debt coverage but other than
that, we're going to program ourprofits and whatever.
But yeah, that's.
I think having a good cpathat's going to watch your back
(30:04):
and protect you is reallyimportant.
Yeah, that's savvy um.
So I guess that knows yourgoals and such Um and and and
you know, the, the, the CPA thatwe used had our best interest.
John (30:17):
We just never.
They didn't know what theydidn't know Right and we didn't.
We didn't offer the correctinformation or any information.
Intro (30:24):
Yeah.
John (30:25):
So it's it's tough to do your job when you don't have all
the pieces.
Dale (30:29):
Yeah, for sure.
Um, so well, that's awesome.
Um.
Another thing I wanted to getinto was the and we've talked
about it a little bit butcommunity and content going,
maybe just going back to that,like, if I'm a, if I'm a retail
chain and I was just on thephone with somebody that are
(30:50):
retail chain, they've got fivestores, um, and they, you know,
want to find ways to add valuemaybe through that community
content piece.
Like, what does that even looklike?
And I, I'm real, that's not,I'm not asking that in a very
clear way but for somebody to uhfocus more on on community or
(31:16):
creating content, like, what are, what are some of the steps
that you might recommend?
John (31:20):
Sure, so so the the the community piece is a is a little
bit of a?
Um, not straightforward answer,but you can, but you can.
You can get a lot of the answerand guidance that you need from
content.
Um, so, on the content piece,you know if we're talking about.
Hey, I'm a retailer and it's2020, it's may 2nd 2024.
(31:43):
Like I, I don't have anycontent.
I need to figure out content.
Um, you know all the algorithmson the social channels.
Um, all still treatingshort-form vertical video
content as the best type ofcontent.
Dale (32:00):
That's funny.
You say that Short-formvertical content, not landscape
vertical the phone.
John (32:08):
Um, yeah, you know when, when tiktok came on the scene,
uh, a few years back it, they,they quickly became a force.
So you have, you know, googleand uh and and facebook,
instagram, overcompensating ontheir platforms for the type of
content, because, because thereality is, consumers enjoy that
(32:30):
content, it's easy to digest,and if you're putting that
(32:52):
content on those TikTokInstagram Reels, youtube Shorts,
if you put out content likethat on those channels, you have
this ability, if it's actuallygood content, to hit this
virality piece, and the viralitypiece is just simply more
(33:12):
eyeballs and you can quickly, um, quickly become, have something
, have an identification onthere where, like, um, you're
starting to get more peoplefollowing and and understanding
and engaging with you.
Um, and if it's just genuinecontent and you know certain
(33:33):
things are going to work fordifferent brands and certain
people, but once you find yourvoice that people identify with,
the engagement can kind ofprobably lead you down the path
of what that community should orwill be able to look like yeah,
I like that.
Dale (33:50):
So leading with content and then responding.
John (33:54):
Yeah.
Dale (33:54):
In a way.
John (33:55):
Yeah, responding appropriately.
Now, your, your, your.
Your audience, members orfollowers or customers will
always tell you what they want.
If you just listen and if you,if you do want to build
community, they're going to tellyou what, how the community
should be.
You just have to listen andengage with them and ask yeah,
(34:18):
be you just have to listen andengage with them and ask
questions.
Dale (34:26):
What tips do you have for people who want to start paying
for some ads and I'm not talkingabout advice to run like
campaigns at your scale, becausethat's a whole other business
that most shops like you'll liveand die on that.
But if somebody says, yeah, Iprobably should pay in a little
bit to boost some things, likelike what do you tell that shop
that is starting to create somecontent and wants to do a little
paid media?
John (34:44):
um, I mean the.
The platforms make it reallyeasy.
Now, right, you literally can,um, you know you don't have to
be.
Yes, you can go the traditionalway.
Open up facebook businessmanager, connect your page,
create an ad, add an asset, putsome copy, set a budget um, a
url, target to go to the website.
(35:04):
You can go that way, um, andthat way is is 100, an absolute
solution.
But the platforms make itreally easy.
Can open up tiktok right now, orinstagram, and you can go to
any of your pieces of contentand there's a boost button or a
promote button, and it's superstreamlined.
Next, next page will tell youwhat are you trying to
(35:26):
accomplish.
Are you trying to get morelikes or followers, or are you
trying to send them to a url ora website, um, and next page is
is how long is is running andhow much are you spending, and
within um, within a couple ofminutes, you can, you can boost
or promote um one of your piecesof content, and it's most of
(35:49):
them.
Most of the platforms also areable to track um to a certain
degree and tell you what, whatwas accomplished and, depending
on your size, you can probablynotice was accomplished and,
depending on your size, you canprobably notice, notice, if, if,
if there was something, yeah,yeah, that's awesome.
Dale (36:03):
So one last thing, Um, and then if there's anything else
you want to add, you know, feelfree to add it, but the uh,
you'd mentioned that you hadbought a shop and then you ended
up selling it again, and thatwas you know.
I'd love to just hear thatexperience and if you had a
takeaway on here's what Ilearned about doing.
(36:24):
You know, as an internetretailer, you know, online
content creator, media company,almost with a Netflix show, my
experience jumping into a shopand jumping out was, you know.
John (36:37):
Maybe here's what I learned a shop and jumping out
was you know, maybe here's whatI learned, sure, so you know.
So back then had a theory Um,and I still think this is this
is the truth that um, direct toconsumer is just a sales channel
.
Um, it's not.
It's not the full picture.
I think that, and I hate sayingthe word omni channel, um, but
it's.
It literally stands the hair upon my arms.
(37:00):
I hate that word, but thereality is but, John, you got to
be omni-channel.
Okay, I'm just kidding yeah, butit's the reality is.
Direct to consumer is just achannel.
So, you know, I still believethat we're still working on the
uh, the correct, the, thecorrect retail model and it's
(37:21):
not what we thought it was atfirst and that was, I guess,
2017, 2018?
I'm trying to think no 2019.
We made an acquisition in 2019.
So we knew we wanted to have aretail presence.
(37:46):
Now, I believe a retailpresence is not a Battlbox
branded store, but Battlboxproducts in other people's
stores.
Dale (37:54):
It's a private label.
That's another thing and Iwasn't going to jump into that
too much, but is that somethingyou're working on?
And developing your ownBattlbox brand?
John (38:02):
Yeah, so we have a lot of branded products now and we have
some health brands now andwe're actually in the midst of
putting together a morepretty-looking, graphic-friendly
catalog of our products to taketo retailers.
But we didn't necessarily knowthat that's the right approach.
(38:23):
Now Go to 2019, we saw anopportunity where it was a
business that Flashlights andCamping Gear, so right in our
wheelhouse, where they had anice online presence, really
nice website, respectable amountof traffic and sales.
But they also had a traditionalbrick and mortar store and it
(38:49):
was in Georgia another site andthen retail.
We can have all of theirproducts.
We can also have our productsLike this is great.
Dale (39:13):
It's the best of all worlds and everything's going to
be a honeymoon forever.
John (39:17):
Completely false.
I've been there.
Dale (39:19):
I've been there.
I've been there before, yeah,yeah, too many times, and we
just you know we had become good, and arguably very good, at
direct-to-consumer onlinee-commerce.
John (39:32):
And pure naivety.
Again, we were under theimpression that, yeah, you know,
selling retail, that's.
How is that any different?
Dale (39:41):
Clearly, you're going to kill it.
You're going to be a master ateverything else you do, because
you, you know, and everythingyou, everything else you touch,
will turn to gold.
John (39:50):
Right, clear, clearly we're wrong with that approach.
And there's just so many othernuances.
Right, there's, yes, therethere's staffing, management of
people in other businesses, butstaffing for a store is
completely different and it's acompletely different approach.
And inventory management iscompletely different.
(40:14):
Instead of hundreds of aspecific product, we might only
have three or four of this andhave more SKUs as opposed to
less, in greater amounts andjust understanding.
Um, you know, the great thingabout direct to consumer and
digital is you're able to, evenin a post iOS world, you're
(40:35):
still able to track stuff to acertain degree.
Like it's not that easy totrack stuff and and getting, and
it's not as simple as justrunning some facebook ads to get
people into your store.
Like it's a.
It's a completely differentanimal.
It's a it's.
It's a different species.
Yeah, and we, just we just gotour teeth kicked in.
(40:57):
We, we just didn't know what wewere doing and while we, for
the most part, are arguablysemi-intelligent, the learning
curve was just, it was a lot andI think we could have figured
it out, but in order to figureit out, it would mean we would
take our eye off the ball ofwhat we knew was working in our
(41:21):
current core competencies.
We couldn't have figured outboth and we didn't.
You know.
We could have made some hiresthat that came from that world
and maybe put ourselves in abetter shot, but it it was
becoming a pain point and afrustration and we saw an
(41:46):
opportunity to arguably cut ourlosses at no real loss, and we
took it.
Dale (41:52):
That's a big win.
I laugh and kind of joke withyou about that because I've been
in that place a lot of timesand one of the best businesses I
sold I I sold it for like$2,000 down and I'm going to get
another $8,000 after.
It was a small project that Ipaid 50 K for and it was the
(42:14):
best sale ever and probably mymost favorite forty thousand
dollars to lose.
Actually, yeah, because it waslike, oh, just like, get it away
from me.
I don't even care, just get itout of my life.
John (42:26):
It was a bad decision, oh you know, and it's then, and
then that's a win.
Dale (42:31):
You were able to to move on from it with yeah, with some
learnings probably lots of, lotsof learnings and a lot of it
are those things, a lot of thoseof like taking your eye off the
goal and realizing.
On our last episode, actually,with paul he mentioned, you know
we talked to retailers who are,hey, I want to get into online,
I'm going to do it online,totally, do whatever you know,
(42:51):
great, do that.
Do private label, you know,build whatever dream business
you want to, but just realizingthat they're their own
businesses with their ownproblems and struggles, and you
can't just spin one up with youraura and expertise to just like
go and succeed because you'resome special deal and yeah, I've
(43:15):
learned that with certain.
Yeah, there's a lot ofcomplexity.
So, well, that's cool and I'mglad you were able to get out of
it without you know, justgetting your teeth kicked in is
a good thing compared to losing,you know, losing an arm or
dying in the process.
John (43:35):
All of it is still present , so yeah To win.
Dale (43:38):
Yeah, yeah, that's awesome .
Um well, John, it's been reallyawesome spending this time with
you and learning more aboutkind of how your mind works and
props on everything you've donewith battle box yeah, we talked
a lot about the mistakes we'vemade, but that mistakes are
important yeah, well, well, andit's all.
(43:59):
It's all a part of growing acompany to 18 million in revenue
, selling it, buying it back.
You know, dealing with COVID inthe transition, which was crazy
, and still being in business,paying your vendors on time,
right, paying your vendors, evenlike, just like.
There's a lot yeah, there was.
John (44:20):
There was in the first couple years, just us not doing
what we're we?
We paid all of our vendors butwe were.
We were late sometimes and itwas because we didn't know.
It was the naivety of ofmanaging cash flow correctly.
Um, yeah, that's a whole notherI could talk about the
learnings we took from that.
Dale (44:38):
That's a whole nother I could talk about the learnings
we took from that Gettingsomeone in place smarter than us
on the finance side, though,was such a good move.
Yeah, in my business, I waspartners with my dad, who I took
all the credit as theentrepreneur.
I'm the guy that's buying, I'mthe entrepreneur, I started the
(45:03):
company and I, you know,definitely took too much credit,
but he was the steady forcebehind paying everyone on time,
and only after selling thecompany did I realize, oh, wow,
like, not everybody acts likethat.
Of course, people wanted towork with us, because we always
paid our bills, and the threetimes we were late, it was like
a phone call hey, I'm going tobe three minutes, I'm going to
(45:24):
be three weeks late.
Is that OK, right?
And?
And people like, oh, that'sfine, realizing now as a brand,
you're like wow, we were a dreamcustomer dream.
So I think you're right.
Is having somebody responsiblethere that will maybe fight the
rest of the company to?
We've dealt with plenty ofpeople who just, you know, tell
(45:45):
that story of hey, we got tomeet with accounting and I'm not
going to slander anybody onthis call, but it's amazing how
far that goes.
And if and that's what willhappen, though, if you don't
have your numbers in in line, ifyou don't know your model and
have your outfit put togetherright um, you're running your
challenges like that yeah,awesome.
(46:08):
Well, hey, thanks for spendingthe time with us, John.
Intro (46:10):
Thank you appreciate it thank you for joining us on the
adventure Retail Podcast.
Until next time, keep exploring.
No-transcript.
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